Document:

exv10w12

 

Exhibit 10.12

SUNCOM WIRELESS HOLDINGS, INC.

DIRECTOR RESTRICTED STOCK AWARD AGREEMENT

     THIS
AGREEMENT is made effective as of this
          
day of
                  ,
200       by and between
SunCom Wireless Holdings, Inc., a Delaware corporation (“SunCom”) (SunCom and its subsidiaries
being referred to herein collectively as the “Company”), and                    (the “Director”).

W I T N E S S E T H

     WHEREAS, the Board of Directors of the Company (the “Board”), by action duly taken, has
approved an award to the Director consisting of
                
shares (the “Shares”) of the Company’s
Class A Common Stock (the “Common Stock”), subject to certain vesting and transferability
restrictions as set forth herein (the “Restricted Stock Award” or the “Award”) and the terms of the
SunCom Wireless Holdings, Inc. Directors’ Stock and Incentive Plan, as amended and restated (the
“Plan”); and

     WHEREAS, as a condition of the grant of the Restricted Stock Award, the Director is required
to execute this Restricted Stock Award Agreement (this “Agreement”).

     In consideration of the mutual promises and covenants contained in this Agreement, the parties
hereto, intending to be legally bound, agree as follows:

     1. Grant of Restricted Stock Award; Terms and Conditions of the Plan. Effective as of
the date of this Agreement (the “Grant Date”), and subject to all the terms and conditions set
forth herein and in the Plan, the Company hereby grants the Director a Restricted Stock Award
consisting of
                 shares (as defined above, the “Shares”). This Award is granted pursuant to
the Plan and is subject in its entirety to the terms of the Plan, the terms of which are
incorporated herein, and this Agreement. Unless the context otherwise requires, terms not defined
herein shall have the meanings given such terms in the Plan. To the extent that any conflict may
exist between any term or provision of this Agreement and any term or provision of the Plan, the
term or provision of the Plan will control. All questions of interpretation concerning this Award
are determined by the Board. All determinations by the Board will be final and binding upon all
persons having or claiming any interest in the Award or the Shares.

     2. Vesting; Effect of Termination of Service.

     (a) The Restricted Stock Award will vest as follows:

                           Shares will vest on                                  , 200     (such period between the Grant
Date and the vesting date being referred to as the “Restriction Period”).

     (b) Upon the Director’s termination of service as a member of the Board prior to                                  , 200    ], for any reason, including as a result of death, retirement or disability, the
Director will forfeit any remaining interest in the Restricted Stock Award and any corresponding
unvested Shares.

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     (c) Notwithstanding the vesting date set forth in subsection (a) of this Section 2, in the
event of a Change of Control, as defined herein, all unvested Shares will vest immediately.
“Change of Control” means any transaction or event, or series of transactions or events, whether
voluntary or involuntary, that results in, or as a consequence of which, any of the following
events shall occur: (A) any person (as defined in Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”)), shall acquire, directly or
indirectly, beneficial ownership (as defined in Rule 13d-3 of the 1934 Act) of more than 50% of the
voting stock of SunCom; or (B) any sale of all or substantially all of the assets of SunCom; or (C)
a proxy contest for the election of directors of SunCom results in the persons constituting the
Board of Directors of SunCom immediately prior to the initiation of such proxy contest ceasing to
constitute a majority of the Board of Directors upon the conclusion of such proxy contest.

     3. Nontransferability. Unless otherwise permissible under the terms of the Plan or
this Agreement, the Restricted Stock Award will not be assignable or transferable by the Director
other than by will or the laws of descent and distribution. No right or interest of the Director
in the Shares or the Restricted Stock Award shall be pledged to or encumbered in favor of any
party, or will be subject to any lien, obligation or liability of the Director to any party other
than the Company. Any purported assignment or transfer of the Shares or the Restricted Stock Award
that is not in accordance with the express terms of this Agreement will be null and void and of no
effect whatsoever. The sale of vested Shares may be further restricted due to applicable
securities or other laws or pursuant to the Company’s policies, including but not limited to its
Insider Trading Policy.

     4. Rights as a Stockholder; No Right to Continued Service; Forfeiture.

     (a) Except as otherwise provided in the Plan or this Agreement, during the Restriction Period,
the Director will have all of the rights of a stockholder of the Company with respect to the
Restricted Stock Award, including but not limited to the right to vote the Shares subject to the
Restricted Stock Award and to have dividends, if any, declared with respect to such Shares,
regardless of whether or not the Director has an unrestricted right to retain the Shares subject to
the Restricted Stock Award, provided that any dividends declared with respect to the Restricted
Stock Award will be withheld by the Company and paid to the Director, without interest, only when
and to the extent the Director vests in the Restricted Stock Award. Such dividends will be paid no
later than March 15th of the year following the year in which the corresponding portion
of the Award vests. Notwithstanding the foregoing, (i) the Director will not be entitled to
delivery of the stock certificate(s) representing unvested Shares subject to the Award (or any
dividends thereon) unless and until the Restriction Period with respect to such shares has expired
and any Forfeiture Restrictions have lapsed (in which case delivery of such Shares will be made as
soon as practicable), (ii) the Company will (or will designate an agent or representative to)
retain custody of the stock certificate(s) during the Restriction Period, (iii) the Director may
not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Shares during the
Restriction Period, and (iv) a breach of any terms and conditions established by the Board
regarding the Award will cause a forfeiture of the Award and the underlying Shares related to the
Award.

     (b) Nothing in this Agreement will confer upon the Director any right to continue serving on
the Board. Except as may be otherwise provided in the Plan, if the service of the Director
terminates for any reason and all or any part of an Award has not vested or been earned pursuant to
the terms of the Plan and this Agreement, the Award, to the extent not then vested or earned, will
be forfeited immediately upon such termination of service and the Director will have no further
rights with respect to the Award or any Shares of Common Stock or other benefit related to the
Award.

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     5. Legends. The Company may at any time place legends referencing any applicable
federal or state securities law restrictions on certificates representing the Shares subject to the
Restricted Stock Award. The Director will, at the request of the Company, promptly present to the
Company any and all certificates representing such Shares that are in the possession of the
Director in order to effectuate the provisions of this Section 5.

     6. Transfer Restrictions. The Director agrees that while serving as a Director of the
Company (or any successor), the Director will not, directly or indirectly, sell, transfer, assign,
pledge, place in trust or otherwise dispose of (collectively, “Transfer”) beneficial ownership of
any shares of the Common Stock, including the Shares, whether now owned or subsequently acquired,
however acquired (“SunCom Shares”), except as otherwise expressly permitted in this Section. Any
such Transfer will be subject to the terms and conditions of any other agreements applicable to any
Transfer of SunCom Shares as may be in effect during the term of this Agreement.

     (a) The Director may Transfer SunCom Shares provided the price per share is at least eight
dollars (as such amount may be appropriately adjusted for stock splits, stock dividends,
combinations, recapitalizations and such similar events) or such lower amount as may be established
by the Committee from time to time in its sole discretion.

     (b) The Director may Transfer such SunCom Shares as may be necessary to satisfy any tax
obligation arising as a result of the award or vesting of any SunCom Shares or upon the exercise of
any option to acquire any SunCom Shares.

     (c) The Director may Transfer SunCom Shares provided the Director has not been a director of
or employed by the Company or any of its affiliates for a period of at least 90 days.

     (d) The Director may Transfer any SunCom Shares that have been acquired in an open market
acquisition on or after January 1, 2001.

     (e) In the event of a Transfer of the Common Stock by J.P. Morgan Partners (23 A SBIC), LLC,
Equity-Linked Investors-II or Private Equity Investors III, L.P., the Director may Transfer an
equivalent proportion of SunCom Shares.

Nothing in this Section will be deemed to preclude any Transfer of SunCom Shares either: (i) to
members of the Director’s immediate family, or to a trust for the benefit of members of the
Director’s immediate family, provided that the family member or trust agrees to continue to be
bound by the transfer restrictions set forth in this Section 6; or (ii) to or for the benefit of
any charitable organization.

     7. Modification. No change, termination, waiver or modification of this Agreement
will be valid unless in writing and signed by all of the parties to this Agreement. However,
notwithstanding the preceding sentence, the Board has unilateral authority to amend the Plan and
this Agreement (without the Director’s consent) to the extent necessary to comply with applicable
laws, rules or regulations or changes to applicable laws, rules and regulations (including but in
no way limited to Code Section 409A and related regulations or other guidance and federal
securities laws).

     8. Consent to Jurisdiction. The Director hereby consents to the jurisdiction of any
state or federal court located in the county in which the principal executive office of the Company
is then located for purposes of the enforcement of this Agreement and waives personal service of
any

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and all process upon him. The Director waives any objection to venue of any action instituted
under this Agreement.

     9. Parties to Agreement. This Agreement will be binding on and will operate for the
benefit of the Company, its successors and assigns, and the Director and his heirs, estate,
personal representatives, successors and assigns.

     10. Notices. All notices, designations, consents, offers or any other communications
provided for in this Agreement must be given in writing, personally delivered, or by facsimile
transmission with an appropriate written confirmation of receipt, by nationally recognized
overnight courier or by U.S. mail. If by mail or overnight courier, notice must be sent with
first-class postage prepaid and return receipt requested, in which event it will be deemed to have
been given on the date following the date it was so posted. Notice to the Company is to be
addressed to its then principal office. Notice to the Director or any transferee is to be
addressed to his or its respective address as it appears on the transfer books of the Company, or
to such other address as may be designated by the receiving party by notice in writing to the
Secretary or Assistant Secretary of the Company.

     11. Counterparts; Further Assurances. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument. At any time, and from time to time after executing this Agreement,
the Director will execute such additional instruments and take such actions as may be reasonably
requested by the Company to confirm or perfect or otherwise to carry out the intent and purpose of
this Agreement.

     12. No Restriction on Company Action. Nothing contained in this Agreement will be
construed to prevent the Company from taking any corporate action that is deemed by the Company to
be appropriate or in the Company’s best interests, whether or not such action would have an adverse
effect on the Restricted Stock Award. Neither the Director nor any beneficiary thereof, nor any
other person, will have any claim against the Company as a result of any such action.

     13. Provisions Severable. If any provision of this Agreement is invalid or
unenforceable, it will not affect the other provisions, and this Agreement will remain in effect as
though the invalid or unenforceable provisions were omitted. Upon a determination that any term or
other provision is invalid or unenforceable, the Company, in accordance with Delaware general
corporate law, will in good faith modify this Agreement so as to effect the original intent of the
parties as closely as possible.

     14. Captions. Captions herein are for convenience of reference only and will not be
considered in construing this Agreement.

     15. Entire Agreement. This Agreement supersedes any statements, representations or
agreements of the Company with respect to the grant of the Award or any related rights, and the
Director hereby waives any rights or claims related to any such statements, representations or
agreements. This Agreement does not supersede or amend any existing confidentiality agreement,
nonsolicitation agreement, noncompetition agreement, consulting agreement or any other similar
agreement between the Director and the Company, including, but not limited to, any restrictive
covenants contained in such agreements.

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     16. Governing Law. This Agreement is to be governed in accordance with the laws of
the State of Delaware, without regard to the principles of conflicts of laws, and in accordance
with applicable general laws of the United States.

     17. Right of Offset. Notwithstanding any other provision of the Plan or this
Agreement, the Company may reduce the amount of any benefit or payment otherwise payable to the
Director or on his behalf by the amount of any obligation the Director has to the Company, and the
Director is deemed to have consented to such reduction by entering into this Agreement.

     18. Tax Matters; Withholding.

     (a) The Company has made no warranties or representations to the Director with respect to the
tax consequences (including but not limited to income tax consequences) related to the Award or
issuance or transfer of Shares pursuant to the Award, and the Director is in no manner relying on
the Company or its representatives for an assessment of such tax consequences. The Director
acknowledges that there may be adverse tax consequences upon acquisition or disposition of the
Shares subject to the Award and that the Director has been advised that he should consult with his
own attorney, accountant, and/or tax advisor regarding the decision to enter into this Agreement
and the consequences thereof. The Director also acknowledges that the Company has no
responsibility to take or refrain from taking any actions in order to achieve a certain tax result
for the Director. The Company will have the right to deduct in connection with the Award any taxes
required by law to be withheld and to require any payments necessary to enable it to satisfy its
withholding obligations.

     (b) Within thirty (30) days of the Grant Date, the Director may file an “83(b) election” with
the Internal Revenue Service to recognize as income 100% of the Fair Market Value of the Shares as
of the Grant Date. The 83(b) election should be sent via certified mail to the Internal Revenue
Service. This election is generally irrevocable. The Director must also send a copy of the 83(b)
election to the Company’s Human Resources Department in Berwyn, PA (Attention: Manager of
Qualified Plans).

19. Forfeiture of Shares and/or Gain from Shares.

     (a) Notwithstanding any other provision of this Agreement, if, at any time during the period
of his service on the Board or during the 24-month period following termination of his service on
the Board for any reason (regardless of whether such termination was by the Company or the
Director, and whether voluntary or involuntary), the Director engages in a Prohibited Activity (as
defined herein), then (i) the Award will immediately be terminated and forfeited in its entirety,
(ii) any Shares subject to the Award, regardless of whether such Shares are vested or unvested
and/or deferred or undeferred, will immediately be forfeited and returned to the Company and the
Director will cease to have any rights related thereto and will cease to be recognized as the legal
owner of such Shares, and (iii) any Gain (as defined herein) realized by the Director with respect
to any Shares subject to the Award will immediately be paid by the Director to the Company.

     (b) For the purposes herein, a “Prohibited Activity” means (i) the Director’s solicitation or
assisting any other person in so soliciting, directly or indirectly, in one or a series of
transactions, of any customers, suppliers, vendors, or other service providers to or of the Company
for the purpose of inducing that customer, supplier, vendor or other service provider to terminate
or alter his or its relationship with the Company; (ii) the Director’s inducement, directly or
indirectly, in one or a series of transactions, of any employees or service providers to terminate
their employment with or service

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to the Company for the purpose of performing services for, assisting, advising or otherwise
supporting any business which is competitive with the business of the Company; (iii) the Director’s
violation of any noncompetition restrictions applicable to him; (iv) the Director’s violation of
any of the Company’s policies, including, without limitation, the Company’s insider trading
policies; (v) the Director’s violation of any material (as determined by the Board) federal, state
or other law, rule or regulation; (vi) the Director’s disclosure or misuse of any confidential
information or material concerning the Company (except as otherwise required by law or as agreed to
by the parties herein); (vii) the Director’s dishonesty, theft or embezzlement in a manner which
negatively impacts the Company in any way; (viii) the Director’s refusal or failure to perform his
duties for the Company in accordance with applicable legal standards; or (ix) the Director’s
engaging in any conduct that could be materially damaging to the Company without a reasonable good
faith belief that such conduct was in the best interest of the Company. The Board has sole and
absolute discretion to determine if a Prohibited Activity has occurred.

     (c) For the purposes herein, “Gain” means, unless the Board determines otherwise, the greater
of the Fair Market Value (as defined in the Plan) of the Shares (or portion thereof) at the time of
grant or vesting or the disposition price of such Shares at the time of disposition, multiplied by
the number of Shares sold or disposed.

     (d) Notwithstanding the provisions of Section 19(a) herein, the waiver by the Company in any
one or more instances of any rights afforded to the Company pursuant to the terms of Section 19(a)
herein will not be deemed to constitute a further or continuing waiver of any rights the Company
may have pursuant to the terms of this Agreement or the Plan (including but not limited to the
rights afforded the Company in Section 19 herein).

     (e) By accepting this Agreement, and without limiting the effect of Section 17 herein, the
Director consents to a deduction (to the extent permitted by applicable law) from any amounts the
Company may owe the Director from time to time to the extent of the amounts the Director owes the
Company pursuant to this Agreement, including but not limited to Section 17 or Section 19 herein.
Whether or not the Company elects to make any set-off in whole or in part, if the Company does not
recover by means of set-off the full amount owed by the Director pursuant to this Agreement, the
Director agrees to immediately pay the unpaid balance to the Company.

     20. Gender and Number. Except where otherwise indicated by the context, words in any
gender shall include any other gender, words in the singular shall include the plural and words in
the plural shall include the singular.

[Signature Page To Follow]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its
officers thereunto duly authorized, and the Director has hereunto set his hand, effective as of the
day and year first above written.

	 	 	 	 	 
	 	SUNCOM WIRELESS HOLDINGS, INC.

 	 
	 	 	 
	 	By:  Michael E. Kalogris 	 
	 	Title:  	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	DIRECTOR

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

7exv10w1

 

Exhibit 10.1

	 	 	     Portions of this exhibit were omitted and filed separately with the Secretary of the
Commission pursuant to an application for confidential treatment filed with the Commission pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934. Such portions are marked by a series of
asterisks.

SUPPLY AGREEMENT

between

PLANTEX USA INC.

2 University Plaza, Suite 305, Hackensack, NJ 07601

(“Plantex”)

and

VALERA PHARMACEUTICALS, INC.

7 Clarke Drive, Cranbury, New Jersey 08512

(“Valera”)

WHEREAS, Anthra Pharmaceuticals, Inc. (“Anthra”) and Genchem Pharma Ltd. are parties to that
certain Supply Agreement dated as of September 11, 1997 pursuant to which, among other things,
Anthra agreed to purchase N-Trifluoroacetyl-adriamycin-14 valarate, upon the terms and conditions
set forth in such agreement;

WHEREAS, pursuant to that certain Asset Purchase Agreement dated September 29, 2005, Valera has
acquired substantially all of the assets of Anthra associated with its Valrubicin business in the
United States and Canada including rights of Anthra under the Anthra Agreement (as defined below);

WHEREAS, Plantex and Valera desire to provide for the manufacture, supply and purchase of the
active pharmaceutical product Valrubicin, upon the terms and conditions set forth in this
Agreement;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements set
forth in this Agreement, and other good and valuable consideration the adequacy and sufficiency of
which is acknowledged, the Parties, intending to be legally bound, agree as follows:

1. INTERPRETATION AND CERTAIN DEFINITIONS

	 	1.1	 	The preamble to this Agreement forms an integral part hereof.
	 
	 	1.2	 	Section headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the interpretation of this Agreement.
	 
	 	1.3	 	All annexes to this Agreement, signed by both Parties, whether attached at the
time of signature hereof or at any time thereafter, shall be construed as an integral
part of this Agreement.
	 
	 	1.4	 	For purposes of this Agreement, the following words and phrases shall bear the
respective meanings assigned to them below (and cognate expressions shall bear
corresponding meanings):

	 	1.4.1	 	“Action” – shall mean any suit, action, investigation
(governmental or otherwise), claim or proceeding initiated or filed against a
Party which results in or could result in a Loss or Losses for which
indemnification is required by an Indemnifying Party pursuant to Section 10
herein.
	 
	 	1.4.2	 	“Affiliate” – shall mean, with respect to any Party, any Person
that is controlled by, controls, or is under common control with, that Party.
For this purpose, “control” of a corporation or other business entity shall mean
direct or indirect beneficial ownership of more than fifty percent (50%) of the
voting interest in, or more than fifty percent (50%) in the equity of, or the
right to appoint more than fifty percent (50%) of the directors or management of,
such corporation or other business entity.

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	 	1.4.3	 	“Agreement” – shall mean this Agreement, including Exhibits and
Schedules hereto, as it is hereafter amended from time to time by the mutual
agreement of the Parties.
	 
	 	1.4.4	 	“Anthra Agreement” – shall mean the supply agreement between
Anthra Pharmaceuticals Inc. and Genchem Pharma Ltd. dated September 11, 1997.
	 
	 	1.4.5	 	“API” – shall mean the active pharmaceutical ingredient
N-Trifluroacetyl-adriamycin-14 valerate, otherwise known as Valrubicin.
	 
	 	1.4.6	 	“cGMP” – shall mean current good manufacturing practices in
accordance with the rules and regulations promulgated by the FDA from to time to
time.
	 
	 	1.4.7	 	“DMF” – shall mean the applicable drug master file covering the
analysis and Manufacture of the API filed with the FDA.
	 
	 	1.4.8	 	“Effective Date” – shall mean the date this Agreement is signed by
the latter of the Parties to actually sign this Agreement.
	 
	 	1.4.9	 	“FDA” – shall mean the United States Food and Drug Administration
and all agencies under its direct control or any successor organization.
	 
	 	1.4.10	 	“Finished Product(s)” – shall mean the finished dosage form of Valrubicin
sterile solution, manufactured with the API.
	 
	 	1.4.11	 	“Indemnified Party” – shall mean the Party to this Agreement entitled to be
indemnified by the Indemnifying Party against a Loss or Losses pursuant to
Section 10 below.
	 
	 	1.4.12	 	“Indemnifying Party” – shall mean the Party obligated to indemnify the
Indemnified Party against a Loss or Losses pursuant to Section 10 below.
	 
	 	1.4.13	 	“Launch” - shall mean with regard to Finished Product(s), the first commercial
sale of Finished Product(s) by or on behalf of Valera to an independent third
party in the Territory and “Launch Date” means the date of that sale.
	 
	 	1.4.14	 	“Loss” – shall mean any and all liabilities, losses, costs, damages and
expenses, including, without limitation, reasonable attorneys’ fees and expenses.
	 
	 	1.4.15	 	“Manufacture” and “Manufacturing” – shall mean, along with other forms of the
word, the formulation, manufacturing, testing, handling, packaging, storage,
labeling, shipping and/or disposal of the API or any Finished Products, as the
case may be, and the raw materials and components used in connection with the
preparation thereof.
	 
	 	1.4.16	 	“Party” or “Parties” – shall mean and include Plantex and Valera, or each of
them individually, as opposed to a “third party,” which is not a party to this
Agreement.
	 
	 	1.4.17	 	“Person” – shall mean any individual, partnership, association, corporation,
trust or legal person or entity.
	 
	 	1.4.18	 	“Regulatory Approval” – shall mean a required consent or approval of the FDA or
any other governmental authority having authority over the Manufacture, use,
import, export, clinical testing, transport, marketing, sale or distribution of
the Finished Product in all or any portion of the Territory.
	 
	 	1.4.19	 	“Regulatory Authorities” – shall mean any and all bodies and organizations,
including, without limitation, the FDA, which regulate the Manufacture, use,
import, export, clinical testing, transport, marketing, sale or distribution of
API and/or the Finished Products.
	 
	 	1.4.20	 	“Specifications” – shall mean the specifications for the API contained in
Schedule I attached hereto.
	 
	 	1.4.21	 	“Term” – shall mean as defined in Section 11.1.

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	 	1.4.22	 	“Territory” – shall mean the United States of America, and each of its
territories, districts and possessions and the commonwealth of Puerto Rico and
Canada.

2. DEVELOPMENT EFFORT; PURCHASE COMMITMENT

	 	2.1	 	Subject to the terms and conditions of this Agreement and for so long as Plantex
is not in breach of any obligation under this Agreement (after giving effect to
applicable cure periods herein), Valera covenants and agrees that neither Valera nor any
of its Affiliates or any of their respective permitted licensees or contract
manufacturers will, directly or indirectly, source API from any supplier other than
Plantex in connection with the development, Manufacture or sale of Finished Product in
the Territory and securing Regulatory Approval for the Finished Product in the
Territory. Valera agrees to use its commercially reasonable efforts to obtain or to
have obtained Regulatory Approval in the Territory to Manufacture Finished Product.
	 
	 	2.2	 	Subject to the terms and conditions of this Agreement and for so long as Plantex
is not in breach of any obligation under this Agreement (after giving effect to
applicable cure periods herein), throughout the Term of this Agreement, Valera covenants
and agrees that all of the requirements of Valera and its Affiliates and their
respective permitted licensees and contract manufacturers for API for commercial sale of
Finished Product in the Territory shall be purchased from Plantex hereunder, but in any
case, beginning in the calendar year following the year in which Valera receives
Regulatory Approval for the Finished Product in the United States, such requirements for
API shall be no less than ****** of API per ****** (the “Purchase Requirements”).
	 
	 	2.3	 	Subject to the terms and conditions of this Agreement and for so long as Valera
is not in breach of any obligation under this Agreement (after giving effect to
applicable cure periods herein), throughout the Term of this Agreement, Plantex
covenants and agrees that it will not supply API for use in any pharmaceutical product
in the Territory for use in the treatment of any disease of the urinary tract to any
Person other than Valera, its Affiliates and their respective permitted licensees and
contract manufacturers, if any; it being understood that Plantex shall be entitled to
supply API for use in pharmaceutical products in the Territory to third parties other
than Valera, its Affiliates and their respective permitted licensees and contract
manufacturers, if any, provided that the purpose or approved use of such pharmaceutical
product does not include the treatment of any disease of the urinary tract.

3. SUPPLY; PAYMENT; QUALITY CONTROL

	 	3.1	 	Developmental Quantities. Subject to the terms contained herein, Valera
may order quantities of the API by issuing binding purchase orders (each, a “Firm
Purchase Order”) to Plantex with projected delivery dates (which shall not be less than
ninety (90) days after date of provision of the purchase order) from time to time during
the development process period commencing with the date hereof.
	 
	 	3.2	 	Commercial Quantities. Starting nine (9) months prior to Launch and
thereafter by the 15th day of the first month of each quarter during the
Term, Valera shall provide Plantex with a good faith, non-binding twelve (12) month
rolling forecast of its API requirements by quarter. Valera may order quantities of the
API by issuing Firm Purchase Orders to Plantex.
	 
	 	 	 	Plantex shall accept or reject each Firm Purchase Order within ten (10) days after its
receipt thereof and supply the quantities set forth on each Firm Purchase Order it
accepts; provided that Plantex may not and shall not reject any Firm Purchase Order if
(a) the quantity set forth thereon is at least eighty percent (80%) and no greater
than one hundred and twenty percent (120%) of the most recent forecast supplied by
Valera to Plantex prior to delivery of Firm Purchase Order for the given delivery
periods, (b) the delivery date is at least ninety (90) days from the date of provision
of the Firm Purchase Order to Plantex and (c) the Firm Purchase Order otherwise
complies with the terms and conditions of this Agreement; provided further, however,
that if Plantex chooses to accept a Firm Purchase Order for quantities in excess of
one hundred and twenty percent (120%) of the most recent forecast supplied by Valera
for the given delivery period, Plantex shall only be required to use reasonable
efforts to fill the quantities exceeding one hundred and twenty percent (120%) of such
forecast.
	 
	 	3.3	 	Safety Stock. Notwithstanding anything to the contrary contained herein,
beginning on the first day of the calendar year in which the Purchase Requirements
become effective and for so long as the Purchase Requirements remain effective, (i) each
purchase order delivered by Valera hereunder shall provide for quantities of API in
increments of ****** and (ii) ****** of API that meets the requirements of this
Agreement (it being understood that Plantex shall use commercially reasonable efforts to
build up such inventory within six (6) months of the Effective Date). The shelf life of
such inventory shall never be less than ******. When Valera orders API, Plantex may
supply the API from this inventory or from newly manufactured API in Plantex’s sole
discretion. Valera may inspect the inventory

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	 	 	 	required to be held by Plantex pursuant to this Section 3.3 on three (3) business days
prior written notice, and Plantex shall reasonably cooperate with such inspection
including giving Valera reasonable access to the facilities at which such inventory is
stored.
	 
	 	3.4	 	If any term or condition contained in any purchase order is inconsistent with
this Agreement, then the terms and conditions provided in this Agreement will control.
No additional term or condition set forth in any purchase order will be binding upon
Plantex unless agreed to in writing by Plantex.
	 
	 	3.5	 	(a) The purchase price for API shall be ****** US dollars ****** (US$******).
	 
	 	 	 	(b) Notwithstanding anything to the contrary contained herein, beginning with the
first day of the calendar year in which the Purchase Requirements become effective and
for so long as the Purchase Requirements remain effective, Valera shall pay Plantex a
minimum annual purchase price per calendar year of one million US dollars
(US$1,000,000) against delivery of ****** of API; provided, however, that in the event
Valera has failed to provide Plantex prior to December 1 of any calendar year for
which the Purchase Requirements are in effect for such calendar year with Firm
Purchase Orders with respect to such calendar year or has provided Plantex with Firm
Purchase Orders with respect to such calendar year for a quantity of API that is less
than the Purchase Requirements with respect to such calendar year, then Valera shall
be deemed to have submitted a Firm Purchase Order for the balance of the Purchase
Requirements on December 1 of such calendar year and Plantex shall ship to Valera the
balance of such Purchase Requirements no later than December 15 of such calendar year.
	 
	 	3.6	 	Plantex will issue invoices upon shipment of API dated the date of the shipment
(or deemed shipped as per Section 3.5 hereof). Invoices will be due and payable by
Valera as follows: ******. Amounts not paid when due shall accrue interest calculated at
the rate of ten percent (10%) per annum (but in no event greater than the maximum rate
permitted by law) calculated on a daily basis.
	 
	 	3.7	 	During any period during this Agreement in which Plantex, for any reason,
including, without limitation, force majeure as defined in Section 12 hereof, fails to
supply the requisite quantities of API within sixty (60) days after the date of delivery
specified by Valera in any Firm Purchase Order or any other purchase order accepted and
confirmed in writing by Plantex, then Valera, as its sole remedy, may (i) ****** against
payment of the applicable purchase price in accordance with the terms herein or (ii)
cover such quantities under such purchase order through an alternate supplier. Any such
cover purchases shall be credited against the Purchase Requirements set forth in Section
2.2. In the event Plantex regains its ability to resume supplying hereunder, Valera’s
right to cover shall terminate immediately upon the delivery by Plantex to Valera of
written notice thereof except in respect of orders already placed by Valera from the
alternate supplier.
	 
	 	3.8	 	Valera and its Affiliates shall use the API only for the Manufacture of Finished
Products for sale in the Territory. Valera and its Affiliates may not resell or
otherwise transfer all or any portion of API not used in the Manufacture of Finished
Products for sale in the Territory to any other Person, either directly or indirectly,
including through contract manufacturers or other third parties, except as permitted
under Section 14.2 hereof.
	 
	 	3.9	 	Plantex or its Affiliate shall maintain with the FDA a valid DMF for the API that
is in material compliance with applicable FDA requirements; it being understood that
Plantex is currently in the process of submitting revised information for a valid DMF.
Provided that all representations and warranties of Valera shall remain true and all
covenants and undertakings of Valera are being fully complied with, Valera shall have
the right to reference the DMF in its drug applications for any Finished Product. All
API will be manufactured in accordance with cGMP and conform to the Specifications.
	 
	 	3.10	 	Plantex shall obtain and maintain, or shall cause to be obtained and maintained,
all Regulatory Approvals necessary for the Manufacturing activities undertaken by
Plantex in connection with this Agreement. Plantex shall bear all costs related to
obtaining and maintaining all such Regulatory Approvals.
	 
	 	3.11	 	Each Party shall comply with all applicable treaties, laws, rules, regulations
and Regulatory Approvals in connection with the performance of its obligations under
this Agreement.
	 
	 	3.12	 	Subject to the terms of this Section 3.12, Plantex shall supply Valera only with
API that was Manufactured at facilities that have passed Valera’s qualification audit in
accordance with the qualifications set forth on Exhibit A hereto. During the
Term, Valera shall be entitled to perform an initial qualification audit at each
facility at which Plantex proposes to have the API Manufactured, which audit may be
conducted at any time on reasonable prior notice to Plantex after receipt of Plantex’s
notice to Valera of the proposed facility; provided, however, that such qualification
audit shall be based exclusively on the qualifications set forth on Exhibit A
hereto. Notwithstanding the

36

 

	 	 	 	foregoing, in the event that Plantex notifies Valera of a facility that will be
involved in the Manufacture of the API and Valera does not conduct its qualification
audit within thirty (30) days after Valera’s receipt of such notice, such facility may
be used in the Manufacture of the API and such facilities need not pass the
qualifications set forth on Exhibit A hereto unless and until Valera conducts
its qualification audit and notifies Plantex that such facility has not passed the
audit; provided such audit findings are consistent with the qualifications set forth
on Exhibit A hereto. In addition to the initial qualification audit, Valera
may perform upon no less than twenty (20) days prior notice to Plantex and during
normal business hours annual quality audits of each facility involved in the
Manufacture of the API. Valera acknowledges Plantex’s current intention to
Manufacture API for developmental use at Plantex’s Affiliate’s facility in Rho, Italy
and API for commercial use at Plantex’s Affiliate’s facility in Santhia, Italy.
	 
	 	3.13	 	After Valera’s initial qualification audit of the facility at Santhia, Italy, no
change shall be made in any Manufacturing or quality assurance processes (including but
not limited to any change that affects any written quality plans for production or
written quality procedures respecting the same, or changes outside the validated level
or procedure, in manufacturing procedures, component part or raw materials vendors,
manufacturing sites or batch sizes), which change would reasonably be likely to affect
the safety or efficacy of the API, its compliance with any and all applicable
Specifications or any Regulatory Approval, without first notifying Valera of the
proposed change and obtaining Valera’s approval thereof, which approval shall not be
unreasonably withheld or delayed in the case of changes considered to be minor pursuant
to then-current regulations of the FDA. Notwithstanding the foregoing, Valera may
withhold its consent in its discretion in the case of (a) any change considered to be
major pursuant to then-current regulations of the FDA or (b) any change the cost of
implementation of which (including cost and expense of studies and necessary filings
with Regulatory Authorities) is potentially expected to be in excess of ****** US
dollars ($******). Regardless of whether the change is considered minor or major
pursuant to then-current FDA regulations, Plantex shall bear the entire cost of
implementing any such change including, without limitation, the expenses incurred in
respect of any studies and any amendment, notification or resubmission required with
respect to any and all affected Regulatory Approvals solely as a result of such change
up to a maximum of ****** US dollars ($******) in out-of-pocket expenses per change;
provided that Valera shall not be required to pay such costs in excess of ****** US
dollars ($******) unless Valera consented to the change as set forth in this Section
3.13.
	 
	 	3.14	 	The Parties shall comply, or shall ensure compliance, with all requirements of
the Technical Agreement attached to this Agreement as Exhibit B.
	 
	 	3.15	 	Plantex shall notify Valera as soon as practicable and in no event later than
five (5) business days after discovery of any batch failure that would reasonably be
likely to result in Plantex’s inability to meet Valera’s requested delivery dates.
Plantex shall notify Valera as soon as practicable and in no event later than three (3)
business days after any failure of a released batch of the API distributed to Valera.
	 
	 	3.16	 	Plantex agrees to notify Valera of any action known by Plantex brought by any
Regulatory Authority in relation to the API or any of Plantex’s Manufacturing activities
that would reasonably be likely to materially affect Plantex’s ability to perform its
obligations hereunder.

4. DELIVERY; RISK OF LOSS

Unless agreed otherwise in writing by the Parties, API will be shipped CIP (per Incoterms
2000) to the location specified in Valera’s Purchase Order. All deliveries from Plantex will
be made on or before the delivery date specified on each Firm Purchase Order or the
additional purchase orders accepted and confirmed in writing by Plantex, as long as such
delivery date is no less than ninety (90) days after the relevant purchase order date.

5. API WARRANTIES; ACCEPTANCE AND CLAIMS

	 	5.1	 	Plantex represents and warrants that at the time of sale and shipment of API by
Plantex hereunder, that such API (a) will conform to the Specifications; (b) will have
been Manufactured, stored and packaged for shipment in accordance with cGMP, the
requirements of all Regulatory Approvals and all other applicable laws, rules and
regulations all as in effect at the time thereof; (c) will not be adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as amended
from time to time (the “Act”), or other applicable law, rule or regulation that is
similar to such Act; (d) will not be an article which may not, under provisions of
Sections 404, 505 of 512 of the Act, be introduced in interstate commerce; and (e) will
have a shelf life of at least eighteen (18) months. THE FOREGOING WARRANTIES ARE
EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.

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	 	5.2	 	Valera shall have the right to reject all or part of any shipment of API it
orders and receives from Plantex on the ground that it fails to conform with a warranty
contained in Section 5.1 herein, provided that (a) Valera delivers written notice to
Plantex within sixty (60) days from the date of receipt of such shipment and (b) Plantex
confirms such nonconformance in writing after having reasonable opportunity to
investigate. In the event of the foregoing, Valera may return the nonconforming API in
accordance with Section 5.3; otherwise, all shipments of API shall be deemed accepted by
Valera. If a dispute arises as to whether the API conforms to Specifications which is
not resolved within thirty (30) days of the delivery by Valera of the notice of
nonconformance, then the matter (along with related samples, batch records or other
evidence, as appropriate) shall be submitted to an independent testing laboratory agreed
to by each of Valera and Plantex. The Parties in good faith shall select such
independent testing laboratory as soon as reasonably practicable following such thirty
(30) day period. The determination of the independent testing laboratory will be
binding upon the Parties. If it is determined that the nonconformance is due to damage
to API (x) caused by Valera or its agents or (y) that occurs subsequent to delivery of
the API by Plantex, Plantex will have no liability to Valera with respect to such
nonconformance and the cost of any testing and evaluation by the testing laboratory will
be borne by Valera. If it is determined that the nonconformance is caused by Plantex,
then Plantex will promptly replace the nonconforming API and reimburse Valera for the
cost of any testing and evaluation by the testing laboratory. If it is determined that
there is no nonconformance, Plantex will have no liability to Valera with respect to
such alleged nonconformance and the cost of any testing and evaluation by the testing
laboratory will be borne by Valera.
	 
	 	5.3	 	Plantex shall accept for return and replacement any API manufactured and supplied
to Valera under this Agreement that does not conform with the warranties set forth in
Section 5.1 above and for which proper notice has been given and nonconformance of which
has been confirmed pursuant to Section 5.2. Except for indemnity obligations, the
foregoing will be Valera’s sole remedy for claims that any shipment of API failed to
comply with such warranties. It is understood that the foregoing limited remedy applies
only to the failure to conform to the warranties contained in Section 5.1. All returns
of API with obvious defects must be in the original manufactured condition. Plantex will
pay reasonable return freight and shipping charges, but shall not assume the risk of
loss in transit associated with those returns.
	 
	 	5.4	 	Valera hereby agrees that Plantex does not make nor has it made any
representation whatsoever as to whether Valera should commercialize the API and, except
as otherwise set forth in this Agreement, any and all use by Valera and its Affiliates
of the API is and shall be Valera’s responsibility and at its sole discretion.
Notwithstanding anything to the contrary contained herein, Plantex shall have the right
to cease supplying API to Valera in the event Plantex is of the good faith opinion,
based upon the advice of recognized patent counsel, that the supply of such API would
result in a significant risk of damages being assessed against Plantex for infringement
of third party patent or other intellectual property rights.

6. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS

	 	6.1	 	Valera hereby represents and warrants to Plantex that (a) Valera is a corporation
duly organized and existing under the laws of its jurisdiction of incorporation, (b) it
has acquired as of the Effective Date and thereafter all rights to the Finished Product
in the Territory and as of the Effective Date and thereafter all rights and obligations
of Anthra under the Anthra Agreement have been assigned by Anthra to Valera, (c) it has
the requisite authority to enter into this Agreement and to perform its obligations
hereunder, (d) this Agreement is a legal, valid and binding agreement of Valera,
enforceable against Valera in accordance with its terms, (e) there is no contractual or,
to Valera’s knowledge, other restriction, limitation or condition applicable to Valera
which might affect adversely its ability to perform hereunder, and (f) Valera, its
Affiliates and any contract manufacturers are in material compliance with all laws and
regulations applicable to conduct of their business.
	 
	 	6.2	 	Plantex hereby represents and warrants to Valera that (a) Plantex is a
corporation organized and existing under the laws of its jurisdiction of incorporation,
(b) Plantex has the corporate authority to enter into this Agreement and to perform its
obligations hereunder, (c) this Agreement is a legal, valid and binding agreement of
Plantex enforceable against Plantex in accordance with its terms, (d) there is no
contractual or, to Plantex’s knowledge, other restriction, limitation or condition which
might affect adversely its ability to perform hereunder and (e) Plantex is in material
compliance with all applicable laws and regulations.
	 
	 	6.3	 	In addition to any other provision of this Agreement, both Parties shall comply
with all applicable restrictions respecting the import and/or export of the API and/or
of the Finished Product and/or of any other material which are now or hereafter imposed
by applicable Regulatory Authorities or their governments.

38

 

	 	6.4	 	The representations, warranties, covenants and undertakings contained in this
Agreement are continuous in nature and shall be deemed to have been given by each Party
at execution of this Agreement, at the Effective Date and at each stage of performance
hereunder.
	 
	 	6.5	 	Plantex covenants that during the term of this Agreement and thereafter:
	 
	 	 	 	6.5.1 Plantex will not and will cause its Affiliates to not assert against Valera or
any of its Affiliates or any of their respective licensees or vendors (such as
contract manufacturers) involved in Valera-authorized development, Manufacture,
distribution, sale or import of the API or the Finished Product in the Territory any
intellectual property rights that Plantex or any Affiliate of Plantex may have or may
obtain with respect to the development, Manufacture, use, distribution, sale, offer
for sale or import of API in the Territory; provided that (a) such Valera-authorized
development, Manufacture, use, distribution, sale, offer for sale or import is
consistent with this Agreement and (b) that such covenant shall not apply with respect
to API obtained from suppliers other than Plantex or an Affiliate of Plantex unless
the API was obtained from another supplier as part of covering a supply failure caused
by a breach of an obligation by Plantex under this Agreement or a force majeure event
affecting Plantex or an Affiliate of Plantex; and
	 
	 	 	 	6.5.2 Plantex will not and will cause each Affiliate of Plantex that Manufactures the
API to not assert against Valera or any of its Affiliates or any of their respective
licensees or vendors (such as contract manufacturers) involved in Valera-authorized
development, Manufacture, distribution, sale or import of the Finished Product in the
Territory any intellectual property rights that Plantex or any Affiliate of Plantex
that Manufactures the API may have or may obtain with respect to the development,
Manufacture, use, distribution, sale, offer for sale or import of the Finished Product
in the Territory; provided that (a) such Valera-authorized development, Manufacture,
use, distribution, sale, offer for sale or import is consistent with this Agreement
and (b) that such covenant shall not apply with respect to Finished Product
Manufactured from API obtained from suppliers other than Plantex or an Affiliate of
Plantex unless the API was obtained from another supplier as part of covering a supply
failure caused by a breach of an obligation by Plantex under this Agreement or a force
majeure event affecting Plantex or an Affiliate of Plantex. The Parties acknowledge
that the only Affiliate of Plantex that currently Manufactures the API is SICOR S.r.l.

7. REGULATORY INSPECTIONS AND COMMUNICATIONS

	 	7.1	 	Each Party will promptly deliver to the other Party all reports, data,
information and correspondence received by it from the FDA or any other Regulatory
Authority with respect to the API and any cGMP issues relating thereto. In addition,
each Party will promptly deliver to the other Party any written response, information,
data or correspondence delivered by it to the FDA or any other Regulatory Authority with
respect to the API. Each of the Parties agrees to cooperate to the extent reasonably
requested by the other in connection with any communications with the FDA or any other
Regulatory Authority.

8. COMPLAINT HANDLING AND ADVERSE DRUG REACTION REPORTS

	 	8.1	 	Valera shall be responsible for all adverse drug event reporting and responding
to all adverse drug reports received from lay persons and/or health care professionals
regarding the Finished Products.
	 
	 	8.2	 	If Valera determines, after investigating an adverse event report, that the
characteristics or quality of the API supplied under this Agreement may have been a
factor in the adverse event, then Valera shall notify Plantex promptly.

9. RECALLS AND WITHDRAWALS

To the extent permitted or required by law, any decision to recall, withdraw or cease
distribution of any Finished Product as a result of a violation of applicable law or
regulation, or because the Finished Product presents a possible safety risk, shall be made by
Valera. Valera will promptly notify Plantex of any such decision to recall, withdraw or cease
distribution. Valera shall indemnify and hold harmless Plantex against any and all reasonable
costs and expenses which Plantex may incur as a result of any recall of Finished Products
except to the extent that such recall is due to a defect in the API, in which case Plantex
shall indemnify and hold harmless Valera against any and all reasonable costs and expenses
which Valera may incur as a result of such recall to the extent attributable to the defective
API.

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10. INDEMNIFICATION AND LIMITATIONS

	 	10.1	 	Plantex shall indemnify, defend, save and hold harmless Valera and each of its
Affiliates and their respective officers, directors, employees and agents from and
against Loss or Losses payable to third parties in connection with any and all Actions
by third parties solely resulting from, or arising out of (a) any material breach of any
warranty or material non-fulfillment or non-performance by Plantex of any covenant or
obligation of Plantex under this Agreement or (b) any enforcement action by a Regulatory
Authority relating to the API resulting from the failure by Plantex to comply with
applicable laws, rules, orders or regulations. Plantex will not be liable hereunder for
any Losses resulting from any settlement of any claim, litigation or proceeding effected
without its consent, which consent shall not be unreasonably withheld; provided,
however, that Plantex shall have no liability to Valera for any Actions or Losses to the
extent that such Actions or Losses resulted from or arose out of: (i) the negligence or
willful misconduct of Valera or its directors, officers, Affiliates, employees,
servants, agents or any person for whose actions Valera is legally liable; (ii) a
material breach by Valera of any of its representations, warranties, covenants or
agreements set forth in this Agreement; or (iii) any matter for which Valera has
liability to Plantex pursuant to Section 10.2.
	 
	 	10.2	 	Valera shall indemnify, defend, save and hold Plantex and each of its Affiliates
and their respective officers, directors, employees and agents harmless from and against
Loss or Losses payable to third parties in connection with any and all Actions by third
parties resulting from, or arising out of (a) any material breach of any representation
or warranty herein pertaining to Valera or material non-fulfillment or non-performance
by Valera of any covenant or undertaking made herein, (b) any actual or alleged defect
in any Finished Product or other product liability claim relating to any Finished
Product, (c) any actual or alleged infringement (whether direct, contributory or
induced) or violation of any patent, trade secret or proprietary rights of any third
party arising out of the registration, importation, storage, Manufacture, use, sale
and/or distribution of any Finished Product (each, a “Claim of Infringement”) or (d) any
enforcement action by a Regulatory Authority relating to any Finished Product resulting
from the failure by Valera to comply with applicable laws, rules, orders or regulations.
Valera will not be liable hereunder for any Loss or Losses resulting from any settlement
of any claim, litigation or proceeding effected without its consent, which consent shall
not be unreasonably withheld; provided, however, that Valera shall have no liability to
Plantex for any Actions or Losses to the extent that such Actions or Losses resulted
from or arose out of: (i) the negligence or willful misconduct of Plantex or its
directors, officers, Affiliates, employees, servants, agents or any person for whose
actions Plantex is legally liable; (ii) a material breach by Plantex of any of its
representations, warranties, covenants or agreements set forth in this Agreement; (iii)
any matter for which Plantex has liability to Valera pursuant to Section 10.1; or (iv)
any Claim of Infringement asserted by any Affiliate of Plantex.
	 
	 	10.3	 	The terms and conditions of Section 10 shall survive any termination or
expiration of this Agreement.
	 
	 	10.4	 	Except as expressly set forth in Sections 10.1 and 10.2 above with respect to
amounts payable to third parties, or liability for breach of Section 13 or willful
misconduct, neither Party (nor any of their respective Affiliates) shall be responsible
to the other Party for such other Party’s lost profits or incidental or consequential
damages, including loss or damage to goodwill or reputation.
	 
	 	10.5	 	Upon the occurrence of an event that requires indemnification under this
Agreement, the Indemnified Party will give prompt written notice to the Indemnifying
Party providing reasonable details of the nature of the event and basis of the indemnity
claim. The Indemnifying Party will then have the right, at its expense and with counsel
of its choice, to defend, contest, or otherwise protect against any such Action. The
Indemnified Party will also have the right, but not the obligation, to participate, at
its own expense in the defense thereof with counsel of its choice. The Indemnified Party
shall cooperate to the extent reasonably necessary to assist the Indemnifying Party in
defending, contesting or otherwise protesting against any Action, provided that the
reasonable cost in doing so will be paid by the Indemnifying Party. If the Indemnifying
Party fails within thirty (30) days after receipt of notice to notify the Indemnified
Party of its intent to defend, or to defend, contest or otherwise protect against the
Action or fails to diligently continue to provide the defense after undertaking to do
so, the Indemnified Party will have the right upon ten (10) days prior written notice to
the Indemnifying Party to defend, settle and satisfy any Action and recover the costs of
the same from the Indemnifying Party.
	 
	 	10.6	 	In the event that in determining the respective obligations of indemnification
under this Section 10, it is found that the fault of the Indemnified Party or its
respective Affiliates, contributes to any Losses for which the Indemnifying Party is
otherwise liable hereunder, then each Party shall be responsible for that portion of the
indemnifiable Losses to which its fault contributed.

40

 

	 	10.7	 	Without limiting its obligations hereunder, Valera shall maintain, commencing
with Launch and continuing thereafter throughout the Term, sufficient product liability
insurance coverage to satisfy its obligations hereunder. Valera shall, upon request,
provide to Plantex certificates of insurance, evidencing such insurance. Without
limiting its obligations hereunder, Plantex shall maintain, commencing with Launch and
continuing thereafter throughout the Term, sufficient product liability insurance
coverage and/or self insurance to satisfy its obligations hereunder. Plantex shall, upon
request, provide to Valera certificates of insurance, evidencing such insurance.

11. TERM AND TERMINATION

	 	11.1	 	This Agreement shall become effective upon the Effective Date and, unless earlier
terminated as provided below, shall remain in full force and effect until the tenth
(10th) anniversary of the Launch Date of the Finished Product (the “Initial
Term”). The Initial Term shall be automatically extended for successive terms of two (2)
years (each, a “Renewal Term”) unless either Plantex or Valera provides the other with
written notice of its intention not to extend the Term of this Agreement at least twelve
(12) months before the expiration of the Initial Term or any Renewal Term. For purposes
of this Agreement, “Term” shall refer collectively to the Initial Term and any Renewal
Term, unless the context otherwise requires.
	 
	 	11.2	 	This Agreement will terminate upon the occurrence of any of the following events
or conditions which termination will automatically occur where termination by a
specified Party is not indicated and will occur by action of the specified Party where
so indicated:

	 	11.2.1	 	The expiration of the Term pursuant to the provisions of Section 11.1;
	 
	 	11.2.2	 	The breach of any representation or warranty made hereunder or the
non-performance of any covenant, undertaking or any other obligation made
hereunder by either Party that is not cured (a) within thirty (30) days from the
date of written notice delivered to the Party in breach in the case of a payment
default, and (b) within ninety (90) days from the date of written notice in all
other cases, provided, however, that only the aggrieved Party may terminate this
Agreement pursuant to this Section 11.2.2;
	 
	 	11.2.3	 	The mutual written agreement of the Parties to this Agreement;
	 
	 	11.2.4	 	Pursuant to the provisions of Section 12;
	 
	 	11.2.5	 	The filing of a bankruptcy petition by or against Plantex or Valera or the
appointment of a receiver for the assets or business of Plantex or Valera that is
not dismissed within sixty (60) days from the date of such filing or appointment;
and
	 
	 	11.2.6	 	The failure by Valera to obtain Regulatory Approval prior to June 30, 2007.

	 	11.3	 	Upon termination of this Agreement, all rights and obligations under this
Agreement will cease to exist except for (a) the payment of unpaid invoices due, (b) the
rights and obligations of the Parties under Sections 6.5, 10, 13.1-13.5 and 14.10 of
this Agreement, and (c) any other term or condition that by its term survives
termination.
	 
	 	11.4	 	The Parties hereby agree that upon the Effective Date this Agreement shall
supersede the Anthra Agreement and that the Anthra Agreement shall be null and void.
Plantex shall cause its Affiliate, Genchem Pharma Ltd., to carry out any actions
necessary to annul the Anthra Agreement, including signing a letter of termination in
the form attached hereto as Schedule II. The Parties agree that no claims exist
between themselves or their Affiliates arising out of or relating to the Anthra
Agreement and to the extent such claims do exist, they are hereby forever and
irrevocably released.

12. FORCE MAJEURE

Except for the obligation of Plantex or Valera to make payments to the other pursuant to this
Agreement (that will not be deferred or extended for any reason), neither Plantex nor Valera
will be responsible to the other for any failure to perform or delay in performing if the
failure or delay is due to any strike, riot, civil commotion, sabotage, embargo, war, action
or inaction of any governmental body (including any Regulatory Authority) or act of God or
other cause beyond its reasonable control. Notwithstanding the foregoing, if any delay in the
performance by either Party of its obligations under this Agreement shall continue for a
period of ninety (90) days or more, then the Party not suffering the force majeure event may
terminate this Agreement by written notice to the other Party and each of Plantex and Valera
shall be relieved from all duties and obligations under this Agreement, except those duties
and obligations accruing prior to such termination.

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13. CONFIDENTIALITY

	 	13.1	 	In carrying out the terms of this Agreement it may be necessary that one Party
disclose to the other certain information, which is considered by the disclosing Party
to be proprietary and of a confidential nature. As used herein “Confidential
Information” means any and all information, know-how and data, technical or
non-technical, concerning any finished drug product or active pharmaceutical ingredient,
its manufacture, marketing and sale, that is disclosed under this Agreement as set forth
below and that Valera or Plantex, as the case may be, considers to be and treats as
proprietary and confidential. Confidential Information includes, but shall not be
limited to plans, processes, compositions, formulations, specifications, samples,
systems, techniques, analyses, production and quality control data, testing data,
marketing and financial data, and such other information or data relating to any
finished drug product or active pharmaceutical ingredient, or its manufacture, marketing
or sale.
	 
	 	13.2	 	The recipient of any Confidential Information shall not use it for any purpose
other than for purposes of performing its obligations under this Agreement or enjoying
its rights under this Agreement. The Party receiving any Confidential Information will
divulge it only to those of its officers, directors, employees, advisors and Affiliates
(and such Affiliates’ officers, directors, employees and advisors) and Regulatory
Authorities who have a need to know it as a part of the receiving Party’s obligations
hereunder or as part of the normal process of obtaining and maintaining Regulatory
Approvals and said officers, directors, employees, advisors and Affiliates (and such
Affiliates’ officers, directors, employees and advisors) shall hold the information in
confidence pursuant to this Agreement. The recipient of any Confidential Information
shall not disclose it to any third party, except as otherwise contemplated in this
subsection, without the prior written consent of the disclosing Party.
	 
	 	13.3	 	The obligations of confidentiality as provided herein will terminate seven (7)
years from the expiration or termination of this Agreement and will impose no obligation
upon the recipient of any Confidential Information with respect to any portion of the
received information that (a) was known to or in the possession of the recipient prior
to the disclosure; or (b) is or becomes publicly known through no fault attributable to
the recipient; or (c) is provided to the recipient from a source independent of the
disclosing Party that is not subject to a confidential or fiduciary relationship with
the disclosing Party concerning the information as demonstrated by the recipient by
written evidence; or (d) is generated by the recipient independently of any disclosure
from the disclosing Party as demonstrated by the recipient by written evidence; or (e)
is required by law to be disclosed to government officials who shall be informed of the
confidential nature of such information.
	 
	 	13.4	 	Upon expiration or earlier termination of this Agreement, the recipient of any
Confidential Information shall, as the disclosing Party may direct in writing, either
destroy or return to the disclosing Party all Confidential Information disclosed
together with all copies thereof, provided, however, the recipient may retain one
archival copy thereof for the purpose of determining any continuing obligations of
confidentiality.
	 
	 	13.5	 	The terms of this Section 13 (except for Section 13.6 below) will survive
termination or expiration of this Agreement.
	 
	 	13.6	 	All publicity, press releases and other announcements relating to this Agreement
or the transactions contemplated hereby shall be reviewed in advance by, and shall be
subject to the approval of, both Parties. Each Party responding to a request for such
approval shall respond to the requesting Party in writing within five (5) days of such
request.

14. GENERAL PROVISIONS

	 	14.1	 	This Agreement shall be binding upon each of the Parties hereto and each of their
respective successors and assigns, if any.
	 
	 	14.2	 	Neither Party may assign any of its rights or obligations under this Agreement
without the prior written consent of the other Party, which consent may not be
unreasonably withheld or delayed. Such consent may be conditioned upon the agreement of
the assigning Party to remain primarily liable for performance of all obligations of the
assignee. Notwithstanding the foregoing, a Party may assign all of its rights and
obligations under this Agreement to an Affiliate of a Party or to the successor of the
business of the Party related to this Agreement (whether by merger, sale of stock, sale
of assets or otherwise) without the consent of the other Party; provided that the
successor is bound to the obligations of the assigning Party either by operation of law
or pursuant to a written agreement in form and substance reasonably acceptable to the
other Party. Any attempt to assign this Agreement in violation of the provisions set
forth herein will be deemed a default by the assigning Party under this Agreement and
null and void.

42

 

	 	14.3	 	Any notice, request, instruction or other communication required or permitted to
be given under this Agreement must be in writing and must be given by sending the notice
properly addressed to the other Party’s address shown below (or any other address as
either Party may indicate by notice in writing to the other from time to time) (a) by
hand or by prepaid registered or certified mail, return receipt requested, (b) via
telecopy, facsimile or telegram, or (c) via nationally recognized overnight courier.

	 	 	 	 	 
	 

	 	If to Plantex:
	 	Plantex USA Inc.
	 

	 	 	 	2 University Plaza, Suite 305
	 

	 	 	 	Hackensack, NJ 07601
	 

	 	 	 	Attention: President
	 

	 	 	 	Fax Number: 201-343-3833
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Plantex USA Inc.
	 

	 	 	 	2 University Plaza, Suite 305
	 

	 	 	 	Hackensack, NJ 07601
	 

	 	 	 	Attention: General Counsel
	 

	 	 	 	Fax Number: 215-293-6499
	 
	 	 	 	 
	 

	 	If to Valera:
	 	Valera Pharmaceuticals, Inc.
	 

	 	 	 	7 Clarke Drive
	 

	 	 	 	Cranbury, NJ 08512
	 

	 	 	 	Attention: President
	 

	 	 	 	Fax Number: 609-409-1650

	 	 	 	All such notices shall be deemed given when received.
	 
	 	14.4	 	Except to the extent required by law or deemed appropriate by legal counsel to
comply with securities laws, including the furnishing of a press release and the filing
of such documents and information with the U.S. Securities and Exchange Commission as
may be required by federal securities laws and the filing of any report, statement or
document required by any other federal or state regulatory body or in connection with a
due diligence investigation of the Party as part of a proposed acquisition, disposition
or financing transaction, neither Plantex nor Valera will publish, disclose or otherwise
announce the existence of this Agreement or the terms hereof without the consent of the
other Party, which consent will not be unreasonably withheld.
	 
	 	14.5	 	Either Party’s failure to terminate or seek redress for a breach of, or to insist
upon strict performance of any term, covenant, condition or provision contained in this
Agreement will not prevent a similar subsequent act from constituting a breach of this
Agreement.
	 
	 	14.6	 	This Agreement will be governed and construed in accordance with the laws of the
State of New Jersey, except for its conflict of law provisions.
	 
	 	14.7	 	Plantex and Valera will at all times act as independent parties without the right
or authority to bind the other with respect to any agreement, representation or warranty
made with or to any third party.
	 
	 	14.8	 	This Agreement contains the entire and only agreement between the Parties with
respect to the Manufacture and sale of the API and no oral statements or representations
or written matter not contained in this Agreement will have any force or effect. This
Agreement may not be amended or modified in any way except by writing executed by
authorized representatives of both Parties.
	 
	 	14.9	 	If any portion of this Agreement is determined to be illegal or otherwise
unenforceable by agreement of the Parties, by an arbitrator, by a court of competent
jurisdiction or by an administrative agency of competent jurisdiction, that section, to
the extent permitted by law, shall be treated as deleted from this Agreement and the
remaining portions of this Agreement will continue to be in full force and effect
according to the terms hereof.
	 
	 	14.10	 	Nothing contained in this Agreement shall be deemed to constitute a grant to
either Party of any license or other right under patents, designs, copyrights or other
industrial or intellectual property rights, now or hereafter belonging to the other
Party.
	 
	 	14.11	 	This Agreement may be executed in one or more counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute one
agreement.

43

 

	 	14.12	 	It is hereby acknowledged that the manufacturer of the API (provided such
manufacturer is an Affiliate of Plantex) is intended to be a third party beneficiary
hereunder such that all representations and covenants of Valera and its Affiliates
contained in this Agreement shall also inure to the benefit of such manufacturer of API.

(signature page follows)

44

 

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of May ___, 2006.

	 	 	 	 	 	 	 	 	 	 	 
	PLANTEX USA, INC.	 	 	 	VALERA PHARMACEUTICALS, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Erez Israeli
	 	 	 	By:
	 	/s/ Matthew Rue	 	 
	Name:

	 	 

Erez Israeli
	 	 
	 	Name:
	 	 

Matthew Rue
	 	 
	Title:

Date:

	 	 

VP Marketing
 

5/18/06
 

	 	   
	 	Title:

Date:
	 	 

VP Marketing
 

5/16/06
 

	 	   
	 
	 	 	 	 	 	 	 	 	 	 
	By:

Name:

Title:

Date:

	 	/s/ Cheryl Bohnel
 

Cheryl Bohnel
 

Corp. Sec/Dir-Acctg
 

5/18/06
 

	 	    	 	 	 	 	 	 

45

 

Schedule I

Specifications

The Specifications are attached to this Schedule I.

Valera acknowledges that Plantex desires to adjust the Specifications for the production batches of
the API to be supplied under this Agreement. Plantex shall provide the proposed adjusted
Specifications to Valera for review and approval, which approval shall not be unreasonably withheld
if: (a) each Regulatory Authority approves the change without requiring any testing other than
laboratory testing, (b) Plantex bears the entire cost of any laboratory work and the preparation
and filing of any and all submissions with each Regulatory Authority, the U.S. Pharmacopeia and
other similar entities necessary to update the DMF and the USP monograph and (c) such change shall
not introduce any delay in making the production batches available to Valera. Once approved by
Valera, the adjusted Specifications shall not be changed except in accordance with Section 3.13 of
the Agreement.

46

 

Specifications

******

47

 

Schedule II

Form Letter of Termination of the Anthra Agreement

Genchem Pharma Ltd. (“Genchem”) and Valera Pharmaceuticals, Inc. (“Valera”), as successor to Anthra
Pharmaceuticals, Inc.’s (“Anthra”) rights under the Supply Agreement entered into between Anthra
and Genchem on September 11, 1997 (the “Supply Agreement”), hereby terminate the Supply Agreement
and determine that the Supply Agreement is null and void. Genchem and Valera further agree that no
claims exist between them arising out of or relating to the Supply Agreement and no such claims
shall be addressed and to the extent any such claims exist, they are hereby forever and irrevocably
released.

	 	 	 	 	 	 	 
	 
 

[Valera]

	 	 
	 	 
 

[Genchem]
	 	 

48

 

EXHIBIT A

QUALIFICATIONS

Further to Section 3.12 to the Agreement, the scope of Valera’s qualification audit shall include
but not necessarily limited to the following:

Valera personnel or their representatives will have the right to inspect those areas of the
facility used in the synthesis, purification and storage of the API and critical intermediates.
The inspection will include the equipment used in the process and the utilities needed to support
the equipment. In addition, all standard operating procedures as well as cleaning, maintenance and
calibration records for the relevant equipment may be requested for inspection. Valera will have
the right to review any proposed changes to the facility, equipment or process that may directly
impact the manufacture the API or materially affect the filed Drug Master File (DMF).

Valera will have the right to review (but not remove) all production records for valrubicin and its
precursors including master batch record (MBR), outputs from monitoring or control equipment (e.g.
temperature charts), release results for raw materials and sampling and in-process test results.
Valera will have the right to inspect all quality control and analytical results that pertain to
the testing and release of the API. In addition, Valera will have the right to review all quality
assurance reports, personnel training records as permitted by law and related documentation that
are required to maintain a compliant operation for the production of the API.

Valera will have the right to review any reports resulting from a governmental agency or regulatory
body’s inspection of Sicor’s facility at Santhia, as well as the company’s response, if and when
such inspections and or reports could result in any interruption or loss of supply of API or could
otherwise materially affect Sicor’s ability to operate as a safe and compliant manufacturing site
for the API. Valera will be notified of all regulatory reportable changes to the DMF prior to
implementation.

49

 

EXHIBIT B

TECHNICAL AGREEMENT

See Attached

50

 

API TECHNICAL AGREEMENT

******

51

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