Document:

THIS WARRANT HAS NOT BEEN REGISTERED
                        UNDER THE SECURITIES ACT OF 1933
                             AND IS NOT TRANSFERABLE
                            EXCEPT AS PROVIDED HEREIN

                               Vaughan Foods, Inc.

                                PURCHASE WARRANT

                                   Issued to:

                        PAULSON INVESTMENT COMPANY, INC.

                             Exercisable to Purchase

                                 1,650,000 Units

                                       of

                               VAUGHAN FOODS, INC.

                            Void after ________, 2012
<PAGE>

     This is to certify that, for value received and subject to the terms and
conditions set forth below, the Warrantholder (hereinafter defined) is entitled
to purchase, and the Company promises and agrees to sell and issue to the
Warrantholder, at any time on or after ________, 2008 and on or before ________,
2012, up to 1,650,000 Units (hereinafter defined) at the Exercise Price
(hereinafter defined).

     This Warrant Certificate is issued subject to the following terms and
conditions:

     1. DEFINITIONS OF CERTAIN TERMS. Except as may be otherwise clearly
required by the context, the following terms have the following meanings:

          (a) "Act" means the Securities Act of 1933, as amended.

          (b) "Cashless Exercise" means an exercise of Warrants in which, in
lieu of payment of the Exercise Price, the Holder elects to receive a lesser
number of Securities such that the value of the Securities that such Holder
would otherwise have been entitled to receive but has agreed not to receive, as
determined by the closing price of such Securities on the date of exercise or,
if such date is not a trading day, on the next prior trading day, is equal to
the Exercise Price with respect to such exercise. A Holder may only elect a
Cashless Exercise if Securities issuable by the Company on such exercise are
publicly traded securities.

          (c) "Class A Warrant" means a warrant defined as a Class A Warrant in
the Warrant Agreement.

          (d) "Class B Warrant" means a warrant defined as a Class B Warrant in
the Warrant Agreement.

          (e) "Closing Date" means the date on which the Offering is closed.

          (f) "Commission" means the Securities and Exchange Commission.

          (g) "Common Stock" means the common stock, par value $0.001, of the
Company.

          (h) "Company" means Vaughan Foods, Inc., an Oklahoma corporation.

          (i) "Company's Expenses" means any and all expenses payable by the
Company or the Warrantholder in connection with an offering described in Section
6 hereof, except Warrantholder's Expenses.

          (j) "Corporate Financing Rule" means Rule 2710 of the rules of the
National Association of Securities Dealers, Inc.

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<PAGE>

          (k) "Effective Date" means the date on which the Registration
Statement is declared effective by the Commission.

          (l) "Exercise Price" means the price at which the Warrantholder may
purchase one Unit upon exercise of Warrants as determined from time to time
pursuant to the provisions hereof. The initial Exercise Price is $_____ per
Unit.

          (m) "Offering" means the public offering of Units made pursuant to the
Registration Statement.

          (n) "Participating Underwriter" means any underwriter participating in
the sale of the Securities pursuant to a registration under Section 6 of this
Warrant Certificate.

          (o) "Registration Statement" means the Company's registration
statement (File No. 333 -______) as amended on the Closing Date.

     (p) "Rules and Regulations" means the rules and regulations of the
Commission adopted under the Act.

          (q) "Securities" means the securities obtained or obtainable upon
exercise of the Warrant or securities obtained or obtainable upon exercise,
exchange, or conversion of such securities.

          (r) "Unit" means one share of Common Stock, one redeemable Class A
Warrant and one redeemable Class B Warrants.

          (s) "Unit Warrant" means either a Class A Warrant or a Class B
Warrant.

          (t) "Warrant Agreement" means that certain Warrant Agreement, dated as
of _______, 2007, by and between the Company and ___________________ relating to
the issuance of Unit Warrants.

          (u) "Warrant Certificate" means a certificate evidencing the Warrant.

          (v) "Warrantholder" means a record holder of the Warrant or
Securities. The initial Warrantholder is Paulson Investment Company, Inc.

          (w) "Warrantholder's Expenses" means the sum of (i) the aggregate
amount of cash payments made to an underwriter, underwriting syndicate, or agent
in connection with an offering described in Section 6 hereof multiplied by a
fraction the numerator of which is the aggregate sales price of the Securities
sold by such underwriter, underwriting syndicate, or agent in such offering and
the denominator of which is the aggregate sales price of all of the securities
sold by such underwriter, underwriting syndicate, or agent in such offering and
(ii) all out-of-pocket expenses of the Warrantholder, except for the fees and
disbursements of one firm retained as legal counsel for the Warrantholder that
will be paid by the Company.

          (x) "Warrant" means the warrant evidenced by this certificate, any
similar certificate issued in connection with the Offering, or any certificate
obtained upon transfer or partial exercise of the Warrant evidenced by any such
certificate.

     2. EXERCISE OF WARRANT. All or any part of the Warrant represented by this
Warrant Certificate may be exercised commencing one year after the Effective
Date and

                                       3
<PAGE>

ending at 5 p.m. Pacific Time on the fifth anniversary of the Effective Date
(the "Expiration Date") by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by its duly
authorized attorney, at the office of the Company, 216 N.E. 12th Street, Moore,
Oklahoma 73160, Attention: Chief Executive Officer; or at such other office or
agency as the Company may designate. The date on which such instructions are
received by the Company shall be the date of exercise. If the Holder has elected
a Cashless Exercise, such instructions shall so state. Subject to the provisions
below, upon receipt of notice of exercise, the Company shall immediately
instruct its transfer agent to prepare certificates for the Securities to be
received by the Warrantholder upon completion of the Warrant exercise. When such
certificates are prepared, the Company shall notify the Warrantholder and
deliver such certificates to the Warrantholder or as per the Warrantholder's
instructions immediately upon payment in full by the Warrantholder, in lawful
money of the United States, of the Exercise Price payable with respect to the
Securities being purchased, if any. If the Warrantholder shall represent and
warrant that all applicable registration and prospectus delivery requirements
for their sale have been complied with upon sale of the Securities received upon
exercise of the Warrant, such certificates shall not bear a legend with respect
to the Act.

     If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Warrantholder a new Warrant Certificate (dated the date hereof), in form and
tenor similar to this Warrant Certificate, evidencing that portion of the
Warrant not exercised. The Securities to be obtained on exercise of the Warrant
will be deemed to have been issued, and any person exercising the Warrant will
be deemed to have become a holder of record of those Securities, as of the date
of the payment of the Exercise Price.

     3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class, and price of
Securities for which this Warrant Certificate may be exercised are subject to
adjustment from time to time upon the happening of certain events as follows:

          (a) If the outstanding shares of the Company's Common Stock are
divided into a greater number of shares or a dividend in stock is paid on the
Common Stock, the number of shares of Common Stock for which the Warrant is then
exercisable will be proportionately increased and the Exercise Price will be
proportionately reduced; and, conversely, if the outstanding shares of Common
Stock are combined into a smaller number of shares of Common Stock, the number
of shares of Common Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased. The increases and reductions provided for in this Section 3(a) will
be made with the intent and, as nearly as

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<PAGE>

practicable, the effect that neither the percentage of the total equity of the
Company obtainable on exercise of the Warrants nor the price payable for such
percentage upon such exercise will be affected by any event described in this
Section 3(a).

          (b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company, or other
change in the capital structure of the Company, other than changes in par value,
then, as a condition of such change, lawful and adequate provision will be made
so that the holder of this Warrant Certificate will have the right thereafter to
receive upon the exercise of the Warrant the kind and amount of shares of stock
or other securities or property to which he would have been entitled if,
immediately prior to such event, he had held the number of shares of Common
Stock obtainable upon the exercise of the Warrant. In any such case, appropriate
adjustment will be made in the application of the provisions set forth herein
with respect to the rights and interest thereafter of the Warrantholder, to the
end that the provisions set forth herein will thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the exercise of the Warrant. The Company
will not permit any change in its capital structure to occur unless the issuer
of the shares of stock or other securities to be received by the holder of this
Warrant Certificate, if not the Company, agrees to be bound by and comply with
the provisions of this Warrant Certificate.

          (c) When any adjustment is required to be made in the number of shares
of Common Stock, other securities, or the property purchasable upon exercise of
the Warrant, the Company will promptly determine the new number of such shares
or other securities or property purchasable upon exercise of the Warrant and (i)
prepare and retain on file a statement describing in reasonable detail the
method used in arriving at the new number of such shares or other securities or
property purchasable upon exercise of the Warrant and (ii) cause a copy of such
statement to be mailed to the Warrantholder within thirty (30) days after the
date of the event giving rise to the adjustment.

          (d) No fractional shares of Common Stock or other securities will be
issued in connection with the exercise of the Warrant, but the Company will pay,
in lieu of fractional shares, a cash payment therefor on the basis of the mean
between the bid and asked prices of the Common Stock in the over-the-counter
market or the last sale price of the Common Stock on the principal exchange or
other trading facility on which the Common Stock is traded on the day
immediately prior to exercise.

          (e) If securities of the Company or securities of any subsidiary of
the Company are distributed pro rata to holders of Common Stock, such number of
securities will be distributed to the Warrantholder or its assignee upon
exercise of its rights hereunder as such Warrantholder or assignee would have
been entitled to if this Warrant Certificate had been exercised prior to the
record date for such distribution. The provisions with respect to adjustment of
the Common Stock provided in this Section 3 will also apply to the securities to
which the Warrantholder or its assignee is entitled under this Section 3(e).

          (f) Notwithstanding anything herein to the contrary, there will be no
adjustment made hereunder on account of the sale by the Company of the Common
Stock or other Securities purchasable upon exercise of the Warrant.

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<PAGE>

          (g) If, immediately prior to any exercise of Warrants, there shall be
outstanding no securities of a class or series that, but for the provisions of
this Section 3, would be issuable upon such exercise (the "FORMERLY ISSUABLE
SECURITIES"), then, upon such exercise, and in lieu of the Formerly Issuable
Securities, the Company shall issue that number and kind of other securities or
property for which the Formerly Issuable Securities were most recently
exercisable or into which the Formerly Issuable Securities were most recently
convertible, as the case may be.

     4. RESERVATION OF SECURITIES. The Company agrees that the number of shares
of Common Stock or other Securities sufficient to provide for the exercise of
the Warrant upon the basis set forth above will at all times during the term of
the Warrant be reserved for exercise.

     5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of
the Warrant will be duly and validly issued in accordance with their terms, and
the Company will pay all documentary and transfer taxes, if any, in respect of
the original issuance thereof upon exercise of the Warrant.

     6. REGISTRATION OF SECURITIES ISSUABLE ON EXERCISE OF WARRANT CERTIFICATE.

          (a) The Company will register the Securities with the Commission
pursuant to the Act so as to allow the unrestricted sale of the Securities to
the public from time to time commencing on the first anniversary of the
Effective Date and ending at 5:00 p.m. Pacific Time on the fifth anniversary of
the Effective Date (the "REGISTRATION PERIOD"). The Company will also file such
applications and other documents necessary to permit the sale of the Securities
to the public during the Registration Period in those states in which the Units
were qualified for sale in the Offering or such other states as to which the
Company and the Warrantholder agree. In order to comply with the provisions of
this Section 6(a), the Company is not required to file more than one
registration statement.

          (b) The Company will pay all of the Company's Expenses and each
Warrantholder will pay its pro rata share of the Warrantholder's Expenses
relating to the registration, offer, and sale of the Securities.

          (c) Except as specifically provided herein, the manner and conduct of
the registration, including the contents of the registration statement, will be
entirely in the control and at the discretion of the Company. The Company will
file such post-effective amendments and supplements as may be necessary to
maintain the currency of the registration statement during the period of its
use. In addition, if the Warrantholder participating in the registration is
advised by counsel that the registration statement, in their opinion, is
deficient in any material respect, the Company will use its best efforts to
cause the registration statement to be amended to eliminate the concerns raised.

          (d) The Company will furnish to the Warrantholder the number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as it may reasonably request
in order to facilitate the disposition of Securities owned by it.

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<PAGE>

          (e) The Company will, at the request of Warrantholders holding at
least 50 percent of the then outstanding Warrants, (i) furnish an opinion of the
counsel representing the Company for the purposes of the registration pursuant
to this Section 6, addressed to the Warrantholders and any Participating
Underwriter, (ii) furnish an appropriate letter from the independent public
accountants of the Company, addressed to the Warrantholders and any
Participating Underwriter, and (iii) make such representations and warranties to
the Warrantholders and any Participating Underwriter as are customarily given to
underwriters of public offerings of equity securities in connection with such
offerings. A request pursuant to this subsection (e) may be made on three
occasions. The documents required to be delivered pursuant to this subsection
(e) will be dated within ten days of the request and will be, in form and
substance, equivalent to similar documents furnished to the underwriters in
connection with the Offering, with such changes as may be appropriate in light
of changed circumstances.

     7. INDEMNIFICATION IN CONNECTION WITH REGISTRATION.

          (a) If any of the Securities are registered, the Company will
indemnify and hold harmless each selling Warrantholder, any person who controls
any selling Warrantholder within the meaning of the Act, and any Participating
Underwriter against any losses, claims, damages, or liabilities, joint or
several, to which any Warrantholder, controlling person, or Participating
Underwriter may be subject under the Act or otherwise; and it will reimburse
each Warrantholder, each controlling person, and each Participating Underwriter
for any legal or other expenses reasonably incurred by the Warrantholder,
controlling person, or Participating Underwriter in connection with
investigating or defending any such loss, claim, damage, liability, or action,
insofar as such losses, claims, damages, or liabilities, joint or several (or
actions in respect thereof), arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained, on the effective
date thereof, in any such registration statement or any preliminary prospectus
or final prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be liable in any case
to the extent that any loss, claim, damage, or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement, preliminary prospectus,
final prospectus, or any amendment or supplement thereto, in reliance upon and
in conformity with written information furnished by a Warrantholder for use in
the preparation thereof. The indemnity agreement contained in this subparagraph
(a) will not apply to amounts paid to any claimant in settlement of any suit or
claim unless such payment is first approved by the Company, such approval not to
be unreasonably withheld.

          (b) Each selling Warrantholder, as a condition of the Company's
registration obligation, will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed any registration statement
or other filing or any amendment or supplement thereto, and any person who
controls the Company within the meaning of the Act, against any losses, claims,
damages, or liabilities to which the Company or any such director, officer, or
controlling person may become subject under the Act or otherwise, and will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, or controlling person in connection with investigating
or defending any such loss, claim, damage, liability, or action, insofar as such
losses, claims, damages, or liabilities (or actions in respect

                                       7
<PAGE>

thereof) arise out of or are based upon any untrue or alleged untrue statement
of any material fact contained in said registration statement, any preliminary
or final prospectus, or other filing, or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in said registration statement, preliminary or final prospectus, or other
filing, or amendment or supplement, in reliance upon and in conformity with
written information furnished by such Warrantholder for use in the preparation
thereof; provided, however, that the indemnity agreement contained in this
subparagraph (b) will not apply to amounts paid to any claimant in settlement of
any suit or claim unless such payment is first approved by the Warrantholder,
such approval not to be unreasonably withheld.

          (c) Promptly after receipt by an indemnified party under subparagraphs
(a) or (b) above of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, notify the indemnifying party of the commencement thereof; but the
omission to notify the indemnifying party will not relieve it from any liability
that it may have to any indemnified party otherwise than under subparagraphs (a)
and (b).

          (d) If any such action is brought against any indemnified party and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party; and after
notice from the indemnifying party to such indemnified party of its election to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.

     8. RESTRICTIONS ON TRANSFER. This Warrant Certificate and the Warrant may
not be sold, transferred, assigned, pledged, or hypothecated, or be the subject
of any hedging, short sale, derivative, put, or call transaction that would
result in the effective economic disposition of the securities by any person for
a period of one year immediately following the Effective Date, except as
permitted in subparagraph (g)(2) of the Corporate Financing Rule. The Warrant
may be divided or combined, upon request to the Company by the Warrantholder,
into a certificate or certificates evidencing the same aggregate number of
Warrants.

     9. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled to
any rights of a shareholder of the Company but will, upon written request to the
Company, be entitled to receive such quarterly or annual reports as the Company
distributes to its shareholders.

     10. NOTICE. Any notices required or permitted to be given hereunder will be
in writing and may be served personally or by mail; and if served will be
addressed as follows:

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<PAGE>

         If to the Company:

                  Vaughan Foods, Inc.
                  216 N.E. 12th Street
                  Moore, Oklahoma 73160
                  Attention:  Chief Executive Officer

         If to the Warrantholder:

                  at the address furnished
                  by the Warrantholder to the
                  Company for the purpose of
                  notice.

     Any notice so given by mail will be deemed effectively given 48 hours after
mailing when deposited in the United States mail, registered or certified mail,
return receipt requested, postage prepaid and addressed as specified above. Any
party may by written notice to the other specify a different address for notice
purposes.

     11. APPLICABLE LAW. This Warrant Certificate will be governed by and
construed in accordance with the laws of the State of Oregon, without reference
to conflict of laws principles thereunder. All disputes relating to this Warrant
Certificate shall be tried before the courts of Oregon located in Multnomah
County, Oregon to the exclusion of all other courts that might have
jurisdiction.

         Dated as of _______, 2007

                                            VAUGHAN FOODS, INC.

                                            By: ________________________________
                                                Name: Mark E. Vaughan
                                                Title:   Chief Executive Officer

         Agreed and Accepted as of _______, 2007

                                            PAULSON INVESTMENT COMPANY, INC.

                                            By: ________________________________
                                                Name:
                                                Title:

                                        9EXHIBIT 10.1

CONFIDENTIAL TREATMENT REQUEST
[ * ] INDICATES INFORMATION THAT HAS BEEN OMITTED PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST AND THIS INFORMATION
HAS BEEN FILED UNDER SEPARATE COVER WITH THE COMMISSION

                          LICENSE AND SUPPLY AGREEMENT

         THIS LICENSE AND SUPPLY AGREEMENT (the  "AGREEMENT") is entered into as
of this 11th day of April,  2007, (the "EFFECTIVE DATE") by FLUID AIR INC. DOING
BUSINESS  AS  PHARMPRO.  a  corporation  pursuant  to the  laws of the  State of
Illinois, with its principal office at 2550 White Oak Circle, Aurora,  Illinois,
60502  (hereinafter  referred to as "FAI") and  SYNOVICS  LABORATORIES  INC.,  a
corporation  pursuant  to the laws of the State of  Nevada,  with its  principal
office at Suite 450, 2575 E. Camelback Rd, Phoenix,  Arizona, 85016 (hereinafter
referred to as "SYNOVICS"). FAI and SYNOVICS are referred to herein individually
as a "PARTY" and collectively as the "PARTIES."

         WHEREAS, FAI is in the business of manufacturing and developing generic
product and owns intellectual property rights related to the manufacture of this
Product (as defined below);

         WHEREAS,  SYNOVICS  has  expertise  in the  marketing  of  generic  and
over-the-counter pharmaceutical products; and

         WHEREAS,   SYNOVICS  desires  to  contract  with  FAI  to  develop  and
manufacture a generic  version of Omeprazole with a novel  manufacturing  method
developed by FAI for marketing worldwide by SYNOVICS and FAI is willing to grant
such rights subject to the terms and conditions set forth in this Agreement.

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
mutual  promises,  covenants  and  conditions  set  forth  below,  the  Parties,
intending to be legally bound, hereby agree as follows:

1.       DEFINITIONS.

         1.1      "ACCEPTABLE  COMPOUND"  has the  meaning  set forth in SECTION
7.5(a) hereof.

         1.2      "AFFILIATE"  means:  (a) any  entity  that owns,  directly  or
indirectly,  a controlling interest in a Party, by stock ownership or otherwise;
(b) any entity in which a Party owns a controlling  interest, by stock ownership
or otherwise;  or (c) any entity,  under direct or indirect  common control of a
Party. For purposes of this paragraph, "controlling interest" and "control" mean
ownership of fifty percent  (50%) or more of the voting stock  permitted to vote
for the election of the Board of Directors or any other arrangement resulting in
control or the right to control the management and the affairs of the Party.

         1.3      "ANDA"  means  an  abbreviated  new  drug  application  or any
equivalent of the foregoing,  filed with the FDA and necessary for beginning the
bioequivalence review trials for the use of Products in humans or any equivalent
or similar application filed with the Regulatory  Authorities of a country other
than the United States prior to beginning

<PAGE>

bioequivalence review trials of the Products in humans in that country.

         1.4      "CALENDAR  QUARTER" means the respective  periods of three (3)
consecutive  calendar  months  ending  on March  31,  June 30,  September  30 or
December 31, for so long as this Agreement is in effect.

         1.5      "CERTIFICATE OF ANALYSIS" means the certificate for each batch
of a particular Product delivered hereunder, in the form contemplated by SECTION
7.4(c).

         1.6      "CHANGE OF CONTROL"  means a corporate  transaction  involving
the  sale  of all or  substantially  all  the  assets  of FAI,  or a  merger  or
acquisition  involving  a  Third  Party,  such  that  the  stockholders  of  FAI
immediately prior to the transaction hold less than fifty percent (50%) of FAI's
or the other surviving  entity's  outstanding voting securities or capital stock
immediately following the closing of the transaction.

         1.7      "CMC" means that portion of the ANDA  application  responsible
for the chemistry,  manufacturing  and controls  review  required for Regulatory
Approval.

         1.8      "COMMERCIALLY  REASONABLE  EFFORTS"  means  those  efforts and
resources that would  reasonably be used by a company in the industry to develop
and/or  commercialize a Product having similar market  potential  (E.G.,  market
size) and at a similar stage in its product life (E.G.,  stage of development or
number of years  post-launch),  taking into account the  competitiveness  of the
marketplace, the proprietary position of the compound or product, the regulatory
structure involved,  and the profitability of the applicable products, and other
relevant factors affecting such profitability.

         1.9      "COMMERCIAL MANUFACTURING QUALITY AGREEMENT" means a checklist
of activities and responsibilities attached as Exhibit "C" and made part of this
LICENSE AND SUPPLY AGREEMENT.

         1.10     "COMPOUND" means a generic version of OTC Omeprazole.

         1.11     "COMPOUND  IMPROVEMENT"  means any analog or  derivative  of a
Compound  or any use of a Compound  or any such  analog or  derivative,  that is
discovered or made by or on behalf of or otherwise comes into the Control (other
than through the grant of a license by SYNOVICS  under this  Agreement)  of FAI,
its Affiliates or sublicensees during the Term.

         1.12     "CONTROL"   means,   with  respect  to  any   information   or
intellectual  property right,  possession by a Party of the ability  (whether by
ownership,  license or otherwise) to grant access,  a license or a sublicense to
such information or intellectual  property right without  violating the terms of
any  agreement  or other  arrangement  with any Third  Party as of the time such
Party would first be required hereunder to grant the other

                                       2
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

Party such access, license or sublicense.

         1.13     "COST OF GOODS  SOLD"  means  the  price  that  SYNOVICS  will
purchase  from FAI,  individual  capsules in bulk form of the Product at a price
based upon the following quantities produced in a batch sizes of:

         (a)      [*]

         (b)      [*]

         1.14     "DETAILED  FORECAST"  has the  meaning  set  forth in  SECTION
7.3(b).

         1.15     "FAI KNOW-HOW" means all know-how, processes,  information and
data that is: (a) controlled by FAI as of the Effective Date or during the Term;
and (b) necessary or useful for the development or commercialization of Products
in the Field.

         1.16     "FAI PATENT  RIGHTS" mean (a) those United States  patents and
patent  applications  listed  on  EXHIBIT  "A"  attached  hereto,  and  (b)  all
divisionals,   continuations,   continuations-in-part,   reissues,   extensions,
supplementary  protection  certificates and foreign counterparts of such patents
and patent  applications  that are existing as of the Effective Date or filed or
issued  during the Term,  in each case (i) that are  controlled by FAI; and (ii)
for which SYNOVICS  requires a license from FAI to use, sell,  offer for sale or
import the Compounds or Products in any country of the Territory.

         1.17     "FDA" means the United  States  Food and Drug  Administration,
and any successor thereto.

         1.18     "FD&C ACT"  means the United  States  Federal  Food,  Drug and
Cosmetics Act and applicable regulations promulgated thereunder, as amended from
time to time.

         1.19     "FIELD"  means  the  use  of  the  Product  as a  Proton  Pump
Inhibitor for the prevention or treatment of gastrointestinal diseases.

         1.20     "FIRST  COMMERCIAL  SALE" means,  with respect to any Product,
the first sale of such Product to a Third Party in any country of the  Territory
after  such  Product  has been  granted  Regulatory  Approval  by the  competent
Regulatory Authorities in such country.

         1.21     "GOOD  CLINICAL  PRACTICE"  or "GCP"  means  the  then-current
standards for clinical trials for pharmaceuticals,  as set forth in the FD&C Act
and such  standards  of good  clinical  practice as are required by the European
Union and other  organizations  and governmental  agencies in countries in which
the  Product is intended to be sold,  to the extent  such  standards  are not in
contravention with United States GCP.

                                       3
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

         1.22     "GOOD  LABORATORY  PRACTICE"  or "GLP" means the  then-current
standards for  laboratory  activities for  pharmaceuticals,  as set forth in the
FD&C Act and such standards of good  laboratory  practice as are required by the
European Union and other organizations and governmental agencies in countries in
which the Product is intended to be sold,  to the extent such  standards are not
in contravention with United States GLP.

         1.23     "GOOD MANUFACTURING  PRACTICE" or "GMP" means the then-current
standards for the manufacture of  pharmaceuticals,  as set forth in the FD&C Act
and  such  standards  of good  manufacturing  practice  as are  required  by the
European Union and other organizations and governmental agencies in countries in
which the Licensed  Product is intended to be sold, to the extent such standards
are not in contravention with United States GMP.

         1.24     "HSR ACT" means the Hart-Scott-Rodino  Antitrust  Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.

         1.25     "OMEPRAZOLE"  means the  compound  having the chemical name 5-
methoxy-2-((4-methoxy-3,5-dimethylpyridin-2yl)methylsulfinyl)-1H-benzimidazole.

         1.26     "OTC" means the over-the-counter version of the Product

         1.27     "NET PRODUCT  SALES" means,  with respect to the Product,  the
gross  amounts  invoiced  for  sales  of  the  Product(s)  by  SYNOVICS,  to its
Customers, its Affiliates or Sublicensees, less the sum of:

                  (a)      trade,  quantity and cash discounts  actually allowed
or paid;

                  (b)      credits or allowances  given or made for rejection or
return of previously sold products;

                  (c)      to the extent included in the invoiced price,  taxes,
duties or other  governmental  charges  levied  on or  measured  by the  billing
amount, as adjusted for rebates and refunds;

                  (d)      to the extent included in the invoiced price, charges
for shipping,  freight and insurance directly related to the distribution of the
Product by SYNOVICS (excluding amounts reimbursed by Third Party customers); and

                  (e)      discounts,    refunds,    rebates,    charge   backs,
retroactive price adjustments and any other allowances granted to managed health
care organizations or to federal,  state and local governments,  their agencies,
purchasers and reimbursers;

PROVIDED,  HOWEVER,  that  during  any  Calendar  Quarter  the sum of the  items
described  in (a) and (d)  above,  for any  Product  shall not exceed [*] of the
gross sales for such  Product  during such  Calendar  Quarter and any amounts in
excess of such [*]  limitation

                                       4
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

shall not be deductible in any other Calendar Quarter.

Sales of a Product for use in  conducting  clinical  trials of such Product in a
country of the Territory in order to obtain Regulatory  Approval of such Product
in such country  shall not be considered as "sales" for purposes of this SECTION
1.27.

         1.28     "PRODUCT(s)"   means  capsules  supplied  in  bulk  form  that
contains the Compound  manufactured  by FAI filled into  SYNOVICS  supplied bulk
shipping containers in accordance with the Specifications.

         1.29     "REGULATORY   APPROVAL"   means   all   approvals,   licenses,
registrations  or  authorizations  of any  national  or  international  or local
regulatory agency,  department,  bureau or other governmental entity,  necessary
for the commercial sale of the Product.

         1.30     "REGULATORY  AUTHORITY"  means any  national,  supra-national,
regional,  state or local regulatory  agency,  department,  bureau,  commission,
council or other  governmental  entity in the Territory involved in the granting
of Regulatory Approval for any Product.

         1.31     "RESULTS" means all data,  information and results obtained or
developed by or on behalf of FAI or any of its Affiliates in connection with the
evaluation  of the  Compound  for use in any  Product,  the  development  of any
Product,  and/or  obtaining  Regulatory  Approval for any  Product,  which data,
information and results relate solely to the Compound and shall include, without
limitation,  results obtained or developed in connection with any control arm of
any study performed by or on behalf of FAI or any of its Affiliates.

         1.32     "SPECIFICATIONS" means the specifications developed during the
performance  of this  LICENSE  AND SUPPLY  AGREEMENT  as  approved  by the Joint
Development  Committee for the manufacturing and testing of the Compound and the
Product.

         1.33     "SUPPLY TERM" has the meaning set forth SECTION 11.

         1.34     "TERM" means the period  commencing on the Effective Date and,
unless this Agreement is terminated  sooner as provided in SECTION 11, ending on
the date when no payment  obligations  under this  Agreement  are or will become
due.

         1.35     "TERRITORY" means all countries of the world.

         1.36     "THIRD  PARTY(IES)"  means any person(s) or entity(ies)  other
than SYNOVICS, FAI or their respective Affiliates.

         1.37     "USA" means the United States of America and its territories.

         1.38     "VALID  CLAIM"  means  an  unexpired  claim of an  issued  and
unexpired

                                       5
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

patent  forming  part of the Patent  Rights,  which claim has not been  declared
invalid by an unappealed or  unappealable  order of a court or other tribunal of
competent jurisdiction.

2.       GRANT OF RIGHTS.

         2.1      GRANT OF LICENSE.  Subject to the terms and conditions of this
Agreement, FAI hereby grants to SYNOVICS during the Term and SYNOVICS accepts an
exclusive  license  under the FAI Patent  Rights and to use the FAI Know-How and
Regulatory Approvals, to use, sell, offer for sale and export the Product in the
Territory;  PROVIDED, HOWEVER, that, except as expressly provided in SECTION 7.7
or 11.3 below,  such license shall not include any right on the part of SYNOVICS
or its Affiliates or permitted sublicensees to make or have made the Compound.

         2.2      DILIGENCE. SYNOVICS or its sub-licensee,  shall be responsible
for the performance and  coordination of stability and  bioequivalence  testing,
drafting and submission of the ANDA  application to obtain  Regulatory  Approval
for the Product for sale in each country within the Territory. SYNOVICS shall be
the owner and shall  register such ANDA  application  in its own name. FAI shall
assist  SYNOVICS in the preparation of the ANDA  application.  FAI shall prepare
and be financially  responsible  for its  contribution to the CMC portion of the
ANDA application.

         2.3      SUBLICENSING. SYNOVICS may sublicense the rights granted to it
by FAI under this  Agreement to any of  SYNOVICS's  Affiliates or to one or more
Third Parties,  PROVIDED,  HOWEVER,  that: (a) SYNOVICS shall remain responsible
for the performance of all of its obligations under this Agreement, whether such
obligations   are  performed  by  SYNOVICS,   its   Affiliates  or  any  of  its
sublicensees;  (b) SYNOVICS  shall be  responsible  for all payment  obligations
resulting   from   the   commercialization   of  any   Product,   whether   such
commercialization  activities  are  performed by or on behalf of  SYNOVICS,  its
Affiliates or any of its sublicensees; and (c) SYNOVICS shall provide FAI with a
true,  accurate and complete copy of each sublicense  agreement  within ten (10)
business days after entering into such sublicense agreement.

         2.4      RETAINED RIGHTS; NO IMPLIED  LICENSES.  FAI retains all rights
in and to the FAI Patent  Rights  and the FAI  Know-How  that are not  otherwise
expressly granted to or conferred upon SYNOVICS under this Agreement.

         2.5      GOVERNMENT APPROVALS.

                  (a)      GOVERNMENT APPROVALS.  Each of SYNOVICS and FAI shall
use its good faith  efforts to eliminate any concern on the part of any court or
government  authority  regarding  the  legality  of  the  proposed  transaction,
including,  if  required  by federal or state  antitrust  authorities,  promptly
taking all steps to secure government  antitrust clearance,  including,  without
limitation,   cooperating  in  good  faith  with  any  government  investigation
including the prompt production of documents and information

                                       6
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

demanded by a second  request  for  documents  and of  witnesses  if  requested.
SYNOVICS  shall be  responsible  for paying any fees  required to be paid to any
governmental  agency in connection with making any such filings that may be made
to  secure  government  antitrust  clearance  or any  filings  that  may be made
pursuant to SECTION  2.5(b)  below,  and each Party shall bear its own expenses,
including, without limitation, legal fees, incurred in connection with preparing
such filings.

                  (b)      COOPERATION.  SYNOVICS and FAI will cooperate and use
respectively all reasonable efforts to make all other registrations, filings and
applications,  to give all  notices  and to  obtain as soon as  practicable  all
governmental  or other consents,  transfers,  approvals,  orders,  qualification
authorizations,  permits  and  waivers,  if  any,  and  to do all  other  things
necessary or desirable for the  consummation of the transactions as contemplated
hereby.  Neither Party shall be required,  however, to divest products or assets
or  materially  change its  business  if doing so is a  condition  of  obtaining
approval under any governmental  approvals of the  transactions  contemplated by
this Agreement.

                  (c)      VALUATION OF TRANSACTION.  SYNOVICS represents to FAI
that it (a) has valued the transactions  contemplated  hereby in accordance with
and  pursuant  to the  requirements  of the HSR Act  and the  rules  promulgated
thereunder (16 CFR 801.1 et seq.),  and (b) has determined  that,  based on such
valuation, no filing, including,  without limitation, the filing of a notice and
report, is required under the HSR Act or the rules promulgated thereunder.

3.       PRODUCT DEVELOPMENT.

         3.1      PRODUCT  DEVELOPMENT  PLAN.  FAI has  provided  to  SYNOVICS a
Product  Development  Plan,  which is attached  hereto as EXHIBIT "B". FAI shall
notify  SYNOVICS  in  writing  within  ten  (10)  days of  making  any  material
modification to the Product  Development Plan, which  notification shall specify
the modification made and the reason for making such  modification.  The Product
Development  Plan  will  serve as the  basis of  communication  between  FAI and
SYNOVICS  concerning the development of the ANDA and CMC  application.  FAI will
provide  updates to SYNOVICS  with monthly  updates with regards to the progress
executing the Product Development Plan.

         3.2      APPROVAL DATE. FAI shall use Commercially  Reasonable  Efforts
to complete  the Product  Development  Plan by no later than July 30,  2007.  In
addition,  upon SYNOVICS's  request,  FAI shall use its Commercially  Reasonable
Efforts to provide SYNOVICS with advice and assistance in SYNOVICS's  efforts to
develop and register the Products in other countries in the Territory outside of
the USA in the name of SYNOVICS.  The assistance to be provided by FAI hereunder
shall include,  without  limitation,  providing  SYNOVICS  reasonable access via
telephone  and/or  in-person  contact  during normal  business  hours with FAI's
technical  personnel  having  knowledge about the Compounds as well as providing
any and all documentation necessary for submission.

                                       7
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

         3.3      PROGRESS  REPORTS.  Within ten (10) days  after each  calendar
month,  FAI shall  provide  SYNOVICS  with a  written  report  setting  forth in
reasonable  detail the progress made by or on behalf of FAI in the  development,
registration  and  Regulatory  Approval  of Products  within the USA.  Each such
report shall include,  without limitation, a detailed description of all studies
conducted  during  the  period  covered  by the  report,  a summary  of all data
generated as part of FAI's Product development efforts during the period covered
by the report and other content as may be requested by SYNOVICS.

         3.4      DILIGENCE OF SYNOVICS.  SYNOVICS  shall be solely  responsible
for and shall use its Commercially  Reasonable  Efforts, at its sole expense, to
conduct all research and development  activities  required to obtain  Regulatory
Approval of the  Product in the USA,  provide  timely  laboratory  analysis  for
assay,  Product  uniformity and  dissolution  for samples  generated  during the
development,  scale-up, tech transfer and submittal/testing batch production and
to perform all studies and activities set forth in the Product Development Plan.

         3.5      DILIGENCE  OF FAI.  FAI  shall be solely  responsible  for and
shall use its Commercially  Reasonable  Efforts, at its sole expense, to conduct
all research and development activities required to prepare for submission,  the
CMC portion of the ANDA  application in the Territory and to perform all studies
and activities set forth in the Product  Development Plan. FAI further agrees to
comply  with all  applicable  GLP,  GCP and GMP in its design,  development  and
manufacture of Products hereunder.

         3.6      COMMUNICATIONS.  To ensure orderly  communications between the
Parties with respect to the development and registration of Products, each Party
shall address all communications  and inquiries  pertaining to such matters only
to the other  Party's  representative  designated  in  accordance  with  SECTION
14.6(a) hereof.

4.       REGULATORY MATTERS.

         4.1      REGULATORY  FILINGS.  SYNOVICS  shall be  responsible  for the
preparation  and  filing,  in SYNOVICS  name,  with the  appropriate  Regulatory
Authorities  all  documents,  including,  without  limitation,  all  ANDAs  (but
including any drug master files for the Compound)  that are necessary to conduct
clinical studies of the Products and submit applications for Regulatory Approval
that are  necessary  to market and sell  Products  in all  countries  within the
Territory.  In  conjunction  with  such  filings  and at  SYNOVICS's  reasonable
request,  FAI shall furnish to SYNOVICS all  information  that is (a) already in
the  possession and control of FAI or its Affiliates and (b) necessary to obtain
such  Regulatory  Approval  for  such  Product.  Such  information  may  include
information on the manufacturing and toxicity of the Product.

         4.2      EVENT  REPORTING.  SYNOVICS shall be responsible for reporting
all Events (as defined  below)  associated  with the Product to the  appropriate
Regulatory

                                       8
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

Authorities  in  accordance  with  applicable   laws,   rules  and  regulations.
Additionally,  if either Party receives information  regarding Events related to
the use of a Product,  such Party  shall  promptly  provide the other Party with
such  information.  For  purposes of this SECTION  4.2,  "EVENT"  shall mean any
adverse  event,   adverse  drug   reaction,   including,   without   limitation,
malfunctions,  product  failure,  improper or  inadequate  design,  manufacturer
labeling  or user error  reported  during the use or sale of any  Product or any
Products by or on behalf of SYNOVICS, its Affiliates, sublicensees and customers
(including,  without  limitation,  end users purchasing any Product or using any
Product purchased from any of the foregoing

         4.3      MUTUAL  COVENANTS.  Each Party covenants that during the Term:
(a)  it  shall  comply  with  all  federal,  state,   provincial,   territorial,
governmental   and  local  laws,   rules  and  regulations   applicable  to  the
development,  manufacture and  commercialization of Product and Products by such
Party;  and (b) it shall  disclose  to the other  Party all  information  in its
possession or control concerning side effects,  injury,  toxicity or sensitivity
reaction and incidents or severity thereof with respect to the Product.

5.       JOINT DEVELOPMENT COMMITTEE

         5.1      FORMATION;  COMPOSITION.  Within  thirty  (30) days  after the
Closing Date, the Parties shall  establish a committee  (the "JOINT  DEVELOPMENT
COMMITTEE" or "JDC") to coordinate the  development  and Regulatory  Approval of
the Product.  Each Party shall initially  appoint one (1)  representative to the
JDC.  The JDC may  change  its  number of  representatives  from time to time by
mutual consent of its members,  provided that the JDC shall consist at all times
of an equal number of  representatives of each Party. Each Party may replace its
JDC  representatives at any time upon written notice to the other Party. The JDC
may invite  non-members to participate  in the  discussions  and meetings of the
JDC,  provided  that such  participants  shall have no vote.  The Parties  shall
alternate  designating a  representative  to act as the  Chairperson of the JDC,
with each Party having its designated representative Chairperson for a period of
twelve (12) months (or such other term as the JDC  establishes).  SYNOVICS shall
designate  the first  Chairperson.  The  Chairperson  shall be  responsible  for
administering JDC meetings and circulating the agenda prior to each meeting, but
shall  have no  additional  powers  or  rights  beyond  those  held by the other
representatives of the JDC.

         5.2      SPECIFIC  RESPONSIBILITIES  OF THE  JDC.  In  addition  to its
general responsibilities, the JDC shall in particular:

         (i)      review the  overall  strategy  for and design of all  clinical
trials and other studies conducted under the Product Development Plan;

                                       9
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

         (ii)     discuss  the  requirements  for  Regulatory  Approval  for the
Territory and oversee and coordinate regulatory matters;

         (iii)    arrange for and coordinate  initial  commercial  supply of the
Product;

         (iv)     facilitate  the flow of  information  between the Parties with
respect  to the  development  of,  and  obtaining  Regulatory  Approval  for the
Products for use worldwide;

         (v)      perform such other  functions as may be appropriate to further
the purposes of this Agreement, as directed by the JDC; and

         (vi)     create  the  Specifications  based  upon  Phase 1 and 2 of the
Product Development Plan.

         5.3      MEETINGS.  During the period in which  Licensed  Products  are
being  developed,  the JDC shall meet at least once per [calendar  quarter],  or
such other  frequency as the Parties  mutually  agree in writing.  The JDC shall
typically meet in person,  but may meet by  videoconference or teleconference if
requested  by a  Party.  In-person  JDC  meetings  will  be  held  at  locations
alternately  selected by SYNOVICS  and FAI.  Each Party will bear the expense of
its respective JDC members'  participation  in JDC meetings.  The chairperson of
the JDC shall be responsible for keeping reasonably  detailed written minutes of
all JDC meetings that reflect,  without  limitation,  material decisions made at
such meetings.  The chairperson  shall use reasonable  efforts to distribute the
meeting  minutes to each  member of the JDC for review and  approval  within ten
(10) business  days after a meeting.  Minutes will be deemed  approved  unless a
member of the JDC  objects  to the  accuracy  of such  minutes  within  ten (10)
business days of receipt.

         5.4      DECISION-MAKING.  The  JDC  shall  act by  unanimous  vote  at
meetings.  Should the JDC become deadlocked on or otherwise not be able to agree
upon any issue before it, and such issue  remains  unresolved  after a period of
thirty (30) days,  then it shall be resolved by means of the dispute  resolution
provision of SECTION 14.8.

6.       COMMERCIALIZATION.

         6.1      MARKETING  AND  SALE.  SYNOVICS  shall at its own  expense  be
solely  responsible  for and shall use its  Commercially  Reasonable  Efforts to
promote,  market,  distribute  and sell the  Product.  SYNOVICS  shall be solely
responsible for  establishing  the price of the Products sold by or on behalf of
it pursuant to this Agreement.

         6.2      USE OF  TRADEMARK/TRADENAME.  SYNOVICS shall promote,  market,
distribute and sell each Product under  tradenames and trademarks of its choice.
SYNOVICS  further agrees to include on the packaging,  label and  advertising or
promotional  materials for each Product a statement indicating that such Product
is being made,  distributed and sold by SYNOVICS pursuant to a license from FAI,
which

                                       10
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

statement shall be in both form and substance acceptable to FAI.

         6.3      PERIODIC REVIEW.  SYNOVICS and FAI shall periodically meet, at
such times and places as are mutually  agreed upon by the Parties,  for SYNOVICS
to provide FAI with a status of the progress of SYNOVICS's  commercialization of
the Product. Such meetings shall occur at least once per calendar year. SYNOVICS
and FAI shall each be  responsible  for its own expenses  incurred in connection
with attending such meetings.

7.       SUPPLY OF PRODUCTS.

         7.1      EXCLUSIVE  SUPPLY. In accordance with and subject to the terms
of this  Agreement,  SYNOVICS  agrees to purchase  its and its  Affiliates'  and
sublicensees' entire requirements of the Product from FAI during the Supply Term
and FAI shall  supply  SYNOVICS  with all  amounts  of the  Product  ordered  by
SYNOVICS in  accordance  with the  forecasting  and ordering  provisions of this
SECTION 7 until the latter of: (i) the  expiration  of the last to expire of the
FAI Patent Rights  containing a Valid Claim in such  country;  and (ii) ten (10)
years from the First Commercial Sale of such Product in such country after which
point SYNOVICS shall not be obligated to purchase any further  Product from FAI.
All quantities of Products supplied to SYNOVICS  hereunder are to be supplied as
capsules in bulk form filled in SYNOVICS  supplied bulk  shipping  containers in
compliance with the specifications  provided by SYNOVICS.  SYNOVICS acknowledges
that FAI currently obtains the Omeprazole, excipients and coating solutions from
Third Party manufacturers.

         7.2      MANUFACTURE OF PRODUCTS.

                  (a)      COMPLIANCE.  All  quantities  of the Compound and the
Product  supplied  by  FAI  to  SYNOVICS  hereunder  shall  be  manufactured  in
accordance with GMP, the Specifications and the Commercial Manufacturing Quality
Agreement,  Exhibit "C", attached hereto. The Specifications may only be revised
as  provided in SECTION  7.2(B).  While any  quantity of the  Products is in its
possession,  FAI  shall  comply  with all  applicable  federal,  state and local
statutory and regulatory  requirements  regarding the manufacture,  handling and
storage of the Product.

                  (b)      CHANGE CONTROL.

                           (i)      FAI INITIATED CHANGES.  If FAI or any of its
Affiliates or subcontractors  desires or is required pursuant to a change in the
applicable  Regulatory  Approval  for  a  Products  to  make  a  change  in  the
Specifications,  configuration,  packaging or  manufacturing  processes for such
Products to be supplied to SYNOVICS  hereunder,  FAI shall notify  SYNOVICS,  in
writing,  of the  proposed  change and  SYNOVICS  shall have thirty (30) days in
which to submit to FAI its comments  regarding  the proposed  change.  FAI shall
implement any comments received from SYNOVICS

                                       11
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

during such thirty (30) day period prior to completing the proposed change(s).

                           (ii)     SYNOVICS  INITIATED  CHANGES.   If  SYNOVICS
requests that FAI make a change in the Specifications,  configuration, packaging
or  manufacturing  processes  for  any  Products  to  be  supplied  to  SYNOVICS
hereunder,  FAI shall complete such change within thirty (30) days of receipt of
such change.

                           (iii)    REGULATORY   APPROVAL.   SYNOVICS   will  be
responsible  for applying for and obtaining any Regulatory  Approval that may be
necessary as a result of the proposed change(s)  described in SECTIONS 7.2(b)(i)
or 7.2(b)(ii) above for its manufacture and supply of the Products to SYNOVICS.

                           (iv)     COSTS.  FAI shall be solely  responsible for
the costs incurred by FAI or its  subcontractors  in connection  with activities
undertaken by FAI or its  subcontractors in implementing the proposed  change(s)
described  in  SECTION  7.2(a)(i)  AND (ii)  above.  SYNOVICS  shall  be  solely
responsible  for the  reimbursement  of  costs to FAI or its  subcontractors  in
connection  with  activities   undertaken  by  FAI  or  its   subcontractors  in
implementing the proposed change(s) described in Section 7.2 (b)(ii) above.

                  (c)      SAFETY STOCK.  SYNOVICS will include in its forecasts
made pursuant to SECTION 7.3 below and, to the extent  available  from FAI, will
purchase a sufficient quantity of the Product from FAI to maintain in SYNOVICS's
inventory a minimum of that amount of Product that is equal to the lesser of (i)
[*] of the quarterly  average amount of Products  ordered by SYNOVICS during the
preceding four (4) Calendar Quarters or (ii) [*].

         7.3      FORECASTS.

                  (a)      LONG TERM FORECASTS. During the Supply Term, SYNOVICS
shall provide FAI with a rolling, good faith,  non-binding forecast (by Calendar
Quarter) of the quantity of each Products expected to be purchased,  in the next
year following the date of such forecast (with the first calendar year being the
date on which such forecast is due), by SYNOVICS for the use in the  development
and  manufacture of the Products.  The first such forecast shall be submitted in
writing  to FAI no later than June 30,  2008 and  thereafter  updated  forecasts
shall be submitted to FAI no later than January 1 of each year.

                  (b)      DETAILED BINDING  FORECASTS.  During the Supply Term,
SYNOVICS  shall  deliver  to  FAI a  detailed  rolling  forecast  setting  forth
SYNOVICS's  requirements and anticipated  delivery schedules for the Product for
each  Calendar  Quarter  during the  succeeding  twelve  (12) month  period (the
"DETAILED  FORECAST").  The Detailed  Forecast  shall  thereafter  be updated by
SYNOVICS  quarterly,  no later than the first day of each Calendar  Quarter,  so
that each Calendar  Quarter FAI shall have been provided with a rolling Detailed
Forecast  for  each  Calendar  Quarter  during  the  twelve  (12)  month  period

                                       12
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

commencing on the first day of the next Calendar  Quarter  following the date on
which such Detailed  Forecast is submitted.  The Detailed Forecast shall be firm
and  binding on  SYNOVICS,  subject to the  permissible  variances  set forth in
SECTION 7.3(c) below. If SYNOVICS fails to provide any updated Detailed Forecast
in accordance with this SECTION 7.3(b),  the Detailed  Forecast last provided by
SYNOVICS shall be deemed to be SYNOVICS's binding Detailed Forecast for the next
succeeding twelve (12) month period.

                  (c)      DETAILED  FORECAST  VARIANCES.  Each updated Detailed
Forecast  may modify the amount of the  quantity of a Products  estimated in the
previous Detailed Forecast in accordance with the following limitations:

                           (i)      for the first  Calendar  Quarter  covered by
such updated Detailed Forecast, [*];

                           (ii)     for the second  Calendar  Quarter covered by
such updated Detailed Forecast, [*];

                           (iii)    for the third  Calendar  Quarter  covered by
such updated Detailed Forecast, [*]; and

                           (iv)     for the fourth  Calendar  Quarter covered by
such updated Detailed Forecast, [*].

         7.4      ORDERS AND DELIVERY.

                  (a)      PURCHASE  ORDERS.  From time to time,  SYNOVICS shall
place  purchase  orders  with  FAI,  in a  format  agreed  upon by the  Parties,
specifying the quantities  (which shall be consistent  with the terms of SECTION
7.3) of each Product desired, and the place(s) to which and the manner and dates
by which  delivery  is to be made;  such  delivery  dates to be no earlier  than
ninety (90)  calendar  days (or such  shorter  period of time as the Parties may
mutually  agree  upon in  writing)  after  the date on which FAI  receives  such
purchase order from SYNOVICS.  Without prior written  approval of FAI,  SYNOVICS
shall not submit  more than one  purchase  order for  delivery  of any  Products
during  any one (1)  calendar  month  and  shall  specify  no more than a single
delivery date during any one (1) calendar  month.  All purchase  orders shall be
sent  by  SYNOVICS  to the  attention  of the  following  employee  of FAI or as
otherwise instructed by FAI:

         Thomas E. Tappen, Vice President
         Fluid Air, Inc. doing business as PharmPro
         2550 White Oak Circle
         Aurora, IL   60502
         Facsimile No.:  630-851-1244
         Email:  tet@fluidairinc.com

                                       13
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

To the extent the terms of any  purchase  order or  acknowledgment  thereof  are
inconsistent with the terms of this Agreement, the terms of this Agreement shall
control.  FAI will provide an  acknowledgment  of any purchase order within five
(5) business  days. If at any time FAI has reason to expect it will be unable to
comply with any purchase  order,  it shall  immediately  inform SYNOVICS of such
expectation  and reasons.  If any ordered  shipment of a Product has not arrived
more than thirty (30) days later than the scheduled delivery date, SYNOVICS may,
as  its  sole  and  exclusive  remedy,  at its  option  cancel  that  particular
corresponding  purchase order, or adjust future Detailed  Forecasts (only to the
extent necessary to account for the quantity not delivered).

                  (b)      DELIVERY. FAI shall deliver to SYNOVICS or SYNOVICS's
designee  each order of the Product,  packed in SYNOVICS  supplied bulk shipping
containers in accordance with FAI's or its  subcontractor's  customary practices
and the  Specifications,  EXW  (Incoterms  2000)  FAI's  or its  subcontractor's
production point or storage facilities. SYNOVICS shall be solely responsible for
all shipping and  transportation  costs and duties incurred in and arranging for
any  customs  clearances  that may be  necessary  for  transporting  the ordered
Product and return of bulk shipping  containers  from such site to SYNOVICS's or
its  subcontractors'  facilities.  Title and risk of loss will pass to  SYNOVICS
when each order of a Product is delivered to the designated  carrier of SYNOVICS
at FAI's or its subcontractor's production point or storage facilities.  Failure
of FAI to deliver the Product  within the time period  specified in any purchase
order  provided by SYNOVICS  or failure by FAI to comply with any  provision  of
this Section 7 may be considered to be a material breach of this agreement.

                  (c)      CERTIFICATE  OF  ANALYSIS.  As of the  time  of  such
delivery by FAI or its  subcontractor,  each lot of Product  will conform to its
applicable  Specifications.  FAI shall perform or require its  subcontractor  to
perform release testing in a manner  consistent with testing methods agreed upon
by the Parties.  FAI shall  provide or require its  subcontractor  to provide to
SYNOVICS  testing data for assay,  product  uniformity and  dissolution  for the
purposes of demonstrating conformance to the Specifications,  with each shipment
of Product to  SYNOVICS or its  designated  recipient  stating  that the Product
conforms to the Specifications  and meets release  specifications as of the time
such Product is delivered to SYNOVICS's  carrier.  The  Certificate  of Analysis
shall be in a format agreed upon by the Parties.

                  (d)      STORAGE   CONDITIONS.   SYNOVICS   shall  be   solely
responsible  for ensuring that,  upon delivery of any Product to its carrier and
thereafter,  such Product is properly  stored and shipped in accordance with the
storage and shipping conditions set forth in the applicable Specifications or as
otherwise  mutually  agreed upon by the Parties in writing.  With respect to any
Product not so  properly  stored and  shipped,  FAI shall have no  liability  to
SYNOVICS under SECTIONS 7.5 or 12.1.

                                       14
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

         7.5      INSPECTION OF PRODUCTS.

                  (a)      ANALYSIS  BY  SYNOVICS.  SYNOVICS  may analyze or may
have analyzed on its behalf, in accordance with the testing methods set forth in
the applicable  Specifications,  all Products delivered to SYNOVICS for purposes
of determining whether the same meets the Specifications and was manufactured in
accordance  with GMP  ("ACCEPTABLE  PRODUCTS") and will do so within thirty (30)
days from the date of delivery of such  Products to SYNOVICS  carrier.  SYNOVICS
shall  notify FAI in writing  within such thirty (30) day period of any quantity
of a Product that SYNOVICS is rejecting because it is not Acceptable Product. If
SYNOVICS  does not so notify FAI within the  specified  thirty  (30) day period,
such quantity of Products shall be deemed Acceptable Products.

                  (b)      THIRD  PARTY  TESTING.   If  FAI,  after  good  faith
consultation  with  SYNOVICS,  disputes any finding by SYNOVICS that any Product
order or portion thereof is not Acceptable  Product,  representative  samples of
such Product  shall be forwarded  to a Third Party  jointly  selected by FAI and
SYNOVICS, in their reasonable discretion,  for analysis, which analysis shall be
performed in  compliance  with  applicable  FDA  regulations  for  re-testing of
pharmaceutical  products. The findings of such Third Party regarding whether the
Product was  Acceptable  Product shall be binding upon the Parties.  The cost of
such  analysis by such Third  Party  shall be borne by the Party whose  findings
differed from those generated by such Third Party.

                  (c)      REPLACEMENT OF PRODUCT. FAI shall replace any Product
order,  or  portion  thereof,  which  is not  Acceptable  Product  (unless  such
non-conformance  is due to any negligent or wrongful act or omission by SYNOVICS
or its agents or sub-contractors),  at its cost and expense,  including shipping
costs;  PROVIDED,  HOWEVER,  that to the extent SYNOVICS has not previously paid
for that quantity of Product which is not  Acceptable  Product,  SYNOVICS  shall
remain obligated to pay FAI for such replacement quantities of Product.

                  (d)      DISPOSITION  OF REJECTED  ORDERS.  FAI shall instruct
SYNOVICS  as to  the  disposition  of  any  Product  order  or  portion  thereof
determined not to be Acceptable Product. At the sole option of FAI, said Product
may be returned to FAI, at FAI's expense including  shipping costs, or destroyed
in an environmentally acceptable manner, at FAI's expense.

         7.6      INSPECTION OF AND ACCESS TO FACILITIES AND RECORDS.

                  (a)      INSPECTION  BY  REGULATORY   AUTHORITIES.   Upon  the
request of any Regulatory  Authority having jurisdiction over the manufacture of
either Product  hereunder,  such agency shall have access to observe and inspect
FAI's facilities and procedures used for the manufacture, testing or warehousing
of the  Products and to audit such  facilities  for  compliance  with GMP and/or
other applicable regulatory standards. If FAI is obtaining Compound from a Third
Party manufacturer, FAI shall

                                       15
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

use  Commercially   Reasonable  Efforts  to  ensure  that  such   manufacturer's
facilities  and  procedures  are  similarly  subject to the  provisions  of this
SECTION 7.6(a).

                  (b)      NOTIFICATION  OF  INSPECTIONS.  FAI  also  agrees  to
notify  SYNOVICS within ten (10) business days of any written or oral inquiries,
notifications  or inspection  activity by any Regulatory  Authority in regard to
either the  Compound or the Product to be  supplied to SYNOVICS  hereunder.  FAI
shall  provide a  reasonable  description  of any such  governmental  inquiries,
notifications  or  inspections  promptly  (but in no event  later  than ten (10)
business  days) after such visit or inquiry.  FAI shall  furnish to SYNOVICS (i)
within ten (10) business days after receipt, any report or correspondence issued
by any Regulatory Authority in connection with such visit or inquiry,  including
but not  limited  to, any FDA Form 483 (List of  Inspectional  Observations)  or
applicable  portions of any FDA Warning  Letters that pertain to the Products in
the  Territory  and (ii) not later than five (5) business days prior to the time
it  provides  to any  Regulatory  Authority,  copies of  proposed  responses  or
explanations relating to items set forth above (each, a "PROPOSED RESPONSE"), in
each  case  redacted  of trade  secrets  or other  confidential  or  proprietary
information of FAI that are unrelated to the obligations under this Agreement or
are unrelated to any  Products.  FAI shall discuss with SYNOVICS and consider in
good faith any comments provided by SYNOVICS on the Proposed Response. After the
filing of a response with the FDA or other  regulatory  agency,  FAI will notify
SYNOVICS of any further contacts with such agency relating to the subject matter
of the response.

                  (c)      INSPECTION BY SYNOVICS.  FAI shall permit SYNOVICS to
inspect once annually, or more than once annually in the event SYNOVICS has good
reason to be concerned  regarding the quality of any  Products,  that portion of
the FAI's facility where any Product is  manufactured  or stored and review such
related documents as is reasonably  necessary for the purpose of assessing FAI's
compliance  with  applicable  regulations.  Such  inspection and document review
shall be conducted upon reasonable  prior notice by SYNOVICS,  but not less than
thirty  (30) days  prior to the  proposed  inspection  (except in the event of a
reasonable concern by SYNOVICS regarding the quality of any Products), at a time
and date mutually agreeable to the Parties.

         7.7      ALTERNATE SUPPLIERS.  [*]

         7.8      PURCHASE PRICE.

                  (a)      PRODUCTS.  SYNOVICS  shall  purchase from FAI and FAI
shall  sell  to  SYNOVICS  each  Product  for  use by  SYNOVICS  for  commercial
activities at a purchase price equal to [*].

                  (b)      [*].

                  (c)      METHOD OF PAYMENT.  SYNOVICS  shall make  payments to
FAI for

                                       16
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

the  purchase  price  of  delivered  quantities  of the  Products  by  check  or
electronic  transfer,  to be received  by FAI within  thirty (30) days after the
date of receipt of the Product by SYNOVICS.

         7.9      RECALLS.

                  (a)      RESPONSIBILITY.  In  the  event  of a  recall  of any
Product  required  or  recommended  by a  governmental  agency or  authority  of
competent  jurisdiction  within the Territory or if recall of any Product is (i)
reasonably deemed advisable by SYNOVICS or FAI, or (ii) jointly deemed advisable
by SYNOVICS and FAI, such recall shall be promptly  implemented and administered
by  SYNOVICS  in  a  manner  that  is  appropriate  and  reasonable   under  the
circumstances and in conformity with accepted trade practices.  The costs of any
such recall  shall be borne by the Party or Parties  whose  actions or omissions
caused the recall to be necessary.

                  (b)      COMMUNICATION.  Each Party shall keep the other fully
and promptly informed of any notification,  event or other information,  whether
received directly or indirectly, which might affect the marketability, safety or
effectiveness  of Product or might  result in a recall or seizure of Products by
the FDA.

                  (c)      REPLACEMENT;  REFUND.  In the event of any  recall or
seizure of Product arising out of or resulting from FAI's failure to manufacture
a Product in accordance  with  reasonable  expectations  in following the master
batch record,  Specifications  and GMP, FAI shall,  at the election of SYNOVICS,
either:

                           (i)      supply   conforming   replacement   Product,
without charge to SYNOVICS  (provided SYNOVICS has already paid for the quantity
of Product being replaced), in an amount sufficient to replace the amount of the
Product required to manufacture the Product recalled or seized, or

                           (ii)     refund  to  SYNOVICS,   or  give  credit  to
SYNOVICS against outstanding  receivables due from SYNOVICS against the price of
the same Product to be delivered to SYNOVICS in the future,  in amounts equal to
the price paid by SYNOVICS to FAI for the Product  required to  manufacture  the
Product so recalled or seized, plus the reasonable transportation costs incurred
by SYNOVICS and not  recovered by SYNOVICS in respect of such recalled or seized
Product.

                  (d)      DEFINITIONS.

                           (i)      RECALL.  For  purposes of this  SECTION 7.9,
"recall" shall mean any action by SYNOVICS and/or its Affiliates,  or FAI and/or
its   Affiliates,   to  recover  title  or  possession  or  halt   distribution,
prescription  or consumption of any Products sold or shipped to Third Parties by
SYNOVICS,  its Affiliate or  sublicensee.  The term "recall" also applies to any
Product that would have been subject to recall if it had been sold or shipped.

                                       17
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

                           (ii)     SEIZURE.  For  purposes of this SECTION 7.9,
"seizure"  shall mean any action by the FDA to detain or destroy  any Product or
prevent the distribution, prescription, consumption or release of such Product.

8.       CONSIDERATION.

         8.1      LICENSE FEE. As partial  consideration  for the rights granted
to SYNOVICS pursuant to this Agreement,  SYNOVICS shall pay to FAI a license fee
equal to Five Hundred Thousand US Dollars (US$500,000).  The Parties acknowledge
that  SYNOVICS  has paid a deposit of Two Hundred and Fifty  Thousand US Dollars
(US$250,000)  to FAI.  SYNOVICS  shall pay the  remaining  Two Hundred and Fifty
Thousand US Dollars  (US$250,000)  upon the date in which FAI provides  SYNOVICS
with a copy of certificate from the API supplier in compliance with Section 10.2
(d).

         8.2      MILESTONE  PAYMENTS.  As further  consideration for the rights
granted to SYNOVICS  pursuant to this  Agreement,  SYNOVICS shall pay to FAI the
following one-time,  non-refundable,  non-creditable  amounts within thirty (30)
days of achievement of the development  events set forth below,  with respect to
the first Product to achieve the respective event:

         ------------------------------------------ -------------------
                     DEVELOPMENT EVENT                    PAYMENT
         ------------------------------------------ -------------------
         Completion of the formulation for scale-up        US$[*]
         to the satisfaction of SYNOVICS
         ------------------------------------------ -------------------
         Completion   of   scale-up  to  FAI  Pilot        US$[*]
         facility and Pilot production of submittal
         batches   for    stability   and   pivotal
         bioequivalency studies
         ------------------------------------------ -------------------
         Submission  of the  ANDA to the FDA in the        US$[*]
         USA by SYNOVICS
         ------------------------------------------ -------------------
         Acceptance of ANDA by the FDA in the USA          US$[*]
         ------------------------------------------ -------------------
         Completion  of  scale-up  studies and Tech        US$[*]
         Transfer to FAI Production facility and/or
         approval of the ANDA by the FDA in the USA
         ------------------------------------------ -------------------

                                       18
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

         Within five (5) days of achieving each event listed in above, FAI shall
notify SYNOVICS, in writing, that such event has been achieved.

         8.3      ROYALTIES.

                  (a)      ROYALTY  RATES.  As  further  consideration  for  the
rights granted to SYNOVICS pursuant to this Agreement, SYNOVICS shall pay to FAI
royalties ("ROYALTY PAYMENTS"), as follows:

                           (i)      [*] on the first [*] of Net Product Sales in
any calendar year;

                           (ii)     [*] on the  amount of Net  Product  Sales in
excess of [*] but less than [*] in any calendar year; and

                           (iii)    [*] on the  amount of Net  Product  sales in
excess of [*] in any calendar year.

                  (b)      DURATION   OF  ROYALTY   PAYMENTS.   SYNOVICS   shall
calculate and pay to FAI Royalty  Payments  under this SECTION 8.3 commencing on
the First Commercial Sale in the Territory. Royalty Payments due on each Product
sold by or on behalf of SYNOVICS, at the rates set forth in SECTION 8.3(a) above
shall continue on a country-by-country basis until the latter of: (i) expiration
of the last to expire of the FAI Patent Rights  containing a Valid Claim in such
country;  and (ii) ten (10) years from the First Commercial Sale of such Product
in such  country  after which point  SYNOVICS  shall not be obligated to pay any
royalty to FAI.

                  (c)      PAYMENTS  AND  REPORTS.   Within   thirty  (30)  days
following the close of each  Calendar  Quarter,  following the First  Commercial
Sale of a  Product,  SYNOVICS  shall  furnish  to FAI a written  report  for the
Calendar Quarter  showing:  the aggregate Net Product Sales of each Product sold
by SYNOVICS during such Calendar Quarter; and the Royalty Payments payable under
this Agreement for such Calendar Quarter.  Simultaneously with the submission of
the written  report,  SYNOVICS shall pay to FAI, for the account of SYNOVICS,  a
sum  equal  to the  aggregate  Royalty  Payment  due for such  Calendar  Quarter
calculated  in  accordance  with this  Agreement  (reconciled  for any  previous
overpayments, underpayments or credits).

         8.4      METHOD OF PAYMENT.  The payments to be made by SYNOVICS to FAI
pursuant to SECTIONS 8.1, 8.2 and 8.3 of this Agreement  shall be made in United
States  dollars by way of wire  transfer to FAI on the date each such payment is
due and payable.  Whenever  calculation of Net Product Sales requires conversion
from any  foreign  currency,  SYNOVICS  shall  convert the amount of Net Product
Sales in foreign  currencies into U.S. Dollars,  using the average  year-to-date
rate of exchange for such currencies published in THE WALL STREET JOURNAL on the
last  business day of the

                                       19
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

Calendar Quarter during which such Net Product Sales were made.

         8.5      LATE PAYMENTS. Any amounts not paid by SYNOVICS when due under
this Agreement  shall be subject to interest from and including the date payment
is due through and including  the date upon which FAI has collected  immediately
available  funds in an account  designated by FAI at a rate equal to two percent
(2%) plus the prime rate of interest  quoted in the Money  Rates  section of THE
WALL STREET JOURNAL, calculated daily on the basis of a 360-day year, or similar
reputable data source.

         8.6      MAINTENANCE  OF RECORDS;  AUDITS.  SYNOVICS shall maintain and
cause its  Affiliates  and  sublicensees  to maintain  books of account at their
principal place of business containing all information that may be necessary for
the purpose of calculating all payments under this Agreement. FAI shall have the
right to engage an independent, certified public accountant, selected by FAI and
reasonably  acceptable  to SYNOVICS,  to perform,  on behalf of FAI, an audit of
such books and records of SYNOVICS and its  Affiliates  and  sublicensees  as is
necessary  to confirm any amounts  payable to FAI under this  Agreement  for the
period  or  periods  requested  by FAI,  and the  correctness  of any  report or
payments made under this Agreement. Such audits shall be conducted during normal
business hours upon reasonable prior written notice from FAI in such a manner as
to not unnecessarily  interfere with SYNOVICS's normal business activities,  and
shall  include  results of no more than [*]  preceding  calendar  years prior to
audit  notification.  FAI shall  have a right to  request  from the  independent
certified public accountant full access to review all work papers and supporting
documents  pertinent to such audit.  Such audit shall not occur more  frequently
than [*] per calendar year nor more  frequently than [*] with respect to records
covering  any  specific  period  of  time.  The  use of all  information,  data,
documents  and  abstracts  referred  above  shall  be for the  sole  purpose  of
verifying  statements or  compliance  with this  Agreement,  shall be treated as
SYNOVICS  Confidential  Information subject to the obligations of this Agreement
and,  except in the event of a dispute  between  the Parties  regarding  amounts
payable  hereunder or the results of any audit,  need not be retained  more than
[*] years from the end of the calendar year to which each shall pertain.  If any
audit hereunder  reveals an  underpayment,  SYNOVICS shall promptly make up such
underpayment,  and if such  underpayment is more than [*], together with accrued
interest calculated in accordance with SECTION 8.5. FAI shall bear the full cost
of any audit under this SECTION 8.6, unless such audit discloses an underpayment
by  SYNOVICS  of more  than [*] of the  amount  owed  hereunder,  in which  case
SYNOVICS  shall  bear  the  full  cost of  such  audit  as  performed  by  FAI's
independent, certified public accountant.

         8.7      TAXES AND WITHHOLDING.  All taxes, assessments and fees of any
nature  levied or  incurred  on account of any  payments  from  SYNOVICS  to FAI
accruing under this Agreement, by national,  state or local governments known by
FAI at the Effective Date that have been included in the Cost of Goods,  will be
assumed and paid by SYNOVICS, except taxes with respect to income of FAI, and if
such taxes are  required

                                       20
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

to be withheld by SYNOVICS  they will be deducted  from  payments due to FAI and
will be timely paid by SYNOVICS to the proper  taxing  authority for the account
of FAI, a receipt or other proof of payment therefore secured and sent to FAI as
soon as practicable.  SYNOVICS  agrees to assist FAI in claiming  exemption from
such deductions or withholdings  under any double taxation or similar  agreement
or treaty from time to time in force and will apply the relevant  provisions  of
any such  agreement or treaty to minimize the amount  required to be so withheld
or deducted.

9.       INTELLECTUAL PROPERTY.

         9.1      FILING,  PROSECUTION  AND  MAINTENANCE OF PATENT  RIGHTS.  FAI
shall file,  prosecute  and  maintain  the Patent  Rights in the  Territory  and
licensed to SYNOVICS  under this  Agreement for FAI'S Method of Producing  Small
Granules.

         9.2      ENFORCEMENT OF PATENT RIGHTS. If SYNOVICS becomes aware of any
infringement  within  the  Territory  of any Valid  Claim  within the FAI Patent
Rights,  it will notify FAI in writing to that  effect.  Any such  notice  shall
include any available  evidence to support an allegation of infringement by such
Third Party. FAI shall have the sole right, but not the obligation,  to take (or
to permit any of its  licensees  to take) any such  action  which it  reasonably
deems necessary to obtain a discontinuance  of such infringement or to bring (or
to permit any of its licensees to bring) suit against the Third Party infringer.
In no event  shall FAI enter  into any  settlement,  consent  judgment  or other
voluntary final disposition of such suit which would adversely affect SYNOVICS's
rights  under this  Agreement  in any way  without  first  obtaining  SYNOVICS's
written  consent to do so, which  consent  shall not be  unreasonably  withheld.
SYNOVICS will reasonably cooperate with FAI in any such suit or action and shall
have the right to consult with FAI and be  represented by its own counsel at its
own expense.  Any recovery or damages derived from a suit which SYNOVICS has not
joined and shared costs shall be retained by FAI.

10.      REPRESENTATIONS AND WARRANTIES.

         10.1     REPRESENTATIONS  AND  WARRANTIES  OF BOTH  PARTIES.  As of the
Effective Date,  each of SYNOVICS and FAI hereby  represents and warrants to the
other Party hereto as follows:

                  (a)      it is a  corporation  or entity  duly  organized  and
validly  existing  under  the  laws  of  the  state  or  other  jurisdiction  of
incorporation or formation;

                  (b)      the  execution,  delivery  and  performance  of  this
Agreement  by such Party has been duly  authorized  by all  requisite  corporate
action and do not require any shareholder action or approval;

                  (c)      it has the power and authority to execute and deliver
this

                                       21
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

Agreement and to perform its obligations hereunder; and

                  (d)      the execution, delivery and performance by such Party
of this Agreement and its compliance  with the terms and provisions  hereof does
not and will not  conflict  with or  result  in a breach of any of the terms and
provisions of or constitute a default  under:  (i) a loan  agreement,  guaranty,
financing  agreement,  agreement  affecting  a  product  or other  agreement  or
instrument  binding or affecting it or its property;  (ii) the provisions of its
charter or operative  documents or bylaws; or (iii) any order, writ,  injunction
or decree of any court or governmental  authority entered against it or by which
any of its property is bound.

         10.2     REPRESENTATIONS  AND  WARRANTIES  OF FAI.  In  addition to the
representations  and  warranties  made by FAI under  SECTION  10.1,  FAI  hereby
represents and warrants to SYNOVICS that:

                  (a)      FAI Controls the FAI Patent  Rights and has the right
to grant the licenses granted to SYNOVICS under SECTION 2 of this agreement;

                  (b)      each Product supplied under this Agreement:  (i) will
conform to its applicable  Specifications  at the time of delivery to SYNOVICS's
carrier;  (ii) will be  manufactured  in accordance with the GMP; and (iii) will
not be adulterated or misbranded at the time of delivery to SYNOVICS's  carrier;
and

                  (c)      FAI has  not and  will  not use in any  capacity  the
services of any persons debarred under 21 USC ss. 335(a) or 335(b) in connection
with the manufacture of the Products to be supplied to SYNOVICS hereunder.

                  (d)      the Compound and Product  supplied to SYNOVICS  shall
be  manufactured  in accordance  with the Product  Development  Plan attached to
Exhibit  "B" to this  Agreement,  in such a manner so as to  circumvent  and not
breach or infringe the patent, copyright or other intellectual property right of
a third party which is listed in the FDA's Orange Book  regarding OTC Omeprazole
relative  to  Application  Number  021229 or any patent  which is  indicated  in
Exhibit "B" to this Agreement.  FAI shall further obtain a certificate  from its
API  suppliers  in a form that is  acceptable  to SYNOVICS  that states that the
materials or Compound that they supply are  manufactured  in such a manner so as
to  circumvent  and not  breach  or  infringe  the  patent,  copyright  or other
intellectual property right of any other party. FAI shall supply SYNOVICS with a
copy of each such supplier  certificate for approval and acceptance by SYNOVICS.
Failure to obtain such a certificate to the satisfaction of SYNOVICS may, at the
sole option of SYNOVICS, result in immediate termination of this Agreement.

         10.3     REPRESENTATION BY LEGAL COUNSEL.  Each Party hereto represents
that it has been  represented by legal counsel in connection with this Agreement
and  acknowledges   that  it  has  participated  in  the  drafting  hereof.   In
interpreting  and  applying

                                       22
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

the  terms  and  provisions  of  this  Agreement,  the  Parties  agree  that  no
presumption shall exist or be implied against the Party which drafted such terms
and provisions.

         10.4     WARRANTY  DISCLAIMER.  EXCEPT AS  EXPRESSLY  PROVIDED  IN THIS
AGREEMENT, THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF, AND EACH
PARTY EXPRESSLY  DISCLAIMS,  ANY AND ALL  REPRESENTATIONS  AND WARRANTIES OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY,  INCLUDING, WITHOUT LIMITATION,  WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT OF
THE INTELLECTUAL  PROPERTY RIGHTS OF THIRD PARTIES,  OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES.

11.      TERM AND TERMINATION.

         11.1     TERM.  The  term of this  Agreement  shall  commence  upon the
Effective Date.  Unless this Agreement is terminated  sooner as provided in this
SECTION 10, this Agreement shall expire for the Product on a  country-by-country
basis on the expiration of SYNOVICS's  obligation to make Royalty  Payments with
respect to such  country as provided  in SECTION  7.3, at which time the license
granted to SYNOVICS by FAI under this  Agreement to use the FAI Know-How for the
Product shall be fully-paid.

         11.2     TERMINATION  FOR  CAUSE.   Either  Party  may  terminate  this
Agreement upon written notice provided to the other Party at any time during the
Term:

                  (a)      if the other Party  commits a material  breach of its
obligations  under this  Agreement,  and such breach remains  uncured for ninety
(90)  days  from the  date of  written  notice  of such  breach  is given to the
breaching Party; or

                  (b)      upon  the  filing  or   institution   of  bankruptcy,
reorganization,  liquidation or receivership proceedings,  or upon an assignment
of  substantially  all of the assets for the benefit of  creditors  by the other
Party,  or in the event a receiver or custodian  is  appointed  for such Party's
business,  or if  substantially  all of such  Party's  business  is  subject  to
attachment  or  similar  process;  PROVIDED,  HOWEVER,  that in the  case of any
involuntary  bankruptcy  proceeding  such right to  terminate  shall only become
effective if the  proceeding is not  dismissed  within sixty (60) days after the
filing thereof.

         11.3     EFFECT OF TERMINATION.  Upon expiration or any termination for
cause by SYNOVICS of this  Agreement  all rights and licenses  granted by FAI to
SYNOVICS shall fully  transferred to SYNOVICS without any further  obligation by
SYNOVICS  to make any  further  royalty or payment of any kind to FAI.  SYNOVICS
shall be free to and shall be granted a fully paid up  license  manufacture  the
Compound or the Product using any FAI Patent Rights and FAI Know-How.  FAI shall
provide to SYNOVICS,  without  charge,  such  information  as may be required to
manufacture  the  Product  at  a  site  specified  by  SYNOVICS.  The  following
provisions  shall  survive  expiration  or any  termination  of this  Agreement:
Sections 4, 6, 7, 8, 9, 10, 11, 12, and 13. Upon

                                       23
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

termination for cause by FAI of this Agreement,  all rights and licenses granted
by FAI to SYNOVICS shall be fully terminated

12.      INDEMNIFICATION AND INSURANCE.

         12.1     INDEMNIFICATION  BY FAI. Unless otherwise provided herein, FAI
shall indemnify, hold harmless and defend SYNOVICS and its Affiliates,  and each
of  their  respective  directors,  officers,  employees  and  agents  (each,  an
"SYNOVICS  INDEMNIFIED  PARTY")  from and against any and all  liability,  loss,
damage,  cost and expense (including without  limitation  reasonable  attorneys'
fees) ("LIABILITY")  incurred by a SYNOVICS Indemnified Party in connection with
suits,  claims,  actions or demands ("CLAIMS") brought or made by a Third Party,
to the  extent  that  such  Claims  arise out of:  (a) the  breach by FAI of any
representation or warranty  contained in this Agreement;  or (b) the manufacture
or use of  Products by FAI.  Notwithstanding  the  foregoing,  FAI shall have no
obligation  under this  Agreement  to  indemnify,  defend or hold  harmless  any
SYNOVICS  Indemnified  Party with respect to Liability that results from willful
misconduct or negligent acts or omissions of SYNOVICS, its Affiliates, or any of
their respective directors, officers, employees and agents.

         12.2     INDEMNIFICATION BY SYNOVICS.  SYNOVICS shall indemnify, defend
and  hold  harmless  FAI and  its  Affiliates,  and  each  of  their  respective
directors,  officers,  employees and agents (each, an "FAI  INDEMNIFIED  PARTY")
from  and  against  any  Liability  incurred  by an  FAI  Indemnified  Party  in
connection with Claims brought or made by a Third Party, to the extent that such
Claims  arise out of: (a) the breach by  SYNOVICS of any  obligation,  covenant,
representation  or warranty  contained  in this  Agreement;  or (b) the storage,
promotion, packaging, distribution, use, marketing, sale or other disposition of
Products by  SYNOVICS,  its  Affiliates,  its  permitted  sublicensees  or their
respective  subcontractors;  or (c) submittal of the ANDA for the Product to the
FDA. Notwithstanding the foregoing, SYNOVICS shall have no obligation under this
Agreement to indemnify,  defend, or hold harmless any FAI Indemnified Party with
respect to Liability  that results from willful  misconduct or negligent acts or
omissions  of  FAI,  its  Affiliates,  or any  of  their  respective  directors,
officers, employees or agents.

         12.3     CONDITIONS  TO  INDEMNIFICATION.  In the event of a Claim by a
Third Party against a Party  entitled to  indemnification  under this  Agreement
("INDEMNIFIED  PARTY"),  the  Indemnified  Party shall promptly notify the other
Party ("INDEMNIFYING  PARTY") in writing of the Claim and the Indemnifying Party
shall undertake and solely manage and control, at its sole expense,  the defense
of the Claim and its settlement.  The Indemnified Party shall cooperate with the
Indemnifying Party,  including,  as requested by the Indemnifying Party entering
into a joint defense  agreement.  The  Indemnified  Party may, at its option and
expense,  be  represented  in any such  action or  proceeding  by counsel of its
choice.  The  Indemnifying  Party  shall not be  liable  for any  litigation  or
settlement  costs or expenses  incurred  by the  Indemnified  Party  without the
Indemnifying  Party's written consent.  The Indemnifying  Party may not settle a
Claim

                                       24
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

without the consent of the Indemnified  Party,  if such settlement  would impose
any monetary  obligation  on the  Indemnified  Party or require the  Indemnified
Party to submit to an  injunction  or otherwise  limit the  Indemnified  Party's
rights under this Agreement.

         12.4     INSURANCE.  SYNOVICS and FAI shall each obtain and maintain at
all times during the Term,  Commercial  General Liability  Insurance,  including
Products Liability Insurance, with insurance carriers having an A.M. Best rating
of A- VII or  better,  with  limits  for  SYNOVICS  of not  less  than  [*]  per
occurrence and [*] in the aggregate, or self-insurance,  in either case to cover
its  indemnification  obligations  under  SECTION 12.2 hereof and for FAI of not
less than [*] per occurance  and [*] in the aggregate for General  Liability and
[*] per occurance for Completed Operations Liability Insurance. Each party shall
furnish the other with a certificate of insurance evidencing said coverage.

         12.5     LIMITATION  OF  LIABILITY.  IN NO EVENT SHALL  EITHER PARTY BE
LIABLE TO THE  OTHER  PARTY  FOR  INDIRECT,  SPECIAL,  INCIDENTAL,  PUNITIVE  OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, COMPOUNDS OR
THE  PRODUCTS,  REGARDLESS OF THE FORM OF ACTION,  WHETHER IN CONTRACT,  TORT OR
OTHERWISE,  EVEN IF SUCH PARTY WAS ADVISED OF THE  POSSIBILITY  OF SUCH DAMAGES;
PROVIDED,  HOWEVER,  that the  foregoing  shall not be construed to limit either
Party's indemnification obligations under SECTION 12.

13.      CONFIDENTIALITY.

         13.1     NONDISCLOSURE   OBLIGATION.   In   carrying   out  rights  and
obligations under this Agreement, the Parties will share proprietary information
and  data  ("CONFIDENTIAL  INFORMATION")  with  each  other.  A Party  receiving
Confidential  Information  under  this  Agreement  ("RECIPIENT")  from the other
disclosing Party ("DISCLOSER")  shall maintain such Confidential  Information as
follows: During the Term and for a period of five (5) years following expiration
or  termination of this  Agreement,  the Recipient  agrees:  (a) not to use such
Confidential  Information  for any  purpose  other than in  connection  with the
purpose of carrying out its rights and obligation  under this Agreement;  (b) to
treat such Confidential  Information as it would its own information of the same
nature and importance, and in any event, to use no less than a reasonable degree
to care to protect the proprietary nature of such Confidential Information;  and
(c) to take  all  reasonable  precautions  to  prevent  the  disclosure  of such
Confidential Information to any Third Party without the prior written consent of
the Discloser.

         13.2     EXCEPTIONS.  A Recipient's  obligations regarding Confidential
Information shall not apply to information that:

                  (a)      was known to the Recipient prior to receipt hereunder
as  demonstrated  by  Recipient's  written  records in  existence at the time of
disclosure by the Discloser;

                                       25
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

                  (b)      at the time of  disclosure  by the  Discloser  to the
Recipient,  was  generally  available to the public,  or which after  disclosure
hereunder   becomes   generally   available  to  the  public  through  no  fault
attributable to the Recipient;

                  (c)      is hereafter  made available to the Recipient for use
and unrestricted disclosure by the Recipient from any Third Party having a right
to do so; or

                  (d)      is  generated by the  Recipient  by its  employees or
contractors  who  have  not  had  access  to or  knowledge  of the  Confidential
Information   disclosed  hereunder,   as  demonstrated  by  Recipient's  written
records;.

         13.3     AUTHORIZED DISCLOSURES.

                  (a)      Nothing in this Agreement  shall prohibit  disclosure
by a  Party  of  Confidential  Information  to  its  sublicensees,  consultants,
advisors, clinical investigators and contract manufacturer,  if any, but only on
a need-to-know basis for purposes provided for in this Agreement;  PROVIDED that
such  disclosure  occurs  pursuant  to  a  written   confidentiality   agreement
containing provisions substantially as protective as those of this SECTION 13.

                  (b)      The  restrictions set forth in this Section shall not
prevent  disclosure  pursuant to a law,  regulation,  rule,  act or order of any
governmental  authority  or  agency;  provided  that  the  Recipient  gives  the
Discloser  prompt  prior  notice  in order to permit  an  opportunity  to seek a
protective  order or other  similar  order  with  respect  to such  Confidential
Information,  and  thereafter the Recipient  discloses to the requesting  entity
only the minimum  information  required to be  disclosed in order to comply with
the  request,  whether  or not a  protective  order  or other  similar  order is
obtained by the Discloser.

         13.4     RETURN OF INFORMATION. If this Agreement is terminated for any
reason,  then each Party,  upon the request of the other Party,  shall return to
such other Party all copies of Confidential Information received from such other
Party hereunder;  PROVIDED,  HOWEVER, that each Party's legal counsel may retain
one copy of such  Information  in a  secure  location  solely  for  purposes  of
determining such Party's continuing obligations  hereunder.  Notwithstanding the
foregoing,  this  Section  13.3 shall not apply to any  Results  provided to FAI
under SECTION 11.5.

         13.5     PUBLICITY;  PRESS RELEASE.  The Parties shall issue a mutually
agreed upon joint press release  promptly  following the Effective Date. FAI and
SYNOVICS  will  jointly  discuss  and agree in writing on any  statement  to the
public regarding this Agreement or any aspect of this Agreement, subject in each
case to  disclosure  otherwise  required by law or  regulation or any listing or
trading  agreement  concerning its publicly  traded  securities as determined in
good faith by each Party. When a Party elects to make any such statement it will
give the other Party at least five (5) day's prior notice (unless  disclosure is
required by law, or any listing or trading  agreement

                                       26
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

concerning its publicly traded  securities,  in a shorter period of time) to the
other Party to permit review and comment on such statement.  Notwithstanding the
foregoing,  either Party shall have the right to publicly  disclose  information
regarding this  Agreement or the Parties'  activities  hereunder,  to the extent
such information has already been made publicly available in a manner consistent
with this SECTION 12.5.

14.      MISCELLANEOUS.

         14.1     FORCE MAJEURE.  Neither Party shall be liable to the other for
delay or failure in the  performance of the obligations on its part contained in
this  Agreement  if and to the  extent  that  such  failure  or  delay is due to
circumstances  beyond its reasonable  control  (including,  without  limitation,
FAI's  inability  to  obtain  from  a  Third  Party  materials  needed  for  the
manufacture  Products in sufficient  quantities  to meet its supply  obligations
under SECTION  7.1).  The affected  Party shall notify the other Party  promptly
should such circumstances  arise,  giving an indication of the likely extent and
duration thereof,  and shall use all Commercially  Reasonable  Efforts to resume
performance of its obligations as soon as practicable.

         14.2     ASSIGNMENT.   This  Agreement   shall  not  be  assignable  or
transferred  in part or in whole by any Party without the prior written  consent
of the other;  provided,  however,  that either Party, without notice and at any
time for any reason,  may assign or transfer this  Agreement in whole or in part
to (a) any of its  Affiliates  who agree to be bound by the terms and conditions
of this Agreement or (b) any successor of such Party as part of consolidation or
merger,  corporate  reorganization  or sale of all or  substantially  all of its
business assets to which this Agreement relates.

         14.3     NO WAIVER. The failure of either Party to require  performance
by the other Party of any of that other Party's  obligations  hereunder shall in
no manner affect the right of such Party to enforce the same at a later time. No
waiver by any Party hereto of any condition,  or of the breach of any provision,
term, representation or warranty contained in this Agreement, whether by conduct
or otherwise,  in any one or more instances,  shall be deemed to be or construed
as a further or  continuing  waiver of any such  condition or breach,  or of any
other condition or of the breach of any other provision, term, representation or
warranty hereof.

         14.4     SEVERABILITY.  If a  court  or  other  tribunal  of  competent
jurisdiction  should  hold  any  term  or  provision  of  this  Agreement  to be
excessive,  or invalid,  void or unenforceable,  the offending term or provision
shall be deleted or revised to the extent  necessary to be enforceable,  and, if
possible,  replaced by a term or provision which, so far as practicable achieves
the legitimate aims of the Parties.

         14.5     RELATIONSHIP BETWEEN THE PARTIES. Both Parties are independent
contractors  under this Agreement.  Nothing herein  contained shall be deemed to
create an employment,  agency, joint venture or partnership relationship between
the  Parties  hereto or any of their  agents or  employees,  or any other  legal
arrangement that would

                                       27
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

impose  liability  upon one  Party  for the act or  failure  to act of the other
Party.  Neither  Party shall have any express or implied power to enter into any
contracts  or  commitments  or to incur  any  liabilities  in the name of, or on
behalf  of,  the  other  Party,  or to  bind  the  other  Party  in any  respect
whatsoever.

         14.6     CORRESPONDENCE AND NOTICES.

                  (a)      ORDINARY    NOTICES.     Correspondence,     reports,
documentation, and any other communication in writing between the Parties in the
course of ordinary  implementation of this Agreement shall be delivered by hand,
sent by facsimile,  or by airmail to the employee or representative of the other
Party  who  is   designated   by  such  other  Party  to  receive  such  written
communication.

                  (b)      EXTRAORDINARY  NOTICES.   Extraordinary  notices  and
communications  (including,  without limitation,  notices of termination,  force
majeure,  material breach,  change of address) shall be in writing and delivered
to the  addressees  identified  below by hand or sent by  nationally  recognized
overnight  delivery  service,  prepaid  registered  or certified air mail, or by
facsimile  confirmed by any of the foregoing  means, and shall be deemed to have
been   properly   served  to  the   addressee   upon  receipt  of  such  written
communication.

                           If to FAI:
                           Thomas E. Tappen, Vice President
                           Fluid Air, Inc. doing business as PharmPro
                           2550 White Oak Circle
                           Aurora, IL  60502
                           Facsimile No.:  630 851 1244

                           If to SYNOVICS:
                           Ronald Lane, CEO
                           Synovics Laboratories Inc.
                           2575 East Camelback Road
                           Suite 450
                           Phoenix, AZ  85016
                           Facsimile No.:  602 508 0115

         14.7     GOVERNING LAW. This Agreement  shall be governed and construed
in accordance with the laws of Delaware,  excluding any choice of law rules that
may direct the application of the law of another jurisdiction.

         14.8     DISPUTE  RESOLUTION.  The Parties  recognize  that a bona fide
dispute  as to  certain  matters  may from time to time  arise  during the Term.
Unless  otherwise  set forth in this  Agreement,  in the event of such a dispute
either  Party  may,  by written  notice to the other  Party,  have such  dispute
referred to their respective officers  (designated

                                       28
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

below) or their  successors or designees for attempted  resolution by good faith
negotiations  within  thirty (30)  calendar  days after such notice is received.
Said designated officers are as follows:

                           For FAI:        Martin P. Bender, President

                           For SYNOVICS:   Ronald Lane, CEO

If the  designated  officers are not able to resolve  such dispute  through good
faith negotiations within such thirty (30) calendar day period, either Party may
have the given dispute  settled by binding  arbitration in the manner  described
below:

                  (a)      ARBITRATION  REQUEST.  If a Party intends to begin an
arbitration to resolve a dispute arising under this Agreement,  such Party shall
provide  written notice (the  "ARBITRATION  REQUEST") to the other Party of such
intention  and the  issues  for  resolution.  From the  date of the  Arbitration
Request  and until such time as the  dispute  has become  finally  settled,  the
running  of the  time  periods  as to which  Party  must  cure a breach  of this
Agreement becomes suspended as to the subject matter of the dispute.

                  (b)      ADDITIONAL  ISSUES.  Within  ten (10)  business  days
after the receipt of the  Arbitration  Request,  the other Party may, by written
notice, add additional issues for resolution.

                  (c)      NO  ARBITRATION  OF  PATENT/CONFIDENTIALITY   ISSUES.
Unless  otherwise  agreed by the  Parties,  disputes  relating  to  patents  and
non-disclosure, non-use and maintenance of Confidential Information shall not be
subject  to  arbitration,  and  shall  be  submitted  to a  court  of  competent
jurisdiction.

                  (d)      ARBITRATION  PROCEDURE.  Discovery shall be under the
local rules of evidence of the jurisdiction under which arbitration  occurs. The
Arbitration  shall  be  held  under  the  rules  of  the  American   Arbitration
Association.  The Arbitration  shall be in English,  using three (3) independent
arbitrators.  Each Party shall select one  independent  arbitrator  within forty
five (45) days of the Arbitration  Request, and the two (2) arbitrators selected
by the Parties shall select the third independent  arbitrator within ninety (90)
days after the Arbitration Request.

The arbitrators may award any remedy allowed by law,  excluding punitive damages
and attorneys' fees. Promptly after rendering a decision,  the arbitrators shall
issue to both Parties a written  opinion of the findings of fact and conclusions
of law.  The  decision  of the  arbitrators  shall be binding  upon the  Parties
without the right of appeal. Either Party may enter a judgment upon the decision
rendered by the arbitrators in any court having jurisdiction thereof.

The  Parties  shall  share  equally  the  reasonable  documented  cost  of  such
Arbitration  procedure.  Each Party shall bear its own cost in  participating in
such proceeding.

                                       29
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

         14.9     ENTIRE  AGREEMENT;  AMENDMENT.  This Agreement,  including its
exhibits,  sets forth the complete,  final and exclusive  agreement  between the
Parties and supersedes and terminates all prior and  contemporaneous  agreements
and understandings between the Parties, whether oral or in writing,  relating to
the subject matter hereof. No subsequent alteration,  amendment,  change, waiver
or addition to this  Agreement  shall be binding upon the Parties unless reduced
to writing and signed by an authorized officer of each Party.

         14.10    HEADINGS. The headings and captions used in this Agreement are
solely for the convenience of reference and shall not affect its interpretation.

         14.11    COUNTERPARTS.  This  Agreement  may be executed in one or more
counterparts  each  of  which  shall  be an  original  and  all of  which  shall
constitute together the same document.

         14.12    FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments,  and to do all other acts, as may be necessary
or  appropriate  in order to carry out the purposes and intent of this Agreement
including,  without limitation,  any filings with any antitrust agency which may
be required.

         IN  WITNESS  WHEREOF,  this  Agreement  has been  executed  by the duly
authorized representatives of the Parties as of the date set forth below.

FLUID AIR INC., DOING BUSINESS AS PHARMPRO        SYNOVICS LABORATORIES INC.

By:/s/ Martin Bender                              By:/s/ Ronald Lane
   ---------------------------------                 ---------------------------

Name:  Martin P. Bender                           Name:  Ronald Lane

Title: President                                  Title: CEO

                                       30
* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

                                   EXHIBIT "A"

                                FAI PATENT RIGHTS

[*]

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

                                   EXHIBIT "B"

                            PRODUCT DEVELOPMENT PLAN

                  [*]

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

                                   EXHIBIT "C"

                   COMMERCIAL MANUFACTURING QUALITY AGREEMENT

         This Commercial Manufacturing Quality Agreement,  dated as of this 11th
day  of  APRIL,  2007  (together  with  the  Appendixes  attached  hereto,  this
"AGREEMENT"),  defines the duties of, Fluid Air, Inc. DBA PharmPro,  an Illinois
corporation,  ("FAI"),  and Synovics  Laboratories  Inc.,  a Nevada  corporation
("SYNOVICS"),  for the contract  pharmaceutical  manufacture of the "Product" as
defined in that certain  LICENSE AND SUPPLY  AGREEMENT  ("LSA")  dated April 11,
2007, by and among FAI and SYNOVICS.  In particular,  this Agreement is intended
to clearly state which party is responsible for the cGMP (defined below) aspects
of  Manufacturing  (defined  below) the  Product,  and  specify the way in which
PharmPro shall ensure that the Product complies with the approved Specifications
per the LSA and the Marketing Authorizations (defined below).

         This  Agreement  takes  the  form of a  detailed  checklist  of all the
activities  associated with  pharmaceutical  production,  analysis,  release and
distribution.  Responsibility for each activity is assigned to FAI, SYNOVICS, or
both in the appropriate box in the Responsibility  Delegation Checklist attached
hereto as Appendix A.

         In order to provide better quality assurance,  each party shall perform
the activities  defined herein as its responsibility in accordance with Standard
Operating  Procedures  (defined  below) to the extent that a Standard  Operating
Procedure is applicable to such activity. In the event of a conflict between the
terms  of this  Agreement  and a  Standard  Operating  Procedure,  the  Standard
Operating Procedure shall control.

         This Agreement is  incorporated in and subject to the terms of the LSA.
In the event of a conflict  between  this  Agreement  and the LSA, the LSA shall
control.  This Agreement shall  automatically  terminate upon any termination of
the LSA.

         This  Agreement is intended to comply with the guidance and  directives
set forth in the cGMPs,  as  applicable,  establishing  certain  principles  and
guidelines of good manufacturing practice for medicine products for human use.

         The contact  information for the Quality Assurance  Representative from
each  party is set forth on  Appendix  B  attached  hereto.  In the event of any
controversy  or claim  arising  out of,  relating to or in  connection  with any
provision  of this  Agreement,  or the  rights  or  obligations  of the  parties
hereunder,  the Quality Assurance  Representatives  from each party shall try to
settle their differences  amicably between themselves.  If the Quality Assurance
Representatives  are unable to resolve such  disputed  matter within thirty (30)
days of initiating such negotiations,  the dispute shall be referred to at least
one member of senior management of each of the parties. If the members of senior
management are unable to resolve such disputed matter within thirty (30) days of
initiating such negotiations,  then either party may seek a remedy under Section
14.8 of the LSA.

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

         Capitalized  terms used in this Agreement,  but not otherwise  defined,
shall  have the same  meaning  ascribed  to them in the LSA.  In  addition,  for
purposes of this Agreement, the following definitions shall apply:

A.       "API"  means  the  active   pharmaceutical   ingredient   used  in  the
         Manufacture of the Product as identified in the Specifications.

B.       "APPLICABLE  LAWS" means all laws,  ordinances,  rules and  regulations
         within the Territory applicable to the Manufacturing of Product and the
         obligations  of  PharmPro  or  SYNOVICS  thereunder,   as  the  context
         requires,  including,  without limitation,  (i) all applicable federal,
         state and local laws and regulations of the Territory including without
         limitation the U.S.  Federal Food,  Drug and Cosmetic Act, and (ii) the
         cGMPs.

C.       "DEVIATION/FAILURE"  means any OOS  result  and/or  any  manufacturing,
         packaging, labeling or testing deviation that affects the Product.

D.       "FACILITIES"  means the  PharmPro  manufacturing  facility  located  in
         Aurora, Illinois or such other facility as agreed upon by the parties.

E.       "FDA" means the Food and Drug Administration or any successor agency.

F.       "cGMPS"  means the current Good  Manufacturing  Practices  for finished
         pharmaceuticals promulgated by the FDA, as amended from time to time.

G.       "MARKETING    APPLICATION"   means   an   application   for   marketing
         authorization  which  has not yet  been  approved  by the FDA or  other
         Regulatory  Authority,  including  without  limitation,  FDA  New  Drug
         Application,  FDA  Abbreviated  New Drug  Application and other similar
         marketing applications promulgated by Regulatory Authorities.

H.       "MANUFACTURE" or "MANUFACTURING"  means to process,  produce,  package,
         label and test the Product in accordance  with the  Specifications  and
         the terms and  conditions set forth in the Contract  Service  Agreement
         and this Agreement.

I.       "MARKETING AUTHORIZATIONS" means any approved application for marketing
         authorization,  including without limitation, FDA New Drug Application,
         FDA  Abbreviated  New Drug  Application,  and other  similar  marketing
         authorizations promulgated by Regulatory Authorities.

J.       "OOS" means Out-Of-Specification.

K.       "PRODUCT"  means  the  Product  identified  on the  first  page of this
         Agreement.

L.       "REGULATORY AUTHORITY" means any governmental or regulatory body, court
         or arbitrator,  including the U.S. Environmental  Protection Agency and
         the FDA.

M.       "SPECIFICATIONS" means the procedures, requirements, standards, quality
         control testing, other data and scope of services set forth in the LSA.

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
                                       2
<PAGE>

N.       "STANDARD  OPERATING  PROCEDURES"  or "SOPS"  shall  mean the  standard
         operating  procedures in effect at PharmPro which have been approved by
         the PharmPro Quality  Assurance  department and which are applicable to
         the Manufacturing.

O.       "TERRITORY"   means  the  United   States  and  its   territories   and
         possessions, including Puerto Rico.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
                                       3
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed and delivered as of the date first stated above.

                                     SYNOVICS LABORATORIES, INC.

                                     By   /s/ Ronald Lane
                                          --------------------------------------

                                          Name:  Ronald Lane
                                          Title: CEO

                                     FLUID AIR, INC., doing business as PHARMPRO

                                     By   /s/ Martin Bender
                                          --------------------------------------
                                          Name:  Martin P. Bender
                                          Title: President

                             [CONFIDENTIAL GRAPHIC]

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

                                   APPENDIX A

                       RESPONSIBILITY DELEGATION CHECKLIST

[*]

                             [CONFIDENTIAL GRAPHIC]

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>

                                   APPENDIX B

                        QUALITY ASSURANCE REPRESENTATIVES
                               CONTACT INFORMATION

FOR SYNOVICS:
-------------

Ronald Lane, CEO
Synovics Laboratories Inc.
2575 East Camelback Road
Suite 450
Phoenix, AZ  85016
Facsimile No.:  602 508 0115

FOR PHARMPRO:
-------------

Jim McAndrew
Vice President - Operations
Phone: 630-851-2550, Ext. 112
Fax:  630-851-2488
Email: jpm@fluidairinc.com

* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

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