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                                                                EXHIBIT 10.2

             CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
                     THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

                             CO-PROMOTION AGREEMENT

     This Co-promotion Agreement (hereafter, the "AGREEMENT") is entered into as
of April 12, 2005 (the "EFFECTIVE DATE"), by and between Kos Pharmaceuticals,
Inc., a Florida corporation and Kos Life Sciences, Inc., a Delaware corporation
(collectively, "KOS"), Duramed Pharmaceuticals, Inc., a Delaware corporation,
and Duramed Pharmaceuticals Sales Corp., a Delaware Corporation (collectively
"DURAMED"), and Barr Laboratories, Inc., a Delaware corporation ("BARR"), for
the marketing of Kos' fixed-dose niacin product marketed under the brand name
"Niaspan(R)", including certain extensions thereof as provided herein, and
combination niacin and lovastatin product marketed under the brand name
"Advicor(R)", including certain extensions thereof as provided herein (each, a
"PRODUCT" and collectively, the "PRODUCTS", as more fully defined below).

                                    RECITALS

     WHEREAS, Kos owns the Products;

     WHEREAS, compared to well-known cholesterol treatments such as the single
active statins and other statin combination products, niacin-based therapies
such as Niaspan(R) and Advicor(R) are relatively much less well known to
consumers and to physicians and are under-promoted, and the sale of niacin-based
treatments remains highly sensitive to promotion;

     WHEREAS, the Products are at an early stage of their promotional lives and
consequently there is a significant need to increase the promotion of the
Products in order to compete more effectively against established single active
statins, statin combination products and other cholesterol reducing products;

     WHEREAS, Kos has identified a potential new opportunity for the Products
with respect to women's health, and believes that women who need cholesterol
treatment can be reached effectively by detailing to obstetricians,
gynecologists and other health care professionals with prescribing authority and
an interest in women's health care, and that the potential number of lives that
can be saved measures in the tens of thousands;

     WHEREAS, it is estimated that there exists in excess of 4 million women who
have lipid abnormalities that could be addressed by cholesterol reducing
products such as Niaspan or Advicor;

     WHEREAS, in order to pursue such opportunity, Kos wishes to promote and
detail the Products to obstetricians, gynecologists and other health care
professionals with prescribing authority and an interest in women's health care
in the Territory (as defined below);

     WHEREAS, Kos is not experienced in promoting or detailing pharmaceutical
products to obstetricians, gynecologists and women's health care practitioners
in the Territory and wishes to collaborate with another party that provides
expertise in the promotion and detailing of pharmaceutical products to
obstetricians, gynecologists and other health care professionals with
prescribing authority and an interest in women's health care in the Territory;
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     WHEREAS, Duramed possesses expertise in the promotion and detailing of
pharmaceutical products to obstetricians, gynecologists and other health care
professionals with prescribing authority and an interest in women's health care
in the Territory and has in place a substantial and experienced
obstetrics/gynecology specialist sales and marketing team;

     WHEREAS, this Agreement serves numerous consumer interests by increasing
awareness of Niaspan(R) and Advicor(R) among physicians and other health care
professionals with prescribing authority and patients and especially women, who
are uniquely underserved for cardiovascular health purposes;

     WHEREAS, this Agreement would directly serve the growing need for treatment
for the risks of cardiovascular disease in women as identified by the American
Heart Association;

     WHEREAS, Kos seeks to engage Duramed's expertise in detailing and educating
obstetricians, gynecologists and other health care professionals with
prescribing authority and an interest in women's health care, and their
patients, in an effort to save lives by introducing women to the substantial
benefits of Niaspan(R) and Advicor(R) therapy;

     WHEREAS, this collaboration between Kos and Duramed pursuant to this
Agreement is expected to increase the sales for the Products and therefore
expand output;

     WHEREAS, co-promotion of Niaspan and Advicor by Kos and Duramed was not
practicable while litigation was pending between Kos and Barr, but with the
resolution of that litigation, there is now the possibility for collaboration
between Kos and Duramed on the co-promotion of Niaspan and Advicor; and

     WHEREAS, in connection with the resolution of such litigation pending
between Kos and Barr and concurrent with execution of this Agreement, the
Parties are entering into the Settlement and License Agreement and the License
and Manufacturing Agreement;

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, covenants and conditions contained in
this Agreement, together with other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:

1. DEFINITIONS

     1.1 ADVERSE EVENT(S) shall mean those events defined as adverse drug
experiences in Title 21 of the U. S. Code of Federal Regulations, Section
314.80, as amended from time to time and published in the Federal Register.

     1.2 ADVICOR PRODUCT shall mean:

          (a) (i) the prescription extended release lovastatin 20mg/niacin 1gm
     tablet product for human use; (ii) the prescription extended release
     lovastatin 20mg/niacin 500 mg tablet product for human use; and (iii) the
     prescription extended release lovastatin 20mg/niacin 750 mg tablet product
     for human use, each of which is approved under NDA 21-249 and distributed
     and sold (or is intended to be distributed or sold) by Kos in the
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     Territory under the trademark Advicor(R) as of the Effective Date (together
     the "EXISTING ADVICOR PRODUCTS"); and

          (b) future dosage formulations, strengths and presentations of the
     Existing Advicor Products, including all product extensions or newly named
     formulations of the Existing Advicor Products containing niacin (empirical
     formula of C(6)H(5)NO(2)) and lovastatin (empirical formula of
     C(24)H(36)O(5)) as the only active ingredients .

     1.3 AFFILIATE shall mean any corporation, firm, partnership or other entity
that directly or indirectly owns, is owned by or is under common ownership with
a Party to the extent of at least fifty percent (50%) of the equity or other
ownership interest having the power to vote on or direct the affairs of the
entity and any person, firm, partnership, corporation or other entity actually
controlled by, controlling or under common control with a Party.

     1.4 BUSINESS DAY shall mean a day on which commercial banks are open for
business in New York, New York. References in this Agreement to "days" other
than Business Days shall mean calendar days.

     1.5 CODE or CODES shall mean the Code on Interactions with Healthcare
Professionals promulgated by the Pharmaceutical Research and Manufacturers of
America (PhRMA) and the American Medical Association Guidelines on Gifts to
Physicians, as either of the foregoing may be amended.

     1.6 COMMERCIALLY REASONABLE EFFORTS means, with respect to a Party, the
efforts and resources which would be used by that Party consistent with its
normal business practices with respect to a product at a similar stage in its
development or product life and of similar market potential taking into account
efficacy, safety, the anticipated approved labeling, the competitiveness of
alternative products in the market place or under development, the patent and
other proprietary position of the product, the likelihood of regulatory
approval, the commercial value of the product and other relevant factors.

     1.7 CO-PROMOTION ACTIVITIES shall have the meaning set forth in Section
5.4.

     1.8 EFFECTIVE DATE shall mean the date upon which this Agreement becomes
effective and shall be the date first written above.

     1.9 FDA shall mean the United States Food and Drug Administration and any
successor agency thereto.

     1.10 FIELD shall mean obstetrics, gynecology and other areas of medical
practice with a focus on women's health care.

     1.11 FULL TIME EQUIVALENT (or "FTE") shall mean the number of Sales Calls
for Products under this Agreement carried out by an individual Duramed or
Affiliate employee, based on such entity's internal time reporting system,
converted into full-time equivalent units, where one full-time equivalent unit
is **** (as defined below).
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     1.12 GAAP shall mean Generally Accepted Accounting Principles in the United
States.

     1.13 KOS TRADEMARKS shall mean the Niaspan(R) and Advicor(R) trademarks
owned by Kos in the Territory, and any other trademark, service mark, trade
dress or logo developed, applied for, registered, or to be applied for or
registered for use in connection with the sale of the Products in the Territory,
including any trademark rights existing under common law.

     1.14 KNOW-HOW shall mean all present and future information developed by
Kos, whether or not in written form, that is not in the public domain and that
relates to the Products and shall include, without limitation, all biological,
chemical, pharmacological, toxicological, medical or clinical, analytical,
quality, manufacturing, research, or sales and marketing information including
all processes, methods, procedures, techniques, plans, programs, and data and
any other information relating to the Products or useful for the development or
commercialization of the Products in the Territory.

     1.15 LICENSE AND MANUFACTURING AGREEMENT shall mean the License and
Manufacturing Agreement between the Parties dated as of the Effective Date.

     1.16 MARKETING LICENSE EFFECTIVE DATE shall have the meaning set forth in
the Settlement and License Agreement.

     1.17 MARKETING ADVISORY COMMITTEE shall mean the committee established and
conducted in accordance with the procedures set forth in Article 5.

     1.18 MINIMUM DURAMED DETAILS shall have the meaning set forth in Section
2.2(c).

     1.19 NDA shall mean a New Drug Application for a Product in accordance with
the requirements of the FDA.

     1.20 NIASPAN PRODUCT shall mean:

          (a) (i) the prescription extended release niacin 1gm tablet product
     for human use; (ii) the prescription extended release niacin 500 mg tablet
     product for human use; and (iii) the prescription extended release niacin
     750mg tablet product for human use, each of which is approved under NDA
     20-381 and distributed and sold by Kos in the Territory under the trademark
     Niaspan(R) as of the Effective Date (together the "EXISTING NIASPAN
     PRODUCTS"); and

          (b) future dosage formulations, strengths and presentations of the
     Existing Niaspan Products (including any potential modified or reduced
     flush version of any Existing Niaspan Product), including all product
     extensions or newly named formulations of the Existing Niaspan Products
     containing niacin (empirical formula of C6H5NO2) as the single active
     ingredient.

     1.21 NET SALES shall mean the recorded gross sales of both Products in the
Territory to Third Parties in accordance with GAAP less the following
deductions:
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          (i)  sales and excise taxes, duties, and any other governmental
               charges imposed upon the production, importation, use or sale of
               a Product;

          (ii) trade, quantity, cash and other discounts allowed on a Product to
               wholesalers or other Third Parties to whom the Products are sold
               and shipped directly;

          (iii) provisions for actual or expected allowances or credits to
               customers on account of rejection or return of a Product or on
               account of price reductions for a Product;

          (iv) Product rebates and Product charge-backs and other price
               reduction programs granted to managed care entities and
               pharmaceutical benefit management service entities (If Kos
               chooses to contract one or more of the Products together with
               another Kos product with composite rebates or chargebacks, then
               rebates and or chargebacks for the affected Product will be
               recalculated based on the then average rebate or chargeback of
               the Product to the applicable customer category as if such
               Product is contracted independently of any other Kos product.);
               and

          (v)  provisions for actual or expected write-offs of uncollectible
               customer accounts for previously recorded sales;

in each case determined in accordance with Kos' commercial and accounting
policies and practices consistently applied in a manner consistent with GAAP. In
the event that Net Sales as calculated for any period under this Agreement are
lower than the net Product sales utilized by Kos in reporting Kos' net revenue
for financial reporting purposes in Kos' SEC filings for the same period,
including Kos' quarterly SEC Form 10-Q and annual SEC Form 10-K ("REPORTED
PRODUCT NET SALES"), then Net Sales under this Agreement shall be increased by
such amount as is necessary to make them equal to the Reported Net Sales.

     1.22 PARTY(IES) shall mean each of Kos and Duramed.

     1.23 PATENTS shall mean all patents and patent applications in the
Territory that are or become owned by Kos, or to which Kos otherwise has, now or
in the future, the right to grant licenses and license rights, that generically
or specifically cover the Products or a use or formulation of the Products.
Included within the definition of Patents are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals or
extensions thereof. The current list of patents and patent applications
encompassed within Patents is set forth in Appendix B attached hereto.

     1.24 PRODUCTS shall mean all Niaspan Products and all Advicor Products for
all indications approved by the FDA at any time during the Term (as defined
below).

     1.25 PRODUCT DETAIL(S) shall mean a face-to-face meeting, between (i) a
professional pharmaceutical sales representative meeting minimum professional
standards of a four-year college degree (B.A., B.S. or equivalent) with sales
experience and or training in the promotion of products to obstetricians,
gynecologists and health care professionals with prescribing authority and an
interest in women's health, and (ii) a Professional in the Field, during which a
presentation of one of the Product's attributes is orally presented in a manner
consistent with the
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quality of such presentations made by Duramed's professional representatives for
Duramed's other products. A "PRIMARY PRODUCT DETAIL" shall mean a Product Detail
where the presentation of such Product during the Product Detail is the first
presentation made and is the presentation on which the most time is spent during
such meeting. A "SECONDARY PRODUCT DETAIL" is the presentation on which the
second most amount of time is spent during such meeting. When used as a verb,
"PRODUCT DETAIL" shall mean to engage in a Product Detail to a Professional in
the Field.

     1.26 PROFESSIONALS shall mean physicians, physician assistants and other
health care practitioners, including nurses and nurse practitioners, in the
Field who are permitted under applicable laws in the Territory to prescribe the
Products.

     1.27 "SALES CALL" shall mean a sales call on a Targeted Professional (as
defined below).

     1.28 SETTLEMENT AND LICENSE AGREEMENT shall mean the Settlement and License
Agreement between the Parties dated as of the Effective Date.

     1.29 STEERING COMMITTEE shall have the meaning set forth in Section 5.6.

     1.30 TARGETED PROFESSIONALS shall mean the universe of Professionals in the
Field targeted for Product Details, initially established using the process
outlined in Appendix C to this Agreement, and as changed, from time to time, by
the Marketing Advisory Committee.

     1.31 TERM shall have the meaning set forth in Section 3.1.

     1.32 TERRITORY shall mean the United States of America its territories and
possessions, including the Commonwealth of Puerto Rico and the District of
Columbia.

     1.33 THIRD PARTY(IES) shall mean any person or entity other than Kos and
Duramed or their Affiliates.

     1.34 YEAR shall mean each calendar year during the Term.

2. CO-PROMOTION

     2.1 GRANT OF RIGHTS. With effect from the Effective Date, Kos grants to
Duramed the right to co-promote the Products to Targeted Professionals in the
Field in the Territory, subject to (i) Kos' right to co-promote the Products
(itself or with a Third Party, including, without limitation, Takeda
Pharmaceuticals North America, Inc. and Takeda Pharmaceuticals America, Inc.)
throughout the Territory and (ii) all the other terms and conditions of this
Agreement. Kos shall retain exclusively all of its rights with respect to the
Products outside the Field in the Territory and outside of the Territory, and
Duramed shall have no rights with respect to the Products outside of the Field
in the Territory or outside the Territory as a result of the execution or
performance of this Agreement. Duramed shall have no other rights relating to
the Products except as expressly set forth in this in this Agreement, the
Settlement and License Agreement or the License and Manufacturing Agreement.
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     2.2 EFFORTS.

          (a) Duramed shall dedicate no less than **** professional
pharmaceuticals sales representatives, meeting minimum professional standards of
a four-year college degree (B.A., B.S. or equivalent) with sales experience and
or training in the promotion of products to obstetricians, gynecologists and
health care professionals with prescribing authority and an interest in women's
health to detail the Products pursuant to this Agreement and will use
commercially reasonable efforts to have such sales force in place and available
for Product-specific training by Kos by no later than June 15, 2005. Throughout
the Term, Duramed will maintain a sales force of not less than **** professional
pharmaceuticals sales representatives, meeting minimum professional standards of
a four-year college degree (B.A., B.S. or equivalent) with sales experience and
or training in the promotion of products to obstetricians, gynecologists and
health care professionals with prescribing authority and an interest in women's
health to detail the Products pursuant to this Agreement. Except with the prior
written consent of Kos, all Duramed sales representatives who are responsible
for Product Details shall be employees of Duramed or its Affiliates.

          (b) Duramed shall deploy its sales forces in an effort to promote
effectively and conduct the Product Details in accordance with the terms of this
Agreement and the instructions of the Marketing Advisory Committee. Duramed
shall use Commercially Reasonable Efforts consistent with accepted
pharmaceutical industry business practices in conducting its promotional and
Product Detailing activities hereunder.

          (c) Duramed will dedicate not less than **** FTEs to Product Detailing
between June 15, 2005 and August 31, 2006, and not less than **** FTEs per Year
to Product Detailing from September 1, 2006 and throughout the remainder of the
Term. Duramed agrees to perform at least one Primary Product Detail during each
Sales Call and will use its best efforts to provide at least one Secondary
Product Detail during each Sales Call, as long as the Marketing Advisory
Committee determines that there are at least two Products that will benefit from
promotion to the Targeted Professionals ("MINIMUM DURAMED DETAILS"). Any
decision by the Marketing Advisory Committee to reduce promotion on the Products
will result in a decision to jointly reevaluate the number and position of the
Minimum Duramed Details by the Marketing Advisory Committee. The Parties
recognize that the Duramed professional sales representatives conducting the
Sales Calls may have the opportunity to promote the Products by using an
additional **** FTEs to conduct prescriber calls between June 15, 2005 and
August 31, 2006 and by using an additional **** FTEs to conduct prescriber calls
in each subsequent twelve month period to Targeted Professionals or to other
health care professionals targeted for Duramed's or its Affiliate's other
products or for the products of Third Parties. Duramed will utilize its
Commercially Reasonable Efforts to deliver details on the Products during such
additional calls if Duramed determines that an available unreserved detail
position exists for such promotional activities; provided, however, that nothing
in this Agreement shall prevent Duramed, in its sole discretion, from reserving
the detail positions in such additional sales calls for other Duramed or Duramed
Affiliate products or for products of Third Parties.

          (d) Duramed shall provide internal administrative and logistical
support of its sales representatives consistent with its normal practices for
other sales forces employed by Duramed, which support shall include without
limitation, general (non-Product specific) training,
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administrative support services and a sales representative incentive plan
related to the marketing and promotion of the Products to Targeted Professionals
in the Field. Such incentive plans shall be consistent with Duramed's
obligations hereunder and shall provide an incentive that is weighted at a level
commensurate with the Product Detail position of the Products within the total
number of products handled by Duramed's sales force and shall be administered in
a manner consistent with the other sales force incentive programs that Duramed
provides to its other sales forces. Kos shall have the right to review Duramed's
incentive plan with respect to the Products.

          (e) The Parties acknowledge and agree that some or all of Duramed's
obligations hereunder may be performed by Affiliates. To the exent that Duramed
causes or permits its Affiliate to perform any of Duramed's obligations under
this Agreement: (i) Duramed hereby guarantees the performance of all such
obligations in accordance with the terms of this Agreement; and (ii) Duramed
shall cause such Affiliate to comply with all of the terms, provisions and
conditions contained in this Agreement that would be applicable to Duramed in
the performance of such obligations.

     2.3 COMPLIANCE WITH LAW. Duramed agrees that in promoting the Products and
performing Product Details, it will comply in all material respects with
applicable laws and regulations applicable to the marketing, sale and promotion
of pharmaceutical products (including without limitation the Prescription Drug
Marketing Act ("PDMA"), Federal Health Care Program Anti-Kickback Law (42 U.S.C.
Section 1320a-7b) and the Health Insurance Portability and Accountability Act of
1996), the Codes, and the terms of this Agreement. No Party shall be required to
undertake any obligation, or incur any cost or reimbursement obligation, in
connection with any activity under this Agreement that such Party believes, in
good faith, may violate any applicable law, regulation or Code. Consistent with
recent guidance in the pharmaceutical industry promulgated by the Office of
Inspector General of the Health and Human Services Department on April 28, 2003,
Duramed agrees to maintain a compliance program with respect to its promotional
and sales activities pursuant to this Agreement.

3. TERM AND TERMINATION

     3.1 TERM. The Term of this Agreement shall commence on the Effective Date
(it being understood and agreed that Duramed shall not be obligated to perform
Product Details prior to the later of: (a) July 1, 2005, or (b) the date on
which Kos' sales training has been completed), and, unless earlier terminated
pursuant to Section 3.2, shall terminate at 11:59 p.m. Eastern Standard Time on
the earlier of:

     (a) the Marketing License Effective Date on a Product-by-Product and
     dose-by-dose basis; and

     (b) the date which is seven (7) years after the Effective Date (the
     "INITIAL EXPIRATION DATE"); provided, that such date may be extended for an
     additional period of one (1) year at the election of either Party by
     delivery to the other Party of a written notice at least ninety (90) days
     prior to the Initial Expiration Date.
<PAGE>
     3.2 EARLY TERMINATION. Each Party shall have the right to terminate this
Agreement before the end of the Term by written notice to the other Party:

     (i) if the other party fails to pay any amount of money due and payable
     hereunder and which is not disputed in good faith, and fails to remedy the
     same after thirty (30) days written notice;

     (ii) if the other Party has materially breached any provision of this
     Agreement, which breach materially adversely affects the terminating
     Party's rights under this Agreement, in the aggregate, and the breaching
     Party fails to remedy the same within ninety (90) days after written notice
     from the terminating Party (a "BREACH NOTICE") (or, if applicable, such
     longer period (not exceeding one hundred twenty (120) days) as would be
     reasonably necessary for a diligent party to cure such a breach; provided
     that the breaching Party has commenced and continues diligent efforts to
     cure during the initial ninety (90) day period following receipt of the
     Breach Notice); provided that, in the event of a final adjudication by a
     court of competent jurisdiction that a material breach had not occurred,
     the terminating Party shall compensate the alleged breaching Party for any
     amount of money that otherwise would have been due and payable hereunder
     plus interest on such amount set at a rate equal to the average one-year
     London Inter-Bank Offering Rate for the United States Dollar as reported
     from time to time in the Wall Street Journal (or, if such rate is not
     regularly published, as published in such source as the Parties agree)
     ("LIBOR") ****.

     (iii) as to any Niaspan Product or Advicor Product, on a Product by Product
     and dose by dose basis, upon any withdrawal of such Product or dose due to
     the occurrence of serious Adverse Events related to the use of such Product
     that cause a Party to reasonably conclude that the continued use of such
     Product by patients will result in serious life-threatening health and/or
     safety concerns that cannot be addressed through appropriate labeling; or

     (iv) upon the bankruptcy or insolvency, or the making or seeking to make or
     arrange an assignment for the benefit of creditors of the other Party, or
     the initiation of proceedings in voluntary or involuntary bankruptcy, or
     the appointment of a receiver or trustee of such Party's property that is
     not discharged within ninety (90) days.

4. FEES AND PAYMENTS

     4.1 ROYALTY ON NET SALES.

          (a) In consideration for the performance of its obligations hereunder,
Duramed shall be entitled to receive from Kos royalty payments (together
"ROYALTY PAYMENTS") in an amount equal to:

          (i)  Beginning April 1, 2005 and for the remainder of 2005, the Net
               Sales of the Products in a given calendar quarter up to the
               applicable quarterly net sales cap set forth on Appendix A
               (together the "QUARTERLY NET SALES CAPS") for such quarter
               multiplied by the applicable royalty rate as set forth on
               Appendix A (together the "ROYALTY RATES") for such Year; and
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          (ii) thereafter throughout the Term, the aggregate Net Sales of the
               Products in a given Year up to the applicable annual net sales
               cap set forth on Appendix A (together the "ANNUAL NET SALES
               CAPS") multiplied by the applicable Royalty Rates.

          (b) The amount of each Royalty Payment shall be determined and paid on
a calendar quarterly basis; provided, however, that with effect from January 1,
2006, in no event shall any such quarterly payment for the first, second or
third calendar quarter in any Year exceed an amount equal to the applicable
Quarterly Net Sales Cap for the Year multiplied by the applicable Royalty Rate
for such Year. Kos shall provide Duramed with a written statement, as provided
in Section 4.4(b), of the Net Sales for a calendar quarter and the amount of the
Royalty Payment for such quarter within thirty (30) days following the end of
each calendar quarter during a Year, except following the fourth calendar
quarter of each Year. Within forty five (45) days following the end of the
fourth calendar quarter of each Year, Kos shall provide Duramed with a written
statement, as provided in Section 4.4(c), of the Net Sales for such fourth
calendar quarter and the Net Sales for such entire Year. The Royalty Payment to
be paid by Kos following the fourth calendar quarter of each Year shall be
calculated by multiplying the Net Sales of the entire Year, up to the amount of
the applicable Annual Net Sales Cap, by the applicable Royalty Rate and
subtracting from such amount the aggregate amount of all Royalty Payments paid
by Kos following the first three calendar quarters during such Year.

          (c) All Royalty Payments required to be paid by Kos shall be paid by
Kos within ten (10) Business Days following Kos' delivery of the written
statement of the Net Sales and Royalty Payment amount for a calendar quarter. In
the event either Party elects to terminate the Agreement pursuant to Section
3.2, a pro-rated quarterly Royalty Payment will be due to Duramed at the close
of the quarter in which such termination occurs. The amount of such Royalty
Payment will be calculated for the pro-rated Net Sales for such quarter, based
on the number of days that have elapsed during such quarter immediately prior to
the effective date of such termination.

     4.2 PAYMENTS. All payments under this Agreement shall be in U.S. dollars in
immediately available funds, and, unless instructed otherwise by the receiving
Party, shall be made via check or wire transfer to the account designated from
time to time by the receiving Party.

     4.3 TAXES. Unless otherwise required by law, each Party shall be
responsible for paying and reporting all of its own taxes and fees, including
without limitation income taxes, payroll taxes, franchise taxes and all taxes
and fees in connection with the Party conducting business in any jurisdiction.

     4.4 REPORTS.

          (a) Within ten (10) Business Days following the end of each month
during the Term, Kos shall provide Duramed with an initial good faith estimate
of the Net Sales for the month and for the calendar quarter and year-to-date
period that includes such month. Within thirty (30) days following the end of
each of the first three calendar quarters of each Year during the Term, Kos
shall provide Duramed with a written statement of the Net Sales for such quarter
<PAGE>
and for the year-to-date period through the end of such quarter, and a
calculation of the Royalty Payment for such quarter.

          (b) Within forty five (45) days following the end of each calendar
Year of the Term, Kos shall provide Duramed with a written statement of the Net
Sales for such Year, and a calculation of the Royalty Payment for such Year
pursuant to Section 4.1.

          (c) For the avoidance of doubt, the reports provided under
sub-sections (a) and (b) above shall report only aggregate Net Sales of the
Products but shall not report gross sales of the Products or any deductions from
gross sales in the calculation of Net Sales. Upon request by Duramed within
ninety (90) days after a calendar quarter has ended, or within one hundred
twenty (120) days after a Year has ended, Kos shall provide to an independent
nationally-recognized certified public accountant or like person, satisfactory
to Duramed and Kos in their respective reasonable discretion, a written report
setting forth an itemized accounting and calculation of the Net Sales of
Products sold by Kos during such preceding calendar quarter or such preceding
Year, which report shall include information in sufficient detail reasonably
necessary for such accountant to confirm the computational accuracy of the
report provided to Duramed pursuant to sub-section (a) above with respect to
such calendar quarter or such Year. Such accountant shall sign a written
confidentiality agreement reasonably satisfactory to Kos and shall report to
Duramed and Kos only its conclusions as to whether the report provided to
Duramed pursuant to sub-section (a) above is consistent with the itemized
accounting and calculation provided to such accountant, and without limiting the
foregoing, under no circumstances shall such accountant report to Duramed the
prices at which Kos sold any Product or any deductions from gross sales in the
calculation of Net Sales. Duramed shall pay all costs of the independent
accountant. Nothing in this Section 4.4(c) shall limit in any way either Party's
rights under Section 8 of this Agreement.

          (d) Whenever information relating to the Products is reported under
this Agreement, such information shall be listed separately by Product and in
the aggregate.

     4.5 NET SALES TRUE-UP PAYMENT. Within one hundred eighty (180) days
following the end of each Year during the Term, Kos shall determine the actual
cash paid, allowances or credits issued and write-offs taken related to its
recorded gross sales of both Products in the Territory to Third Parties that
occurred during such Year. In the event that any such annual reconciliation
reveals any overpayment or underpayment hereunder, the amount of such
underpayment or overpayment will be added or subtracted, as appropriate, to or
from the next Royalty Payment in accordance with Section 4.1 or, if no further
Royalty Payments are due, by payment to the Party owed such adjustment within
thirty (30) days after identification of such adjustment. Nothing in this
Section 4.5 shall limit in any way either Party's rights under Section 8 of this
Agreement.

5. CO-PROMOTION MANAGEMENT

     5.1 MARKETING ADVISORY COMMITTEE.

          (a) Within thirty (30) days after the Effective Date, Kos and Duramed
shall assemble a team of appropriate personnel from both Kos and Duramed (the
"MARKETING
<PAGE>
ADVISORY COMMITTEE") to plan the ongoing sales and promotional strategies and to
review and direct such activities for the Products in the Field in the
Territory. The Marketing Advisory Committee shall consist of an equal number of
representatives from each of Kos and Duramed, not to exceed a total of four (4)
representatives. Kos shall designate one of its representatives on the Marketing
Advisory Committee to serve as its chairperson. The Marketing Advisory Committee
may from time to time include additional non-voting ad-hoc representatives from
either Party on specific issues as the need arises.

          (b) The representatives of each Party serving on the Marketing
Advisory Committee shall collectively have one vote on all matters considered by
the Marketing Advisory Committee. In the event that the members of the Marketing
Advisory Committee are unable to agree on any matter, such matter shall be
submitted to the senior marketing officer of each Party, who shall meet in
person or by telephone within seven (7) Business Days to review and resolve such
matter. If the senior marketing officers of the Parties are not able to resolve
such matter, the chairperson of the Marketing Advisory Committee shall make a
final decision with respect to such matter that, if consistent with the terms of
this Agreement, shall be binding on the Parties, subject to (i) the exceptions
provided in Section 5.8, and (ii) the right of either Party to require a
disputed matter that is likely, in such Party's reasonable judgment, to have a
material adverse impact on a Party or its sales force to be submitted to the
Steering Committee for resolution.

     5.2 RESPONSIBILITIES OF MARKETING ADVISORY COMMITTEE.

          (a) The Parties agree that Kos will have final planning, oversight,
and decision-making authority for all marketing and promotional activities
related to the Products in the Field. Duramed will have the opportunity, through
the Marketing Advisory Committee, to confer with and advise Kos on such sales,
marketing and promotional matters. Subject to the foregoing, the following
marketing and promotional matters will be considered by the Marketing Advisory
Committee:

          (i) the establishment and implementation of appropriate policies,
     programs, and procedures for the marketing and promotion of the Products to
     Professionals in the Field;

          (ii) any adjustments to the Targeted Professionals;

          (iii) the allocation of Product Details between each of the Products
     during each Plan of Action that the Marketing Committee establishes for
     promotion of the Products;

          (iv) establishment and monitoring of Product sampling practices for
     Professionals in the Field; and

          (v) establishment of requirements for and regular review within the
     Field of prescription tracking, call reporting, and other secondary market
     data with respect to the Products, in a manner consistent with what Duramed
     performs for its other professional sales forces.
<PAGE>
          (b) Notwithstanding anything set forth above in Section 5.2(a), Kos
shall be solely responsible for ensuring that the Products' promotional
materials and labeling comply with the Federal Food, Drug and Cosmetic Act and
all other applicable laws and regulations.

          (c) For the avoidance of doubt, Kos solely shall make all decisions
regarding the pricing of the Products to all channels of trade (including
without limitation chargebacks, rebates, discounts, credits, free goods or any
other matter affecting the ultimate prices to Third Parties) and under no
circumstances shall any such pricing matter be discussed by the Parties.

     5.3 MEETINGS OF MARKETING ADVISORY COMMITTEE. Meetings of the Marketing
Advisory Committee shall be held semi-annually commencing with the first meeting
to occur within thirty (30) days following the Effective Date or more often as
determined by the Marketing Advisory Committee. Either Party may call a special
meeting of the Marketing Advisory Committee on fifteen (15) days written notice
to the other Party. The location of Marketing Advisory Committee meetings and
whether to hold them via teleconference and/or videoconference shall be
determined by the Marketing Advisory Committee, provided one Party does not bear
an undue travel burden. Minutes of each Marketing Advisory Committee meeting
shall be transcribed and issued by a designee of the Committee within ten (10)
Business Days after each meeting and shall be approved by the chairperson not
later than the first order of business at the immediately succeeding Marketing
Advisory Committee meeting. Each Party shall bear its own expenses in connection
with attending meetings of the Marketing Advisory Committee. The Committee shall
also establish a procedure for either (i) calling special interim meetings of
the Committee in the event a need for Committee decisions arises between
regularly scheduled meetings or (ii) establishing a process for making such
interim decisions. Meetings of the Marketing Advisory Committee shall be subject
to strict antitrust compliance guidelines.

     5.4 CO-PROMOTION ACTIVITIES. Subject to the overall marketing and
promotional plan for the Products established by Kos and considered by the
Marketing Advisory Committee, Duramed shall be responsible for performing the
co-promotion activities described below (the "CO-PROMOTION ACTIVITIES"), in each
case in accordance with the activity levels established in this Agreement.
Except as otherwise provided in this Agreement, Duramed shall fully bear all of
the costs incurred by it in connection with its performance of the Co-Promotion
Activities performed by its sales representatives.

          (a) FIELD SALES. The Marketing Advisory Committee shall determine any
adjustments to the Targeted Professionals. Duramed agrees to perform no fewer
than the Minimum Duramed Details during each Year during the Term pursuant to
the directives of the Marketing Advisory Committee and consistent with this
Agreement. Duramed shall maintain records of each Product Detail by its sales
force representatives using a call document which records the name and address
of the Professional in the Field, the date and position of the Product Detail
and the number of samples delivered, and shall supply a monthly record of the
number of total Product Details to Kos within sixty (60) days of the end of each
month in a form to be established by the Marketing Advisory Committee.

          (b) RECORDS. Duramed shall maintain records of each Product Detail by
its sales force representatives using a call document which records the name and
address of the Professional in the Field, the date and position of the Product
Detail and the number of samples
<PAGE>
delivered, and shall supply a monthly record of the number of total Product
Details to Kos within sixty (60) days of the end of each month in a form to be
established by the Marketing Advisory Committee.

          (c) SAMPLING. The Marketing Advisory Committee shall determine the
appropriate level of sampling per member of the target audience, consistent with
Kos' sampling practices on the Effective Date. Kos shall be responsible, at its
own cost and expense, for the delivery of all samples to Duramed sales
representatives or a Third Party designated by Duramed for final distribution of
samples to the Duramed sales representatives. All sample distribution, reporting
and storage shall be conducted by each Party in accordance with the PDMA.

          (d) SALES FORCE TRAINING. As set forth in Section 2.2(d), Duramed
shall be responsible for general (non-Product specific) training of its sales
representatives at its own cost and expense. Such training by Duramed shall
include, without limitation, non-Product specific training as to women's health
issues and promotion of women's health products to Professionals in the Field.
Kos shall be responsible, at its own cost and expense, for all Product-specific
training of Duramed's sales representatives in accordance with training plans
established by the Marketing Advisory Committee, for: (i) the initial sales
representatives, in accordance with Section 2.2(a); (ii) for any new sales
representatives added or hired to detail the Products, in a manner and time as
determined by Kos; and (iii) any on-going Product-specific training Kos
determines is necessary for the Sales Force and any Field communication or
bulletins regarding sales promotion activities for the Products. Duramed will
use Commercially Reasonable Efforts to make its sales representatives available
for initial Product-specific training by Kos by June 15, 2005.

     5.5 OTHER CO-PROMOTION MATTERS.

          (a) BOOKING OF SALES REVENUE. Kos shall record on its books all
revenue from gross sales and Net Sales of the Product.

          (b) PACKAGING. Kos shall have the responsibility for selecting and
approving all packaging materials for the Products.

          (c) TRADEMARKS. Kos shall approve the names, design, and usage in the
Territory of all Kos Trademarks associated with the Products.

     5.6 STEERING COMMITTEE.

          (a) RESPONSIBILITY. Within thirty (30) days following the Effective
Date, the Parties shall form a Steering Committee (the "STEERING COMMITTEE")
whose responsibility shall be to (i) discuss any proposed amendments to and
renewals of this Agreement, (ii) consider any Disputes in accordance with
Article 18, and (iii) assume any other oversight role deemed appropriate by the
Parties.

          (b) COMPOSITION AND PROCEDURES. The Steering Committee shall have
three representatives from each of Kos and Duramed. One of the representatives
from each Party shall be the senior marketing executive for such Party. Kos
shall designate one of its representatives on the Steering Committee to serve as
its chairperson. The Steering Committee may from time to
<PAGE>
time include additional non-voting ad-hoc representatives from either Party on
specific issues as the need arises. Each Party shall have one vote on all
matters. In the event that the members of the Steering Committee are unable to
agree on any matter, the chairperson of the Steering Committee shall make a
final decision with respect to such matter that, if consistent with the terms of
this Agreement, shall be binding on the Parties.

     5.7 MEETINGS OF STEERING COMMITTEE. The Steering Committee shall meet on an
as needed basis pursuant to the request of a Party, but no less often than at
least once per year. The location of such meetings shall be agreed upon between
the Parties, and may be via teleconference and/or videoconference. Minutes of
each Steering Committee meeting shall be transcribed and issued by a designee of
the Committee within ten (10) Business Days after each meeting and shall be
approved by a representative from each Party no later than the first order of
business at the immediately succeeding Steering Committee meeting. Each Party
shall bear its own expenses in connection with attending meetings of the
Steering Committee. The Committee shall also establish a procedure for either
(i) calling special interim meetings of the Committee in the event a need for
Committee decisions arises between regularly scheduled meetings or (ii)
establishing a process for making such interim decisions. Meetings of the
Steering Committee shall be subject to strict antitrust compliance guidelines.

     5.8 DURAMED EXCEPTIONS. Notwithstanding anything to the contrary contained
in this Article 5, no decision by the Marketing Advisory Committee or the
Steering Committee shall require Duramed, without Duramed's prior written
consent, to: (i) increase the Minimum Duramed Details; (ii) perform more Product
Details than the Minimum Duramed Details; (iii) materially increase Duramed's
expenses; (iv) carry any promotional items or make any promotional statement
that does not meet Duramed's internal pharmaceutical promotional guidelines; (v)
revise its existing sales representative compensation policies; or (vi) alter
its sales representatives' call targets reach and/or frequency for Duramed's own
products. In the event Duramed in good faith based on the advice of counsel
believes that a promotional practice or message approved by the Marketing
Advisory Committee does not comply with the provisions of Section 2.3, Duramed
shall promptly inform Kos by providing its rationale therefore. If Kos disagrees
with Duramed's conclusion regarding such practice or message, then the
disagreement shall be submitted promptly to the Steering Committee for
resolution. Until a resolution is reached, Duramed shall have the right to
decline to perform such practice or message.

     5.9 FINANCIAL MATTERS. Within thirty (30) days following the Effective
Date, each of Kos and Duramed shall designate a single finance representative,
who may be changed from time to time on written notice, to be responsible for
correspondence relating to financial reporting, audit activities and any other
financial matters relating to this Agreement. Each Party shall cooperate with
the other Party with respect to any such financial matters and respond to the
requests of the other Party within a reasonable period of time. For the
avoidance of doubt, such financial representatives shall not discuss the pricing
of the Products (including without limitation chargebacks, rebates, discounts,
credits, free goods or any other matter affecting the ultimate prices to Third
Parties) nor gross sales of the Products or any deductions from gross sales in
the calculation of Net Sales.
<PAGE>
6. MANUFACTURING AND SUPPLY

     6.1 KOS RESPONSIBILITIES.

          (a) Unless otherwise determined by Kos pursuant to the License and
Manufacturing Agreement, Kos shall manufacture, package, store and ship (or
cause the manufacturing, packaging, storage and/or shipment of) the Products and
samples of the Products in accordance with (i) "current Good Manufacturing
Practices" as set forth by the FDA, (ii) the Products' approved NDAs, and (iii)
all applicable local, state, and Federal laws and regulations in the Territory.

          (b) Kos shall manufacture sufficient quantities of (i) Products to
meet its sales forecasts for the Term, and (ii) samples of Products to
adequately support the Product Detail obligations of the Parties hereunder.

          (c) Kos shall supply, at its own cost and expense, marketing and
detailing materials and samples of the Products to the Duramed sales
representatives within thirty (30) days of submission of requirements as
forecasted by the Marketing Advisory Committee. Samples shall be allotted
according to the Product Detail requirements of each Party under this Agreement.
The Parties will maintain those records required by the PDMA and, subject to
receipt of necessary information from Duramed, Kos shall be solely responsible
for the filing of any necessary reports to the FDA in connection with the PDMA.

7. REGULATORY, SAFETY AND SURVEILLANCE

     7.1 REGULATORY MATTERS.

          (a) RESPONSIBILITY. All regulatory matters in the Territory regarding
the Products shall remain under the exclusive control of Kos.

          (b) PERMITS. Kos shall be responsible for and maintain all regulatory
and governmental permits, licenses and approvals that may be necessary to
manufacture, ship, sell and market the Products in the Territory.

          (c) REPORTING. Kos shall be responsible for any reporting of matters,
or other communications with the FDA, regarding the manufacture, sale or
promotion of the Products, including Adverse Events, to the FDA and other
relevant regulatory authorities, in accordance with applicable laws and
regulations. Duramed shall promptly, but in no event later than five Business
Days, notify Kos of any Adverse Event of which it should become aware. In the
event Kos or Duramed should become aware of information that may require a
recall, field alert, Product withdrawal or field correction arising from any
defect in either of the Products, it shall immediately notify the other Party in
writing.

          (d) DURAMED INVOLVEMENT. Duramed shall not without consent of Kos,
unless so required by applicable law, correspond or communicate with the FDA or
with any other governmental authority, concerning the Products, or otherwise
take any action concerning any authorization or permission under which any of
the Products are sold. Duramed shall provide to Kos, upon receipt, copies of any
communication from the FDA or other governmental
<PAGE>
authority related to the Products. If Duramed is advised in writing by its
outside counsel that it must communicate with the FDA or other governmental
authority, then Duramed shall so advise Kos and Duramed shall, if the law
permits, comply with any and all reasonable direction of Kos concerning any
meeting or communication with the FDA or other governmental authority.

     7.2 ADVERSE EVENTS. Promptly after the Effective Date, in recognition of
Kos' primary responsibility for reporting Adverse Events associated with the
Products, the Parties shall agree upon standard operating procedures, consistent
with this Agreement, for the investigation and reporting of Adverse Events
regarding the Products. The Parties shall immediately implement such agreed
procedures and shall provide each other on a regular basis with any appropriate
information that enables the other Party to meet its regulatory obligations in
the Territory with respect to the Products or that is relevant to the safe use
of the Products. The agreed procedures will be reviewed jointly on a regular
basis or when there is a change in regulations governing Adverse Event
reporting.

     7.3 MEDICAL INQUIRIES. Promptly after the Effective Date, the Parties shall
establish procedures to enable Kos to respond promptly to any medical inquiries
relating to the Products received by Duramed.

8. AUDIT RIGHTS

          (a) Duramed shall keep complete and accurate records of its Product
Details and incentive compensation payments for the Products to sales
representatives.

          (b) Kos shall keep complete and accurate records of the Net Sales of
the Products.

          (c) Each Party shall have the right, at such Party's sole cost and
expense, through an independent certified public accountant or like person
reasonably acceptable to the other Party, upon execution of a confidentiality
agreement, to examine such records during regular business hours, in a manner
that does not unreasonably interfere with ongoing operations, upon reasonable
written notice during the Term of this Agreement and for one (1) year after
termination of this Agreement; provided, however, that (i) such examination
shall not take place more often than once per Year and shall not cover such
records for more than that portion of the year in which the audit takes place
and the two preceding years (other than the period prior to the Effective Date),
and (ii) such accountant shall report to such Party only as to the accuracy of
the reports or payments provided or made by the other Party under this
Agreement. Any adjustments required as a result of overpayments or underpayments
identified through a Party's exercise of audit rights shall be made by
subtracting or adding, as appropriate, amounts from or to the next Royalty
Payment in accordance with Section 4.1 or, if no further Royalty Payments are
due, by payment to the Party owed such adjustment within thirty (30) days after
identification of such adjustment. The Party requesting the audit shall bear the
full cost and expense of the audit unless such audit correctly discloses that
the discrepancy for the Year differs by more than **** from the amount the
accountant determines is correct, in such case the owing Party shall pay the
reasonable fees and expenses charged by the accountant. In addition, the owing
Party shall pay interest from the original date due and until payment on the
amount of the underpayment or overpayment at a rate equal to *** and calculated

<PAGE>
from the date due until the payment date. In the event that a Party disputes an
invoice or other payment obligation under this Agreement, such Party shall
timely pay the amount of the invoice or other payment obligation that is not in
dispute, and the Parties shall resolve such dispute in accordance with Article
18.

9. INTELLECTUAL PROPERTY

     9.1 OWNERSHIP OF INTELLECTUAL PROPERTY. Each Party shall have and retain
sole and exclusive right, title and interest in and to all inventions,
discoveries, writings, trade secrets, know-how, methods, practices, procedures,
engineering information, designs, devices, improvements, manufacturing
information and other technology, whether or not patentable or copyrightable,
and any patent applications, patents, or copyrights based thereon ("INVENTIONS")
that are made, discovered, conceived, reduced to practice or generated by such
Party (or its employees or representatives). Duramed shall not represent to any
Third Party that it has any proprietary or property right or interest in the
Products, or in any patent relating thereto, or in any trademark used in
connection therewith.

     9.2 PATENT PROSECUTION. Kos, at its expense, shall have responsibility for
filing, prosecution and maintenance of all Patents that it owns in the
Territory.

     9.3 NOTIFICATION OF PATENT LITIGATION. In the event of the institution of
any suit by a Third Party against Kos or Duramed for patent infringement
involving the manufacture, use, sale, license, or marketing or promotion of the
Products anywhere in the Territory during the Term, the Party sued shall
promptly notify the other Party in writing.

     9.4 PATENT INFRINGEMENT. In the event that after the Effective Date Kos or
Duramed becomes aware of actual or threatened infringement of a Patent as such
infringement relates to the Products anywhere in the Territory, that Party shall
promptly notify the other Party in writing. Kos shall investigate and/or bring
an infringement action against any Third Party as it reasonably determines to be
appropriate. Kos shall have full control over the conduct of such investigations
and litigation, including the settlement thereof. The cost of such investigation
and litigation shall be borne entirely by Kos, with Kos being entitled to the
entire proceeds, if any, of such litigation. Duramed shall reasonably assist Kos
and cooperate in any such investigation and litigation at Kos' request and
expense.

     9.5 TITLE TO TRADEMARKS. The ownership and all goodwill from the use of any
Kos Trademarks shall at all times vest in and inure to the benefit of Kos.
Except as expressly provided in this Agreement or as mutually agreed by the
Parties, neither Party shall use the Trademarks of the other Party for any
purpose.

     9.6 TRADEMARK LICENSE. Kos grants to Duramed a fully paid, license to use
the Kos Trademarks in the Territory during the Term in connection only with the
marketing and promotion of the Products as contemplated in this Agreement,
subject to Kos retaining full rights to use the Kos Trademarks in the Territory,
and without limiting in any way Kos' rights with respect to the Kos Trademarks
outside the Territory.

     9.7 NOTIFICATION OF TRADEMARK LITIGATION. In the event of the institution
of any suit by a Third Party against Kos or Duramed for trademark infringement
involving the marketing,
<PAGE>
promotion or sale of the Products in accordance with the annual marketing plan
in the Territory, the Party sued shall promptly notify the other Party in
writing.

     9.8 TRADEMARK INFRINGEMENT. In the event that Kos or Duramed becomes aware
of actual or threatened infringement of a Kos Trademark anywhere in the
Territory, that Party shall promptly notify the other Party in writing. Kos
shall investigate and/or bring an infringement and/or opposition or cancellation
action against any Third Party. Kos shall have full control over the conduct of
such investigations and litigation, including the settlement thereof. The cost
of such investigation and litigation shall be borne entirely by Kos, with Kos
being entitled to the entire proceeds, if any, of such litigation. Duramed shall
reasonably assist Kos and cooperate in any such investigation and litigation at
Kos' request and expense.

10. CONFIDENTIALITY

     10.1 DISCLOSURE OF KNOW-HOW. To the extent that Kos has disclosed or in the
future discloses to Duramed any Know-How, Duramed shall not acquire any
ownership rights in such Know-How by virtue of this Agreement or otherwise.

     10.2 CONFIDENTIAL INFORMATION. During the Term and thereafter, Kos and
Duramed shall not use or disclose to Third Parties any information received from
the other Party or otherwise developed or obtained (including prior to the Term,
during the Term, or during any period in which the Parties have audit rights
pursuant to Article 8) by either Party in the performance of activities in
furtherance of this Agreement without first obtaining the written consent of the
disclosing Party, except as may be otherwise provided in, or required in order
for a Party to fulfill its obligations under, this Agreement. During and
following the Term, this confidentiality obligation shall not apply to such
information that (i) is or becomes a matter of public knowledge (other than by
breach of this Agreement by the receiving Party), (ii) is required by law to be
disclosed, (iii) the receiving Party can establish was already known to it or
was in its possession at the time of disclosure, (iv) the receiving Party can
establish was independently developed by persons in its employ who had no
contact with and were not aware of the content of the confidential information,
or (v) is disclosed to the receiving Party by a Third Party having the right to
do so. The Parties shall take reasonable measures to assure that no unauthorized
use or disclosure is made by others to whom access to such information is
granted.

     10.3 PUBLIC ANNOUNCEMENTS.

          (a) Except as consistent with a press release mutually agreed by the
Parties, or other publicly disclosed information concerning this Agreement, no
public announcement or other disclosure to Third Parties concerning the
existence of or terms of this Agreement shall be made, either directly or
indirectly, by either Party, without first obtaining the written approval of the
other Party and agreement upon the nature, text and timing of such announcement
or disclosure; provided, however, either Party shall have the right to make any
such public announcement or other disclosure required by law after such Party
has provided to the other Party a copy of such announcement or disclosure and an
opportunity to comment thereon. Each Party agrees that it shall cooperate fully
with the other with respect to all disclosures regarding this Agreement to the
Securities Exchange Commission and any other governmental or regulatory
agencies, including requests for confidential treatment of proprietary
information of
<PAGE>
either Party included in any such disclosure. Neither Party shall be required to
provide the other Party with any advance notice of any public announcements or
other disclosures related to periodic, routine financial reporting unless such
announcement or other disclosure will include non-routine information relating
to the Products or this Agreement.

          (b) Notwithstanding anything to the contrary in this Section 10.3, as
set forth in Title XI of the Medicare Prescription Drug Improvement and
Modernization Act (Subtitle B - Federal Trade Commission Review) signed into law
on December 8, 2003, if applicable to this Agreement, each of the Parties shall
submit this Agreement to the U.S. Federal Trade Commission ("COMMISSION") Bureau
of Competition ("BUREAU") and the Assistant Attorney General, and each Party
shall present and (if necessary) discuss or respond to questions regarding this
Agreement with the Bureau or the Assistant Attorney General, provided such Party
requests the Bureau and the Assistant Attorney General treat this Agreement as
confidential to the extent legally permitted. The Parties shall cooperate with
each other in connection with all such filings and responses, including by
notifying each other of all questions received with respect to this Agreement
and by providing to the other Party copies of all responses to such questions
prior to filing, and if requested, by considering in good faith to all
reasonable additions, deletions or changes to any such response which are
requested by the other Party.

11. RESTRICTIVE COVENANTS

     11.1 NON-SOLICITATION. During the Term and for a period of six (6) months
thereafter, neither Party shall recruit or solicit, directly or through a Third
Party, for employment or otherwise, any employee of the other Party without the
written consent of the other Party. The Parties agree that general solicitation,
such as through advertisements or recruiting services, not targeted at the other
Party's employees shall not be a violation of the foregoing sentence.

12. RIGHTS AND DUTIES UPON TERMINATION

     12.1 CONTINUING OBLIGATIONS. The following provisions shall survive the
termination of this Agreement for any reason: Sections 9.1, 9.2, 9.5, 11.1
(which shall survive for a period of **** only) and 17.4, and Articles 8 (which
shall survive for a period of **** only), 10, 12, 13, 14 and 18. In addition,
any other provision required to interpret and enforce the Parties' rights and
obligations under this Agreement shall also survive, but only to the extent
required for the full observation and performance of this Agreement.

     12.2 REMEDIES. Termination of this Agreement in accordance with its
provisions shall not limit the remedies that may be otherwise available to
either Party in law or equity; provided that neither Kos nor Duramed shall be
liable under this Agreement for any indirect, incidental, punitive, exemplary,
special or consequential damages of any kind whatsoever sustained as a result of
a breach of this Agreement. Any payments due hereunder by a Party to the other
Party shall not be deemed to be indirect, incidental, punitive, exemplary,
special or consequential damages.

     12.3 RETURNS. Upon termination of this Agreement, Duramed shall immediately
return to Kos all product samples, sales and promotional and communication
materials, marketing plans and reports and other tangible items provided by Kos
to Duramed or otherwise developed or
<PAGE>
attained jointly or by Duramed pursuant to the terms and intent of this
Agreement. Notwithstanding the foregoing, Duramed shall have the right to keep
in its legal files one (1) copy of any items reasonably necessary to confirm its
surviving obligations hereunder.

13. REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNIFICATION

     13.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF KOS. Kos represents and
warrants that

          (a) Kos has the corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, and the execution,
delivery and performance of this Agreement has been duly and validly authorized
and approved by proper corporate action on the part of Kos. Assuming due
authorization, execution and delivery on the part of Duramed, this Agreement
constitutes a legal, valid and binding obligation of Kos, enforceable against
Kos, in accordance with its terms.

          (b) The execution and delivery of this Agreement by Kos and the
performance by Kos contemplated hereunder will not violate any applicable laws
or any of its organizational documents.

          (c) Neither the execution and delivery of this Agreement nor the
performance hereof by Kos requires Kos or any of its Affiliates to obtain any
permits, authorizations or consents from any governmental authority or from any
other person, not previously obtained.

     13.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF DURAMED. Duramed and Barr
each represent and warrant that:

          (a) Duramed and Barr each have the corporate power and authority to
execute and deliver this Agreement and to perform their respective obligations
hereunder, and the execution, delivery and performance of this Agreement has
been duly and validly authorized and approved by proper corporate action on the
part of Duramed and Barr. Assuming due authorization, execution and delivery on
the part of Kos, this Agreement constitutes a legal, valid and binding
obligation of each of Duramed and Barr, enforceable against each of them in
accordance with its terms.

          (b) The execution and delivery of this Agreement by each of Duramed
and Barr and the performance by them contemplated hereunder will not violate any
applicable laws or any of its organizational documents.

          (c) Neither the execution and delivery of this Agreement nor the
performance hereof by either Duramed or Barr requires either Duramed, Barr or
any of their respective Affiliates to obtain any permits, authorizations or
consents from any governmental authority or from any other person.

     13.3 INDEMNIFICATION BY KOS. Except as otherwise expressly provided in
Section13.4, Kos shall defend, indemnify and hold harmless Duramed and its
Affiliates and their officers, directors, shareholders, employees, agents,
representatives, successors and assigns from and
<PAGE>
against all claims, complaints, or lawsuits for damages (collectively referred
to as "CLAIMS") arising out of:

          (a) the design, manufacture, labeling, marketing, sale or use of any
Product, including any product liability Claims, but excluding any such Claims
resulting from: (i) promotion by Duramed or its Affiliates which is not pursuant
to the terms of this Agreement, in conformity with the direction of the
Marketing Advisory Committee or in accordance with applicable laws and
regulations; or (ii) the manufacture of any Product by Barr or any of its
Affliates pursuant to the License and Manufacturing Agreement;

          (b) any negligent act or omission, or willful wrongdoing by Kos in the
performance of this Agreement;

          (c) subject to Section 13.4 (ii), the infringement or misappropriation
of any Third Party patent, copyright, trademark, service mark, trade secret or
other intellectual property by virtue of the manufacture, use, sale or offering
for sale of any Product, but excluding any such Claims resulting from the
manufacture of any Product by Barr or any of its Affliates pursuant to the
License and Manufacturing Agreement;

          (d) the failure by Kos to comply with any FDA or other governmental
requirement;

          (e) any breach of any covenant, representation or warranty of Kos
under this Agreement.

          Kos shall not be obligated under this Section to the extent that the
Claim was the result of the nonperformance, negligence or willful misconduct of
any employee or agent of Duramed or anyone acting on behalf of Duramed,
including its Affiliates and their officers, directors, shareholders, employees,
agents, representatives, successors and assigns.

     13.4 INDEMNIFICATION BY DURAMED. Except as otherwise provided in Section
13.3, Duramed shall defend, indemnify and hold harmless Kos and its Affiliates
and their officers, directors, shareholders, employees, agents, representatives,
successors and assigns from and against all Claims arising out of (i) any
negligent act or omission, or willful wrongdoing by Duramed in the performance
of this Agreement, (ii) the infringement or misappropriation by Duramed of any
Third Party patent, copyright, trademark, service mark, trade secret or other
intellectual property, as a result of Duramed's marketing or promotion of the
Products which is not pursuant to the terms of this Agreement, not in conformity
with the direction of the Marketing Advisory Committee or not in conformance
with the approved label for such Products, (iii) any breach of any covenant,
representation or warranty of Duramed under this Agreement, and (iv) the
adulteration of any Product samples, after their delivery to Duramed or any of
its Affiliates and while still under the control of Duramed or its Affiliates.
Duramed shall not be obligated under this Section to the extent that the Claim
was the result of the nonperformance, negligence or willful misconduct of any
employee or agent of Kos or anyone acting on behalf of Kos, including its
Affiliates and their officers, directors, shareholders, employees, agents,
representatives, successors and assigns.
<PAGE>
     13.5 LIMITATIONS ON INDEMNIFICATION. The obligations to indemnify, defend,
and hold harmless set forth in Sections 13.3 and 13.4 shall be contingent upon
the Party seeking indemnification (the "INDEMNITEE"): (i) notifying the
indemnifying Party of a claim, demand or suit within fifteen (15) Business Days
of receipt of same; provided, however, that Indemnitee's failure or delay in
providing such notice shall not relieve the indemnifying Party of its
indemnification obligation except to the extent the indemnifying Party is
prejudiced thereby; (ii) allowing the indemnifying Party and/or its insurers the
right to assume direction and control of the defense of any such claim, demand
or suit; (iii) using its best efforts to cooperate with the indemnifying Party
and/or its insurers in the defense of such claim, demand or suit at the
indemnifying Party's expense; and (iv) agreeing not to settle or compromise any
claim, demand or suit without prior written authorization of the indemnifying
Party. The Indemnitee shall have the right to participate in the defense of any
such claim, demand or suit referred to in this Section utilizing attorneys of
its choice, at its own expense, provided, however, that the indemnifying Party
shall have full authority and control to handle any such claim, demand or suit.

     13.6 INSURANCE.

          (a) During the Term and continuing for a period of **** after the
expiration of this Agreement or the earlier termination thereof, Kos shall
obtain and/or maintain, at its sole cost and expense, product liability
insurance or self-insurance in an amount not less than **** per occurrence and
in the aggregate. Such product liability insurance or self-insurance shall
insure against all liability, including personal injury, physical injury, or
property damage arising out of the manufacture, sale, distribution, marketing
and/or promotion of the Products in the Territory and shall include Barr
Pharmaceuticals and its subsidiaries as additional insureds. Maintenance of such
insurance coverage will not relieve Kos of any responsibility under this
Agreement for damages in excess of such insurance or otherwise.

          (b) During the Term, Duramed or Duramed's Affiliate shall carry
insurance in amounts not less than the following for each type specified or as
otherwise might be required by applicable law or regulation:

               (i) ****

          (c) Each Party shall provide written proof of the existence of such
insurance to the other Party upon request.

     13.7 COVENANT TO PROMOTE PRODUCTS. Kos will use Commercially Reasonable
Efforts to continue the promotion of the Products throughout the Term of the
Agreement.

14. GUARANTEE

     Barr hereby absolutely, unconditionally and irrevocably guarantees the due
and punctual fulfillment of all of the obligations required to be performed by
Duramed and/or its Affiliates under this Agreement after giving effect to any
applicable cure periods (the "DURAMED OBLIGATIONS"). For the avoidance of doubt
and without limiting the foregoing, Barr hereby absolutely, unconditionally and
irrevocably guarantees that in the event that Duramed does not or is unable to
perform any of the Duramed Obligations for any reason whatsoever, Barr will
itself perform such Duramed Obligations. This guarantee shall be continuing
until all Duramed
<PAGE>
Obligations now existing or hereafter arising have been discharged in full, and
shall be and continue to be fully effective notwithstanding any amendment to any
of the Duramed Obligations (but subject to any changes to the Duramed
Obligations resulting therefrom) or any extensions of time for performance of
any Duramed Obligations (but subject to any changes to the Duramed Obligations
resulting therefrom). To the extent that Kos grants to Duramed (i) any waiver of
any default by Duramed under this Agreement, (ii) any extension of time of
performance by Duramed under this Agreement, (iii) any release from the
performance of its obligations under this Agreement, or (iv) any other
indulgences whatsoever, Kos shall have and shall be deemed to have also granted
such to Barr under this Section 14. Barr acknowledges and agrees that Kos has
relied upon the covenants and guarantees set forth in this Section 14 in
entering into this Agreement.

15. ASSIGNMENT

     Neither Party shall assign or transfer its rights or obligations under this
Agreement without the prior written consent of the other Party; provided
however, that either Party may make such an assignment or transfer without such
consent (i) to an Affiliate of such Party, or (ii) in connection with a merger,
or consolidation with, or the sale to a Third Party of, the entire
pharmaceutical business of such Party. In the event of any such permitted
assignment or transfer without such consent, as a condition to such assignment
or transfer, the assigning or transferring Party must confirm to the other Party
in writing that it will remain fully liable for all obligations under this
Agreement as if such assignment or transfer had not occurred.

16. NOTICES

     Any notice, request, approval or other document required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
given when delivered in person, or sent by overnight courier service, postage
prepaid, or sent by certified or registered mail, return receipt requested, or
by facsimile transmission, to the following addresses of the Parties and to the
attention of the persons identified below (or to such other address, addresses
or persons as may be specified from time to time in a written notice). Any
notices given pursuant to this Agreement shall be deemed to have been given and
delivered upon the earlier of (i) if sent by overnight courier service, on the
date when received at the address set forth below as proven by a written receipt
from the delivery service verifying delivery, or (ii) if sent by certified or
registered mail, three (3) Business Days after mailed by certified or registered
mail postage prepaid and properly addressed, with return receipt requested, or
(iii) if sent by facsimile transmission, on the day when sent by facsimile as
confirmed by automatic transmission report coupled with certified or registered
mail or overnight courier service receipt proving delivery, or (iv) if delivered
in person, on the date of delivery to the address set forth below as proven by
written signature of the recipient.
<PAGE>
Kos Pharmaceuticals, Inc (for itself and for Kos Life Sciences, Inc.):

                                 1 Cedar Brook Drive
                                 Cranbury, NJ 08512-3618
                                 Facsimile: 954-331-3884
                                 Attention: Adrian Adams, President and
                                            Chief Executive Officer

Copy to:

                                 1 Cedar Brook Drive
                                 Cranbury, NJ 08512-3618
                                 Facsimile: 609-495-0907
                                 Attention: Andrew I. Koven, Executive
                                            Vice President, General Counsel
                                            & Corporate Secretary

Copy to:

                                 2200 N. Commerce Parkway
                                 Suite 300
                                 Weston FL 33326
                                 Facsimile: 954-331-3877
                                 Attention: Juan Rodriguez, Senior Vice
                                            President, Controller and
                                            Corporate Administration

Duramed Pharmaceuticals, Inc.:

                                 400 Chestnut Ridge Road
                                 Woodcliff Lake, NJ 07677-7668
                                 Facsimile: 1 (201) 930-3335
                                 Attention: President

Copy to:

                                 Barr Pharmaceuticals, Inc.
                                 400 Chestnut Ridge Road
                                 Woodcliff Lake, NJ 07677-7668
                                 Facsimile: 1 (888) 343-0563
                                 Attention: General Counsel
<PAGE>
Barr Laboratories, Inc.:

                                 400 Chestnut Ridge Road
                                 Woodcliff Lake, NJ 07677-7668
                                 Facsimile: 1 (201) 930-3335
                                 Attention: President
Copy to:

                                 Barr Laboratories, Inc.
                                 400 Chestnut Ridge Road
                                 Woodcliff Lake, NJ 07677-7668
                                 Facsimile: 1 (888) 343-0563
                                 Attention: General Counsel

     Notwithstanding the foregoing, notice of any breach of this Agreement
delivered by a Party under Section 3.2 shall be provided in accordance with the
foregoing provisions to the chief executive officer of the other Party in
addition to the persons identified above.

17. MISCELLANEOUS

     17.1 FORCE MAJEURE. If the performance of any part of this Agreement by
either Party, or of any obligation under this Agreement, is prevented,
restricted, interfered with or delayed by reason of any cause beyond the
reasonable control of the Party liable to perform, unless conclusive evidence to
the contrary is provided, the Party so affected shall, upon giving written
notice to the other Party, be excused from such performance to the extent of
such prevention, restriction, interference or delay, provided that the affected
Party shall use its reasonable best efforts to avoid or remove such causes of
nonperformance and shall continue performance with the utmost dispatch whenever
such causes are removed. When such circumstances arise, the Parties shall
discuss what, if any, modification of the terms of this Agreement may be
required in order to arrive at an equitable solution.

     17.2 NO PARTNERSHIP. It is expressly agreed that Kos and Duramed shall be
independent contractors and that the relationship between the two Parties shall
not constitute a partnership or agency. Neither Kos nor Duramed shall have the
authority to make any statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other, without the prior
written consent of the other Party to do so.

     17.3 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

     17.4 GOVERNING LAW. This Agreement and any dispute arising out of or
related to this Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York, without giving effect to conflicts
of law principles. With respect to any Proceeding relating to this Agreement,
but subject to the provisions of Section 18, each Party irrevocably agrees and
consents to the exclusive jurisdiction of the federal and state courts in
<PAGE>
New York, New York and waives any objection to venue of any such proceeding
brought in any such court.

     17.5 WAIVER OF BREACH. The failure of either Party at any time or times to
require performance of any provision hereof shall in no manner affect its rights
at a later time to enforce the same. No waiver by either Party of any condition
or term in any one or more instances shall be construed as a further or
continuing waiver of such condition or term or of another condition or term.

     17.6 SEVERABILITY. In the event any portion of this Agreement were to be
held illegal, void or ineffective, the remaining portions of this Agreement
shall remain in full force and effect. If any of the terms or provisions of this
Agreement are in conflict with any applicable statute or rule of law, then such
terms or provisions shall be deemed inoperative to the extent that they may
conflict therewith and shall be deemed to be modified to conform with such
statute or rule of law. In the event that the terms and conditions of this
Agreement are materially altered as a result of this Section 17.6, the Parties
shall renegotiate the terms and conditions of this Agreement to resolve any
inequities.

     17.7 ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement
between the Parties relating to the subject matter thereof and shall supersede
all previous writings and understandings. No terms or provisions of this
Agreement shall be varied or modified by any prior or subsequent statement,
conduct or act of either of the Parties, except that the Parties may amend this
Agreement by written instruments specifically referring to and executed in the
same manner as this Agreement.

18. DISPUTE RESOLUTION

     18.1 INTERNAL RESOLUTION. Any dispute, controversy or claim arising out of
or relating to this Agreement (collectively referred to as "DISPUTE") shall be
attempted to be settled by the Parties, in good faith, by submitting each such
Dispute to the Steering Committee, which shall meet in person or by telephone
within seven (7) Business Days to review any Dispute. If the Dispute is not
resolved by the Steering Committee within fourteen (14) Business Days after a
meeting to discuss the Dispute, either Party may at any time thereafter provide
the other written notice specifying the terms of such Dispute in reasonable
detail. Within seven (7) Business Days of receipt of such notice, the Chief
Executive Officers of each Party, or a member of management designated by the
respective Chief Executive Officer, shall meet in person (at a mutually agreed
upon time and location) or by telephone for the purpose of resolving such
Dispute. They will discuss the problems and/or negotiate for a period of up to
twenty (20) Business Days in an effort to resolve the Dispute or negotiate an
acceptable interpretation or revision of the applicable portion of this
Agreement mutually agreeable to both Parties, without the necessity of formal
procedures relating thereto.

     18.2 ARBITRATION. If the Parties have been unable to resolve a Dispute
through the above-described procedures, the Party initiating such procedures
may, in its discretion, within fourteen (14) Business Days after the
above-described procedures have been exhausted, propose non-binding arbitration
in accordance with the CPR Non-Administered Arbitration Rules in effect on the
date of this Agreement and subject to the terms of this Agreement. Any such
non-
<PAGE>
binding arbitration shall be concluded within ninety (90) days of the initiation
of such proceeding, the location of any such non-binding arbitration shall be
New York, New York, and it shall be conducted by a sole arbitrator reasonably
acceptable to both Parties. The Parties may not pursue any other legal or
equitable rights or remedies relating to any dispute until the conclusion of the
non-binding arbitration, unless their rights would be irreparably prejudiced by
such delay. In the event such non-binding arbitration is not commenced within an
additional fourteen (14) Business Day period, the Parties may pursue any
available legal or equitable rights or remedies.
<PAGE>
NOW THEREFORE, the Parties, through their authorized officers, have executed
this Agreement as of the date first written above.

KOS PHARMACEUTICALS, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------
Date:
      -------------------------------

KOS LIFE SCIENCES, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------
Date:
      -------------------------------
<PAGE>
DURAMED PHARMACEUTICALS, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------
Date:
      -------------------------------

DURAMED PHARMACEUTICALS SALES CORP.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------
Date:
      -------------------------------

BARR LABORATORIES, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------
Date:
      -------------------------------<PAGE>

                                                                EXHIBIT 10.3

           CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
                       SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

                        SETTLEMENT AND LICENSE AGREEMENT

     This is an agreement (hereinafter referred to as "Agreement") dated as of
this 12th day of April, 2005 (the "Effective Date"), by and between Kos
Pharmaceuticals, Inc., a corporation organized and existing under the laws of
the State of Florida and Kos Life Sciences, Inc., a corporation organized and
existing under the laws of Delaware (together, "Kos"), and Barr Laboratories,
Inc. ("Barr"), a corporation organized and existing under the laws of the State
of Delaware. Kos and Barr are sometimes individually referred to herein as a
"Party" and collectively referred to herein as "the Parties."

     WHEREAS, Kos Pharmaceuticals, Inc. and Barr are parties to the patent
litigation captioned, Kos Pharmaceuticals, Inc., v. Barr Laboratories, Inc.,
Civil Action No. 02 CV 1683 (VM), Civil Action No. 02 CV 8995 (VM), Civil Action
No. 04 CV 2403 (VM) and Civil Action No. 04 CV 7086 (VM), pending before the
Honorable Victor Marrero in the United States District Court for the Southern
District of New York (the "Lawsuit");

     WHEREAS, Kos currently manufactures and markets the Existing Niaspan
Products (as defined herein) and certain Existing Advicor Products (as defined
herein) and may in the future manufacture and market additional Niaspan Products
(as defined herein) and Advicor Products (as defined herein) (collectively with
the Existing Niaspan Products and the Existing Advicor Products, the "Kos
Products");

     WHEREAS, Barr has filed Abbreviated New Drug Applications (each an "ANDA")
with the FDA to seek permission to market a generic version of the Existing
Niaspan Products, including ANDA Nos. 76-250 (1000 mg tablets) and 76-378 (500
and 750 mg tablets);

     WHEREAS, Kos asserts in the Lawsuit that Barr's generic versions of the
Existing Niaspan Products would infringe certain claims of Kos' patents relating
to niacin (the "Patent Claims"), including certain claims in at least the
following patents: U.S. Patent Nos. 5,126,145, 5,268,181, 6,080,428, 6,129,930,
6,406,715, 6,676,967, and 6,746,691 (the "Asserted Patents");

     WHEREAS, with respect to certain claims of the Asserted Patents, Barr has
admitted infringement and has asserted affirmative defenses and counterclaims
alleging invalidity and unenforceability, and with respect to certain other
claims of the Asserted Patents, Barr has asserted affirmative defenses and
counterclaims alleging invalidity, unenforceability and/or non-infringement;

     WHEREAS, Kos also owns patents relating to niacin products that have not
been asserted against Barr in the pending litigation, including at least U.S.
Patent Nos. 6,469,035, and 6,818,229 (the "Unasserted Patents");

     WHEREAS, Kos also owns pending patent applications and may file in the
future other patent applications relating to its work on the Kos Products
including at least the following
<PAGE>
applications and any and all applications arising from those applications as
either a continuation application, a continuation-in-part application, and/or
divisional applications: ****

     WHEREAS, Barr has filed, or intends to file, ANDAs containing Paragraph IV
Certifications with respect to generic versions of other of the Kos Products;
and

     WHEREAS, the Parties wish to fully settle the Lawsuit and all patent issues
concerning Barr's generic versions of the Kos Products, upon the terms and
subject to the conditions set forth below;

     WHEREAS, settlement of the Lawsuit will help both Kos and Barr avoid the
substantial uncertainty and risk involved with prolonged litigation; and

     WHEREAS, settlement of the Lawsuit will permit both Kos and Barr to save
litigation costs, as well as adhere to the judicially recognized mandate that
encourages the settlement of litigation whenever possible; and

     WHEREAS, settlement of the Lawsuit will permit the management of both Kos
and Barr to refocus on running their respective companies rather than devoting
substantial time and resources to the patent litigation; and

     WHEREAS, pursuant to the terms of this Agreement, Barr will have the right
to enter the market for Niaspan and Advicor at least four (4) years prior to the
expiration of the last to expire of Kos' currently issued patents in the
Territory, thereby benefiting consumers by permitting generic entry that may not
have occurred if the Lawsuit was allowed to proceed; and

     WHEREAS, the public will benefit significantly from this final settlement
as it saves judicial resources and creates certainty for Kos and Barr that will
encourage the development, investment and marketing of Niaspan and Advicor and
other pharmaceutical products; and

     WHEREAS, by reducing litigation expenses, this Agreement allows saved money
to be spent on marketing and development of Niaspan and Advicor, allowing the
products to reach a larger group of patients and thus saving lives; and

     WHEREAS, money saved by settling the Lawsuit can now be invested by Kos and
Barr into research and development, thereby benefiting consumers by identifying
new uses for current drugs, as well as furthering the creation of new
proprietary medications; and

     WHEREAS, by settling the Lawsuit, Barr avoids the possibility of incurring
treble damages were Barr found to have willfully infringed the Asserted Patents
by entering the market prior to expiration of the Asserted Patents; and

     WHEREAS, by settling the Lawsuit, Barr avoids the possibility of having to
pay Kos' attorneys' fees were Barr's conduct found to be exceptional under 35
U.S.C. 285.
<PAGE>
     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:

     1. The following terms, when used with initial capital letters shall have
the meaning set forth below.

          a. "Advicor Product" shall mean:

          (a) (i) the prescription extended release lovastatin 20mg/niacin 1gm
     tablet product for human use; (ii) the prescription extended release
     lovastatin 20mg/niacin 500 mg tablet product for human use; and (iii) the
     prescription extended release lovastatin 20mg/niacin 750 mg tablet product
     for human use, each of which is approved under NDA 21-249 and distributed
     and sold (or intended to be distributed or sold) by Kos in the Territory
     under the trademark Advicor(R) as of the Effective Date (together the
     "Existing Advicor Products"); and

          (b) future dosage formulations, strengths and presentations of the
     Existing Advicor Products, including all product extensions or newly named
     formulations of the Existing Advicor Products containing niacin (empirical
     formula of C(6)H(5)NO(2)) and lovastatin (empirical formula of
     C(24)H(36)O(5)) as the only active ingredients.:

          b. "ANDA" shall mean an abbreviated new drug application in the
     Territory.

          c. "Affiliate" shall mean any corporation, firm, partnership or other
     entity that directly or indirectly owns, is owned by or is under common
     ownership with a Party to the extent of at least fifty percent (50%) of the
     equity or other ownership interest having the power to vote on or direct
     the affairs of the entity and any person, firm, partnership, corporation or
     other entity actually controlled by, controlling or under common control
     with a Party.

          d. "Business Day" shall mean any day other than a Saturday, Sunday or
     day on which banks in New York, New York are authorized or obligated by
     applicable law to close. Any reference in this Agreement to "day" whether
     or not capitalized shall refer to a calendar day, not a Business Day.

          e. "Commercially Reasonable Efforts" shall mean, with respect to a
     Party, the efforts and resources which would be used by that Party
     consistent with its normal business practices with respect to a product at
     a similar stage in its development or product life and of similar market
     potential taking into account efficacy, safety, the anticipated approved
     labeling, the competitiveness of alternative products in the market place
     or under development, the patent and other proprietary position of the
     product, the likelihood of regulatory approval, the commercial value of the
     product and other relevant factors.

          f. "Co-Promotion Agreement" shall mean the Co-Promotion Agreement
     between the Parties dated as of the Effective Date.
<PAGE>
          g. "Fully Loaded Manufacturing Cost" shall mean, with respect to each
     Licensed Product, Barr's internal and external costs, determined in
     accordance with United States generally accepted accounting principles, as
     consistently applied by Barr in accordance with its past practice and in
     the ordinary course of its business for products other than Licensed
     Products, incurred in manufacturing, acquiring, packaging, transporting
     and/or storing such Licensed Product (including product testing activities
     relating to quality assurance, quality control and regulatory compliance),
     in each case to the extent related and allocable to the Licensed Product.

          h. "Gross Profit" shall mean Net Sales less Fully Loaded Manufacturing
     Cost.

          i. "Indications" shall mean the indications for use of the Advicor
     Product and the Niaspan Product, as approved by the FDA from time to time.

          j. "Kos Patents" shall mean all issued patents (including the Asserted
     Patents and the Unasserted Patents) as of the Effective Date, and all
     future patents which issue from patent applications (including the
     Applications) pending as of the Effective Date or future patent
     applications which claim any invention conceived prior to the Effective
     Date, which, in each case, are owned or controlled by Kos and which cover
     the Licensed Products.

          k. "License and Manufacturing Agreement" shall mean the License and
     Manufacturing Agreement between the Parties dated as of the Effective Date.

          l. "Licensed Intellectual Property" shall mean (i) the Kos Patents;
     (ii) all other intellectual property (other than trademarks) owned or
     controlled by Kos related to the Licensed Products; and (iii) all current
     and future regulatory exclusivities (including, but not limited to
     pediatric exclusivity) applicable to the Licensed Products.

          m. "Licensed Products" shall mean the Niacin Licensed Products and the
     Niacin-Lovastatin Licensed Products.

          n. "Losses" shall mean all pending and potential claims, demands, all
     manner of actions, causes of action, suits, debts, liabilities, losses,
     damages, attorneys' fees, costs, expenses, judgments, settlements,
     interest, punitive damages and other damages or costs of whatever nature,
     whether known or unknown, pending or future, certain or contingent.

          o. "NDA" shall mean a new drug application in the Territory.

          p. "Net Sales" shall mean the recorded gross sales of Licensed
     Products in the Territory to Third Parties in accordance with GAAP less the
     following deductions:

          (i)  sales and excise taxes, duties, and any other governmental
               charges imposed upon the production, importation, use or sale of
               a Product;
<PAGE>
          (ii) trade, quantity, cash and other discounts allowed on a Licensed
               Product to wholesalers or other Third Parties to whom the
               Licensed Products are sold and shipped directly;

          (iii) provisions for actual or expected allowances or credits to
               customers on account of rejection or return of a Licensed Product
               or on account of price reductions for a Licensed Product;

          (iv) Licensed Product rebates and Licensed Product charge-backs and
               other price reduction programs granted to managed care entities
               and pharmaceutical benefit management service entities (if Barr
               or any of its Affiliates chooses to contract one or more of the
               Licensed Products together with another Barr product with
               composite rebates or chargebacks, then rebates and or chargebacks
               for the affected Licensed Product will be recalculated based on
               the then average rebate or chargeback of the Licensed Product to
               the applicable customer category as if such Licensed Product is
               contracted independently of any other Barr product); and

          (v)  provisions for actual or expected write-offs of uncollectible
               customer accounts for previously recorded sales;

in each case determined and applied consistently in accordance with Barr's
commercial and accounting policies and practices consistently applied in a
manner consistent with GAAP. In the event that Net Sales as calculated for any
period under this Agreement are lower than the Licensed Product net sales
utilized by Barr in reporting Barr's revenue for financial reporting purposes in
Barr's SEC filings for the same period, including Barr's quarterly SEC Form 10-Q
and annual SEC Form 10-K ("Reported Licensed Product Net Sales"), then Net Sales
under this Agreement shall be increased by such amount as is necessary to make
them equal to the Reported Licensed Product Net Sales. For the avoidance of
doubt, "Net Sales" shall not include any sales by Barr or its Affiliates to Kos
or its Affiliates pursuant to the License and Manufacturing Agreement between
Kos Life Sciences, Inc. and Barr dated as of the Effective Date.

          q. "Niacin ANDAs" shall mean:

          (i)  Abbreviated New Drug Applications Nos. 76-250 (1gm tablets) and
               76-378 (500 and 750 mg tablets) which reference the products
               approved under New Drug Application 20-381, filed with the FDA by
               Barr or any of its Affiliates in order to obtain approval to
               manufacture and/or sell 1gm, 750 mg and/or 500 mg extended
               release oral niacin tablets (and any supplement or amendment
               filed pursuant to FDA requirements); and

          (ii) any other Abbreviated New Drug Application filed with the FDA by
               Barr or any of its Affiliates in order to obtain approval to
               manufacture and/or sell any oral dosage form containing niacin
               (empirical formula of C(6)H(5)NO(2)) as the single active
               ingredient (and any supplement or amendment filed pursuant to FDA
               requirements).
<PAGE>
          r. "Niacin-Lovastatin ANDA" shall mean:

          (i)  the Abbreviated New Drug Applications, which reference the
               product approved under New Drug Application 21-249, to be filed
               with the FDA by Barr or any of its Affiliates in order to obtain
               approval to manufacture and/or sell lovastatin 20mg/niacin/1 gm,
               lovastatin 20 mg/niacin 750 mg and lovastatin 20mg/niacin 500 mg
               extended release oral tablets (and any supplement or amendment
               filed pursuant to FDA requirements); and

          (ii) any other Abbreviated New Drug Application filed with the FDA by
               Barr or any of its Affiliates in order to obtain approval to
               manufacture and/or sell any oral dosage form containing niacin
               (empirical formula of C(6)H(5)NO(2)) and lovastatin (empirical
               formula of C(24)H(36)O(5)) as the only active ingredients (and
               any supplement or amendment filed pursuant to FDA requirements).

          s. "Niacin Licensed Products" shall mean 1 gm, 750 mg and/or 500 mg
     extended release oral niacin tablets and any oral dosage form containing
     niacin (empirical formula of C(6)H(5)NO(2)) as the single active ingredient
     which is manufactured pursuant to any Niacin ANDA.

          t. "Niacin-Lovastatin Licensed Products" shall mean lovastatin 20
     mg/niacin 1 gm, lovastatin 20 mg/niacin 750 mg and lovastatin 20 mg/niacin
     500 mg and any oral dosage form containing niacin (empirical formula of
     C(6)H(5)NO(2)) and lovastatin (empirical formula of C(24)H(36)O(5)) as the
     only active ingredients which is manufactured pursuant to any
     Niacin-Lovastatin ANDA.

          u. "Niaspan Product" shall mean:

          (a) (i) the prescription extended release niacin 1gm tablet product
     for human use; (ii) the prescription extended release niacin 500 mg tablet
     product for human use; and (iii) the prescription extended release niacin
     750mg tablet product for human use, each of which is approved under NDA
     20-381 and distributed and sold by Kos in the Territory under the trademark
     Niaspan(R) as of the Effective Date (together the "Existing Niaspan
     Products"); and

          (b) future dosage formulations, strengths and presentations of the
     Existing Niaspan Products (including any potential modified or reduced
     flush version of any Existing Niaspan Product), including all product
     extensions or newly named formulations of the Existing Niaspan Products
     containing niacin (empirical formula of C(6)H(5)NO(2)) as the single active
     ingredient.

          v. "Paragraph IV Certification" shall mean a certification as defined
     in 21 U.S.C. 355(j)(2)(A)(vii)(IV).

          w. "Patent Claims" shall mean those claims of the Asserted Patents
     which were alleged in the Lawsuit to be infringed by Barr's generic
     versions of the Existing Niaspan Products.
<PAGE>
          x. "Person" or "person" shall mean any individual, firm, corporation,
     partnership, limited liability company, trust, joint venture, governmental
     authority, or other entity or organization.

          y. "Proceeding" shall mean any action, audit, litigation,
     investigation, suit or other proceeding.

          z. "Territory" shall mean the United States of America and its
     territories and possessions, including the Commonwealth of Puerto Rico and
     the District of Columbia.

          aa. "Third Party" shall mean any person or entity other than Kos and
     Barr or their Affiliates.

     2. Upon the terms and subject to the conditions of this Agreement, in
consideration of the mutual execution of this Agreement and the mutual agreement
to be legally bound by the terms hereof, each Party, on behalf of itself and its
Affiliates, directors, officers, employees, agents, representatives, heirs,
assigns, predecessors or successors ("Related Parties"), hereby releases,
acquits and forever discharges the other Party and its Related Parties from any
and all Losses arising out of, derived from, predicated upon or relating to the
infringement of the Patent Claims by Barr's generic versions of the Existing
Niaspan Products, and the actions underlying such Patent Claims and the
Lawsuits; provided, however, nothing in this Agreement shall prevent or impair
the right of either Party to bring a Proceeding in court or any other forum for
a breach of this Agreement, the License and Manufacturing Agreement and the
Co-Promotion Agreement (including, without limitation, any claim for
infringement of any intellectual property based upon activities which are not
the subject of the license grants hereunder) or any representation, warranty or
covenant herein or therein. The Parties agree to the entry of a Consent
Dismissal Without Prejudice in the Litigation, and providing that each side
shall bear its own costs of suit and attorney fees. To effectuate this
provision, promptly following the execution of this Agreement, the Parties shall
cause the Consent Dismissal Without Prejudice attached hereto as Attachment A
(each Party acknowledging that the approval of the court is required in order to
make such Consent Dismissal Without Prejudice effective) to be filed with the
United States District Court for the Southern District of New York and shall
take all other necessary actions to obtain the settlement and dismissal of the
Lawsuits.

     3. Each Party acknowledges and agrees that:

          a. It may have sustained Losses that are presently unknown and
     unsuspected, and that such Losses might give rise to Losses in the future.
     Nevertheless, each Party acknowledges and agrees that this Agreement has
     been negotiated and agreed upon, notwithstanding the existence of such
     possible Losses, all of which have been hereby released under Section 2
     hereof.

          b. If any fact relating to this Agreement or the Lawsuits and now
     believed to be true is found hereafter to be other than, or different from,
     that which is now believed, each Party expressly assumes the risk of such
     difference in fact and agrees that this Agreement shall be, and will
     remain, effective notwithstanding any such difference in
<PAGE>
     fact, subject to each Party's right to bring a Proceeding for a breach of
     any representation or warranty herein.

          c. This Agreement may be pleaded as a full and complete defense to,
     and used as a basis for injunction against, any Proceeding that may be
     instituted, prosecuted or attempted in breach hereof.

          d. Kos and Barr agree that nothing in this Agreement or in the Consent
     Dismissal Without Prejudice shall be construed to preclude Barr from
     challenging the validity or enforceability of the Kos Patents, as they
     relate to products other than the Licensed Products; and Kos agrees not to
     take a contrary position in any Proceeding.

     4. Kos hereby grants to Barr a license, without the right to sublicense
(other than to Barr's Affiliates), under the Licensed Intellectual Property, to:

          a. manufacture for sale to Kos and its Affiliates or sublicensees at
     any time, as requested by Kos pursuant to the License and Manufacturing
     Agreement,

          b. make, have made and import in the Territory commencing prior to the
     Marketing License Effective Date for sale and offering for sale only
     commencing on or after the Marketing License Effective Date (as defined
     below), and

          c. sell and offer for sale only commencing on or after the Marketing
     License Effective Date and thereafter, to market, sell and have sold in the
     Territory,

Niacin Licensed Products and Niacin-Lovastatin Licensed Products (collectively,
the "Licensed Products") for all current and future Indications (the "License").
The License will be exclusive (even as to Kos and its Affiliates) only with
respect to generic versions (whether manufactured under an ANDA or an NDA) of
the Kos Products, and Kos shall not grant a license to any Affiliate or Third
Party to make, have made, import, offer for sale, or sell any generic versions
of the Kos Products. For avoidance of doubt, Kos retains the exclusive right to
make, have made, import, offer for sale, market and sell the Kos Products in
their branded presentations under Kos' NDAs (and any supplements or amendments
thereto).

     5. As to each Licensed Product, on a product-by-product and dose-by-dose
basis, the "Marketing License Effective Date" will be the earliest of: (a)
September 20, 2013; (b) the date on which any Third Party enters the market with
a generic version of the applicable dosage of the applicable Kos Product; or (c)
the date on which a court enters a final decision that is no longer subject to
appeal holding that all claims of the Kos Patents asserted by Kos against a
Third Party's generic version of the applicable dosage of the applicable Kos
Product are invalid and/or unenforceable and/or not infringed by the Third
Party's generic version of the applicable dosage of the applicable Kos Product.

     6. a. As to each Licensed Product, the License will initially bear a
royalty, payable by Barr to Kos, of **** of Barr's Gross Profit, but will be
reduced as follows:

     (i) ****
<PAGE>
In addition, the License will become fully paid and royalty free as to each
Licensed Product and dose upon the earlier of: (x) the date of the expiration of
the last to expire claim of a valid patent covering such Licensed Product and
dose; or (y) the date on which a court enters a final decision that is no longer
subject to appeal holding that each of the remaining unexpired patent claims
covering such Licensed Product and dose are invalid or unenforceable.

          b. Royalties payable by Barr to Kos hereunder shall be determined and
     paid on a calendar quarterly basis. Barr shall provide Kos with a written
     statement, as provided in sub-section e below, of its Gross Profit for any
     calendar quarter in which royalties are payable hereunder for Licensed
     Product sold in the Territory and the royalties payable hereunder for such
     quarter within thirty (30) days following the end of each calendar quarter.
     All royalties payable hereunder shall be paid by Barr within ten (10)
     Business Days following Barr's delivery of such written statement, and
     shall be subject to annual reconciliation at the end of each calendar year.

          c. All payments under this Agreement shall be in U.S. dollars in
     immediately available funds, and, unless instructed otherwise by the
     receiving Party, shall be made via wire transfer to the account designated
     from time to time by the receiving Party.

          d. Unless otherwise required by law, each Party shall be responsible
     for paying and reporting all of its own taxes and fees, including without
     limitation income taxes, payroll taxes, franchise taxes and all taxes and
     fees in connection with the Party conducting business in any jurisdiction.

          e. Within ten (10) days following the end of each month in which
     royalties are payable hereunder for Licensed Product sold in the Territory,
     Barr shall provide Kos with an initial good faith estimate of its Gross
     Profits for the month and for the calendar quarter and year-to-date period
     that includes such month. Within thirty (30) days following the end of each
     of the first three calendar quarters of each year in which royalties are
     payable hereunder for Licensed Product sold in the Territory, Barr shall
     provide Kos with a written statement of its Gross Profits for such quarter
     and for the year-to-date period through the end of such quarter, and a
     calculation of the royalties payable hereunder for such quarter. Within
     forty five (45) days following the end of each calendar year in which
     royalties are payable hereunder for Licensed Product sold in the Territory,
     Barr shall provide Kos with a written statement of the Gross Profits for
     such year, and a calculation of the royalties payable by Barr to Kos for
     such year pursuant to this Section 6.

          f. For the avoidance of doubt, the reports provided under sub-section
     e above shall report only aggregate Gross Profits of the applicable
     Licensed Products but shall not report gross sales of the Licensed
     Products, Net Sales of the Licensed Products or Barr's Fully Loaded
     Manufacturing Cost for the Licensed Products. Upon request by Kos within
     ninety (90) days after a calendar quarter has ended, or within one hundred
     twenty (120) days after a year has ended, Barr shall provide to an
     independent nationally-recognized certified public accountant or like
     person, satisfactory to Barr and Kos in their respective reasonable
     discretion, a written report setting forth an itemized accounting and
     calculation of the Gross Profits on Licensed Products sold by Barr and its
     Affiliates
<PAGE>
     during such preceding calendar quarter or such preceding year, which report
     shall include information in sufficient detail reasonably necessary for
     such accountant to confirm the computational accuracy of the report
     provided to Kos pursuant to sub-section e. above with respect to such
     calendar quarter or such year. Such accountant shall sign a written
     confidentiality agreement reasonably satisfactory to Barr and shall report
     to Kos only its conclusions as to whether the report provided to Kos
     pursuant to sub-section e. above is consistent with the itemized accounting
     and calculation provided to such accountant, and without limiting the
     foregoing, under no circumstances shall such accountant report to Kos the
     prices at which Barr sold any Licensed Product or any deductions from gross
     sales in the calculation of Net Sales or Gross Profits. Kos shall pay all
     costs of the independent accountant.

          g. Whenever information relating to the Licensed Products is reported
     under this Agreement, such information shall be listed separately by
     Licensed Product and dose, and in the aggregate.

          h. Within one hundred eighty (180) days following the end of each year
     in which royalties are payable hereunder for Licensed Product sold in the
     Territory, Barr shall determine the actual cash paid, allowances or credits
     issued and write-offs taken related to its recorded gross sales of Licensed
     Products in the Territory that occurred during such year. In the event that
     any such annual reconciliation reveals any overpayment or underpayment
     hereunder, the amount of such underpayment or overpayment will be added or
     subtracted, as appropriate, to or from the next royalty payment in
     accordance with this Section 6 or, if no further royalty payments are due,
     by payment to the Party owed such adjustment within thirty (30) days after
     identification of such adjustment.

          i. Barr shall keep complete and accurate records of Net Sales, Fully
     Loaded Manufacturing Costs and Gross Profits of Licensed Products. Kos
     shall have the right, through an independent certified public accountant or
     like person reasonably acceptable to Barr, upon execution of a
     confidentiality agreement, to examine such records during regular business
     hours, in a manner that does not unreasonably interfere with ongoing
     operations, upon reasonable written notice for so long as any royalties are
     payable hereunder for Licensed Product sold in the Territory and for one
     (1) year thereafter; provided, however, that (i) such examination shall not
     take place more often than once per year and shall not cover such records
     for more than that portion of the year in which the audit takes place and
     the two preceding years (other than the period prior to the calendar
     quarter in which the Effective Date occurs), and (ii) such accountant shall
     report to Kos only as to the accuracy of the reports or payments provided
     or made by Barr under this Agreement. Any adjustments required as a result
     of overpayments or underpayments identified through Kos' exercise of audit
     rights shall be made by subtracting or adding, as appropriate, amounts from
     or to the next royalty payment in accordance with this Section 6 or, if no
     further royalty payments are due, by payment to the Party owed such
     adjustment within thirty (30) days after identification of such adjustment.
     Kos shall bear the full cost and expense of the audit unless such audit
     correctly discloses that the discrepancy for the year differs by more than
     **** from the amount the accountant determines is correct, in such case the
     owing Party shall pay the reasonable fees and
<PAGE>
     expenses charged by the accountant. In addition, the owing Party shall pay
     interest from the original date due and until payment on the amount of the
     underpayment or overpayment at a rate equal to the average **** as reported
     from time to time in the Wall Street Journal (or, if such rate is not
     regularly published, as published in such source as the Parties agree) and
     calculated from the date due until the payment date. In the event that a
     Party disputes an invoice or other payment obligation under this Agreement,
     such Party shall timely pay the amount of the invoice or other payment
     obligation that is not in dispute, and the Parties shall resolve such
     dispute in accordance with Section 31.

     7. If requested by Barr, Kos will provide the FDA with correspondence
confirming the existence of the License and occurrence of the Marketing License
Effective Date, and Kos and its Affiliates will take no action to discourage the
FDA from approving any of Barr's ANDAs or other relevant approval applications
for an applicable Licensed Product. Kos and its Affiliates will not file a
citizen petition seeking to discourage or prevent FDA from approving any of
Barr's ANDAs or other relevant approval applications for an applicable Licensed
Product.

     8. Nothing in this Agreement will prohibit Barr from filing an ANDA which
includes a Paragraph IV Certification with respect to any Licensed Product. Barr
has already undertaken significant efforts to prepare to file an ANDA which
includes a Paragraph IV Certification for its generic versions of the Existing
Advicor Product. In light of these efforts, Kos acknowledges that Barr intends
to file an ANDA which includes a Paragraph IV Certification with respect to its
generic versions of the Existing Advicor Product as soon as possible. This
Agreement settles all claims between Kos and Barr that would relate to Barr
filing an ANDA which includes a Paragraph IV Certification for its generic
version of the Existing Advicor Product or any other Licensed Products.

     9. Barr will use Commercially Reasonable Efforts to obtain final FDA
approval of an ANDA for each Licensed Product as promptly as practicable after
the Effective Date. If Barr is unable to obtain final FDA approval for a
Licensed Product by the Marketing License Effective Date for such Licensed
Product, Kos will allow Barr to manufacture the applicable Licensed Product and
dose under Kos' NDA for such Licensed Product for sale by Barr pursuant to the
License. Kos may also consider, in its sole discretion, any request from Barr
that Kos manufacture the applicable Licensed Product and dose for Barr under
Kos' NDA at a price equal to two times Kos' Fully Loaded Manufacturing Cost and
on terms substantially similar to those set forth in the License and
Manufacturing Agreement entered into between the Parties as of the date hereof

     10. Barr agrees that neither it nor any of its Affiliates will sell or
offer for sale (other than to Kos) any Licensed Product the manufacture, use,
sale or offer for sale of which is covered by the Kos Patents prior to the
Marketing License Effective Date for such Licensed Product, on a dose-by-dose
basis. Barr acknowledges and agrees that nothing in this Agreement gives Barr
any rights: (a) with respect to any Licensed Product outside the Territory; (b)
with respect to any product other than a Licensed Product; or (c) to offer for
sale, market or sell any generic version of any Kos Product (other than to Kos,
its Affiliates or sublicencees, as requested by Kos pursuant to the License and
Manufacturing Agreement) at any time prior to the applicable Marketing License
Effective Date.
<PAGE>
     11. All rights not expressly granted to Barr pursuant to the licenses set
forth herein are expressly reserved to Kos, and Kos has no obligation to make
available any intellectual property rights or to take any other actions other
than as expressly set forth herein; provided, however, that Kos shall not use or
sue or bring a Proceeding seeking to enforce any of the Kos Patents or any other
intellectual property rights pertaining to the Kos Products to prevent or
restrict Barr or its Affiliates, licensees, sublicensees or subcontractors from
undertaking the licensed activities with respect to Licensed Products in the
Territory which are permitted under this Agreement, so long as all such
activities comply in all material respects with the terms contained herein.

     12. Each Party hereto represents and warrants to the other Party that, as
of the date hereof:

          a. this Agreement is a legal, valid and binding obligation of the
     warranting Party, enforceable against such Party in accordance with its
     terms, except as enforcement may be limited by bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting creditors' rights
     generally or by general principles of equity;

          b. the warranting Party is not subject to any judgment, order,
     injunction, decree or award of any court, administrative agency or
     governmental body that would or might interfere with its performance of any
     of its material obligations hereunder; and

          c. the warranting Party has full power and authority to enter into and
     perform its obligations under this Agreement in accordance with its terms.

     13. Kos represents and warrants that, as of the date hereof, it presently
owns, licenses or has the legal rights to use each of the Kos Patents and the
NDAs in existence as of the Effective Date with respect to the Advicor Product
and the Niaspan Product, and to grant the licenses hereunder, and that it has
the right to settle the Lawsuits. Barr represents and warrants that it has the
right to settle the Lawsuits. Barr further represents and warrants that, as of
the date hereof, it presently owns and has the legal rights to use each of the
ANDAs filed by it with respect to the Niaspan Product and that it will own and
have the legal rights to use each of the ANDAs to be filed by it pursuant to
Section 8 with respect to the Advicor Product.

     14. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY
OPERATION OF APPLICABLE LAW.

     15. Each Party shall notify the other Party if it becomes aware that a
Person is infringing any of the Kos Patents in the Territory. Kos will have the
exclusive right to bring a Proceeding against such infringement in its own name.
Absent a later agreement between the Parties, Kos shall control such Proceeding,
pay all costs and expenses in connection therewith and shall retain all
proceeds, damages and settlements therefrom.

     16. a. Except as otherwise expressly provided in Section 16.b, Kos shall
defend, indemnify and hold harmless Duramed and its Affiliates and their
officers, directors, shareholders, employees, agents, representatives,
successors and assigns from and against all claims, complaints, or lawsuits for
damages (collectively referred to as "Claims") arising out of:
<PAGE>
               (i)  any negligence or willful misconduct by Kos in the
                    performance of this Agreement; and

               (ii) any breach of any covenant, representation or warranty of
                    Kos under this Agreement.

     Kos shall not be obligated under this Section to the extent that the Claim
     was the result of the nonperformance, negligence or willful misconduct of
     any employee or agent of Barr or anyone acting on behalf of Barr including
     its Affiliates and their officers, directors, shareholders, employees,
     agents, representatives, successors and assigns.

          b. Except as otherwise provided in Section 16.a, Barr shall defend,
     indemnify and hold harmless Kos and its Affiliates and their officers,
     directors, shareholders, employees, agents, representatives, successors and
     assigns from and against all Claims arising out of:

               (i)  the design, manufacture, labeling, marketing, sale or use of
                    any Licensed Product, including any product liability
                    Claims;

               (ii) the failure by Barr to comply with any FDA or other
                    governmental requirement with respect to any Licensed
                    Product; or

               (iii) the infringement or misappropriation of any Third Party
                    patent, copyright, trademark, service mark, trade secret or
                    other intellectual property with respect to any Licensed
                    Product.

     Barr shall not be obligated under this Section to the extent that the Claim
     was the result of the nonperformance, negligence or willful misconduct of
     any employee or agent of Kos or anyone acting on behalf of Kos, including
     its Affiliates and their officers, directors, shareholders, employees,
     agents, representatives, successors and assigns.

     17. The obligations to indemnify, defend, and hold harmless set forth in
Section 16 shall be contingent upon the Party seeking indemnification (the
"Indemnitee"): (i) notifying the indemnifying Party of a claim, demand or suit
within fifteen (15) Business Days of receipt of same; provided, however, that
Indemnitee's failure or delay in providing such notice shall not relieve the
indemnifying Party of its indemnification obligation except to the extent the
indemnifying Party is prejudiced thereby; (ii) allowing the indemnifying Party
and/or its insurers the right to assume direction and control of the defense of
any such claim, demand or suit; (iii) using its best efforts to cooperate with
the indemnifying Party and/or its insurers in the defense of such claim, demand
or suit at the indemnifying Party's expense; and (iv) agreeing not to settle or
compromise any claim, demand or suit without prior written authorization of the
indemnifying Party. The Indemnitee shall have the right to participate in the
defense of any such claim, demand or suit referred to in this Section utilizing
attorneys of its choice, at its own expense, provided, however, that the
indemnifying Party shall have full authority and control to handle any such
claim, demand or suit.

     18. For so long as any Licensed Products are sold in the Territory and
continuing for a period of **** after the expiration of this Agreement, Barr
shall obtain and/or maintain, at its
<PAGE>
sole cost and expense, product liability insurance or self insurance in an
amount not less than **** per occurrence and in the aggregate. Such product
liability insurance or self insurance shall insure against all liability,
including personal injury, physical injury, or property damage arising out of
the manufacture, sale, distribution, marketing and/or promotion of the Products
in the Territory and shall include Kos and its subsidiaries as additional
insureds. Maintenance of such insurance coverage will not relieve Barr of any
responsibility under this Agreement for damages in excess of such insurance or
otherwise.

     19. Neither Party hereto may assign any of its rights or obligations under
this Agreement without the prior written consent of the other Party, except to
an Affiliate, or in connection with a merger, reorganization, change of control
or sale of all or substantially all of the applicable business of such Party.
Any purported assignment in violation of the foregoing shall be null and void ab
initio and of no force or effect. No assignment of this Agreement will relieve
the assigning Party from any of its obligations hereunder. In the event of a
permitted assignment, this Agreement shall be binding upon and inure solely to
the benefit of the Parties and their respective successors and permitted
assigns.

     20. For avoidance of doubt, all rights and licenses granted under or
pursuant to any section of this Agreement are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code (the "Bankruptcy
Code"), licenses of "intellectual property" as defined under the Bankruptcy
Code. The Parties shall retain and may fully exercise all of their respective
rights and elections under the Bankruptcy Code; provided, however, that should
Kos become a party to a bankruptcy proceeding and such proceeding is not
dismissed within thirty (30) days then, to the extent permitted by law, this
Agreement and the licenses granted by Kos hereunder shall be adopted by any
bankruptcy trustee or relevant Third Party charged with the disposition of same,
and shall not be rejected by same, it being the Parties' intent that, in such
event, Barr and its Affiliates and sublicensees shall be entitled to retain the
rights granted to them hereunder by Kos.

     21. Kos and Barr shall not use or disclose to Third Parties any information
received from the other Party or otherwise developed or obtained (including
prior to the Effective Date or during any period in which the Parties have audit
rights pursuant to Section 6 i.) by either Party in the performance of
activities in furtherance of this Agreement without first obtaining the written
consent of the disclosing Party, except as may be otherwise provided in, or
required in order for a Party to exercise its rights or fulfill its obligations
under, this Agreement. This confidentiality obligation shall not apply to such
information that (i) is or becomes a matter of public knowledge (other than by
breach of this Agreement by the receiving Party), (ii) is required by law to be
disclosed, (iii) the receiving Party can establish was already known to it or
was in its possession at the time of disclosure, (iv) the receiving Party can
establish was independently developed by persons in its employ who had no
contact with and were not aware of the content of the confidential information,
or (v) is disclosed to the receiving Party by a Third Party having the right to
do so. The Parties shall take reasonable measures to assure that no unauthorized
use or disclosure is made by others to whom access to such information is
granted.

     22. Except as consistent with a press release mutually agreed by the
Parties, or other publicly disclosed information concerning this Agreement, no
public announcement or other disclosure to Third Parties concerning the
existence of or terms of this Agreement shall be made,
<PAGE>
either directly or indirectly, by either Party, without first obtaining the
written approval of the other Party and agreement upon the nature, text and
timing of such announcement or disclosure; provided, however, either Party shall
have the right to make any such public announcement or other disclosure required
by law after such Party has provided to the other Party a copy of such
announcement or disclosure and an opportunity to comment thereon. Each Party
agrees that it shall cooperate fully with the other with respect to all
disclosures regarding this Agreement to the Securities Exchange Commission and
any other governmental or regulatory agencies, including requests for
confidential treatment of proprietary information of either Party included in
any such disclosure. Neither Party shall be required to provide the other Party
with any advance notice of any public announcements or other disclosures related
to periodic, routine financial reporting unless such announcement or other
disclosure will include non-routine information relating to the Products or this
Agreement.

     23. The Parties each covenant that:

          a. they shall use their respective Commercially Reasonable Efforts to
     resolve any and all objections that may be asserted with respect to this
     Agreement under any applicable law;

          b. they shall use their respective Commercially Reasonable Efforts to
     obtain approval of this Agreement under all applicable laws and shall make
     all required filings with all governmental authorities. Subject to
     confidentiality restrictions that may be reasonably requested, Kos and Barr
     shall make every effort to coordinate and exchange all filings and
     documents submitted to all government authorities regarding this Agreement;

          c. they shall use their respective Commercially Reasonable Efforts to
     comply with and terminate any investigation or inquiry regarding the
     Agreement by any government authority. Subject to such confidentiality
     restrictions as may be reasonably requested, Kos and Barr will render
     reasonable assistance as the other may request in connection with this
     Agreement and coordinate and cooperate with one another in exchanging
     information, permitting reasonable access to Kos' and Barr's documents,
     officials, and data in connection with receiving approvals of this
     Agreement by all governmental authorities;

          d. if any administrative, judicial or legislative action or proceeding
     is instituted (or threatened to be instituted) challenging the transaction
     contemplated by this Agreement as violative of any applicable law, Kos and
     Barr will render reasonable assistance to contest and resist any such
     action or proceeding, and to have vacated, lifted, reversed or overturned
     any decree, judgment, injunction or other order (whether temporary,
     preliminary or permanent) that is in effect and that challenges this
     Agreement, including, without limitation, by pursuing all reasonable
     avenues of administrative and judicial appeal;

          e. they shall promptly inform each other of any material communication
     made to, or received by such party from any governmental authority
     regarding this Agreement.
<PAGE>
     24. Without limiting any other provision of this Agreement, each Party
shall, at its own cost and expense, take all actions and do all things
reasonably necessary or proper, including under applicable law to make effective
and further the intents and purposes of the transactions contemplated by this
Agreement, including executing any further instruments reasonably requested by
the other Party.

     25. This Agreement (including all attachments hereto), the License and
Manufacturing Agreement and the Co-Promotion Agreement constitute the entire
agreement and understanding between the Parties with respect to the subject
matter hereof and supersedes all prior agreements or understandings, oral or
written, with respect to such matters. The Parties may amend or modify the
provisions of this Agreement, including this provision, only by mutual agreement
in writing.

     26. The relationship between the Parties created by this Agreement is one
of independent contractors and neither Party shall have the power or authority
to bind or obligate the other except as expressly set forth in this Agreement.

     27. No provision of this Agreement shall be waived by any act, omission or
knowledge of a Party or its agents or employees except by an instrument in
writing expressly waiving such provision and signed by a duly authorized officer
of the waiving Party. The failure of any Party to assert its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.

     28. The Parties agree and acknowledge that this Agreement is the product of
both Parties and shall not be construed against either of the Parties other than
in accordance with its terms.

     29. All notices or other communications hereunder shall be deemed to have
been duly given and made if in writing and if served by personal delivery upon a
Party, if delivered by registered or certified mail (return receipt requested)
or by a reputable overnight express courier service (charges prepaid), or if
sent by facsimile to the person at the address set forth below, or such other
address as may be designated in writing hereafter, in the same manner, by such
person as follows:
<PAGE>
     In the case of Kos:

          c/o Kos Pharmaceuticals, Inc.
          1 Cedar Brook Drive
          Cranbury, NJ 08512-3618
          Facsimile: 954-331-3884
          Attention: Adrian Adams, President and Chief Executive Officer

          with a copy to

          1 Cedar Brook Drive
          Cranbury, NJ 08512-3618
          Facsimile: 609-495-0907
          Attention: Andrew I. Koven, Executive Vice President, General Counsel
                     & Corporate Secretary

          and

          2200 N. Commerce Parkway
          Suite 300
          Weston FL 33326
          Facsimile: 954-331-3877
          Attention: Juan Rodriguez, Senior Vice President, Controller and
                     Corporate Administration

     In the case of Barr:

          Barr Laboratories, Inc.
          400 Chestnut Ridge Road
          Woodcliff Lake, New Jersey 07677
          Facsimile: (201) 930-3335
          Attn: President

          with a copy to:

          Barr Laboratories, Inc.
          400 Chestnut Ridge Road
          Woodcliff Lake, New Jersey 07677
          Facsimile: (888) 843-0563
          Attn: General Counsel

Such notices will be deemed to have been given on the date delivered in the case
of hand delivery or delivery by overnight courier, on the date set forth in the
confirmation sheet in the case of facsimile delivery, and on the fifth (5th)
business day following the date of post mark in the case of delivery by mail.

     30. This Agreement and any dispute arising out of or related to this
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York,
<PAGE>
without giving effect to conflicts of law principles. With respect to any
Proceeding relating to this Agreement, but subject to the provisions of Section
31, each Party irrevocably agrees and consents to the exclusive jurisdiction of
the federal and state courts in New York, New York and waives any objection to
venue of any such proceeding brought in any such court.

     31. The following procedures shall apply to the resolution of any dispute
arising under this Agreement:

          (a) Any dispute, controversy or claim arising out of or relating to
this Agreement (collectively referred to as "Dispute") shall be attempted to be
settled by the Parties, in good faith, by submitting each such Dispute to the
Chief Executive Officers of each Party by written notice from either Party to
the other Party specifying the terms of such Dispute in reasonable detail.
Within seven (7) Business Days of receipt of such notice, the Chief Executive
Officers of each Party, or a member of management designated by the respective
Chief Executive Officer, shall meet in person (at a mutually agreed upon time
and location) or by telephone for the purpose of resolving such Dispute. They
will discuss the problems and/or negotiate for a period of up to twenty (20)
Business Days in an effort to resolve the Dispute or negotiate an acceptable
interpretation or revision of the applicable portion of this Agreement mutually
agreeable to both Parties, without the necessity of formal procedures relating
thereto.

          If the Parties have been unable to resolve a Dispute through the
above-described procedures, the Party initiating such procedures may, in its
discretion, within fourteen (14) Business Days after the above-described
procedures have been exhausted, propose non-binding arbitration in accordance
with the CPR Non-Administered Arbitration Rules in effect on the date of this
Agreement and subject to the terms of this Agreement. Any such non-binding
arbitration shall be concluded within ninety (90) days of the initiation of such
proceeding, the location of any such non-binding arbitration shall be New York,
New York, and it shall be conducted by a sole arbitrator reasonably acceptable
to both Parties. The Parties may not pursue any other legal or equitable rights
or remedies relating to any dispute until the conclusion of the non-binding
arbitration, unless their rights would be irreparably prejudiced by such delay.
In the event such non-binding arbitration is not commenced within an additional
fourteen (14) Business Day period, the Parties may pursue any available legal or
equitable rights or remedies.

     32. This Agreement may be executed in any number of counterparts, and
execution by each of the Parties of any one of such counterparts will constitute
due execution of this Agreement. Each such counterpart hereof shall be deemed to
be an original instrument, and all such counterparts together shall constitute
but one agreement.

     33. If any provision of this Agreement is held invalid, illegal or
unenforceable for any reason, the Parties shall negotiate in good faith for a
substitute provision to continue the intent and purpose of such invalid
provisions, and the validity, legality and enforceability of the remaining
provisions shall not be in any way impaired thereby.

     34. No person other than the Parties hereto and their respective
Affiliates, successors and permitted assigns shall be deemed an intended
beneficiary hereunder or have any legal or equitable rights or benefits to
enforce any provision of this Agreement.
<PAGE>
     This Agreement is signed as indicated below by duly authorized
representatives of Kos and Barr, respectively, effective as of the date first
written above.

KOS PHARMACEUTICALS, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       -----------------------------

KOS LIFE SCIENCES, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       -----------------------------

BARR LABORATORIES, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       -----------------------------

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