Document:

EXHIBIT 10.40

 

AMENDED AND RESTATED

MANUFACTURING AND PACKAGING AGREEMENT

 

This Manufacturing and Packaging Agreement (“Agreement”)
is made this    day of March, 2007 by and between Cardinal Health
PTS, LLC, having a place of business at 2725 Scherer Drive, St Petersburg,
Florida 33716 (“Cardinal Health”) and Reliant Pharmaceuticals, Inc. (“Reliant”),
having its principal place of business at 110 Allen Road, Liberty Corner, New
Jersey 07938. (Cardinal Health and Reliant are each a “Party” and shall
collectively be referred to herein as the “Parties.”)

 

BACKGROUND

 

A.            Cardinal
Health provides contract pharmaceutical development, manufacturing, packaging,
analytical, and sales and marketing services to the pharmaceutical industry.

 

B.            Reliant
has rights to market certain pharmaceutical products and wants Cardinal Health
to assist in the formulation, filling, packaging and testing of such products
as provided in this Agreement and the attachments hereto.

 

C.            In
April 2005, Cardinal Health and Reliant entered into that certain
Manufacturing and Packaging Agreement under which Reliant engaged Cardinal
Health to provide certain services to Reliant in connection with the processing
of the Product (defined below) (the “Initial
Agreement”) on a non-exclusive basis.

 

D.            The
Parties wish to amend and restate the Initial Agreement as set forth below.

 

E.             THEREFORE,
in consideration of the mutual conditions and covenants set forth herein, the
Parties hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

The
following terms have the following meanings in this Agreement:

 

1.1                                 “Affiliate(s)” means any corporation,
firm, partnership or other entity that controls, is controlled by or is under
common control with a Party. For purposes of this definition, “control” shall
mean the ownership of at least fifty percent (50%) of the voting share capital
of such entity or any other comparable equity or ownership interest.

 

1.2                                 “API” means the active pharmaceutical
ingredient described in the Manufacturing Specifications, which have been
released by Reliant and provided to Cardinal Health as raw material, along with
a certificate of analysis, as provided in this Agreement.

 

1.3                                 “API
Cap” shall have the meaning set forth in Section 15.1.

 

 

1.4                                 “Applicable Laws” means all laws,
ordinances, rules and regulations within the Territory applicable to the
Manufacturing and Packaging of the Product or any aspect thereof and the
obligations of Cardinal Health or Reliant, as the context requires under this
Agreement, including, without limitation, (A) all applicable federal,
state and local laws and regulations of each Territory; (B) the U.S.
Federal Food, Drug and Cosmetic Act, and (C) the current Good
Manufacturing Practices promulgated by the Regulatory Authorities, as amended
from time to time (“cGMPs”).

 

1.5                                 “Batch” means defined quantity of
finished drug product that has been or is being Manufactured and Packaged in
accordance with the Specifications.

 

1.6                                 “Calendar Quarter” means a period of
three (3) consecutive months commencing on January 1, April 1, July 1
or October 1 of any calendar year.

 

1.7                                 “Cardinal Health Technology” shall have
the meaning set forth in Article 12.

 

1.8                                 “Change Order” shall have the meaning
set forth in Section 4.5(A).

 

1.9                                 “Confidential Information” shall have
the meaning set forth in Section 11.2.

 

1.10                           “Contract Year” means each consecutive
twelve (12) month period beginning on January 1, 2007.

 

1.11                           “Defective Product” shall have the
meaning set forth in Section 5.2.

 

1.12                           “Delivery
Date” shall mean the date on which Cardinal Health tenders the relevant
Batch(es) to the carrier in accordance with Section 6.1. Each Delivery
Date shall be specified by Reliant on the relevant Purchase Order and confirmed
by Cardinal Health as set forth in Section 4.4.

 

1.13                           “Dispute” shall have the meaning set
forth in Section 19.9.

 

1.14                           “Effective Date” means January 1,
2007.

 

1.15                           “Facility
or Facilities” means Cardinal
Health’s facilities located in St. Petersburg, Florida or such other facility
as agreed by the Parties.

 

1.16                           “FDA” means the United States Food and
Drug Administration and any successor agency thereto.

 

1.17                           “Firm Commitment” shall have the
meaning set forth in Section 4.3.

 

1.18                           “Manufacture”
or “Manufacturing” means the compounding, filling, encapsulation, producing
and/or inspection of the API and Raw Materials into Product in accordance with
the Specifications and the terms and conditions set forth in this Agreement.

 

 

1.19                           “Manufacturing Date” means the day on which the
Product is to be compounded by Cardinal Health, which shall not be more than
forty-five (45) days prior to the Delivery Date.

 

1.20                           “Manufacturing
Related Reference Documents” means (a) all completed production/Batch
records; (b) all quality control test/request forms (result worksheets)
and associated data; (c) dynamic monitoring performed during processing; (d) any
alert/action notifications generated during processing; (e) any planned or
unplanned deviations associated with the Product; (f) any out of
Specification result investigations associated with the Product; (g) the
Certificate of Analysis for the Batch comparing testing to Specifications; (h) the
appropriate disposition notification for the Batch, and (i) a Yield
statement.

 

1.21                           “Manufacturing
Sample” shall have the meaning set forth in Section 5.1.

 

1.22                           “Minimum
Requirement” shall have the meaning set forth in Section 4.1.

 

1.23                           “Package”
or “Packaging” means the labeling and the packaging of the Product onto the
bulk product packaging in accordance with the Specifications and the terms and
conditions of this Agreement.

 

1.24                           “Product” means Omacor® as fully
compounded API Manufactured and Packaged in accordance with the Specifications,
including both Sample Product and Trade Product.

 

1.25                           “Product
Maintenance Fee” shall have the meaning set forth in Section 7.2.

 

1.26                           “Product
Maintenance Services” shall have the meaning set forth in Section 2.3.

 

1.27                           “Purchase Order” shall have the meaning
set forth in Section 4.4.

 

1.28                           “Raw Materials” means all raw
materials, supplies, components and packaging, not including API, necessary to
Manufacture, Package and ship the Product in accordance with the
Specifications.

 

1.29                           “Regulatory Authority” means any
governmental regulatory authority within a Territory involved in regulating any
aspect of the development, manufacture, market approval, sale, distribution,
packaging or use of the Product.

 

1.30                           “Reliant Technology” shall have the
meaning set forth in Article 12.

 

1.31                           “Review Period” shall have the meaning
set forth in Section 5.1.

 

1.32                           “Rolling Forecast” shall have the
meaning set forth in Section 4.3.

 

1.33                           “Sample Product” shall mean Product
supplied to physicians and other permitted recipients without charge in
accordance with all Applicable Laws.

 

1.34                           “Softgel
Technology” means Cardinal Health’s proprietary technology for the manufacture
of softgels for the oral administration of pharmaceutical active ingredients
having 

 

 

certain solubility
characteristics and includes proprietary know-how including without limitation
know-how relating to (i) the development of fill and shell formulations; (ii) the
design and use of the encapsulation process to enhance stability, solubility,
bioavailability, and manufacturability of active ingredient chemical entities
in softgels; (iii) the selection and preparation of solvents, vehicles,
excipients, surfactants, stabilizers, gelatin, plasticizers and other
components of the liquid fill and the gelatin shell; (iv) certain
encapsulation, drying and related manufacturing techniques and machinery for
making commercial quantities of softgels, and (v) Cardinal Health’s
proprietary [***] technique.

 

1.35                           “Specifications” means the procedures,
requirements, standards, quality control testing and other data and the scope
of services as set forth in Exhibit A, which are hereby
incorporated by reference into this Agreement, along with any valid amendments
or modifications thereto, subject to the terms and conditions of Article 9.

 

1.36                           “Term” shall have the meaning set forth
in Section 15.1.

 

1.37                           “Territory” means the United States of
America, its territories and possessions.

 

1.38                           “Trade
Product” means any Product which has been designated and packaged for
commercial sale in the Territory.

 

1.39                           “Unit”
means each individual unit of Product, as described more fully in the Specifications.

 

1.40                           “Unit Pricing” shall have the meaning
set forth in Section 7.1.

 

1.41                           “Yield”
shall have the meaning set forth in Section 3.4.

 

ARTICLE 2

VALIDATION, MANUFACTURING, PACKAGING &
RELATED SERVICES

 

2.1                                 Validation
Services. During the Term, Cardinal Health shall perform the
qualification and validation services described in Exhibit D of
this Agreement for the prices specified therein.

 

2.2                                 Supply
and Purchase of Product. During the Term, Cardinal Health shall Manufacture
and Package the Products in accordance with the Specifications, Applicable Laws
and the terms and conditions of this Agreement. Reliant shall purchase Product
from Cardinal Health in accordance with the terms and conditions of this
Agreement, including but not limited to the obligations set forth in Section 4.1
and Section 4.2 hereof.

 

2.3                                 Product
Maintenance Services. During the Term and subject to Reliant’s payment of
the Product Maintenance Fee as set forth in Section 7.2, if applicable,
Reliant shall be entitled to the Product maintenance services set forth below
(collectively, the “Product Maintenance Services”). For the avoidance of doubt,
in the event that, in accordance with the terms of Section 7.2, Reliant 

 

[***]:  Certain information on this page has
been omitted and filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

 

 

is not required to pay
the Product Maintenance Fee, Reliant shall nonetheless be entitled to the
Product Maintenance Services:

 

•                  Administration
of Foreign Trade Zone;

•                  One
annual audit;

•                  Annual
Product review;

•                  Access to document library over and
above the Quality Agreement, including additional copies of batch paperwork or
other batch documentation;

•                  Annual
Drug Master File update;

•                  Preparation of Product licenses or
permits under United States local, state or Federal regulations (in each case
as more fully set forth in Article 10);

•                  Product
Document and Manufacturing Sample Storage relating to cGMP requirements;

•                  Vendor
re-qualification;

•                  Maintenance
and storage of Audit Reports; and

•                  Bulk
stability (6 months, warehouse conditions).

 

ARTICLE 3

MATERIALS

 

3.1           API.

 

A.                                   Reliant
shall supply to Cardinal Health for Manufacturing and Packaging, at Reliant’s
sole cost, the API and applicable reference standards in quantities sufficient
to meet Reliant’s requirements for each Product as further set forth in Article 4.
Prior to delivery of any of the API or reference standard to Cardinal Health
for Manufacturing and Packaging, Reliant shall provide to Cardinal Health a
copy of the API Material Safety Data Sheet (“MSDS”), as amended, and any
subsequent revisions thereto. Reliant shall supply the API, reference
standards, and Certificate of Analysis FOB the Facility no later than thirty
(30) days before the scheduled Manufacture Date upon which such API will be
used by Cardinal Health. Upon receipt of the API, Cardinal Health shall conduct
identification testing of the API. Cardinal Health shall use the API solely and
exclusively for Manufacturing and Packaging under this Agreement. The maximum
volume of API that Reliant supplies to Cardinal Health shall not exceed the
amount reflected in the Firm Commitment and the next six (6) months of the
Rolling Forecast.

 

B.                                     All
API provided by Reliant shall meet applicable Specifications that apply
thereto, and shall be produced in accordance with all applicable federal, state
and local laws and regulations, including, without limitation, cGMPs.

 

C.                                     Cardinal
Health shall inspect API as received to verify its identity and shall give
Reliant oral and written notice of any nonconformity with Specifications within
thirty (30) calendar days of receipt of API by Cardinal Health. Reliant shall
provide a Certificate of Analysis with each delivery of API and such
certificate shall be the basis for drug potency.

 

D.                                    Reliant
shall retain title to API at all times and shall bear the risk of loss thereof;
provided, however, subject to Section 15.1, from the time
API is received at Cardinal Health’s Facility to the time API is returned (or
Product is delivered) to Reliant’s designated carrier at 

 

 

Cardinal Health’s loading
dock, Cardinal Health shall bear the risk of loss of API arising from Cardinal
Health’s negligence or failure to comply with cGMPs or failure to comply with
all Specifications.

 

3.2                                 Raw
Materials. Cardinal Health shall be responsible for procuring, inspecting
and releasing adequate Raw Materials as necessary to meet the Firm Commitment,
unless otherwise agreed to by the Parties in writing. All Raw Material supplier
changes must be agreed by the Parties by amending the Specifications in
writing.

 

3.3                                 Reimbursement
for Materials. In the event of (A) a Specification change requested by
Reliant or Cardinal Health for Reliant’s benefit and agreed by the Parties, or
to comply with any new requirement of a Regulatory Authority, (B) termination
of this Agreement by Reliant without cause or expiration of this Agreement; or (C) unforeseeable
obsolescence of any Raw Material, Reliant shall bear the cost of any unused Raw
Materials that cannot be used by Cardinal Health or returned for credit,
provided that Cardinal Health purchased such Raw Materials in quantities
consistent with Reliant’s most recent Firm Commitment and the supplier’s
minimum purchase obligations.

 

3.4                                 Yield
and Inventory Reconciliation. Cardinal Health will achieve a minimum Yield
in Manufacturing the Product. “Yield” means the relation between the API
content of the Product Manufactured over a certain time period and the actual
quantity of API used to Manufacture such quantity of Product. The minimum Yield
was determined after the Manufacture of the greater of twenty (20) batches or
the number of batches Manufactured during the first three (3) months of
production and is set forth in Exhibit C. In the event the minimum
yield falls below [***]% at any time during the Term, the Parties agree to
discuss remedies to elevate the minimum yield in good faith and amend the
Agreement as the Parties deem appropriate, provided, however, the
foregoing discussions shall not relieve Cardinal Health of its obligations to
pay for quantities of API consumed in excess of the minimum Yield under this Section 3.4.
In the event the Parties have not agreed on remedies to elevate the Yield to [***]%
within three (3) months of determining the minimum Yield as set forth
above, the Parties expressly agree that for purposes of this Section 3.4
and the obligations set forth herein, the minimum Yield shall be no less than [***]%,
unless the Parties discuss and agree that it is commercially impracticable
under the circumstances. After the Parties have established the minimum Yield,
Cardinal Health shall, after Manufacture of each Batch, compare actual Yield
for such batch with the minimum Yield. Cardinal Health shall prepare a
quarterly report that sets forth all Yields by lot numbers that exceed the
minimum Yield. Cardinal Health will reimburse or credit Reliant an amount that
is equal to the current price that Reliant actually paid for API per kilo in
the Contract Year (currently [***] dollars ($[***])[***]) consumed in excess of
the minimum Yield, as evidenced by written documentation submitted to Cardinal
by Reliant. The Parties agree that for specific written orders Reliant may provide
Cardinal Health with instructions for Manufacturing that result in Yields lower
than the minimum Yield. Reliant will not be entitled to reimbursement or credit
for API to the extent that API loss is attributable solely to Reliant’s
specific instructions. Within three (3) business days of the end of each
quarter Cardinal Health shall notify Reliant of the quantities of API (both raw
material and in-process) in inventory. Upon reasonable advance notice to
Cardinal Health and at mutually agreeable times but not more than twice in any
twelve 

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

(12) month period,
Reliant shall be permitted to inspect API inventory at Cardinal Health’s
Facility.

 

ARTICLE 4

COMMITMENT OF THE PARTIES, PURCHASE ORDERS &
FORECASTS

 

4.1                                 Minimum
Requirement. During each Contract Year, Reliant shall purchase the minimum
dollar volume of Product (the “Minimum Requirement”) set forth on Exhibit B.
If Reliant does not purchase such Minimum Requirement during any Contract Year,
within thirty (30) days after the end of such Contract Year and upon receipt of
an invoice from Cardinal Health, Reliant shall pay Cardinal Health the
difference between (A) the Minimum Requirement and (B) the sum of all
purchases from Cardinal Health for the Product during the just concluded
Contract Year.

 

4.2                                 Commitment
of the Parties.

 

(a) INTENTIONALLY
OMITTED

 

(b)                                 Reliant
commits to purchase a minimum of 80% of its Manufacturing requirements for Trade
Product in the Territory per Contract Year from Cardinal Health during the Term
of this Agreement, subject to Section 4.2 (c) and (d) below. For
the avoidance of doubt, Reliant may, in its sole discretion, purchase any or
all of its Sample Product from any third party. Further, for the avoidance of
doubt, the pricing for all Product will be at the level assuming that Reliant
purchases 100% of its requirements for Trade Product from Cardinal Health, and,
in the event Reliant purchases less than 100% of its requirements from Cardinal
Health the Parties will conduct a reconciliation of pricing at the conclusion
of that Contract Year.

 

Within
sixty (60)
days following the end of each Contract Year during the Term of this Agreement,
and within sixty
(60) days following the termination or expiration of this Agreement for
any reason, Reliant shall submit to Cardinal Health a written report (each, an “Annual
Report”), certified by an officer of Reliant, setting forth, with respect to
the immediately preceding Contract Year: (i) Reliant’s Manufacturing
requirements for Trade Product in the Territory, (ii) the aggregate Units
of Trade Product purchased from Cardinal Health; (iii) the calculation of
the percentage of its Manufacturing requirements for Trade Product purchased
from Cardinal Health, and (iv) the amount, if any, to be paid to Cardinal
Health in accordance with the terms and conditions set forth in Exhibit B
based on the actual percentage of Reliant’s Manufacturing requirements
purchased from Cardinal Health. In the event that such Annual Report indicates
that Cardinal Health is owed an additional amount for Trade Product purchased
in the immediately preceding Contract Year, Cardinal Health shall invoice
Reliant for such amount, and Reliant shall pay such invoice within thirty (30)
days of the date of receipt of such invoice.

 

(c)                                  In
the event Cardinal Health (i) determines it cannot meet any of Reliant’s
Rolling Forecasts delivered in accordance with Section 4.3 below, or (ii) fails
to deliver any Product within ten (10) days of a respective Delivery Date
for three (3) consecutive months during the Term, such that at the end of
any three month period Cardinal Health has failed to deliver the total number
of lots for which Reliant has issued Purchase Orders, Reliant’s obligations
under 

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

4.2(b) shall be
reduced in direct proportion to the percentage such unfulfilled Purchase Orders
represent as measured against Reliant’s obligations in Section 4.2(b), provided,
however, Reliant shall use commercially reasonable efforts to return to
the purchase requirement level set forth in Section 4.2(b) following
resolution of any technical issues.

 

(d)                                 Any
quantity of Product which is not delivered to Reliant by Cardinal Health within
ten (10) days of any Delivery Date, for any reason whatsoever, during the Term
shall give Reliant the option to purchase such quantity of Trade Product, but
only such quantity, from a qualified third-party supplier.

 

(e)                                  In
the event Cardinal Health’s Facility undergoes expansion and subsequent FDA
approval of such expansion, Reliant shall have the option, but not the
obligation, to have its Product Manufactured and Packaged in such new wing,
provided, however, that Reliant shall bear the cost of relocating to such new
wing, up to a cap of $[***].

 

4.3                                 Forecast.
On the Effective Date and on or before the first (1st) day of each
calendar month following the Effective Date, 
Reliant shall furnish to Cardinal Health in writing, an eighteen (18)
month rolling forecast of the quantities of Product that Reliant intends to
order from Cardinal Health during such period (“Rolling Forecast”). The first
three (3) months of such Rolling Forecast shall constitute a binding order
for the quantities of Product specified therein (“Firm Commitment”) and the
following fifteen (15) months of the Rolling Forecast shall be non-binding,
good faith estimates.

 

4.4                                 Purchase
Orders. On or before the first (1st) day of each calendar month,
Reliant shall submit a purchase order for the Firm Commitment, which specifies
the actual number of Batches to be Manufactured and Packaged, the approximate
number of Units in each Batch, and the requested Delivery Dates for each Batch
(“Purchase Order”). Reliant shall submit each Purchase Order to Cardinal Health
at least ninety (90) days in advance of the earliest Delivery Date requested in
the Purchase Order. Cardinal Health shall confirm Delivery Dates to Reliant. In
the event of a conflict between the terms of any Purchase Order and this
Agreement, this Agreement shall control. Notwithstanding the foregoing,
Cardinal Health shall supply Reliant with quantities of Product that exceed by
not more than [***] percent ([***]%)  the
quantities specified in the Firm Commitment (“Excess Quantities”), and shall
use best commercial efforts to supply additional quantities of Product
requested by Reliant (“Additional Quantities”). Cardinal Health’s supply of
Excess Quantities and Additional Quantities are both subject to (i) receipt
of a Purchase Order for such Additional Quantities and Excess Quantities at
least ninety (90) days in advance of the requested Delivery Date for such
Additional Quantities and Excess Quantities, and (ii) Cardinal Health’s
possession of sufficient quantities of API to Manufacture Excess Quantities and
Additional Quantities. Cardinal Health’s failure to supply Reliant with
Additional Quantities shall not constitute a failure to supply under Section 2.2
and 4.2. Should Cardinal Health fail to supply Reliant with its requirements
for the Product, specifically excluding Additional Quantities, for any
particular month hereunder, Cardinal Health shall be required to make up the
difference in the immediately subsequent month.

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

4.5                                 Cardinal
Health’s Cancellation of Purchase Orders. Notwithstanding the terms and
conditions set forth in Section 4.6 below, Cardinal Health reserves the
right to cancel all, or any part of, a Purchase Order upon written notice
to Reliant (and Cardinal Health shall have no further obligations or liability
with respect to such Purchase Order) if Reliant refuses or fails to make
scheduled deliveries of the API.

 

4.6                                 Reliant’s
Modification or Cancellation.

 

A.                                   Reliant
may modify the delivery date, Specifications or quantity of Product in
such Purchase Order only by submitting a written change order (“Change Order”)
to Cardinal Health at least thirty (30) business days in advance of the
earliest scheduled Manufacturing Date for the Manufacturing and Packaging
covered by the change order. Such change order shall be effective and binding
upon Cardinal Health only upon the written acceptance by Cardinal Health and,
notwithstanding the foregoing, Reliant shall remain responsible for the Firm
Commitment portion of the Rolling Forecast.

 

B.                                     Notwithstanding
any amounts due to Cardinal Health under Section 4.1 or Section 4.4,
if Reliant fails to place Purchase Orders sufficient to satisfy the Firm
Commitment, Reliant shall, within thirty (30) days of receipt of invoice, pay
to Cardinal Health the difference between the (i) Unit Price for all Units
that would have been Manufactured and Packaged if Reliant had placed Purchase
Orders sufficient to satisfy the Firm Commitment, and (ii) Cardinal Health’s
cost of any Raw Materials that would have been used in such Units, provided,
however, that Cardinal Health is not in default of any of its supply
obligations hereunder. In the event Cardinal Health has an opportunity to
mitigate its damages hereunder, the Parties shall meet in good faith to discuss
an appropriate reduction.

 

4.7                                 Unplanned
Delay or Elimination of Manufacturing and Packaging. Cardinal Health shall
timely fill each Purchase Order, subject to the terms and conditions of this
Agreement applicable to both Parties. Cardinal Health shall notify Reliant as
soon as possible after the receipt of a Firm Commitment or Purchase Order if
Cardinal Health determines that any Manufacturing or Packaging related to the
Firm Commitment or Purchase Order will be delayed or eliminated for any reason.

 

4.8                                 Inspection
of Manufacturing and Packaging. Reliant may base up to two (2) representatives
at the Facilities to observe the Manufacturing and Packaging provided that
Reliant provide Cardinal Health at least ten (10) days’ advance written
notice of the attendance of such Reliant representatives. Reliant shall
indemnify and hold harmless Cardinal Health for any action or activity of such
representatives while on Cardinal Health’s premises.

 

ARTICLE 5

TESTING; MANUFACTURING SAMPLES; RELEASE

 

5.1                                 Manufacturing
Samples; Testing. Within seven (7) days after Cardinal Health’s
completion of Manufacturing and Packaging of each Batch, Cardinal Health shall
deliver to Reliant, or its designee, a sample of the Product (“Manufacturing
Sample”) and the Manufacturing Related Reference Documents for such Batch. No
later than thirty (30) days after receipt of the Manufacturing Sample and a
complete set of the Manufacturing Related Reference 

 

 

Documents (“Review Period”),
Reliant or its designee shall review the Manufacturing Related Reference
Documents and notify Cardinal Health whether the Manufacturing Sample conforms
to the warranty set forth in Section 13.1 of this Agreement. Upon receipt
of notice from Reliant that a Batch meets the warranty in Section 13.1, or
upon failure of Reliant to respond by the end of the Review Period, Cardinal
Health will invoice Reliant for such Batch in accordance with Section 7.5
below.

 

5.2                                 Non-Conforming
Product. If Reliant notifies Cardinal Health during the Review Period that
the Manufacturing Sample does not conform to the warranty set forth in Section 13.1
and Cardinal Health agrees with Client’s determination, Client shall not be
responsible to pay for such batch (the “Defective Product”), and Cardinal
Health shall, at Reliant’s option, either (A) replace any Batch of
non-conforming Product, or (B) credit any payments made by Reliant for
such Batch. If Cardinal Health does not agree with Reliant’s determination that
such Product fails to meet the warranty set forth in Section 13.1, then
after reasonable efforts to resolve the disagreement, the Parties shall cause a
mutually acceptable independent third party to review records, test data and to
perform comparative tests and/or analyses on the Manufacturing Sample. The
results of the independent review shall be final and binding. Unless otherwise
agreed to by the Parties in writing, the costs associated with such testing and
review shall be borne by the non-prevailing Party.

 

THE OBLIGATION OF
CARDINAL HEALTH TO (A) REPLACE DEFECTIVE PRODUCT IN ACCORDANCE WITH THE
SPECIFICATIONS OR CREDIT PAYMENTS MADE BY RELIANT FOR DEFECTIVE PRODUCT AND (B) REIMBURSE
RELIANT FOR API LOST IN THE DEFECTIVE BATCH, SUBJECT TO THE LIMITATIONS IN ARTICLE 15.1,
SHALL BE RELIANT’S SOLE AND EXCLUSIVE REMEDY (WITHOUT PREJUDICE TO ANY
INDEMNIFICATION OBLIGATIONS UNDER SECTION 14.1 OR THE OBLIGATIONS OF SECTION 10.6
(RECALL)) UNDER THIS ARTICLE FOR DEFECTIVE PRODUCT AND IS IN LIEU OF ANY
OTHER WARRANTY, EXPRESS OR IMPLIED.

 

5.3                                 Supply
of Material for Defective Product. In the event Cardinal Health is required
to replace Product pursuant to Section 5.2, above, in no instance shall
Cardinal Health be liable for damage in excess of fees paid for Defective
Product and API, subject to the limitation of liability in Section 15.1
and the indemnification obligations under Section 14.1.

 

ARTICLE 6

DELIVERY

 

6.1                                 Delivery.
Cardinal Health shall segregate and store all Product until such Product has
been Manufactured and Packaged to the Product Specifications. Upon such
acceptance, Cardinal Health shall tender the Product for delivery, F.O.B. the
Facility. Reliant shall be responsible for all costs and risk of loss
associated with shipment of the Product. Reliant shall qualify at least one (1) carrier
to ship the Product, and if Reliant qualifies more than one carrier Reliant
shall designate the priority of such qualified carriers to Cardinal Health.

 

6.2                                 Failure
to Take Delivery. If Reliant fails to take delivery within seven (7) days
of any scheduled delivery date solely with respect to Product that has been
deemed acceptable by 

 

 

Reliant, Reliant shall be
invoiced for such Product pursuant to Section 7.5   On the first day of each subsequent month
Reliant shall be invoiced for the stored Product at a rate of [***] of Batch
price per month for administration and storage costs. For each such batch of
accepted but undelivered Product, Reliant agrees that: (A) Reliant has
made a fixed commitment to purchase such Product, (B) title and risk of
loss for such Product passes to Reliant, (C) such Product shall be on a
bill and hold basis for legitimate business purposes, (D) if no delivery
date is determined at the time of billing, Cardinal Health shall have the right
to ship the Product to Reliant or Reliant’s designee within four months after
billing, and (E) Reliant will be responsible for any decrease in market
value of such Product that relates to factors and circumstances outside of
Cardinal Health’s control. Within five (5) days following a written
request from Cardinal Health, Reliant shall provide Cardinal Health with a
letter confirming items (A) through (E) of this Section for each
Batch of undelivered Product.

 

ARTICLE 7

PRICING AND PAYMENT

 

7.1                                 Unit
Pricing. Reliant shall pay to Cardinal Health the unit pricing set forth on
Exhibit B (“Unit Pricing”) for all Product. When a Purchase Order
is placed, Reliant shall specify in such Purchase Order whether each lot is
designated for Sample Product or Trade Product. For lots designated for Sample
Product, Reliant shall pay the Unit Pricing for Sample Products as set forth on
Exhibit B. For lots designated for Trade Product, Reliant shall pay
the tiered Unit Price based on the number of Units set forth in its Rolling Forecast
for the then-current Contract Year. By way of example, as of the date a
Purchase Order is submitted, if Reliant’s Rolling Forecast for then current
Contract Year estimates a unit volume in excess of One Hundred Million Units,
Reliant shall pay the Unit Pricing for such volume indicated on Exhibit B.
The Parties shall reconcile all accounts annually, no later than thirty (30)
days after the beginning of each Contract Year hereunder, including
verification by Reliant of its sampling program. In the event Reliant shall
desire to make a Sample Product lot out of a lot otherwise forecast and
purchased as Trade Product, the Parties shall reconcile such transfer and
Cardinal Health shall credit the difference to Reliant within thirty (30) days
of such notification. Unit Pricing for Sample Product to be used by Reliant for
physician sampling shall be extended for two (2) years from the Effective
Date. In the event Reliant shall receive FDA approval for a new indication for
the Product, the Parties agree to discuss in good faith an extension of the
Sample Product pricing program at the original sample price. In the event
Reliant requests services other than Manufacturing and Packaging Product,
Cardinal Health shall provide a written quote of the fee for such additional
services and Reliant shall advise Cardinal Health whether it wishes to have
such additional services performed by Cardinal Health.

 

7.2                                 Product
Maintenance Fee. In partial consideration of the Product Maintenance
Services set forth in Section 2.3, Reliant shall pay Cardinal Health an
annual Product Maintenance Fee of [***] dollars ($[***]) for any Contract Year
wherein Reliant purchases less than [***] Units of Product from Cardinal Health.
For any year in which the Product Maintenance Fee is applicable, it shall be
payable by December 31 of such Contract Year. For the avoidance of doubt,
no Maintenance Fees are due and owing as of the Effective Date.

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

7.3                                 Price
Increase. The Unit Pricing may be adjusted on an annual basis,
effective on the first day of each Contract Year beginning January 1,
2008, upon ninety (90) days’ written notice from Cardinal Health to Reliant. Such
adjustment shall be based on actual increases or decreases in Raw Material or
Manufacturing and Packaging costs, subject to the following limitations: The
Unit Pricing for Product shall include only: (a) the cost of Raw Materials
and (b) Cardinal Health’s Manufacturing and Packaging costs, including
without limitation Cardinal Health’s labor, utilities and overhead. Any price
adjustment shall limit the increase in component (b) to [***] ([***]%); provided,
however, Cardinal Health shall use its best commercial efforts to limit
any increases hereunder as much as possible and Cardinal Health agrees to
provide backup documentation for all annual increases, if any, and such costs
and related documentation shall be auditable upon reasonable notice by an
independent third party reasonably acceptable to Cardinal Health and Reliant. Reliant
shall bear all costs associated for such audit, unless such audit reveals that
Cardinal Health exceeded the permitted increase, in which case Cardinal Health
shall bear the costs of the audit and shall credit such overpayment to Reliant.

 

7.4                                 Taxes;
Duty. All taxes, duties and other amounts assessed on the Raw Materials,
API or the Product prior to or upon sale to Reliant are the responsibility of
Reliant, and Reliant shall reimburse Cardinal Health for any such taxes, duties
or other expenses paid by Cardinal Health, upon receipt of reasonable
documentation.

 

7.5                                 Payment
Terms. Cardinal Health shall invoice Reliant for all Product as provided in
Section 7.1, and for any amounts due pursuant to Section 4.1 or Section 4.2
and payment for such undisputed invoices shall be due within thirty (30) days
after the date of such invoice. In the event payment is not received by
Cardinal Health, for any amounts due under this Agreement, on or before the
thirtieth (30th) day after the date of the invoice, or in the case
of the Product Maintenance Fee, upon the date set forth in Sections 7.2, then
such unpaid amounts shall accrue interest at the rate of percent (1.0%) per
month until paid in full.

 

ARTICLE 8

INTENTIONALLY OMITTED

 

ARTICLE 9

CHANGES TO SPECIFICATIONS

 

All
Specifications and any changes thereto agreed to by the Parties from time to
time shall be in writing, dated and signed by the Parties. No change in the
Specifications shall be implemented by Cardinal Health, whether requested by
Reliant or requested or required by any Regulatory Authority, until the Parties
have agreed in writing to such change, the implementation date of such change,
and any increase or decrease in costs, expenses or fees associated with such
change. Cardinal Health shall respond promptly to any request made by Reliant
for a change in the Specifications, and both Parties shall use commercially
reasonable, good faith efforts to agree to the terms of such change in a timely
manner. If after initial Product qualification, Reliant requests a change in
the Specifications for its own benefit or to comply with the requirements of a
Regulatory Authority, the Specifications shall be amended as soon as 

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

possible after a request
is made for any change in Specifications, and Cardinal Health shall notify
Reliant of the costs associated with such change and shall provide such
supporting documentation as Reliant may reasonably require. Reliant shall
pay all costs associated with such Reliant-requested changes or changes
required by a Regulatory Authority as may be agreed upon by the Parties.
Changes, agreed to between the Parties, for the benefit of Cardinal Health,
shall be at the expense of Cardinal Health. If there is a conflict between the
terms of this Agreement and the terms of the Specifications, this Agreement
shall control.

 

ARTICLE 10

RECORDS; REGULATORY MATTERS

 

10.1                           Batch
Records and Data. Within thirty (30) days following the completion of
Manufacturing and Packaging of each batch, Cardinal Health shall provide
Reliant with properly completed copies of Manufacturing Related Reference
Documents prepared in accordance with the Specifications; provided, however,
that if testing reveals an out-of-Specification result, Cardinal Health shall
provide such Batch records within ten (10) days following resolution of
the out-of Specification result.

 

10.2                           Recordkeeping.
Cardinal Health shall maintain true and accurate books, records, test and
laboratory data, reports and all other information relating to Manufacturing
and Packaging under this Agreement, including all information required to be
maintained by all Applicable Laws. Such information shall be maintained in
forms, notebooks and records for a period of at least two (2) years from
the relevant finished Product expiration date or longer if required under
Applicable Laws.

 

10.3                           Regulatory
Compliance. Cardinal Health, with the assistance of Reliant, shall obtain
all permits and licenses required by any United States federal, state or local
regulatory agency with respect to the Product and the Manufacturing and
Packaging under this Agreement, including any product licenses, applications
and amendments in connection therewith. Cardinal Health will be responsible to
maintain all permits and licenses required by any Regulatory Authority with
respect to the Facility. During the Term, Cardinal Health will assist Reliant
with all regulatory matters relating to Manufacturing and Packaging under this
Agreement, at Reliant’s request and at Reliant’s expense. Each Party intends
and commits to cooperate to satisfy all Applicable Laws relating to
Manufacturing and Packaging under this Agreement. Cardinal Health shall provide
a Certificate of Compliance to Reliant annually during the Term.

 

10.4                           Governmental
Inspections and Requests. Cardinal Health shall immediately advise Reliant
if an authorized agent of any Regulatory Authority visits the Facility
concerning the Manufacturing or Packaging of the Product. Cardinal Health shall
furnish to Reliant a copy of the report by such Regulatory Authority, if any,
within ten (10) days of Cardinal Health’s receipt of such report. Further,
upon receipt of a Regulatory Authority request to inspect the Facilities or
audit Cardinal Health’s books and records with respect to Manufacturing or
Packaging under this Agreement, Cardinal Health shall immediately notify
Reliant, and shall provide Reliant with a copy of any written document received
from such Regulatory Authority. Cardinal Health shall permit Reliant to have a
representative present for any such Product-specific Facility inspection unless
such presence would be unreasonable under the circumstances. To the extent
specifically related to the Manufacturing or Packaging hereunder, Cardinal
Health shall provide Reliant with 

 

 

a copy of any proposed
written response prior to submission and a reasonable opportunity for Reliant
to review and approve, provided such approval is not unreasonably withheld,
conditioned or delayed.

 

10.5                           Reliant
Inspections and Audits.

 

A.                                   Except
for circumstances as set forth in Section 10.4, during the term of this
Agreement, duly-authorized employees, agents and representatives of Reliant
shall be granted access upon at least twenty-four (24) hours prior notice,
unless more time is reasonably requested by Cardinal Health, and at reasonable
times during regular business hours to only the portion of the Facilities where
Cardinal Health Manufactures or Packages API for the purpose of inspecting and
verifying that Cardinal Health is Manufacturing and Packaging API in accordance
with cGMPs, the Specifications and the Product Master Batch Record. For
purposes of this Section 10.5, duly-authorized agents and representatives
shall be required to sign Cardinal Health’s standard Confidential Disclosure
Agreement prior to being allowed access to Cardinal Health’s Facilities.

 

B.                                     With
due regard to information and operations which constitute Proprietary
Information of Cardinal Health, duly-authorized employees, agents and
representatives of Reliant shall have the right to inspect Cardinal Health
Batch Records relating to Product and those portions of Cardinal Health’s
Facilities used for Manufacturing and Packaging Product. Reliant’s Quality
Assurance Manager will arrange audit visits with Cardinal Health Quality
Management.

 

10.6                           Recall.
In the event Cardinal Health believes a recall, field alert, Product withdrawal
or field correction may be necessary with respect to any Product provided
under this Agreement, Cardinal Health shall immediately notify Reliant in
writing. Cardinal Health will not act to initiate a recall, field alert,
Product withdrawal or field correction without the express prior written
approval of Reliant, unless otherwise required by Applicable Laws. In the event
Reliant believes a recall, field alert, Product withdrawal or field correction may be
necessary with respect to any Product provided under this Agreement, Reliant
shall immediately notify Cardinal Health in writing and Cardinal Health shall
provide all necessary cooperation and assistance to Reliant. Reliant shall
solely control the implementation of such recall, filed alert, Product
withdrawal or field correction. The cost of any recall, field alert, Product
withdrawal or field correction shall be borne by Reliant unless such recall, field
alert, Product withdrawal or field correction is caused solely by Cardinal
Health’s breach of its representations, warranties and obligations under this
Agreement or Applicable Laws or its negligence or willful misconduct, then such
cost shall be borne by Cardinal Health. For purposes hereof, such cost shall be
limited to reasonable, actual and documented administrative costs incurred by
Reliant for such recall, withdrawal or correction, and replacement of the
Defective Product to be recalled, in accordance with Article 5.

 

10.7                           Quality
Agreement. Within thirty (30) days following the execution of this
Agreement, the Parties shall execute a Quality Agreement in substantially the form attached
to this Agreement as Exhibit E. The Quality Agreement shall in no
way determine liability or financial responsibility of the Parties for the
responsibilities set forth therein. In the event of a conflict between the
terms of this Agreement and the Quality Agreement, this Agreement shall
control.

 

 

10.8                           Qualification
of Additional Facilities. In the event Reliant requests that Cardinal
qualify additional Facilities to Manufacture and Package the Product, Reliant
shall be solely responsible for any costs associated therewith which shall be
limited to technology transfer and technology transfer service costs. In the event that Cardinal Health desires to qualify
additional Facilities to Manufacture and Package the Product, Cardinal Health
shall be solely responsible for any costs associated therewith.

 

ARTICLE 11

CONFIDENTIAL INFORMATION

 

11.1                           Confidentiality
Agreement. The use and disclosure of confidential information exchanged
between the Parties shall be governed by the Confidentiality Agreement by and
between Cardinal Health, Reliant and Pronova Biocare, a.s., dated July 29,
2004 (the “Confidentiality Agreement”).

 

11.2                           No
Implied License. Except as otherwise set forth herein, the Party receiving
Confidential Information (as such is defined in the Confidentiality Agreement)
will obtain no right of any kind or license under any patent application or
patent by reason of this Agreement. All Confidential Information will remain
the sole property of the Party disclosing such information or data.

 

11.3                           Return
of Confidential Information. Upon termination or expiration of this
Agreement, the Party to which Confidential Information has been disclosed will,
upon request, promptly return within thirty (30) days, all such Confidential
Information, including any copies thereof, and cease its use or, at the option
of the receiving Party,  promptly
destroy the same and certify such destruction to the disclosing Party, except
for a single copy thereof which may be retained for the sole purpose of
determining the scope of the obligations incurred under this Agreement.

 

11.4                           Disclosure
of Confidential Information. Notwithstanding the terms set forth this Article 11
or the Confidentiality Agreement, each of the Parties shall have the right to
disclose the existence and terms of this Supply Agreement to those of its
directors, managers, officers, employees, accountants, attorneys, advisers,
agents, investment bankers, lenders and potential lenders, financing sources,
acquirers or business combination candidates who need to know such terms for
the purpose of evaluating or entering into a potential business arrangement (“Third
Parties”); provided, that such Third Parties are required to maintain the
confidentiality of this Supply Agreement to the same extent as if they were
Parties hereto Notwithstanding the foregoing, each of the Parties shall have
the right to disclose the existence and terms of this Supply Agreement as may be
required by applicable laws or rules of any stock exchange to which a
Party or any Affiliate of a Party is subject, in which case the disclosing
Party shall provide the non-disclosing Party with prompt advance notice of such
disclosure so that the non-disclosing Party shall have the opportunity if it so
desires to seek a protective order or other appropriate remedy and, in
connection with any disclosure required by the Securities and Exchange
Commission or the rules of any stock exchange to which a Party or any
Affiliate of a Party is subject, the disclosing Party shall use reasonable
efforts to obtain confidential treatment for such disclosure.

 

 

11.5                           Survival.
The obligations of this Article 11 shall terminate five (5) years
from the expiration or termination of this Agreement.

 

ARTICLE 12

INTELLECTUAL PROPERTY

 

All
Cardinal Health Technology, including, without limitation, all improvements,
developments, derivatives or modifications to the Cardinal Health Technology,
shall be owned exclusively by Cardinal Health and, except as set forth herein
no right or license in Cardinal Health Technology is transferred or granted to
Reliant. All Reliant Technology, including, without limitation, all
improvements, developments, derivatives or modifications to the Reliant
Technology shall be owned exclusively by Reliant. Reliant hereby grants to
Cardinal Health a non-exclusive, royalty-free license for the term of this
Agreement to use Reliant Technology, but solely for the purpose of carrying out
Cardinal Health’s obligations under this Agreement. For purposes hereof, “Cardinal
Health Technology” means all Softgel Technology, Cardinal Health Confidential
Information, intellectual property, and developments (including, all patents,
patent applications, know-how, inventions, designs, concepts, improvements,
technical information, manuals, instructions or specifications), owned,
licensed or used by Cardinal Health in developing, formulating, manufacturing,
filling, processing or packaging of pharmaceuticals and the packaging
equipment, processes or methods of packaging, or any improvements to any of the
foregoing, including any container, pouch, vial, ampoule, blister pack or other
form of container developed by Cardinal Health. For purposes hereof, “Reliant
Technology” means all proprietary information, intellectual property and
developments owned, developed, licensed or used by Reliant relating to the API,
including, without limitation, patents, patent applications, know-how,
inventions, designs, concepts, improvements, technical information, trademarks
or trade names.

 

ARTICLE 13

REPRESENTATIONS AND WARRANTIES

 

13.1                           Cardinal
Health. Cardinal Health represents and warrants to Reliant that:

 

A.                                   At
the time of delivery of the Product as provided in Section 6.1, such
Product will conform to and will have been Manufactured and Packaged in
conformance with the Product Specifications and Applicable Laws;

 

B.                                     Cardinal
Health will be solely responsible for and will obtain all governmental
approvals, permits and licenses necessary or desirable in connection with the
Manufacturing and Packaging of the API in the Territory.

 

C.                                     It
has, and shall have, good, complete and valid rights to utilize the Cardinal
Health Technology utilized in connection with the Product and as contemplated
by this Agreement. There are no patents owned by others related to the Cardinal
Health Technology used with the Product which would be infringed or misused by
Cardinal Health’s performance of the Agreement and, to its knowledge, no trade
secrets or other proprietary rights of others related to the Cardinal Health
Technology used with the Product which would be infringed or misused by
Cardinal Health’s performance of this Agreement.

 

 

F.                                      THE
LIMITED WARRANTY SET FORTH IN THIS SECTION 13.1 IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY AND
ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE WARRANTY
EXPRESSED IN THIS SECTION 13.1, CARDINAL HEALTH MAKES NO OTHER WARRANTY,
EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE MANUFACTURING AND PACKAGING OR
THE PRODUCT.

 

13.2                           Reliant.
Reliant represents, warrants and covenants to Cardinal Health that:

 

A.                                   The
API and any other materials supplied by Reliant to Cardinal Health (“Reliant-supplied
Materials”) will comply with all applicable Specifications, will have been
produced in compliance with the Applicable Laws, and will be provided in
accordance with the terms and conditions of this Agreement;

 

B.                                     It
has all necessary authority and all right, title and interest in and to any
Reliant Technology related to the API or any other Reliant supplied materials;

 

C.                                     No
specific safe handling instructions are applicable to the Product, the API or
any other Reliant supplied materials, except as disclosed to Cardinal Health in
writing by the Reliant in sufficient time for review and training by Cardinal
Health prior to delivery;

 

D.                                    All
Product delivered to Reliant by Cardinal Health will be held, used and/or
disposed of by the Reliant in accordance with all applicable laws, rules and
regulations;

 

E.                                      Reliant
will comply with all laws, rules, regulations and guidelines applicable to
Reliant’s performance under this Agreement and its use of Product provided by
Cardinal Health under this Agreement;

 

F.                                      If
release testing is conducted by Reliant, Reliant will not release any Batch of
Product if the required Certificates of Analysis indicate that the Product does
not comply with the Specifications;

 

G.                                     The
content of all artwork provided to Cardinal Health complies with all Applicable
Laws;

 

H.                                    Reliant
has all necessary authority and right, title and interest in and to any
copyrights, trademarks, trade secrets, patents, inventions and developments
related to the API, the manufacture thereof, and any Product artwork;

 

I.                                         To
the knowledge of Reliant, the work to be performed by Cardinal Health under
this Agreement will not violate or infringe upon any trademark, tradename,
copyright, patent or other rights held by any person or entity; and

 

 

J.                                        Reliant
will be solely responsible for and will obtain all governmental approvals,
permits and licenses necessary or desirable in connection with the testing,
marketing, sale, advertising or distribution of the Product in the Territory.

 

13.2                           Mutual.
Each Party hereby represents and warrants to the other Party that:

 

A.                                   Such
Party (1) is duly organized, validly existing and in good standing under
the laws of the state in which it is organized, (2) has the power and
authority and the legal right to own and operate its property and assets, and
to carry on its business as it is now being conducted, and (3) is in
compliance with all requirements of applicable law, except to the extent that
any noncompliance would not materially adversely affect such Party’s ability to
perform its obligations under the Agreement;

 

B.                                     Such
Party (1) has the power and authority and the legal right to enter into
this Agreement and to perform its obligations hereunder and thereunder and
(2) has taken all necessary action on its part to authorize the
execution and delivery of the Agreement and the performance of its obligations
hereunder;

 

C.                                     This
Agreement is validly executed and delivered on behalf of such Party, and
constitutes a legal, valid, binding obligation, enforceable against such Party
in accordance with its terms;

 

D.                                    All
necessary consents, approvals and authorizations of all agencies and other
persons required to be obtained by such Party in connection with the Agreement have
been obtained; and

 

E.                                      The
execution and delivery of this Agreement and the performance of such Party’s
obligations hereunder (1) do not conflict with or violate any requirement
of applicable laws or regulations or any material contractual obligation of
such Party and (2) do not materially conflict with, or constitute a
material default or require any consent under, any material contractual
obligation of such Party.

 

ARTICLE 14

INDEMNIFICATION

 

14.1                           Indemnification
by Cardinal Health. Cardinal Health shall indemnify and hold harmless
Reliant, its Affiliates, directors, officers, employees and agents from and
against any and all suits, claims, losses, demands, liabilities, damages, costs
and expenses (including reasonable attorney’s fees) in connection with any
suit, demand or action by any third party (“Losses”) arising out of or
resulting from (A) any breach of its representations, warranties or
obligations under this Agreement; (B) any negligence or willful misconduct
by Cardinal Health, except to the extent that any of the foregoing arises out
of or results from the negligence, willful misconduct or breach of this
Agreement by of Reliant; or (C) any actual or alleged infringement or
violation of any patent, trade secret, copyright, trademark or other proprietary
rights used by Cardinal Health in Manufacturing and Packaging the Product,
except to the extent such was provided by Reliant.

 

 

14.2                           Indemnification
by Reliant. Reliant shall indemnify and hold harmless Cardinal Health, its
Affiliates, directors, officers, employees and agents from and against all
Losses arising out of or resulting from (A) any breach of its
representations, warranties or obligations under this Agreement; (B) any
manufacture, sale, promotion, distribution, use (other than by Cardinal Health)
of or exposure to the Product, the API or any Reliant-supplied materials,
including, without limitation, product liability or strict liability; (C) Reliant’s
exercise of control over the Manufacturing and Packaging under this Agreement,
to the extent that Reliant’s written instructions or directions violate
applicable law or regulation; (D) any actual or alleged infringement or
violation of any patent, trade secret, copyright, trademark or other
proprietary rights provided by Reliant and used by Cardinal Health in
Manufacturing and Packaging the Product; or (E) any negligence or willful
misconduct by Reliant, except to the extent that any of the foregoing arises
out of or results from the negligence, willful misconduct or breach of this
Agreement by Cardinal Health.

 

14.3                           Indemnification
Procedures. All indemnification obligations in this Agreement are
conditioned upon the Party seeking indemnification (the “Indemnified Party”): (A) promptly
notifying the indemnifying Party (the “Indemnifying Party”) of any claim or
liability of which the Party seeking indemnification becomes aware (including a
copy of any related complaint, summons, notice or other instrument), provided,
however, that failure to provide such notice within a reasonable period of time
shall not relieve the Indemnifying Party of any of its obligations hereunder
except to the extent the Indemnifying Party is materially prejudiced by such
failure; (B) cooperating with the Indemnifying Party in the defense of any
such claim or liability (at the Indemnifying Party’s expense), and (C) not
compromising or settling any claim or liability without prior written consent
of the Indemnifying Party. The liability of an Indemnifying Party under this Article XIV
with respect to Losses arising from claims of any Third Party which are subject
to the indemnification provided for in this Article XIV (“Third Party Claims”) shall be governed by and contingent
upon the following additional terms and conditions. If an Indemnified Party
shall receive notice of any Third Party Claim, the Indemnified Party shall give
the Indemnifying Party notice of such Third Party Claim within thirty (30) days
of the receipt by the Indemnified Party of such notice; provided,
however, that the failure to provide such notice shall not release
the Indemnifying Party from any of its obligations under this Article XIV
except to the extent the Indemnifying Party is materially prejudiced by such
failure. The Indemnifying Party shall be entitled to assume and control the
defense of such Third Party Claim at its expense and through counsel of its
choice if it gives notice of its intention to do so to the Indemnified Party
within thirty (30) days of the receipt of such notice from the Indemnified
Party; provided, however, that if there exists a material conflict of interest that
would make it inappropriate for the same counsel to represent both the
Indemnified Party and the Indemnifying Party, then the Indemnified Party shall
be entitled to retain its own counsel, at the expense of the Indemnifying
Party, provided that the Indemnifying Party shall not be obligated to pay the
reasonable fees and expenses of more than one separate counsel for all
Indemnified Parties, taken together. In the event the Indemnifying Party
exercises the right to undertake any such defense against any such Third Party
Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying
Party, all witnesses, pertinent records, materials and information in the
Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the 

 

 

Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to the
Indemnified Party, all such witnesses, records, materials and information in
the Indemnifying Party’s possession or under the Indemnifying Party’s control
relating thereto as is reasonably required by the Indemnified Party. The
Indemnifying Party shall not, without the written consent of the Indemnified
Party (which shall not be unreasonably withheld or delayed), (a) settle or
compromise any Third Party Claim or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by the claimant
or plaintiff to the Indemnified Party of a written release from all liability
in respect of such Third Party Claim or (b) settle or compromise any Third
Party Claim if the settlement imposes equitable remedies or material
obligations on the Indemnified Party other than financial obligations for which
such Indemnified Party will be indemnified hereunder and which contains no
admission of fault or wrongdoing. No Third Party Claim shall be settled or
compromised by the Indemnified Party without the written consent of the
Indemnifying Party (which shall not be unreasonably withheld or delayed) if
such settlement or compromise would result in an obligation of the Indemnifying
Party to indemnify such Indemnified Party, or would otherwise result in
liability of, or have an adverse impact upon, such Indemnifying Party.

 

ARTICLE 15

LIMITATION OF LIABILITY

 

15.1                           CARDINAL
HEALTH’S LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS FOR LOST,
DAMAGED OR DESTROYED API OR OTHER RELIANT-SUPPLIED MATERIALS WHETHER OR NOT
SUCH API OR RELIANT-SUPPLIED MATERIALS ARE INCORPORATED INTO PRODUCT IS SET FORTH
IN EXHIBIT B. THE LIMITATION OF LIABILITY, WITH RESPECT TO ANY GIVEN
CONTRACT YEAR, SHALL NOT EXCEED THE APPLICABLE AMOUNTS SET FORTH IN EXHIBIT B
(THE “API CAP”). IN THE EVENT THAT CARDINAL HEALTH LIABILITY FOR LOST API SHALL
EXCEED THE API CAP FOR ANY CONTRACT YEAR DURING THE TERM, THE PARTIES SHALL
MEET WITHIN THIRTY (30) DAYS FROM THE DATE CARDINAL HEALTH’S LIABILITY FOR LOST
API EXCEEDS THE API CAP AND NEGOTIATE IN GOOD FAITH WHETHER (A) CARDINAL
HEALTH INCREASES THE API CAP FOR SUCH CONTRACT YEAR, OR (B) WHETHER
RELIANT’S OBLIGATIONS UNDER SECTION 4.2(B) SHALL BECOME NULL AND VOID.
IN THE EVENT THAT THE PARTIES CANNOT REACH AN AGREEMENT WITH REGARD TO THE
FOREGOING SENTENCE WITHIN SUCH THIRTY (30) DAY PERIOD, RELIANT SHALL HAVE THE
SOLE OPTION TO (X) CONTINUE WITH THE AGREEMENT WITH CARDINAL HEALTH HAVING NO
LIABILITY IN EXCESS OF THE API CAP FOR LOST, DAMAGED OR DESTROYED API FOR THE
THEN CURRENT CONTRACT YEAR, OR (Y) HAVE PRODUCT MANUFACTURED AND PACKAGED BY A
QUALIFIED THIRD-PARTY SUPPLIER WITHOUT REGARD TO ITS OBLIGATIONS UNDER SECTION 4.2(B).
ANY AMOUNTS OWING BY CARDINAL HEALTH HEREUNDER SHALL NOT COUNT AGAINST THE
LIABILITY CAP SET FORTH IN SECTION 15.2 BELOW.

 

15.2                           NOTWITHSTANDING,
AND SPECIFICALLY EXCLUDING, ANY AMOUNTS OWED BY CARDINAL HEALTH TO RELIANT
UNDER SECTION 15.1 ABOVE, AND SPECIFICALLY EXCLUDING LOSSES RESULTING FROM
CARDINAL HEALTH’S GROSS NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT, CARDINAL
HEALTH’S 

 

 

 

TOTAL LIABILITY UNDER
THIS AGREEMENT OTHER THAN FOR LOST, DAMAGED OR DESTROYED API, SHALL IN NO EVENT
EXCEED FIVE MILLION DOLLARS ($5,000,000).

 

15.3                           NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES (EXCEPT FOR THOSE INDEMNITY OBLIGATIONS UNDER ARTICLE 14
THAT ARE DEEMED CONSEQUENTIAL DAMAGES) ARISING OUT OF PERFORMANCE UNDER THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUES, PROFITS OR DATA,
WHETHER IN CONTRACT OR TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

15.4                           Limitation
of Liability for Operation of Foreign Trade Subzone. Cardinal Health has
been granted a special purpose subzone (the “FTZ”) that includes the main plant of Cardinal Health’s US
Facility. Reliant may recognize a number of economic benefits resulting
from Cardinal Health’s operation of the FTZ. However, notwithstanding anything
to the contrary contained herein, including but not limited to the provisions
of Section 14.1, Cardinal Health’s liability to the Reliant, if any, as a
result of any and all liabilities, losses, claims, demands, damages, costs,
expenses, settlements made or reasonably approved by Cardinal Health, and money
judgments (including attorneys’ fees and other costs of litigation), related to
Cardinal Health’s operation of the FTZ, including, but not limited to: (A) Cardinal
Health acting as Reliant’s agent for duty drawback purposes pursuant to 19 CFR
§191.9 with respect to the Product; and (B) the suspension or closing of
the FTZ (whether voluntary or not)), incurred by or rendered against the Reliant
for personal injury, sickness, disease or death and other damages shall in no
event exceed Fifty Thousand United States Dollars ($50,000).

 

ARTICLE 16

INSURANCE

 

16.1                           Cardinal
Health. Cardinal Health shall, at its own cost and expense, obtain and maintain
in full force and effect the following insurance during the term of this
Agreement: (A) Commercial General Liability insurance with per-occurrence
and general aggregate limits of not less than $1,000,000; (B) Products and
Completed Operations Liability Insurance with per-occurrence and general
aggregate limits of not less than $5,000,000; (C) Workers’ Compensation
and Employer’s Liability Insurance with statutory limits for Workers’
Compensation and Employer’s Liability insurance limits of not less than
$1,000,000; and (D) Professional Services Errors & Omissions
Liability Insurance with per claim and aggregate limits of not less than
$1,000,000 covering sums that Cardinal Health becomes legally obligated to pay
as damages resulting from claims made by Reliant for errors or omissions
committed in the conduct of the services outlined in the Agreements. In lieu of
insurance, Cardinal Health may self-insure any or a portion of the above
required insurance. In the event that any of the required policies of insurance
are written on a claims made basis, then such policies shall be maintained
during the entire Term and for a period of not less than three (3) years
following the termination or expiration of this Agreement. Cardinal Health
shall obtain a waiver from any insurance carrier with whom Cardinal Health
carries Workers’ Compensation insurance releasing its subrogation rights
against Reliant. Reliant shall be named as an additional insured under the
Commercial 

 

 

General Liability and
Products and Completed Operations Liability insurance policies as respects the
manufacturing services outlined in this Agreement. Cardinal Health shall
furnish certificates of insurance for all of the above noted policies and
required additional insured status to Reliant as soon as practicable after the
Effective Date of the Agreement and upon renewal of any such policies. Each
insurance policy that is required under this Section shall be obtained
from an insurance carrier with an A.M. Best rating of at least A- VII.

 

16.2                           Reliant
Insurance. Reliant shall, at its own cost and expense, obtain and maintain
in full force and effect the following insurance during the term of this
Agreement: (A) Products and Completed Operations Liability Insurance with
per-occurrence and general aggregate limits of not less than $10,000,000; (B) Workers’
Compensation and Employer’s Liability Insurance with statutory limits for
Workers’ Compensation and Employer’s Liability insurance limits of not less
than $1,000,000; (C) All Risk Property Insurance in an amount equal to
full replacement value covering Reliant’s property while it is at Cardinal
Health’s facility; and (D) transit coverage in an amount not less than
$1,000,000 while Reliant’s property is in transit to or from Cardinal Health’s
facility. In the event that any of the required policies of insurance are
written on a claims made basis, then such policies shall be maintained during
the entire Term and for a period of not less than three (3) years
following the termination or expiration of this Agreement. Reliant shall obtain
a waiver from any insurance carrier with whom Reliant carries Workers’
Compensation insurance releasing its subrogation rights against Cardinal
Health. Reliant shall obtain a waiver from any insurance carrier with whom Reliant
carries Property Insurance releasing its subrogation rights against Cardinal
Health. Reliant shall not seek reimbursement for any property claim, or portion
thereof, which is not fully recovered from Reliant’s Property Insurance policy.
Cardinal Health and its Subsidiaries and Parent Corporation shall be named as
additional insureds under the Products and Completed Operations Liability
insurance policies as respects the products and completed operations outlined
in this Agreement. Reliant shall furnish certificates of insurance for all of
the above noted policies and required additional insured status to Cardinal
Health as soon as practicable after the Effective Date of the Agreement and
upon renewal of any such policies. Each insurance policy that is required under
this Section shall be obtained from an insurance carrier with an A.M.
Best rating of at least A- VII.

 

ARTICLE 17

TERM AND TERMINATION

 

17.1                           Term.
This Agreement shall commence on the Effective Date and shall continue for a
period of five (5) Contract Years (January 1, 2007 through December 31,
2011), unless earlier terminated under Section 17.2 (the “Initial Term”). After
the Initial Term, this Agreement may be automatically extended for further
periods of one (1) year each (the “Renewal Term”), unless terminated by
either Party upon written notice given to the other Party at least twelve (12)
months prior to the end of the Initial Term. The Initial Term and any Renewal
Term shall constitute the Term.

 

17.2                           Termination
by Either Party.

 

A.                                   Material
Breach. Either Party may terminate this Agreement effective upon sixty
(60) days prior written notice to the other Party, if the other Party commits a
material breach of this Agreement and fails to cure such breach by the end of
such sixty (60) day period; provided, 

 

 

however, that failure to
pay amounts due under this Agreement within thirty (30) days after such
payments are due (as set forth in Section 7.5) more than two (2) times
in any Contract Year shall constitute cause for immediate termination of this
Agreement, provided, however, that Reliant’s Chief Operating
Officer, or his designee, and Cardinal’s Facility General Manager from each
Party shall discuss such nonpayment in advance of termination.

 

B.                                     Bankruptcy.
Either Party may terminate this Agreement effective upon written notice to
the other Party, if the other Party becomes insolvent or admits in writing its
inability to pay its debts as they become due, files a petition for bankruptcy,
makes an assignment for the benefit of its creditors or has a receiver, trustee
or other court officer appointed for its properties or assets.

 

17.3                           Without
Cause. Either Party may terminate this Agreement without cause upon
thirty-six (36) months’ written notice to the other Party, following the date
which is twenty-four (24) months from the Effective Date.

 

17.4                           Effect
of Termination.

 

A.                                   Expiration
or termination of this Agreement shall be without prejudice to any rights or
obligations that accrued to the benefit of either Party prior to such expiration
or termination.

 

B.                                     In
the event of any termination, Cardinal Health shall promptly return (1) any
remaining inventory of materials received from Reliant, (2) all remaining
inventories of API and Product, and (3) any other Product, or API being
stored for Reliant, to Reliant at Reliant’s expense. Cardinal Health shall have
no obligation to return the foregoing until all outstanding undisputed invoices
sent by Cardinal Health to Reliant have been paid in full. For termination
initiated by Reliant, Reliant shall also be required to pay for (Y) completed
but not yet shipped Product and (Z) Product in process and Product shipped but
not yet invoiced in the event that this Agreement is terminated for reasons
other than Cardinal Health’s default. In the event Reliant breaches or
terminates this Agreement (other than as a result of a breach of this Agreement
by Cardinal Health) or if Cardinal Health terminates this Agreement under Section 17.2
hereof, Reliant will also be required to pay Cardinal Health for its direct
cost of all materials purchased by Cardinal Health for Processing. Reliant
shall specify the location in the continental United States to which delivery,
at Reliant’s expense, of the foregoing is to be made.

 

ARTICLE 18

NOTICE

 

All
notices and other communications hereunder shall be in writing and shall be
deemed given:    (A) when delivered
personally; (B) when delivered by facsimile transmission (receipt
verified);   (C) when received or
refused, if mailed by registered or certified mail (return receipt requested),
postage prepaid; or (D) when delivered if sent by express courier service,
to the Parties at the following addresses (or at such other address for a Party
as shall be specified by like notice; provided, that notices of a change of
address shall be effective only upon receipt thereof):

 

 

	
  To Reliant:

  	
  Reliant
  Pharmaceuticals, Inc.

  
	
   

  	
  110 Allen Road

  
	
   

  	
  Liberty Corner,
  NJ 07938

  
	
   

  	
  Attention:
  Robert Polster, Ph.D., Vice President,

  
	
   

  	
  Commercial
  Operations

  
	
   

  	
  Facsimile:
  908.542.9405

  
	
   

  	
   

  
	
  With a copy to:

  	
  Reliant
  Pharmaceuticals, Inc.

  
	
   

  	
  110 Allen Road

  
	
   

  	
  Liberty Corner,
  NJ 07938

  
	
   

  	
  Attention: Legal
  Department

  
	
   

  	
  Facsimile:
  908.542.9405

  
	
   

  	
   

  
	
  To Cardinal
  Health:

  	
  Cardinal Health
  PTS, LLC

  
	
   

  	
  2725 Scherer
  Drive

  
	
   

  	
  St. Petersburg,
  Florida 33716

  
	
   

  	
  Attention:
  General Manager, Encapsulation,

  
	
   

  	
  North America

  
	
   

  	
  Facsimile: (727)
  803-1632

  
	
   

  	
   

  
	
  With a copy to:

  	
  Cardinal Health, Inc.

  
	
   

  	
  14 Schoolhouse
  Road

  
	
   

  	
  Somerset, New
  Jersey 08873

  
	
   

  	
  Attn: General
  Counsel

  
	
   

  	
  Facsimile: (732)
  537-6491

  

 

ARTICLE 19

MISCELLANEOUS

 

19.1                           Entire
Agreement; Amendments. This Agreement including the attachments, as well as
the Confidentiality Agreement dated July 29, 2004, constitute the entire
understanding between the Parties and supersedes any contracts, agreements or
understanding (oral or written) of the Parties with respect to the subject
matter hereof; provided, however, that this Agreement does not supersede the
Initial Agreement with respect to events that happened prior to January 1,
2007. For the avoidance of doubt, as of January 1, 2007, other than
payments due and owing of which both parties are aware, there are no payments
of any kind due and owing to either party. No term of this Agreement may be
amended except upon written agreement of both Parties, unless otherwise
provided in this Agreement.

 

19.2                           Captions.
The captions in this Agreement are for convenience only and are not to be
interpreted or construed as a substantive part of this Agreement.

 

19.3                           Further
Assurances. The Parties agree to execute, acknowledge and deliver such
further instruments and to take all such other incidental acts as may be
reasonably necessary or appropriate to carry out the purpose and intent of this
Agreement.

 

 

19.4                           No
Waiver. Failure by either Party to insist upon strict compliance with any
term of this Agreement in any one or more instances will not be deemed to be a
waiver of its rights to insist upon such strict compliance with respect to any
subsequent failure.

 

19.5                           Severability.
If any term of this Agreement is declared invalid or unenforceable by a court
or other body of competent jurisdiction, the remaining terms of this Agreement
will continue in full force and effect.

 

19.6                           Independent
Contractors. The relationship of the Parties is that of independent
contractors, and neither Party will incur any debts or make any commitments for
the other Party except to the extent expressly provided in this Agreement. Nothing
in this Agreement is intended to create or will be construed as creating
between the Parties the relationship of joint ventures, co-partners,
employer/employee or principal and agent.

 

19.7                           Successors
and Assigns. This Agreement will be binding upon and inure to the benefit
of the Parties, their successors and permitted assigns. Neither Party may assign
this Agreement, in whole or in part, without the prior written consent of the
other Party (which consent shall not be unreasonably withheld, conditioned or
delayed), except that either Party may, without the other Party’s consent,
assign this Agreement to an Affiliate or to a successor to substantially all of
the business or assets of the assigning company (or the assigning company’s
business unit responsible for the performance of this Agreement), or, in the
case of Reliant, to a successor to all of the assets relating to the Product.

 

19.8                           Governing
Law. This Agreement shall be governed by and construed under the laws of
the State of New York, excluding its conflicts of law provisions.

 

19.9                           Alternative Dispute Resolution. If a dispute, controversy or disagreement (“Dispute”)
arises between the Parties in connection with this Agreement, then the Dispute
shall be presented to the respective presidents or senior executives of
Cardinal Health and Reliant for their consideration and resolution. If such
Parties cannot reach a resolution of the Dispute, then such Dispute shall be
resolved by binding alternative dispute resolution in accordance with the then
existing commercial arbitration rules of The CPR Institute for Dispute
Resolution (“CPR”), 366 Madison Avenue, New York, NY 10017. Arbitration shall be
conducted in New York, New York.

 

19.10                     Counterparts.
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original but all of which together will constitute one and
the same instrument.

 

19.11                     Publicity.
Neither Party will make any press release or other public disclosure regarding
this Agreement or the transactions contemplated hereby without the other Party’s
express prior written consent (which shall not be unreasonably withheld,
conditioned or delayed), except as required under applicable law or by any
governmental agency, in which case the Party required to make the press release
or public disclosure shall use commercially reasonable efforts to obtain the
approval of the other Party (which shall not be unreasonably withheld,
conditioned or delayed) as to the form, nature and extent of the press release
or public disclosure prior to issuing the press release or making the public
disclosure.

 

 

19.12                     Survival.
The rights and obligations of the Parties shall continue under Articles 5
(Testing; Manufacturing Samples; Release), 7 (Payment Terms), , 10 (Records;
Regulatory Matters), 11 (Confidential Information), 12 (Intellectual Property),
14 (Indemnification), 15 (Limitations of Liability), 16 (Insurance) to the extent
expressly stated therein, 18 (Notice), 19 (Miscellaneous), and Sections 4.2, 6.2
and 17.4 (Effect of Termination), notwithstanding expiration or termination of
this Agreement.

 

19.13                     Force
Majeure. Except as to payments required under this Agreement, neither Party
shall be liable in damages for, nor shall this Agreement be terminable or
cancelable by reason of, any delay or default in such Party’s performance
hereunder if such default or delay is caused by events beyond such Party’s
reasonable control including, but not limited to, acts of God, regulation or
law or other action or failure to act of any government or agency thereof, war
or insurrection, civil commotion, destruction of production facilities or
materials by earthquake, fire, flood or storm, labor disturbances, epidemic, or
failure of suppliers, public utilities or common carriers;  provided however, that the Party seeking
relief hereunder shall immediately notify the other Party of such cause(s)
beyond such Party’s reasonable control. The Party that may invoke this section shall
use all reasonable endeavors to reinstate its ongoing obligations to the other.
If the cause(s) shall continue unabated for sixty (60) days, then both Parties
shall meet to discuss and negotiate in good faith what modifications to this
Agreement should result from this force majeure.

 

The
Parties are executing this Agreement on the date stated in the introductory
clause.

 

	
  CARDINAL
  HEALTH PTS, LLC

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name: David J.
  Heyens

  	
  Name: Joseph S.
  Zakrzewski

  
	
  Its: President,
  Encapsulation North America

  	
  Its: Chief
  Operating Officer

  
						

 

 

EXHIBIT A

SPECIFICATIONS

 

	
  Finished Product Release Specification

  

  

  Omacor Capsules

  	
  OMA-RSP

  

  

  Version: 03

  	
  

  

 

	
  Test

  	
   

  	
  Acceptance Criteria

  	
   

  	
  Method

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  

*Microbial limit tests are
performed by qualified laboratories, typically bulk capsule manufacturers.

History:

•      Version
01:  Approved on 6/14/05.

•      Version
02:  Removed unit for anisidine value
(typographical error), modified microbial limit test method numbers and other
minor typographical errors.  Approved on
8/31/05.

•      Version
03:  Changed capsule logo to “REL900” and
other editorial changes.

 

 

	
  Prepared by:

  	
   

  	
     Date:

  	
  8/11/06

  	
     Prepared by:

  	
   

  	
     Date:

  	
  8/11/06

  
	
   

  	
  Cindy Wu

  Manager

  QA/QC

  	
   

  	
   

  	
   

  	
  Goff Baker

  Director

  QA/QC

  	
   

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

 

 

EXHIBIT B

UNIT PRICING, LIMITS OF LIABILITY, AND MINIMUM
REQUIREMENT

 

UNIT PRICING FOR TRADE PRODUCT– [***]% Requirements Level

 

	
  Units
  (millions)

  	
   

  	
  Price per thousand Units

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

 

UNIT PRICING FOR TRADE PRODUCT– [***]% Requirements Level

 

	
  Units
  (millions)

  	
   

  	
  Price per thousand Units

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

 

In the event Reliant
purchases less than [***] percent ([***]%) but more than [***] ([***]%) of its [***]
from Cardinal in any given Contract Year, an additional [***] dollars ($[***])
shall be added to the amounts set forth in the “Price per thousand Units”
column, in accordance with the first chart above i.e., if Reliant purchases up
to [***] units in a Contract Year, and such [***] Units amount represents less
than [***]% of Reliant’s commercial requirement for that given Contract Year,
the price shall be $[***] per [***] Units ([***]).

 

This is a “tiered”
pricing system. Therefore, for example, if Reliant purchases [***] Units from
Cardinal Health in a given Contract Year, and this represents [***] percent ([***]%)
of Reliant’s Manufacturing requirement levels for Trade Product for that
Contract Year, the price for the first [***] Units shall be $[***] per [***] Units,
the price for [***] Units through [***] Units shall be $[***] per [***] Units,
the price for [***]Units through [***] Units shall be $[***] per [***] Units,
and the price for [***] Units through [***] Units shall be $[***]. In the event
the [***] Units purchased from Cardinal Health does not represent [***] percent
([***]%) of Reliant’s Manufacturing requirement levels for Trade Product for
that Contract Year, the Unit Pricing shall be modified in accordance with the
paragraph and applicable chart above.

 

The price for Sample
Product shall be $[***] per [***] Units for any Contract Year wherein Reliant
purchases less than [***] percent ([***]%) of its Manufacturing requirement
levels for Trade Product from Cardinal Health. For any Contract Year wherein
Reliant purchases [***] percent ([***]%) of its Manufacturing requirement
levels for Trade Product from Cardinal Health, the price of the Sample Product
shall be the same as the price for the Trade Product for that Contract Year as
reflected in the applicable above chart.

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

For the avoidance of
doubt, the price for all Product purchased by Reliant from Cardinal Health from
July 1, 2006 through and including December 31, 2006 shall be [***]dollars
($[***]) per [***] Units.

 

LIMITATIONS OF LIABILITY

 

	
  Units

  	
   

  	
  Liability Limit per Each Contract Year

  
	
  Up to and
  including 200 million

  	
   

  	
  $ 1 million

  
	
  201 million up
  to and including 500 million

  	
   

  	
  $ 2 million

  
	
  501 million up
  to and including 750 million

  	
   

  	
  $ 3 million

  
	
  751 million up
  to and including 1 billion

  	
   

  	
  $ 4 million

  
	
  1 billion up to
  and including 1.25 billion

  	
   

  	
  $ 5 million

  
	
  1.251 billion up
  to and including 1.50 billion

  	
   

  	
  $6 million

  
	
  1.51 billion up
  to and including 1.750 billion

  	
   

  	
  $7 million

  
	
  1.751 billion
  and above

  	
   

  	
  $8 million

  

 

MINIMUM REQUIREMENT

 

	
  Contract
  Year

  	
   

  	
  Product / Dosage Form

  	
   

  	
  Minimum Requirement

  
	
  Contract Year 1

  	
   

  	
   

  	
   

  	
  $250,000

  
	
  Contract Years 2
  through 5

  	
   

  	
   

  	
   

  	
  $250,000
  adjusted for inflation and indexes

  

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

EXHIBIT C

 

MINIMUM YIELD SCHEDULE

 

[Reliant Pharmaceuticals
Letterhead]

 

May 23, 2006                                                

VIA
FACSIMILE (727) 803-2224

Cardinal Health PTS, LLC

2725 Scherer Drive

St. Petersburg, Florida  33716

Attention:  President, Encapsulation,

North America Oral Technologies

Re:          Minimum Yield

Dear Mr. Heyens:

                Reference is made hereby to the Manufacturing and
Packaging Agreement dated as of April 14, 2005 (the “Agreement”) between
Reliant Pharmaceuticals, Inc. (“Reliant”) and Cardinal Health PTS, LLC
(“Cardinal Health”).  All capitalized
terms in this letter that are not otherwise defined herein shall have the
meaning set forth in the Agreement.

By this letter Reliant and
Cardinal Health hereby acknowledge and agree that for purposes of Section 3.4,
the parties have established the Minimum Yield to be [***] Percent ([***]%).  This letter shall serve as Exhibit C
to the Agreement.  In all other respects
the Agreement shall remain in full force and effect.

To confirm your agreement
with the foregoing, please execute a copy of this letter in the place indicated
below.

	
   

  	
  Reliant
  Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Robert
  Polster

  
	
   

  	
   

  	
  Vice
  President, Manufacturing

  

 

 

 

Agreed
and acknowledged this 23 day

of
May, 2006

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  David Heyens

  
	
   

  	
  President,
  Encapsulation — North America

  
	
   

  	
   

  
	
  cc:

  	
  Cardinal Health, Inc.
  Associate General Counsel, Pharmaceutical Technologies and Services (via
  facsimile — (614) 757-5051)

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

 

 

EXHIBIT D

 

QUALIFICATION, VALIDATION AND STABILITY SERVICES

 

Quotation

Process Validation of 1000 mg
Omacor

Softgels at the St. Petersburg, FL

Facility

 

QTE-RLD-0025.00

 

 

 

Confidential for Reliant Pharmaceuticals

 

Prepared for Abdel Fawzy, Ph.D

100 Allen Road

Liberty Corner, NJ 07938

908-542-4488

Cardinal Health Contact: Jack Wright

Phone: 609-654-4524

February
15, 2005

 

	
  

   CardinalHealth

  	
  BioPharmaceutical
  Product Development

  Pharmaceutical Product Development

  Clinical Packaging Services

  Analytical Chemistry Services

  Scientific and Regulatory Consulting

  Pulmonary and Nasal Product Development

  Clinical and Small Scale Commercial Manufacturing

  

 

 

	
  QTE-RLD-0025.00

  	
   

  	
  CONFIDENTIAL

  

 

 

Executive Summary

 

Reliant Pharmaceuticals (Reliant) has requested Cardinal Health,
Pharmaceutical Development (Cardinal Health) to perform process validation for
the Omacor 1000 mg softgels at Cardinal Health’s facility in St. Petersburg,
FL. The estimated cost for this project is $[***] plus cost of softgels, over a
period of approximately [***].

 

Section 1.  Scope of Work

 

Cardinal Health, Somerset has developed and scaled up Omacor 1000 mg
softgels to commercial scale in Cardinal Health, St. Petersburg. Cardinal
Health will manufacture three (3) process validation batches and generate
validation report prior final commercial launch. All clinical batch manufacture
activities will be conducted according to cGMP guidelines.

 

Section 2.  Activities/Specifications

 

2.1          Project Activities

 

2.1.1                     Cardinal
Health’s Responsibilities

 

2.1.1.1           Preliminary Activities

 

Cardinal Health
will conduct preliminary activities to include the following:

 

•                  Provide project
management and timelines.

•                  Identify
project team members and outline expectations.

•                  Finalize
initial protocols.

•                  Identify and
receive necessary Reference Standards, API lots, and excipients for
development.

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated Cost ($)

  
	
  1

  	
   

  	
  No Charge

  

 

2.1.1.2           Omacor Development Report

 

Cardinal Health will
carry out project-related activities to include the following:

 

•                  Compile listing
of all batches made in St. Petersburg, FL.

•                  Gather all
information related to any research and development conduct in the St.
Petersburg, FL facility.

•                  Issue a
development report summarizing all work completed in the St. Petersburg,
FL facility.

14 Schoolhouse
Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

2

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated
  Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  

 

2.1.1.3           Omacor 1000 mg Softgel Process Validation

 

Cardinal Health
will perform the following activities in order to validate Omacor 1000 mg
softgel manufacturing process at commercial scale:

 

•                  Generate a
process validation protocol and obtain approval from Reliant.

•                  Obtain drug
substance from Reliant and complete ID test for release (included in analytical
support section).

•                  Order raw
materials and sample for release.

•                  Generate
product masters.

•                  Perform as
customer liaison and supervise batches.

•                  Complete
peroxide test on drug prior to encapsulation (included in analytical support
section).

•                  Manufacture and
validate manufacturing process of three full-scale in-line printed
batches at production site.

•                  Monitor batches
and collect fill and softgel samples for in-process testing as required in the
validation protocol.

•                  Monitor
hardness of softgels during drying.

•                  Wash and bulk
package softgels for shipping to Reliant.

•                  Perform
in-process seal thickness, fill and shell weight measurement.

•                  Clean equipment
as per validated method.

•                  Release
finished product.

•                  Perform QA
review of all documentation.

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated
  Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  

 

2.1.1.4           DMF Update

 

Cardinal Health will
update the DMF to reflect all changes made from the original DMF filing.

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated
  Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

3

 

2.1.1.5           In-Process and Release Testing of
Softgels for Process Validation

 

Cardinal Health will
carry out project-related activities for three process validation batches as
follows:

 

•                  Perform appropriate
in-process fill weight and content uniformity testing and release testing for
three batches of active: appearance, identification (HPLC), assay/related
substances, fill weight, disintegration, content uniformity, moisture, and
microbial limits testing (MLT).

•                  Perform
peroxide test and AQL on three batches.

•                  Issue CoA.

Estimated Cost

	
  Activity and Estimated Duration
  (Weeks)

  	
   

  	
  Estimated Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

* Additional
cost may be incurred for more then three samples ($[***] per sample requiring assay). Content uniformity will be charged at $[***] per set of samples.

2.1.2                     Reliant
Responsibilities

 

Reliant will sign the
protocol and provide a technical contact who will be available for technical
discussions and make decisions that are needed in reference to this project.
Reliant will not use any samples/materials shipped from Cardinal Health for
this project in a manner that is inconsistent with the scope of this project.

 

2.2          Specifications

 

2.2.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will
propose and document the specifications, as applicable, in the Protocol(s).

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

4

 

2.2.2                     Reliant’s
Responsibilities

 

Reliant will provide all
specifications necessary to perform this project.

 

Section 3.  Cost Proposal

 

3.1          Project Costs

Total Estimated Project Cost

	
  Section

  Reference

  	
   

  	
  Activity

  	
   

  	
  Estimated Duration

  (Weeks)

  	
   

  	
  Estimated Cost

  ($)

  	
   

  
	
  2.1.1.1.

  	
   

  	
  Preliminary Activities

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.2.

  	
   

  	
  Omacor Development
  Report

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.3.

  	
   

  	
  Omacor 1000 mg Softgel
  Process Validation

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.4.

  	
   

  	
  DMF Update

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.5.

  	
   

  	
  In-Process and Release
  Testing of Softgels for Process Validation

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Total
  Estimated Project Cost

  	
   

  	
  [***]

  	
   

  

 

3.2          Additional
Fees

 

If copies of raw data are requested in the course of an active project,
Reliant will be invoiced at $[***] for time required to generate and compile
the data packet. If copies of raw data are requested after a final report has
been issued, Reliant will be invoiced at the current laboratory rate for the
hours required to generate and compile the data packet.

 

3.3          Revisions
to Pricing

 

Cardinal Health reserves the right to revise quoted costs for any
project as a result of initial scope change, revisions in Protocols,
modifications of test methods, final review of test methods, undocumented
requirements, retesting or resynthesis, or any unforeseen difficulty in
executing the project. The additional work will be performed based on written
agreement from Reliant and will be documented on a Cardinal Health Quotation
Amendment Record (QAR).

 

All required investigational work (such as OOS investigations, trouble
shooting chromatographic methods, etc.) may be conducted without prior approval
from Reliant, for up to 16 scientist hours per occurrence. If the additional
work requires going beyond [***] hours, Reliant will be contacted prior to
continuation. All investigational retesting performed that is not directly due
to a Cardinal Health error will be invoiced to Reliant.

 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

 

5

Section 4.  Invoicing and Payment Terms

 

4.1          Invoicing

 

Upon request from Reliant, Cardinal Health will
purchase all samples/materials necessary to perform the project and will
invoice Reliant monthly at cost plus reasonable and customary acquisition and
handling costs.

 

Non-standard or special instrumentation or equipment
required solely for this project will be invoiced to Reliant following Reliant
approval.

 

4.2          Additional Invoicing Terms

 

Cardinal Health will issue invoices based on
milestones identified in Section 2.1.1. If a draft report is issued, Reliant
will have 10 business days to return comments to Cardinal Health. If no
comments are received, Cardinal Health will finalize the report and issue the
invoice. If comments are received after issuance of the final report, Reliant
will be billed at the current standard hourly rate for the time required to
complete changes and reissue the report.

 

4.3          Payment Terms

 

Payments toward all invoices are due within 30 days of
receipt of invoice and are non-refundable. Any applicable wire transfer fees
must be included in the payment issued to Cardinal Health. All shipments are
FOB Somerset, New Jersey. Remit all payments to:

 

Cardinal Health, Pharmaceutical Development, Somerset 

P.O. Box 827389

Philadelphia, PA 19182-7389

 

Section 5.  Scheduling/Deliverables

 

5.1          Scheduling

 

Cardinal Health must receive a signed Quotation with a
Purchase Order number (if applicable), a signed Protocol, and all raw
materials/intermediates/final product samples in order for this project to be
scheduled. Once scheduled, Reliant will be notified by Cardinal Health of the
anticipated start and completion date of the project activities.

 

5.2          Deliverables

 

5.2.1                     Reports
and Certificates of Analysis

 

A report and/or
Certificate of Analysis will be issued upon completion of each project phase.

 

6

5.2.2                     Communication

 

In order to establish a
collaborative relationship between Reliant and Cardinal Health, both parties
will appoint a Project Manager to serve as a point of contact to oversee
progress on this project. Upon initiation of the project, Cardinal Health and
Reliant will establish a communication plan, if requested, that may include
conference calls, visits, and timelines.

 

Section 6.  Additional Project Terms

 

6.1          Safety

 

6.1.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will
assess all vendor and Reliant MSDS and all handling data for the
samples/materials associated with this project. If categorized as a CDS and/or
Category 3 or above, the samples/materials will require special handling
precautions and will be subject to a Hazardous Material Fee for all handling
and testing directly associated with the samples/materials. If applicable, this
Hazardous Materials Handling Surcharge will be included in the project costs.

 

6.1.2                     Reliant’s
Responsibilities

 

Reliant will provide MSDS
and all sample/material handling data for the samples/materials associated with
this project. If any sample/material has any special handling considerations,
Reliant will notify Cardinal Health prior to the initiation of the project.

 

6.2          Methods/Documentation

 

6.2.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will
review all project-related documentation and methods received from Reliant
associated with this project.

 

6.2.2                     Reliant’s
Responsibilities

 

Reliant will provide all
available project-related documentation and methods to be used for this
project.

 

7

6.3          Samples/Materials

 

6.3.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will, as
necessary, log in all samples/materials according to current Standard Operating
Procedures. The sample/material lot numbers will be recorded in the laboratory
notebooks at the time of use.

Upon issuance of the
final report or Certificate of Analysis, samples/materials will be stored in
quarantine at Cardinal Health for a period of 30 days. After the 30-day
quarantine period, samples/materials will be disposed of at Cardinal Health
unless requested otherwise by Reliant. If additional storage is requested,
Cardinal Health will issue a QAR for the additional cost.

 

6.3.2                     
Reliant’s Responsibilities

 

If available, Reliant
will provide all samples/materials necessary to perform this project. The
samples/materials should arrive at Cardinal Health with all proper
documentation. If samples/materials are not available, Reliant will request
that Cardinal Health purchase all necessary samples/materials needed to perform
this project.  If return shipment is
requested, Reliant will notify Cardinal Health prior to the disposition of
samples/materials.

 

6.4          Cancellation

 

If this project is cancelled by Reliant for purposes
within their control, Cardinal Health will invoice Reliant the cost of any
sample/materials, work performed before cancellation, reference materials,
equipment, and supplies purchased by Cardinal Health specifically for this
project.  In addition, Cardinal Health
reserves the right to invoice project cancellation fees according to the following
schedule: acceptance of quotation but no approved protocol, $[***]; acceptance
of protocol but no laboratory work, $[***]; and after laboratory work has
begun, [***]%.

 

For pilot plant manufacture, Cardinal Health reserves
the right to invoice project cancellation fees according to the following
calendar day schedule: [***].

 

6.5          Project Notes

 

Reliant communication is encouraged.  To foster project planning, reviews/updates,
and coordination meetings, Cardinal Health will provide four person-hours a
month of communication free of charge. 
Additional communication hours beyond this amount will be invoiced at
the standard hourly rate.

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

8

Reliant shall pay for all product batches, including
batches that do not conform to applicable specifications, unless all methods
and processes associated with the manufacture, testing, and storage of that
product have been fully validated in accordance with generally accepted
standards of the pharmaceutical industry.

 

The costs associated with optional testing have not
been included in the total estimated project cost.

 

The summary of costs detailed above does not include
any extra reformulation activities, any post submission activities, and/or any
activities required for commercial batch manufacture.  Additionally, it does not include any post
approval tasks such as annual stability testing or storage.  If requested by Reliant, these costs will be
quoted separately.

 

Section 7.   Version History

 

 

Revisions

 

	
  Version

  	
   

  	
  Revisions

  
	
  00

  	
   

  	
  New Issue

  

 

Section 8. 
Terms and Conditions

All work performed under this quotation is subject to the
Supply Agreement to be executed between Cardinal Health and Reliant
Pharmaceuticals.  Upon receipt of an
executed Term Sheet and Purchase Order from Reliant, Cardinal Health shall
commence the validation process activities and manufacture the validation lots,
while the parties negotiate the supply agreement.  In the event that the supply agreement has
not been executed as of the date of the completion of the manufacture of the
validation lots, Cardinal Health shall release the validation lots to Reliant
upon payment of the amounts due Cardinal Health as set forth in the Purchase
Order and agreement by the parties as to responsibility for any liabilities
(i.e. recall, product liability etc) associated with the manufacture or sale of
the validation lots.

 

9

Section 9.  Project Approval and Authorization

 

By signing below, Reliant agrees to the project
details as set forth in this Quotation.

 

	
  Reliant Pharmaceuticals.

  	
   

  	
  Cardinal Health PTS, LLC

  
	
   

  	
   

  	
  /s/

  
	
  Signature

  	
   

  	
  Signature

   

  
	
   

  	
   

  	
  Kent Payne, Ph.D.

  
	
  Printed Name

  	
   

  	
  Printed Name

  
	
   

  	
   

  	
  Vice President, Research and Development

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
  16 Feb 2005

  
	
  Date

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  PO Number

  	
   

  	
   

  

 

Please sign and return a copy of the Quotation Approval Page via fax to

Denise McGraw at (732) 537-6480 or email to denise.mcgraw@cardinal.com.

 

EXHIBIT E

 

FORM OF QUALITY AGREEMENT

 

 

COMMERCIAL

QUALITY AGREEMENT

Between

And

For the manufacture of:

OmaCor Capsules

 

	
  Commercial Quality Agreement

  	
   

  	
  OmaCor Capsules

  
	
  Between Reliant Pharmaceuticals,
  Inc. and Cardinal Health

  	
   

  	
   

  

TABLE OF CONTENTS

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  I

  	
   

  	
  QUALITY AGREEMENT AND TERM 

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  PRODUCTS 

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  CONTACT INFORMATION 

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  MANUFACTURING COMPLIANCE

  	
   

  	
   

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Premises

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Equipment

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Personnel

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Materials

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Documentation

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Lot Numbers and Expiration

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Bulk Product Storage and Shipment

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
  8.

  	
   

  	
  Processing of Intermediates (Bulk
  Hold)

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V

  	
   

  	
  QUALITY CONTROL 

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Premises

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Equipment

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Vendor Approval

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Personnel

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Out-of-Specification (OOS
  Investigations)

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Reference Standards

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Product Release

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI

  	
   

  	
  QUALITY ASSURANCE 

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Documentation

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Samples

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Investigations/Deviations

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Product Complaints or Adverse
  Events

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Annual Product Review

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Product Recalls

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Audits by Reliant Pharmaceuticals

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII

  	
   

  	
  REGULATORY 

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Inspections by Regulatory Agencies

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Annual Reports

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Drug Listing

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII

  	
   

  	
  VALIDATION 

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Process

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Equipment Cleaning Validation

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Computer

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Analytical Test Methods

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REVISION HISTORY AND APPROVAL 

  	
   

  	
  14

  	
   

  
										

 

i

 

This Quality Agreement does
not supercede or amend any provisions in the Supply Agreement between Reliant
Pharmaceutical (Reliant) and Cardinal Health (Cardinal) dated April 14, 2005
(as may be amended from time to time, the “Agreement”).  In the event of a conflict between the terms
of the Agreement and this Quality Agreement, the Agreement shall be
controlling.

I               QUALITY AGREEMENT AND TERM

 

1.             It is deemed
necessary by Reliant and Cardinal to allocate the responsibilities of current
good manufacturing practice (cGMP), as defined in 21 CFR part 210-211, by which
OmaCor Capsules shall be manufactured and provided to Reliant.

2.             This Quality
Agreement, in conjunction with the Agreement, shall define the responsibilities
of the parties involved, and the levels of interaction necessary for the
delivery of a compliant drug product.

3.             This Quality
Agreement shall expire with the termination of the Agreement.  This Quality Agreement can be modified with
the written approval of Reliant and Cardinal Quality Departments.  A revision history shall be maintained as
part of the Quality Agreement.

II             PRODUCTS

 

Cardinal has agreed to
manufacture OmaCor Capsules in accordance with all cGMP’s, Product
Specifications and all applicable federal, state, and local laws and
regulations.

 

1

 

III            CONTACT INFORMATION

 

Communication pertaining to the manufacture of the
Drug Product shall flow between the established channels detailed below.

 

	
  DEPARTMENT

  	
   

  	
  RELIANT CONTACT

  	
   

  	
  CARDINAL CONTACT

  
	
  QUALITY
  ASSURANCE

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Keith Bowen

  (908) 542-4432

  (908) 542-4460

  kbowen@reliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail:

  	
  Leandra Mollanazar

  (727) 803-2263

  (727) 803-2315

  leandra.mollanazar@cardinal.com

  
	
  MANUFACTURING OPERATION

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Christopher Campbell

  (908) 542-4425

  (908) 542-9405

  ccampbell@reliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Michael Stanco

  (727) 803-2373

  (727) 803-1632

  michael.stanco@cardinal.com

  
	
  REGULATORY

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Mary Chin

  (908) 542-4461

  (908) 542-4460

  mchin@greliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Gloria Kulcheski

  (727) 803-2454

  (727) 803-2315

  gloria.kulcheski@cardinal.com

  
	
  PRODUCTION PLANNING

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Tanya Quinn

  (908) 860-4654

  (908) 542-9405

  tquinn@reliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Lee Kelly

  727-803-2209

  727-572-9577

  lee.kelly@cardinal.com

  

 

2

 

IV            MANUFACTURING COMPLIANCE

OmaCor will be manufactured by Cardinal according to the Agreement at
their facility located at 2725 Scherer Drive, St. Petersburg, FL  33716 as detailed in the NDA and
Agreement.  The FDA facility number for
this location is 1811396.

1.             Premises

1.1           The manufacturing facility shall
comply with all aspects of 21 CFR Part 210 and 211 Subpart C, as well as all
additional requirements detailed in the Agreement,

2.             Equipment

2.1           Equipment used to manufacture the
Product shall comply with 21 CFR part 211 Subpart D, as well as all additional
requirements detailed in the original DMF and subsequent updates.

2.2           Cardinal shall maintain written
records for equipment usage, cleaning, maintenance and calibration of all
equipment used in the processing of the Drug Product to ensure that cleaning
and maintenance records are readily identifiable with equipment usage in the
event of a drug product problem that may be investigated.  Cardinal shall maintain approved written
procedures including, but not limited to, specifications for cleaning,
assignment of responsibility for cleaning and maintaining equipment.

2.3           Installation qualification (IQ)/
operational qualification (OQ)/ performance qualification (PQ) shall be
performed on all equipment used in the manufacture and analysis of the product,
and the same equipment shall be placed on a calibration and/or preventive
maintenance schedule, as appropriate.

2.4           Cardinal shall only use the major
equipment detailed in the Master Batch Records thereto for the processing and
manufacture of the product.  Use of
equipment other than that stipulated in the mutually agreed to Master Batch production
records shall not be permitted without prior written consent from Reliant
Quality and Regulatory, irrespective of FDA guidance’s detailing equipment
class and subclass equivalencies.

3.             Personnel

3.1           Cardinal shall maintain quality
control and quality assurance units to be responsible for the duties relating
to quality control and quality assurance. 
The responsibilities of these units shall be defined in written
procedures.

3.2           Personnel used to process the drug
product shall be appropriately trained in cGMP’s, as well as the processes they
perform.  Training shall be

 

3

 

                documented and available for review.  Training shall be conducted on a continuing
basis by qualified individuals.

3.3           There shall be an adequate number of
qualified personnel to perform and supervise the processing and manufacture of
the drug product.

4.             Materials

4.1           Cardinal shall use only those
excipients, Active Pharmaceutical Ingredients (“API”), components, and bulk
capsule packaging materials as detailed in the DMF.

4.2           Cardinal shall sample all materials
according to approved procedures, and shall test and release those materials
according to approved analytical methodology and specifications as filled in
the DMF.

4.3           Cardinal shall store all packaging
materials, excipients, API, and finished product in a suitable environment so
as not to impact the materials’ quality. 
A suitable retest program shall be used to demonstrate the quality of
the stored material versus approved specifications.  Certificates of Analysis or analytical test
sheets, as defined by Cardinal, shall be generated and reviewed by quality
control to release all materials used to process and manufacture the Product.

5.             Documentation

5.1           Cardinal shall provide written
documentation in the form of a master batch record for all processes used in
the manufacture of the Product.

5.2           Cardinal shall maintain and follow
Standard Operating Procedures (SOP) required to manufacture, package, analyze,
release, and store in-process materials as well as the Product as detailed in
the DMF, and required by cGMP.

5.3           Cardinal shall follow a suitable
change control procedure for all documentation. 
All changes to controlled documents such as, batch records,
manufacturing specifications, test methods, and raw materials supplied by
Reliant and product specifications must be submitted to Reliant QA for review
and approval prior to final approval and implementation.  Any documentation necessary to support the
change request shall be provided as necessary.

5.4           Labeling of bulk finished product
will be executed per Cardinal’s in-house labeling program.  Bulk shipper labels shall contain a minimum
of the following information:  product
name, strength, container number, storage statement, package by date, Cardinal
shall follow written procedures for 

 

4

 

label control for the
receipt, release, dispensing, and reconciliation of all labels, as appropriate.

6.             Lot Numbers and Expiration

6.1           Cardinal shall assign unique lot
numbers to bulk finished product to ensure complete product traceability.

7.             Bulk Product Storage and
Shipment

7.1           Cardinal shall store all finished
product in suitable containers, labeled with lot specific information, and in a
controlled environment to remove possibility of tampering, theft, adulteration,
or contamination.

7.2           Product shall be labeled with all
D.O.T. and O.S.H.A. information, as required, and suitably packaged to minimize
damage during transit.

7.3           Bulk product container shall be
sealed with tamper evident closures or seals to remove the possibility of
tampering, theft, adulteration, or contamination.

7.4           Bulk finished product may be shipped
by Cardinal to a Reliant specified address once all site specific testing
requirements are approved all deviations and investigations are closed, and the
batch record is approved..  Materials may
be shipped under Quarantine only with the prior written consent from the
Quality Department from Reliant and Cardinal.

7.5           Product should be segregated by lot
number prior to shipment.

8.             Processing of Intermediates
(Bulk Hold)

8.1           Each process intermediate for each
step of the manufacturing process may be held for a period of up to 30
days.  Holding a process intermediate for
a period of longer than 30 days must be supported by stability data, generated
per an approved protocol that supports a longer storage interval.

 

5

 

V             QUALITY
CONTROL

Cardinal shall maintain a cGMP quality control laboratory suitable to
test and release all materials; API, components, in-process test samples, and
finished product according to the analytical methods and specifications
detailed in the DMF and subsequent updates or NDA or approved Supplement.  This laboratory is the only qualified
laboratory to perform analytical testing in support of the materials, API,
components, and drug products, unless otherwise specified in the DMF.  Use of any other laboratory for release
testing is not permitted.

1.             Premises

1.1           The quality control laboratory shall
comply with all aspects of 21 CFR Part 210 and 211.

2.             Equipment

2.1           Installation qualification/
operational qualification/ performance qualification shall be performed on all
equipment used in analysis of excipients, components, and the product and the
same equipment shall be placed on a calibration schedule, as appropriate.

2.2           Cardinal shall maintain written
records for equipment usage, maintenance and calibration.

3.             Vendor Approval

3.1           Cardinal shall suitably qualify all
vendors from which materials are sourced for use in the finished drag
product.  This includes, but is not
limited to excipients, container closure systems, printed commodities, etc.

4.             Personnel

4.1           Personnel used to test and release
the Product shall be appropriately trained in cGMP’s, as well as the methods
and techniques they utilize.  Training
shall be documented and available for review. 
Training shall be conducted on a continuing basis by qualified individuals.

5.             Out-of-Specification (OOS)
Investigations

5.1           Cardinal is responsible for following
its SOP to investigate any test results that fail to meet specifications.  A confirmed OOS failure should be conveyed to
Reliant Quality within 2 business days. 
These OOS investigations are open to review by Reliant during an audit.

 

6

 

6.             Reference Standards

6.1           All testing shall use primary
reference standards, or appropriately qualified secondary reference
standards.  Qualification of secondary
reference standards must comply with current ICH guidelines.

7.             Product Release

7.1           Reliant is responsible for assessing
final product disposition and release. 
Cardinal shall provide a COA/COC and product yield page for each lot
manufactured.

 

7

 

VI            QUALITY
ASSURANCE

Cardinal’s Quality Department shall assure that the drug product was
manufactured, tested, released, and stored in accordance with cGMP’s, and all
requirements as detailed in the in the approved master batch
record/specifications.

1.             Documentation

1.1           Cardinal will provide both a
Certificate of Analysis indicating all Cardinal test results and their
specifications, and a Certificate of Compliance indicating the Drug Product has
been manufactured, packaged, tested, released and stored according to cGMP’s
and all requirements as detailed in the master batch record/specifications.

1.2           Cardinal shall provide written
certification for cGMP Compliance and Debarment annually upon request.

1.3           Cardinal shall retain all Batch
Production Records for the Drug Product for a period of not less than one year
past the finished product expiration date.

1.4           Deviations to the manufacturing
process or analytical test methods must be documented, reviewed versus the
respective validation, and approved by both Reliant and Cardinal Quality
Assurance department s prior to release of the Drug Product.

1.5           Cardinal is responsible for
maintaining all documentation supporting all manufacturing processes,
analytical testing, and storage of the Drug Product for a period of not less
than one year past the expiration date of any finished product lot containing
it.

1.6           Cardinal shall follow a suitable
Change Control Procedure for all documentation. 
All changes to batch records, manufacturing specifications, or test
methods must be submitted to Reliant Quality Assurance for review and approval
prior to implementation.

1.7           Validation records shall be
maintained by Cardinal until the NDA is retired.

2.             Samples

2.1           Cardinal’s Quality Control Unit shall
assure that all test samples are taken in accordance with approved SOP’s.

2.2           Cardinal shall maintain bulk product
reserved samples for a period of not less than one year past the expiration
date of finished products.  At least
twice as much material shall be retained as is needed to conduct testing if
necessary.

 

8

 

2.3           Cardinal shall retain API reserve
samples for one year after the expiration date on the last finished product lot
containing it.  At least twice as much
material shall be retained as is needed to conduct all specification release
testing.

2.4           Manufacturer shall perform annual
inspection of the bulk product retained samples as per 21 CFR 211.170, and will
perform an investigation of deterioration, if necessary, as per 21 CFR 211.170.

3.             Investigations/Deviations

3.1           Cardinal shall notify Reliant Quality
in writing within two business day after confirmation of any situation that
impacts product that has already been released. 
Cardinal shall also provide Reliant with verbal communication of any
such investigation prior to the confirmation so that appropriate action can be
implemented to restrict continued distribution of product until the
investigation can be finalized.

3.2           All major and minor manufacturing
deviations shall be investigated and approved by both Cardinal and Reliant QA
departments.  Copies of the final
approves investigations shall be conveyed to Reliant Quality with the issuance
of the bulk product certificate of analysis. 
In addition, Cardinal shall inform Reliant QA of any confirmed Out of
Specification result.

A Major Deviation is defined as:  A departure from normal operating conditions
that is determined to have a significant or unknown
impact on the identity, strength, quality, and purity of the drug product.  Examples include, but are not limited
to:  failure of a batch or lot to meet
any analytical specification that is not determined to be a laboratory error;
or, compounding errors such as dispensing incorrect quantities of material; or
processing errors such as using equipment that is outside of approved
calibration dating or processing a batch outside the tolerances set forth in
the batch record; or observation of foreign materials in a batch; or packaging
or labeling errors.

A Minor Deviation is defined as:  A departure from normal operating conditions
that is determined to have no impact on the identity, strength, quality, and
purity of the drug product.  Examples
include, but are not limited to:  low
gross yields; or calculation or rounding errors that have no impact on the
batch.

3.3           Rework/Reinspections:  Cardinal shall obtain approval from Reliant
QA before performing any rework or reinspection of intermediates or finished
product.

 

9

 

4.             Product Complaints or Adverse
Events

4.1           All individuals reporting a product
related complaint shall be immediately directed to contact Reliant
Pharmaceuticals’ Customer Complaints Group at telephone number:  908.580.1200.

4.2           All individuals reporting an Adverse
Event shall be immediately directed to contact Reliant Pharmaceuticals’ Medical
Affairs Department at telephone number: 
908.580.1200.

4.3           Reliant Pharmaceutical’s Quality
Department shall evaluate all complaints and determine if product retain
analysis is required.  A written request
shall be forwarded to Cardinal detailing any product retain investigation that
is required.  Cardinal shall provide a
written report of the investigation within 20 business days.

4.4           Cardinal shall maintain a system for
logging, tracking, and responding to complaints.

4.5           Reliant shall be the only authorized
group to provide product related responses to the public.

4.6           Should Reliant discover a product
related problem, Reliant Quality Department shall provide a written complaint
notification to Manufacturer within 2 business days of the occurrence.

4.7           Should Cardinal, through routine
product review, discover a product related issues that causes an investigation,
Cardinal shall provide written notification to Reliant’s Quality Department
within 3 business days.

5.             Annual Product Review

5.1           Cardinal shall perform an annual
product review for the Product detailing all product lots manufactured, product
investigations, lots released or rejected, specification changes (to excipient,
in-process controls, or finished product), and process or method revisions
(including validation reports) for all Product lots manufactured in the
previous calendar year.  All critical
release data shall be trended to evaluate the process.

5.2           The written annual product review
report for a given year shall be sent to Reliant Quality Department.  The reporting period shall commence with the
first day of the month in which the validation campaign started, and shall
close 365 days later (i.e. April 1, 2005 through March 31, 2006).  This period will be the established reporting
period for the product.

 

10

 

5.3           The written annual product review
report for a given year shall be sent to Reliant Quality Department within 90 days
of the close of the reporting period.

6.             Product Recalls

6.1           It shall be the sole responsibility
of Reliant to issue a FDA Field Alert Notification pertaining to a product
quality issue discovered by Cardinal or Reliant.  An alert shall only be issued with
substantive evidence of a quality issue, for which Cardinal shall have 5
business days from obtaining knowledge of the substantial evidence of a quality
issue to provide a full investigation report to Reliant Pharmaceuticals.

6.2           It shall be the sole responsibility
of Reliant to issue a product recall, and discuss with FDA the extent or type
of action that should occur.  Decisions
to initiate a product recall shall be based on product medical reviews and the
investigation report used to support the FDA Field Alert.

7.             Audits by Reliant
Pharmaceuticals

7.1           Routine Audits may be performed by
Reliant or its agent upon prior notification, and not more than once a
year.  CGMP compliance audits of
Cardinal’s facilities may be conducted during regular business hours, and may
cover any system or area, plus associated documentation, used to support
receiving, sampling, testing, releasing and holding of raw materials, or
manufacturing, sampling, testing, releasing, labeling, holding, and
distribution of the drug product.

7.2           Reliant Quality shall provide 180
days notification for a routine audit, and 7 days notification for a ‘for
cause’ audit pertaining to a specific product quality and safety issue.  A ‘for cause’ audit does not constitute a
routine audit.

7.3           An exit meeting shall be held to
provide significant audit observations. 
A written report of observations shall be issued.

7.4           Cardinal shall provide a written
response to the audit observations within 30 business days of receipt of
written observations from Reliant.  The
response shall include details of the corrective actions to the observations,
and the expected completion date of the action. 
Reliant Quality shall follow-up on the progress of the corrective
actions based on the expected completion dates provided.

7.5           Reliant shall have the right to be
present during the manufacture of any product validation lots, or during the
manufacture of a lot in which a CAPA issue is being implemented.  These visits shall not go against Reliant’s
right to an annual audit.

 

11

 

VII          REGULATORY

All final, Regulatory assessments pertaining to the manufacture,
release, and distribution of the Product shall be the responsibility of
Reliant’s Regulatory Affairs group. 
Cardinal shall provide a cGMP compliant facility in order to supply the
Product to Reliant Pharmaceuticals.

1.             Inspections by Regulatory
Agencies

1.1           Cardinal shall inform Reliant
Pharmaceuticals of any Regulatory Agency performing an inspection relating to
the Product, or a facilities inspection affecting the Product within the same
business day of notification.  Reliant
Quality Department may be present at any Product specific inspections and exit
meetings with prior approval from Cardinal’s Quality Department.

1.2           All Product specific regulatory
correspondence, or facilities correspondence affecting the manufacturing of the
Product shall be conveyed to Reliant Quality Department within 2 business days
of receipt.  Cardinal shall provide
written responses to all Product related observations for Reliant review prior
to commitment to any regulatory authority.

1.3           Cardinal shall provide copies of all
regulatory agency inspection documentation (i.e. 483’s, EIR’s, etc.) or any
other regulatory correspondence pertaining to the Product to Reliant Quality
Department within seven business days of receipt.  A redacted copy will be provided to protect
other customer’s products.

2.             Annual Reports

2.1           It shall be the sole responsibility
of Reliant Pharmaceuticals to maintain all regulatory communication and updates
(Supplements, CBE, Annual Reports, etc.) pertaining to the Product as outlined
in ICH and FDA regulatory guidance documents. 
All necessary CMC documentation updates will be conveyed to Cardinal,
who shall provide the necessary documentation to Reliant Regulatory not less
than 45 days prior to filing date.

3.             Drug Listing

3.1           It shall be the responsibility of
Reliant Regulatory to submit FDA Form #2657 every June and December updating
the Drug Product Listing.  When no changes
have occurred since the previously submitted list, no report is required.

 

12

 

VIII         VALIDATION

Cardinal shall assure that all systems used to manufacture, test,
release, and distribute the Product shall have been appropriately transferred,
qualified, and/or validated prior to using that system to process the Product
for commercial product.

1.             Process

1.1           Cardinal shall be responsible for
performing and documenting process validation to comply with cGMP’s and to
ensure consistency of quality Product.  A
process validation protocol shall be forwarded to Reliant for review and
approval prior to carrying out the validation. 
A final report will be issued and a copy will be provided to Reliant
Quality.

2.             Equipment Cleaning Validation

2.1           Cardinal is responsible for reviewing
toxicity and safety information for all products they manufacture to set
appropriate cleaning limits to ensure there are no cross contamination issues
between products.  Cardinal shall demonstrate,
through approved protocol and final report, that cleaning validation has been
performed.

3.             Computer

3.1           Cardinal is responsible for
compliance as it pertains to systems validation, electronic records, electronic
records retention, and electronic signatures for those systems used in the
control of the manufacturing processes, analytical testing, receipt, release
and distribution of materials, API, components, and the Product as prescribed
by 21 CFR part 11, and any other current, approved FDA Guidance requirements..

4.             Analytical Test Methods

4.1           Cardinal shall be responsible for
demonstrating the suitability (methods transfer or validation, as appropriate)
of all methodology used to release raw materials, components, and the finished
product, as appropriate.

 

13

REVISION HISTORY

	
  Revision

  Date

  	
   

  	
  Revision
  Description

  
	
  June 2005

  	
   

  	
  New Document

  

 

	
  APPROVALS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Reliant Pharmaceuticals, Inc.

  	
   

  	
  Cardinal Health

  
	
   

  	
   

  	
   

  
	
   

  	
  June 1, 2005

  	
   

  	
   

  	
  06-06-05

  
	
  Signature

  	
  Date

  	
   

  	
  Signature

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Godfrey Baker

  	
   

  	
  Dina Kostakis

  
	
  Director, QA/QC

  	
   

  	
  Quality and Regulatory Affairs DirectorEXHIBIT
10.42

 

 

AMENDED
AND RESTATED PROMOTION AGREEMENT

 

 

BETWEEN

 

 

NOVARTIS
PHARMACEUTICALS CORPORATION

 

 

AND

 

 

RELIANT
PHARMACEUTICALS, INC.

 

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II
  TERM

  	
  7

  
	
   

  	
   

  
	
  ARTICLE III
  GRANT

  	
  7

  
	
   

  	
   

  
	
  ARTICLE IV
  SERVICES OF RELIANT

  	
  10

  
	
   

  	
   

  
	
  ARTICLE V
  ADDITIONAL AGREEMENTS OF NOVARTIS

  	
  17

  
	
   

  	
   

  
	
  ARTICLE VI
  COMPENSATION

  	
  21

  
	
   

  	
   

  
	
  ARTICLE VII
  TERMINATION

  	
  26

  
	
   

  	
   

  
	
  ARTICLE VIII
  WARRANTIES, REPRESENTATIONS AND COVENANTS

  	
  29

  
	
   

  	
   

  
	
  ARTICLE IX
  INTELLECTUAL PROPERTY

  	
  33

  
	
   

  	
   

  
	
  ARTICLE X
  INDEMNITIES

  	
  35

  
	
   

  	
   

  
	
  ARTICLE XI
  CONFIDENTIALITY

  	
  37

  
	
   

  	
   

  
	
  ARTICLE XII
  NOTICES

  	
  38

  
	
   

  	
   

  
	
  ARTICLE XIII
  PUBLICITY

  	
  39

  
	
   

  	
   

  
	
  ARTICLE XIV
  INSURANCE

  	
  40

  
	
   

  	
   

  
	
  ARTICLE XV
  MISCELLANEOUS

  	
  40

  

 

 

AMENDED
AND RESTATED PROMOTION AGREEMENT

 

This AMENDED AND RESTATED PROMOTION AGREEMENT, dated
and effective the      day of April, 2005 (this “Agreement”), is made by and between
Novartis Pharmaceuticals Corporation, a Delaware corporation, having offices at
59 Route 10, East Hanover, New Jersey 07936 (hereinafter “Novartis”) and Reliant Pharmaceuticals,
Inc., a Delaware corporation (f/k/a Reliant Pharmaceuticals, LLC), having
offices at 110 Allen Road, Liberty Corner, New Jersey 07938 (hereinafter “Reliant”).

 

WHEREAS, on November 16, 2000, Novartis and Reliant
entered into a Promotion Agreement (as previously amended by letter agreement
dated August 23, 2001, Amendment No. 2 to Promotion Agreement dated February
22, 2002, and letter agreement dated February 22, 2002; as so amended, the “Original Promotion Agreement”), pursuant to which Novartis
granted to Reliant certain rights to promote the Product in the Territory (as
such terms are hereinafter defined) on the terms and conditions set forth in
the Original Promotion Agreement; and

 

WHEREAS, Novartis and Reliant desire to amend and restate
the Original Promotion Agreement as set forth herein.

 

NOW, THEREFORE, in consideration of the following
mutual promises and obligations, the parties hereby agree that Original
Promotion Agreement is hereby amended and restated in its entirety as follows:

 

ARTICLE I

DEFINITIONS

 

As used in this Agreement, the following terms shall
be defined as follows:

 

1.1           “Act” shall mean the Federal Food, Drug and
Cosmetic Act, 21 U.S.C. 301, as it may be amended from time to time, and the
regulations promulgated thereunder.

 

1.2           “Affiliate” shall mean all corporations or
business entities which, directly or indirectly, are controlled by, control, or
are under common control with Novartis or Reliant, as the case may be. For this
purpose, control shall mean direct or indirect ownership of at least fifty
percent (50%) of the voting shares or interest of such corporation or business
entity.

 

1.3           “Agreement Half Year” shall mean each six
(6) month period beginning either on January 1 or July 1 of any
Agreement Year including Agreement Year 2005.

 

1.4           “Agreement Year” shall mean each twelve (12)
month period of the Term of this Agreement beginning on the first day of the
calendar year, including “Agreement Year 2005”,
which shall mean the period commencing on January 1, 2005 and ending on
December 31, 2005.

 

1.5           “Alternate Sales Channels” shall mean
promotional services such as telemarketing, peer meetings, medical symposia and
direct mail.

 

 

1.6           “ANDA” shall mean an Abbreviated New Drug
Application as defined in the Act.

 

1.7           “Annual Net Sales Baseline” shall mean the
Annual Net Sales Baseline for Agreement Year 2005 as set forth on Exhibit 1 attached hereto, as
adjusted from time to time in accordance with this Agreement.

 

1.8           “Annual Net Sales Forecast” shall mean the
Annual Net Sales Forecast for Agreement Year 2005 as set forth on Exhibit 1 attached hereto.

 

1.9           Intentionally
Omitted.

 

1.10         “Change of Control” shall mean any
transaction or series of related transactions in which  (i)(x) Reliant merges or consolidates
with another party, (y) equity interests of Reliant are acquired by
another party, or (z) Reliant enters into any other business combination
transaction with another party, and immediately following any such transaction
the equityholders of Reliant immediately prior to the consummation of such
transaction do not own at least a majority of the shares or other equity
interest of the surviving entity immediately following such transaction, or
(ii) all or substantially all of Reliant’s assets are acquired by another
party.

 

1.11         “Competitor” shall mean any entity other
than Novartis and its Affiliates which, (a) 
alone or together with its Affiliates, is commercially selling or
promoting a Statin Product and (b) generates, together with its Subsidiaries,
annual ethical pharmaceutical sales in the Territory of more than $[***] in the
branded and generic market, as reported under United States generally accepted
accounting principles or, in  the event
that such entity does not use United States generally accepted accounting
principles, the International Accounting Standards, in each case with respect
to the then most recently ended fiscal year for which such financial
information is available.

 

1.12         “Coordinator” shall have the meaning ascribed in
Article 3.5(a) hereof.

 

1.13         “Detail” and “Detailing” shall mean an interactive face-to-face contact by a
Sales Representative with a Professional, during which a promotional message
involving the Product is given in accordance with the terms of this Agreement.

 

1.14         “Effective Date” shall mean November 16,
2000.

 

1.15         “Expert” shall have the meaning ascribed in
Article 6.6(a) hereof.

 

1.16         “FDA” shall mean the United States Food and
Drug Administration or any successor agency performing comparable functions.

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

2

 

1.17         “Field of Use” shall mean the approved
indications for the Product set forth in an NDA as of the Effective Date and as
may be approved by the FDA subsequent to the Effective Date.

 

1.18         “First Position Detail” shall mean a Detail
in which the Product is the first product discussed and the primary focus of
such Detail.

 

1.19         “Liability” or “Liabilities”
shall have the meaning ascribed in Article 10.1 hereof.

 

1.20         “Make Whole Amount” shall have the meaning
ascribed in Article 7.8 hereof.

 

1.21         “Marketing Committee” shall have the meaning
ascribed in Article 3.5(b) hereof.

 

1.22         “Marketing Plan” shall have the meaning
ascribed in Article 4.7 hereof.

 

1.23         “Maximum Quarterly Reserve Account Balance” shall have the
meaning ascribed in Article 6.3(b)(ii) hereof.

 

1.24         “Month” shall mean a calendar month.

 

1.25         “Monthly Payment” shall have the meaning ascribed in
Article 6.2(a) hereof.

 

1.26         “Monthly Payment Amount” shall have the meaning ascribed in
Article 6.3(a) hereof.

 

1.27         “NDA” shall mean the following approved New
Drug Applications (a) 20-261 [Lescol]
and (b) 21-192 [Lescol XL],
each as filed by Novartis, and all subsequent submissions, supplements and/or
amendments thereto, in each case as approved by FDA.

 

1.28         “Negotiation Termination Date” shall have the meaning
ascribed in Article 6.6(a) hereof.

 

1.29         “Net Sales” shall mean the gross invoice
price of Product sold by or on behalf of Novartis to independent,
non-Affiliated, third party customers in bona fide, arm’s-length transaction,
less the following deductions in respect of the Product, if not previously
deducted in the amount invoiced or received:

 

(a)           quantity
and/or cash discounts actually allowed or taken;

 

(b)           freight,
postage and shipping insurance invoiced to the customer;

 

(c)           customs
duties and taxes, if any, directly related to the sale;

 

(d)           amounts
repaid or credited by reason of rejections, return of goods, in each case
specifically identifiable as relating to Product;

 

(e)           amounts
incurred resulting from governmental (or an agency thereof) mandated rebate
programs;

 

3

 

(f)            third
party rebates and chargebacks clearly and directly related to the sale of
Product during the Term to the extent actually allowed;

 

(g)           rebates
related to the Novartis discount card programs similar to the Novartis CareCardSM
discount program; and

 

(h)           as
agreed by the parties in writing, any other specifically identifiable amounts
included in Product’s gross sales that were or ultimately will be credited and
that are substantially similar to those listed hereinabove;

 

1.30         “New Effective Date” shall mean the date first shown above.

 

1.31         “Nonparticipating Party” shall have the meaning ascribed in
Article 9.7 hereof.

 

1.32         “Notice of Termination” shall have the meaning ascribed in
Article 7.1 hereof.

 

1.33         “Novartis Claims”
shall have the meaning ascribed in Article 8.1(i) hereof.

 

1.34         “Novartis Indemnified Claims” shall have the meaning ascribed
in Article 9.3 hereof.

 

1.35         “Novartis Indemnified Party” or “Novartis
Indemnified Parties” shall have the meaning ascribed in
Article 10.2 hereof.

 

1.36         “Novartis Infringement Indemnitees” shall have the meaning
ascribed in Article 9.4 hereof.

 

1.37         “Novartis IP” shall have the meaning ascribed in
Article 8.1(g) hereof.

 

1.38         “Original Promotion Agreement” shall have the meaning
ascribed in the Recitals hereto.

 

1.39         “OTC Product” shall mean any pharmaceutical
product for therapeutic use in humans containing fluvastatin as the sole
pharmaceutically active substance or in combination with one or more active substances
that can lawfully be sold to customers and/or patients without being prescribed
by Professionals.

 

1.40         “Patents” shall mean those patents relating
to the Product owned by or licensed to Novartis or its Affiliates set forth on Schedule 1.40 hereto, including,
without limitation, reissues and extensions thereof.

 

1.41         “PDMA” shall have the meaning ascribed in Article 4.14
hereof.

 

1.42         “Primary Detail Equivalent” shall mean
either (i) a First Position Detail or (ii) two and one-half (2.5) Second Position
Details.

 

1.43         “Product” shall mean any dosage form covered
by the NDA containing fluvastatin sodium as the sole pharmaceutically active
substance, which is not an OTC Product.

 

4

 

1.44         “Professionals” shall mean physicians and
other health care practitioners who are permitted by law to prescribe Product.

 

1.45         “Promotional Materials” shall have the
meaning ascribed in Article 4.4 hereof.

 

1.46         “Promotion Effort” shall have the meaning ascribed in Article 4.1
hereof.

 

1.47         “Proprietary Information” shall mean any
proprietary or confidential information communicated from one party to the
other in connection or relating to this Agreement, which is identified as
confidential or proprietary, or which the other party knows or has reason to
know is confidential or proprietary, including, without limitation, financial,
marketing, business, technical and scientific information or data, whether
communicated in writing, orally or electronically.

 

1.48         “PSME” shall mean promotional, selling and
marketing expenses including, but not limited to, clinical studies, market
research, product samples, advertising, promotion and costs of and associated
with the training of the Sales Force, but excluding costs to hire and manage
the Sales Force.

 

1.49         “Quarter” shall mean a calendar quarter.

 

1.50         “Quarterly Payment Amount” shall have the meaning ascribed in
Article 6.3(b) hereof.

 

1.51         “Quarterly Reserve Account” shall have the meaning ascribed
in Article 6.3(b)(i) hereof.

 

1.52         “Quarterly Shortfall Payment Amount” shall
have the meaning ascribed in Article 6.3(b) hereof.

 

1.53         “Quarterly Total Net Compensation” shall
have the meaning ascribed in Article 6.3(b) hereof.

 

1.54         “Reliant Claims”
shall have the meaning ascribed in Article 8.2(h) hereof.

 

1.55         “Reliant Indemnified Claims” shall have the meaning ascribed
in Article 9.4 hereof.

 

1.56         “Reliant Indemnified Party” or “Reliant
Indemnified Parties” shall have the meaning ascribed in
Article 10.1 hereof.

 

1.57         “Reliant Infringement Indemnitees” shall have the meaning
ascribed in Article 9.3 hereof.

 

1.58         “Reliant Promotion Techniques” shall have
the meaning ascribed in Article 9.3 hereof.

 

1.59         “Reliant Split Percentage” shall have the meaning ascribed in
Article 6.3(a) hereof.

 

1.60         “Sales Calls” shall mean any office visits
to Professionals made by Sales Representatives for the purpose of Detailing the
Product.

 

5

 

1.61         “Sales Force” shall mean Reliant’s field
force of Sales Representatives and any additional personnel (full and/or
part-time) hired by or on behalf of Reliant for the same purpose before or
during the Term.

 

1.62         “Sales Representatives” shall mean sales
representatives employed directly or indirectly by or under contract to Reliant
who make Sales Calls, and who have been trained and equipped to make Sales
Calls.

 

1.63         “Seasonalized Net Sales Baselines” shall
mean the Seasonalized Net Sales Baselines for Agreement Year 2005 as set forth
on Exhibit 2 attached
hereto.

 

1.64         “Second Position Detail” shall mean a Detail
in which the Product is the second product discussed and the secondary focus of
such Detail.

 

1.65         “Staffing Baseline” shall have the meaning ascribed in
Article 4.3(a) hereof.

 

1.66         “Statin Product” shall mean a pharmaceutical
product not sold by Novartis or any of its Affiliates which contains an HMG CoA
reductase inhibitor (as the sole pharmaceutically active substance or in
combination with one or more other pharmaceutically active substances).

 

1.67         “Term” shall have the meaning ascribed in
Article II hereof.

 

1.68         “Termination Date” shall have the meaning ascribed in
Article 6.3(c) hereof.

 

1.69         “Termination Payment Amount” shall have the
meaning ascribed in Article 6.3(c) hereof.

 

1.70         “Termination Shortfall Payment Amount” shall
have the meaning ascribed in Article 6.3(c) hereof.

 

1.71         “Territory” shall mean the United States of
America, and its territories and possessions, including without limitation, the
Commonwealth of Puerto Rico.

 

1.72         “Third Party Infringement” shall have the meaning ascribed in
Article 9.7 hereof.

 

1.73         “Trademarks” shall mean Lescol®
and/or such other trademarks as Novartis or an Affiliate of Novartis shall duly
register with the United States Patent and Trademark Office which are utilized
by Novartis and/or its Affiliates in the Territory to identify the Product,
including, without limitation, the trademarks set forth on Schedule 1.73 hereto, and all trade
names used by Novartis in the Territory to identify the Product.

 

1.74         “VA” shall mean the U.S. Department of
Veterans Affairs.

 

6

 

1.75         “VA Adjustment Factor” shall mean $[***] per
capsule and per tablet of the Product, which amount may be increased by
Novartis every Agreement Half Year commencing July 1, 2005, in Novartis’ good
faith and in its sole and reasonable discretion, to reflect Novartis’ material
increased costs relating to the manufacture of the Product, including, without
limitation, inflation, exchange rate fluctuations, material increases in the
cost of raw materials or Product components and proportional changes in the
utilization among the three dosage forms of the Product; provided, however that
any increase in the Adjustment Factor shall not be greater than [***] percent
([***]%) in any given twelve (12) month period. Any proposed increase to the
Adjustment Factor in excess of [***] percent ([***]%)  in any given twelve (12) month period shall
require the prior written consent of Reliant following review of applicable
documentation submitted by Novartis in support of such proposed adjustment.

 

1.76         “VA Contract” shall mean the letter
agreement, dated July 28, 2003, between VA and Novartis, a copy of which is
attached hereto as Schedule 1.76.

 

1.77         “VA Net Sales” shall mean the gross invoice
price of Product sold by or on behalf of Novartis to the VA under the VA
Contract, less the following deductions in respect of the Product, if not
previously deducted in the amount invoiced or received:

 

(a)           the
VA Adjustment Factor, as adjusted from time to time; and

 

(b)           the
items described in subsections (a), (b) and (f) of the definition of Net Sales
in Article 1.29 hereof.

 

ARTICLE II

TERM

 

The term of this Agreement (the “Term”) shall be the period commencing on
the New Effective Date and terminating on December 31, 2007, unless
terminated earlier pursuant to the provisions herein. Notwithstanding the
above, Reliant shall have the right, upon written notice to Novartis prior to
October 1, 2007, to elect to extend the Term for one (1) additional Agreement
Year terminating on December 31, 2008. If Reliant elects to extend the Term for
an additional Agreement Year, the parties will in good faith negotiate staffing
levels, number of Details, PSME, compensation and any other material terms not
otherwise addressed herein for Agreement Year 2008.

 

ARTICLE III

GRANT

 

3.1           Grant
of Promotion Rights. During the Term, subject to the terms of this
Agreement, and subject to rights specifically retained by Novartis hereunder to
promote, market, Detail 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

7

 

and sell the
Product, Novartis hereby grants Reliant the exclusive right to promote, market
and Detail (but not to sublicense, subcontract or otherwise transfer or
delegate its obligation to promote, market and Detail except as may be
authorized by the Marketing Plan, as set forth on Schedule 3.1 attached hereto or as provided in
Article 15.9 below) the Product in the Field of Use under the Trademarks
through its Sales Force or Alternate Sales Channels to Professionals in the
Territory. Subject to the last sentence of this Article 3.1, Novartis
(i) reserves the exclusive right, upon prior written notice to Reliant, to
enter into any agreements with managed care entities and institutional
customers (e.g., mail order houses, pharmacy benefit management companies and
the U.S. Government, including but not limited to, the VA program) with regard
to the Product, (ii) retains the right, upon prior written notice to
Reliant, to conduct Phase IV development for the Product; provided that Reliant
shall only be obligated to fund any such Phase IV development projects as are
approved in advance and in writing by the Marketing Committee,
(iii) retains the right to promote, market and detail the Product at its
own cost and expense, (iv) retains all other rights in and to the Product,
including, but not limited to, the NDA, all pre-clinical and clinical data, the
Drug Master File and all manufacturing, patent and trademark rights and
(v) retains the right to institute, administer and maintain discount
programs of the type described in Article 1.29(g) above, and except as
(a) required to comply with its obligations hereunder and (b) may be
agreed to by the parties, nothing herein shall give Reliant the right to use or
reference the NDA or to market the Product as anything other than a Novartis
product, or to use or reference the NDA to market a similar product. The
foregoing notwithstanding, Novartis shall (A) coordinate with Reliant the
exercise of the rights that Novartis has retained hereunder, including, without
limitation, the rights enumerated in clauses (i), (ii), (iii), (iv) and (v) of
this Article 3.1, (B) provide Reliant with reasonable prior written
notice of Novartis’ intention to exercise such retained rights (or any of
them), (C) permit Reliant to have an active role in the exercise of such
retained rights, including without limitation, allowing Reliant to actively
participate in Novartis’ relationships with managed care entities and
institutional customers and (D) only exercise such rights in a manner
consistent with the Marketing Plan, as in effect from time to time.

 

3.2           Non-compete.
During the Term and for any period after the Term in which Novartis is
obligated to compensate Reliant pursuant to Article 6.2(b), except for the
Product in accordance with this Agreement and except as otherwise agreed by the
parties, Reliant shall not market, promote, Detail, advertise or otherwise sell
any product containing fluvastatin.

 

3.3           Retention
of Rights. Except as otherwise provided herein, nothing in this Agreement
shall, during or after the Term hereof, give Reliant any of Novartis’ rights in
or to the Product, including, but not limited to, Novartis’ rights in or to
trademarks, copyrights, the NDAs, ANDAs, Drug Master Files, patent rights,
preclinical or clinical data, manufacturing rights relating to the Product, or
any supply of the Product or the active ingredient thereof. Novartis may, in
its sole discretion or as required by applicable laws, on reasonable prior
written notice to Reliant, supplement the NDA, or change package inserts at any
time during the Term or thereafter. Reliant recognizes Novartis’ title to the
Trademarks, and shall not at any time, during or after the Term, do or
knowingly suffer to be done any act or thing which will in any way impair the
rights of Novartis in or to said 

 

8

 

Trademarks. Notwithstanding
the foregoing, Novartis hereby grants to Reliant the exclusive right and
license (except as to Novartis and its Affiliates) to use said Trademarks in
connection with the promotion, marketing and Detailing of the Product during
the Term, or as required by law and to discharge its obligations under this
Agreement, in accordance with the terms hereof. It is understood that Reliant
shall not acquire and shall not claim any title to said Trademarks adverse to
Novartis by virtue of the rights granted under this Agreement or through
Reliant’s use of the Trademarks, it being the intention of the parties that all
goodwill and improved reputation generated by Reliant and use of the Trademarks
shall inure to the benefit of Novartis and any use of the Trademarks by Reliant
shall cease at the end of the Term hereof.

 

3.4           OTC
Products. Novartis retains the right, at its sole discretion, to
commercialize or to have commercialized any OTC Product during Agreement Year
2005 without any payment obligation to Reliant for such commercialization,
except as expressly set forth in this Agreement. Thereafter, as provided in
Article 5.11, there shall be no restriction on Novartis’ right to commercialize
or have commercialized any product, whether such product would constitute a
Product, an OTC Product or otherwise.

 

3.5           Cooperation
Structure.

 

(a)           Coordinator.
Each Party shall appoint an authorized representative (“Coordinator”) for the exchange of all
communications related to the promotion, marketing, Detailing and selling of
the Product.

 

(b)           Marketing
Committee. The Coordinators shall establish a Marketing Committee (the “Marketing Committee”) directed and chaired
by Novartis and consisting of equal number of representatives from each party
which will meet at least once per Quarter, to formulate, coordinate, and
implement the Marketing Plan. The Marketing Committee shall act based on the
agreement of a majority of the members of the full Marketing Committee
regardless of the number present when voting occurs. Any component of the
Marketing Plan may be amended during the relevant Agreement Year by agreement
of a majority of the members of the Marketing Committee and with the approval of
the Steering Committee.

 

(c)           Steering
Committee. In addition to the Marketing Committee, a Steering Committee
consisting of three (3) members of senior management from each of Novartis and
Reliant shall meet at least twice annually for the purposes of approving,
discussing and, if necessary, modifying the Marketing Plan.

 

(d)           Disputes.
The parties will use their commercially reasonable efforts to resolve any
disputes arising with respect to issues directly related to the Marketing Plan
by good-faith negotiation and mutual discussion. Upon written request of either
party, a Reliant senior executive shall meet with a senior executive from
Novartis to attempt to resolve any such disputes. In the event the parties fail
to resolve their dispute by the foregoing methods and such dispute relates to
issues which, in the reasonable opinion of counsel to Novartis, (i) could
reasonably present (A) material legal issues that adversely impact the NDA
or have an adverse effect 

 

9

 

on Novartis or (B)
material regulatory compliance issues or (ii) could reasonably give rise
to a material liability of Novartis, then in such instances, Novartis shall
retain the right to ultimately decide disputes escalated to this level.

 

3.6           Reliant
Intellectual Property. Except as expressly set forth herein, nothing in
this Agreement shall be deemed to grant Novartis any rights in or to, and
Novartis shall have no rights in or to, any trademarks, trade names, trade
dress, service marks, service names, logos, designs or other intellectual
property of Reliant, including, without limitation, right in the trademarks “Reliant
Pharmaceuticals,” “Reliant” or any variations thereof.

 

ARTICLE IV

SERVICES OF RELIANT

 

4.1           Product
Promotion. In accordance with the Marketing Plan, and subject to the Act
and any applicable state laws and regulations, as well as the provisions of
this Agreement, Reliant shall, at its sole expense (as between Reliant and
Novartis), use its commercially reasonable efforts to promote the Product to
Professionals, and to persuade such Professionals to prescribe and use the
Product, through the use of verbal, graphic, written and promotional materials.
All such statements, core selling messages and materials to be utilized by
Reliant to promote the Product shall be consistent with the annual Marketing
Plan jointly developed by Reliant and Novartis and, if applicable, shall be
subject to the prior approval of the FDA in accordance with Article 4.8 below. Prior
to January 1 of each of Agreement Years 2006 and 2007, Novartis shall provide
to Reliant a list of Professionals to whom to promote the Product; provided,
however, that Novartis shall have the right, in its sole discretion, to revise
such list no more than two times during each of Agreement Years 2006 and 2007
by providing a revised list to Reliant prior to May 1 and/or November 1 of each
such Agreement Year. In performing its obligations pursuant to this Agreement,
Reliant will exercise the same diligence it employs with respect to the other
products it promotes in the Territory (“Promotion
Effort”). Reliant will cause the Sales Force and Reliant employees
and agents acting on Reliant’s behalf to comply with this Agreement and all
applicable state and federal laws and regulations in connection with the
promotion, marketing and Detailing of the Product. It is understood, and
Reliant agrees, that it will be accountable for any act or omission of the
Sales Force to comply with Reliant’s obligations under this Agreement.

 

4.2           Representations
to Customers. Reliant will not make any false or misleading representations
to customers or others regarding Novartis or the Product and will not make any
representations, warranties or guarantees with respect to the specifications,
features or capabilities of the Product that are not consistent with the
applicable current FDA approved labeling, package insert or other documentation
accompanying or describing the Product, including Novartis’ standard limited
warranty and disclaimers, and that has been provided to Reliant by Novartis or
otherwise approved by Novartis pursuant to Article 4.8. Reliant shall not
make any negative statements about any other Novartis products in an effort to
promote the Product; provided that Reliant, may, in compliance with applicable
law promote and market products competitive with products of Novartis other
than the Product.

 

10

 

4.3           Staffing.

 

(a)           Agreement
Year 2005. During Agreement Year 2005, subject to Article 6.6(a), the
Sales Force will be staffed with a total number of Sales Representatives representing
at least [***] full time equivalents, of which an appropriate number (as
reasonably determined by Reliant) will be field managers. Except as otherwise
set forth herein, at no time during Agreement Year 2005 will the Sales Force be
staffed with less than [***] percent ([***]%) of [***] full time equivalent
Sales Representatives (the “Staffing Baseline”),
whereby [***] Sales Representatives detailing the Product full-time in the
second position shall equal [***] Sales Representative detailing the Product
full time in the first position. For the avoidance of doubt, no less than [***]
percent ([***]%) of the promotional effort will be provided by First Position
Details. The ratio of Sales Representatives working part time shall at no time
exceed [***]percent ([***]%). Reliant shall use commercially reasonable efforts
to promptly fill all vacant positions within the Sales Force resulting from
terminations or resignations. In the event that Reliant fails to maintain the
Staffing Baseline and Novartis provides Reliant with written notice of such
failure to comply which failure is uncured by Reliant after sixty (60) days of
receipt of Novartis’ written notice, Reliant’s share of incremental profit
above the Annual Net Sales Baseline for Agreement Year 2005 will be reduced by
the amount equal to the difference between (a) the amount that would have
been expended by Reliant had Reliant maintained the Staffing Baseline during Agreement
Year 2005 and (b) the amount actually expended by Reliant to provide the
actual level of Sales Force staffing in Agreement Year 2005, in each case using
a cost per Sales Representative of [***]dollars ($[***]). Such reduction of
Reliant’s share of the incremental profit over the Annual Net Sales Baseline
will be in the form of a payment from Reliant to Novartis within ninety (90)
days of receipt of Novartis’ written notice referred to in the preceding
sentence and will not be subject to limitations applicable to payments by
Reliant to Novartis under Article 6.3. Such reduction in Reliant’s share
of the incremental profit over the Annual Net Sales Baseline shall be Novartis’
exclusive remedy for breach by Reliant of its obligation to maintain the
Staffing Baseline, provided, however that this limitation shall not apply in
the event that the Reliant’s full time equivalent Sales Representatives for
Agreement Year 2005 is less than [***] percent ([***]%).

 

(b)           Primary
Detail Equivalents. Subject to Article 6.6, in each Agreement Year
commencing with Agreement Year 2006, Reliant Sales Representatives shall make
not less than [***]  and not more
than [***] Primary Detail Equivalents for each such Agreement Year, with at
least [***] ([***]%) of all such Primary Detail Equivalents in each Agreement
Year being First Position Details. For Agreement Years 2006 and 2007 only, Novartis shall reimburse Reliant on a monthly
basis for each Primary Detail Equivalent that occurred during such 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

11

 

Month at a rate of
[***] dollars [***] ($[***]) per Primary
Detail Equivalent for Agreement Year 2006 and [***] dollars [***]
($[***]) per Primary Detail Equivalent for
Agreement Year 2007. Notwithstanding the above, Novartis shall not reimburse
Reliant for any Primary Detail Equivalents in excess of the aggregate maximum
Primary Detail Equivalents established for the applicable Agreement Year. Such reimbursement shall to be made within
thirty (30) days following the receipt by Novartis of an invoice
therefor, including satisfactory documentation of such Primary Detail
Equivalents.

 

4.4           Promotional
Materials. In addition to Reliant’s obligations pursuant to Articles 4.1
and 4.2 hereunder, and except as otherwise provided in this Agreement, Reliant,
at its sole expense, will create, develop, produce or otherwise obtain, and
utilize promotional, marketing, educational and training materials (“Promotional Materials”) which are necessary
to support fully the Promotion Effort for the Product. Such Promotional
Materials shall include, by way of example, Detailing aids; leave items;
journal advertising; educational programs; formulary binders; appropriate
reprints and reprint carriers; product monographs; patient support kits;
materials to support the handling of physician requests; convention exhibit
materials; direct mail; market research survey and analysis; training materials
(except as set forth in Article 5.3 hereunder); and scripts for
telemarketing and teleconferences. At a minimum, such Promotional Materials
shall include at least one Detailing aid and one leave item. Subject to
Article 3.6 above, Novartis shall own all right, title and interest in and
to any Promotional Materials produced by Reliant pursuant to this
Article 4.4 including applicable copyrights and, if applicable, trademarks.
Reliant shall provide assistance, as reasonably requested by Novartis, in
connection with the filing by Novartis, at Novartis’ expense, of appropriate
copyright and trademark applications with respect to the Promotional Materials.
Novartis hereby grants to Reliant the exclusive right (except as to Novartis),
during the Term, to use in the Territory all Promotional Materials produced by
Novartis or Reliant with respect to the Product, subject to Novartis’ prior
approval (which approval will not be unreasonably withheld, conditioned or
delayed) of said Promotional Materials pursuant to Article 4.8 below. Subject
to Article 4.8 and to applicable law, Reliant shall have the right to use
Reliant’s trademarks, and include the name “Reliant” or any variation thereof
on the Promotional Materials developed by Reliant subsequent to the Effective
Date and on Product labels and packaging. In order to assist Reliant in
adapting Novartis-produced material for promotion, marketing and Detailing of
the Product to Professionals, Novartis shall provide Reliant with timely access
to and use of Novartis’ relevant mechanicals and print production materials,
which, subject to the approval of Novartis (which approval will not be
unreasonably withheld conditioned or delayed), Reliant may duplicate or have
duplicated at its own cost. Alternatively, at Reliant’s request, Novartis may
agree to have duplicated such materials for Reliant at Reliant’s cost. Following
final approval by Novartis of all Promotional Materials, as described above,
Reliant shall provide Novartis, consistent with Reliant’s obligations under
Articles 4.11 and 5.3 hereof, with the requisite 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested with
respect to the omitted portions.

 

12

 

number of copies
so as to allow Novartis to satisfy its obligation to file same with the FDA
simultaneously with their first use by Reliant.

 

4.5           PSME.

 

(a)           Agreement
Year 2005. For Agreement Year 2005, subject to Article 6.6(a), Reliant
will contractually commit PSME of no less than twenty five million dollars
($25,000,000), and during the first Agreement Half Year of Agreement Year 2005,
Reliant will contractually commit PSME of no less than [***] dollars ($[***]). In
the event that the PSME commitment for Agreement Year 2005 falls more than
[***] percent ([***]%) below twenty five million dollars ($25,000,000) and
Novartis provides Reliant with written notice of such failure to comply with
the terms of this Article 4.5(a), which failure is uncured by Reliant,
Reliant’s share of the incremental profit over the Annual Net Sales Baseline
for Agreement Year 2005 will be reduced by the amount equal to the difference
between (a) the amount that would have been expended by Reliant had
Reliant complied with its obligations under this Article 4.5(a) during
Agreement Year 2005 and (b) the amount actually expended by Reliant in
connection with this Article 4.5(a) (the “PSME Shortfall Amount”). Such reduction of Reliant’s share of
the incremental profit over the Annual Net Sales Baseline will be in the form
of a payment from Reliant to Novartis within ninety (90) days of receipt of
Novartis’ written notice referred to in the preceding sentence and will not be
subject to limitations applicable to payments by Reliant to Novartis under
Article 6.3. Such reduction shall be Novartis’ exclusive remedy for breach
by Reliant of its obligations under this Article 4.5(a); provided, however
that this limitation shall not apply in the event that (i) the
contractually committed PSME in the first Agreement Half Year of Agreement Year
2005 (January 1 through June 30) is less than [***] dollars ($[***])
and/or (ii) the PSME Shortfall Amount is greater than [***] dollars
($[***]). Novartis shall have no obligation to reimburse Reliant for PSME for
Agreement Year 2005.

 

(b)           Agreements
Years 2006 and 2007. For each Quarter during Agreement Years 2006 and 2007,
Novartis, after consultation with Reliant, will determine and advise Reliant in writing of the appropriate required
PSME amount for the Product, which shall be subject to adjustment pursuant to
Article 6.6. It is currently anticipated that the total annual required PSME
amount for each such Agreement Year will be twenty five million dollars
($25,000,000). Novartis shall reimburse
Reliant on a monthly basis for all PSME actually expended by Reliant during
Agreement Years 2006 and 2007 which
does not exceed in the aggregate the required PSME amount established by
Novartis for the applicable period, such reimbursement to be made within ten
(10) days following the receipt by Novartis of a monthly non-personal
PSME report.

 

[***]: 
Certain information on this page has been omitted and filed separately with
the Commission.  Confidential treatment
has been requested with respect to the omitted portions.

13

 

4.6           Requests
for Information.

 

(a)           Requests
from Professionals. The parties acknowledge that each may receive requests
for medical information concerning the Product from medical professionals. The
parties agree to coordinate all professional services activities through
Novartis, who shall be the responsible party for responding to all such
requests. Novartis shall promptly provide Reliant with (i) copies of all
written materials and (ii) written summaries of all oral advice, provided
by Novartis in response to such inquiries.

 

(b)           Requests
from Others. The parties also agree to establish a working group of
representatives from each party who will discuss procedures to address medical
inquiries relating to managed healthcare customers, trade relations, customer
service and indigent patients, but Novartis shall have sole responsibility for
taking or not taking any such recommended actions at Novartis’ expense.

 

4.7           Marketing
Plan. At a time consistent with the Novartis business planning process of
each Agreement Year, Reliant and Novartis shall prepare the marketing plan for
the upcoming Agreement Year (the “Marketing
Plan”) in accordance with the process set forth in Article 3.5
hereof. Novartis shall provide Reliant with timelines for development of
business plans and the Marketing Plan for the following Agreement Year no later
than January 31 of then current Agreement Year. The Marketing Plan shall
be in sufficient detail to allow Novartis to evaluate Reliant’s strategy and
tactics for promotion of the Product and to allow Novartis to reasonably
determine that Reliant intends (i) to support fully its Promotion Effort
as required by this Article IV and (ii) to otherwise comply with its
obligations pursuant to this Article IV. Each Marketing Plan will include,
without limitation, a mutually agreed framework for dealing with managed care
accounts.

 

4.8           Promotional
Material Review Process. Reliant will submit all Promotional Materials
developed pursuant to Article 4.4 to the Novartis promotional review core
team for review, comment and approval at least ten (10) working days prior to
scheduled core team meetings to finalize such materials. Reliant shall not use
any such materials not approved by Novartis, and, if applicable, the FDA. Reliant’s
obligation hereunder applies regardless of the intended usage or audience of
the materials. Novartis shall provide its comments and its determination to
Reliant within three (3) weeks of Novartis’ receipt of each such item of
promotional material, unless otherwise agreed. If such comments or
determination is not received by Reliant within such three (3) week period, the
Promotional Materials shall be deemed approved by Novartis and Reliant shall be
authorized to finalize and use same, subject to any required approval by FDA. To
facilitate such review and approval process, upon execution of this Agreement,
Novartis shall appoint its Coordinator as Reliant’s contact for this purpose. The
parties also agree to attempt to facilitate the review process through the use
of teleconferencing and videoconferencing, where appropriate.

 

14

 

4.9           Intentionally
Omitted.

 

4.10         Reporting
Requirements.

 

(a)           Agreement
Year 2005. Within forty-five (45) days after the close of each six (6)
month period of Agreement Year 2005, appropriate representatives of Reliant
shall meet with appropriate representatives of Novartis. At least five (5) days
before such meeting, Reliant will present to Novartis a written status report
summarizing Reliant’s activities pursuant to this Agreement for that prior six
(6) month period, including (a) Sales Representative and field manager
turnover, (b) the total number of Sales Calls, (c) the number of days
in the field per Sales Representative, (d) the number of calls per day per
Sales Representative, (e) the number of Details per Sales Call, (f) the
ratio of Sales Calls to targeted Professionals compared to total Sales Calls,
(g) the percentage of targeted Professionals actually Detailed  and (h) if applicable, a summary of all other
Alternative Sales Channels activities engaged in by Reliant in order to support
fully the Promotion Effort pursuant to this Article IV.

 

(b)           Agreement
Years 2006 and 2007.

 

(i)            Within
twenty-five (25) days after the close of each Month of Agreement Years 2006 and
2007, Reliant shall provide Novartis with a status report in electronic format
in the form attached hereto as Schedule 4.10(b)(i),
which status report will summarize Reliant’s activities pursuant to this
Agreement for such prior Month and on an Agreement Year-to-date basis,
including (a) the amount of PSME spent to date, (b) the total number
of Sales Calls, (c) the number of days in the field per Sales
Representative, (d) the number of Sales Calls per day to targeted
Professionals, (d) the number of Sales Calls which resulted in an actual
Detail of a targeted Professional, including (i) the number of times each
targeted Professional is actually Detailed and (ii) the percentage of
targeted Professionals actually Detailed, in each case providing separate
numbers for First Position Details and Second Position Details, (f) a
comprehensive summary of the Sales Representative vacancy rate for the
Territory, including the number of days and specific dates in which each sales
territory has been vacant, (g) information pertaining to the Sales
Representatives including (A) the number of Sales Representatives, (B) a
breakout of sales teams and (C) the Sales Representative turnover (including
the number of reassignments) and (h) if applicable, a summary of all other
Alternative Sales Channels activities engaged in by Reliant in order to support
fully the Promotion Effort pursuant to this Article IV.

 

(ii)           Within
the later of (A) forty-five (45) days after the close of each Month of
Agreement Years 2006 and 2007 or (B) promptly following receipt by Reliant of
the applicable data from the vendor, Reliant shall provide Novartis with
physician level data in electronic AFCII flat file format as specified on Schedule 4.10(b)(ii) attached
hereto.

 

(c)           Call
Reports. During the Term, in addition to Reliant’s reporting requirements
in Articles 4.10(a) and (b), Reliant will provide Novartis with call activity
reports on a Monthly and Agreement Year-to-date basis.

 

15

 

(d)           Retention
of Records. Reliant shall maintain full and accurate records of call
reports and other promotional activities for no less than three (3) years after
the end of each Agreement Year. Reliant shall permit Novartis to have such
records examined by an independent auditor retained by Novartis and acceptable
to Reliant during regular business hours and upon reasonable advance notice,
but not later than three (3) years following the rendering of any such reports,
and no more often than twice per Agreement Year during the Term or calendar
year thereafter. Such independent auditor shall keep confidential any
information obtained during such examination, shall report to Novartis only the
results of the audit of the items listed in clauses (a) through (h) of Articles
4.10(a) and (b) and the amount of PSME incurred pursuant to Article 4.5
and shall not unreasonably interfere with Reliant’s operations. Any such
information so reviewed and any such information reported to Novartis shall be
considered the Proprietary Information of Reliant. The fees and expenses
relating to the services of the said independent auditor in accordance with
this Article 4.10(d) shall be borne by Novartis, provided, however, that
Reliant shall reimburse Novartis for such fees and expenses in the event the
audit reveals an error equal to or exceeding five percent (5%) of (i) any
of the items listed in clauses (a) through (h) of Article 4.10(a) or (b), as
applicable, and/or (ii) the amount of PSME incurred pursuant to
Article 4.5 (so long as the magnitude of the error with respect to such
amount of PSME exceeds fifty thousand dollars ($50,000)).

 

4.11         Assistance.
Each party agrees to provide to the other all reasonable assistance and take
all actions reasonably requested by the other party that are necessary to
enable the other party to comply with any law or regulation applicable to the
Product, including, but not limited to, Novartis meeting its reporting and
other obligations under Article 5.3. Such assistance and actions shall
include, among other things: (a) both parties promptly reporting to the
other adverse drug reactions of which it becomes aware, so as to permit
Novartis to meet its FDA reporting and other obligations in a timely fashion;
and, in this regard, Novartis will provide Reliant with all applicable internal
procedures, reporting forms and contacts to allow Reliant to promptly report to
Novartis any adverse drug reactions, (b) each party carrying out any
FDA-mandated notifications relating to the Product, (c) Reliant timely
transmitting to the appropriate Novartis personnel copies of all Promotional
Materials required to be filed with the FDA, so as to permit Novartis to meet
its FDA reporting and other obligations in a timely fashion, (d) each
party immediately notifying the other of any material inquiry or other contact
by the FDA or any other governmental agency or authority with such party or its
Affiliates relating to the Product, except that Novartis will notify Reliant of
all such inquiries or contacts which, in the reasonable opinion of counsel to
Novartis, may affect or impact Reliant’s rights and/or obligations under this
Agreement and (e) Novartis promptly notifying Reliant of any regulatory
action with respect to the Product.

 

4.12         Sales
Tax Reporting Requirements. Reliant shall provide to Novartis a periodic
accounting (but not more than twice per year) of the distribution of
Promotional Materials on a state-by-state basis for the purpose of Novartis
complying with its state sales tax reporting requirements.

 

16

 

4.13         Compliance.
Reliant, through its Sales Force and Alternate Sales Channels or otherwise,
shall make no statements, claims or undertakings to any person with whom they
discuss or promote the Product that are inconsistent with the Marketing Plan,
Promotional Materials and the FDA approved labeling for the Product. Reliant,
its employees, representatives and agents shall not offer, pay, solicit or
receive any remuneration to or from Professionals, in order to induce referrals
of or purchase of the Product. The Sales Force shall have no direct contact
with, nor shall the Sales Force be involved with the delivery of Product to
patients of Professionals, other than delivery of samples directly to
Professionals authorized to prescribe the Product. The Sales Force shall be
trained in connection with compliance with Sec. 1128B(b) of the Social
Security Act and the AMA Guidelines on Gifts to Physicians from Industry, prior
to engaging in promotion of the Product.

 

4.14         Compliance
with PDMA. Reliant shall require all Sales Representatives to comply with
applicable Sections of the Prescription Drug Marketing Act of 1987, as amended,
the applicable regulations promulgated thereunder (“PDMA”), state laws and regulations governing the storage and
distribution of pharmaceutical samples. Sales Representatives shall also comply
with the Sample Accountability Policies and Procedures of Novartis including
those set forth in Schedule 4.14.
All such policies in effect as of the New Effective Date are attached to this
Agreement as Schedule 4.14,
and any modifications thereto shall be delivered to Reliant promptly, and in
any event not less than seven (7) days prior to effectiveness of such
modifications.

 

ARTICLE V

ADDITIONAL AGREEMENTS OF NOVARTIS

 

5.1           Obligations
of Novartis. In accordance with the provisions of this Agreement and all
applicable laws and regulations, Novartis shall, at its cost and expense,
(a) use commercially reasonable efforts to perform or cause to be
performed all Product manufacture, labeling, packaging, warehousing,
distribution, order entry, customer services and all other activities to supply
and distribute the Product in order to fill all orders generated by Reliant
activities hereunder in a timely and efficient manner, and (b) maintain
Product inventory at levels sufficient to satisfy at least one hundred percent
(100%) of the annual Net Sales forecast set forth on Exhibit 1 for Agreement Year 2005 and
the annual Net Sales forecasts developed by Novartis for each Agreement Year
thereafter, plus a “safety stock” at levels comparable to other Novartis
products, but in any event no less than a [***] supply based on the then
current Net Sales forecast. Prior to Agreement Year 2006, should demand for the
Product either fall short of or exceed the parties’ joint forecast, neither
party will be responsible to compensate the other in any way for such shortfall
or excess, except as provided in Article VI. From and after Agreement Year
2006 should demand for the Product either fall short of or exceed the then
current Net Sales forecast, neither party will be responsible to compensate the
other 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

17

 

in any way for
such shortfall or excess, except as provided in Article VI. However,
should Novartis encounter supply problems which cause the Product to remain on
backorder for [***], upon written notice from Reliant, the Term shall be
extended for a period of time equal to the period of sustained backorder and
Reliant shall not be responsible for any shortfall which may arise during the
period of sustained backorder or as a direct result thereof. Novartis shall
accept all orders for the Product in conformity with the pricing determined by
Novartis pursuant to Article 5.6, subject to Novartis’ standard sales term
and conditions. Such standard sales terms and conditions in effect as of the
Effective Date are attached to this Agreement as Schedule 5.1, and any modifications thereto shall be
delivered to Reliant promptly, and in any event not less than fifteen (15) days
prior to effectiveness of such modifications. Novartis shall promptly provide
Reliant with written notice in the event that its supply of “safety stock” of
the Product falls below the levels required by this Article 5.1.

 

5.2           Manufacturing
Activities. The Product to be manufactured by or for Novartis for sale in
the Territory shall be manufactured to meet all specifications for the Product
in accordance with the NDA, cGMP’s and in compliance with all other applicable
federal, state and local laws, rules, regulations and requirements of the
Territory and at the time of shipment shall not be adulterated or misbranded
within the meaning of the Act. It is understood, and Novartis agrees, that it
will be accountable for any act or omission of any third party acting for or on
behalf of Novartis to comply with Novartis’ obligations under this Agreement.

 

5.3           Compliance
with Regulatory Requirements. Unless otherwise required by law, Novartis
will retain exclusive authority and responsibility for complying with all
regulatory requirements and maintaining all government agency contacts relating
to the Product, including, but not limited to, maintaining and updating of the
NDA, the development and submission of applications for new indications (if
any, and at its sole discretion based on its reasonable business judgment), the
reporting of any adverse drug reactions to the FDA, the compliance of
Promotional Materials with FDA rules and regulations, the filing of Promotional
Materials with the FDA, and payment of Medicaid and other governmental rebates
which in Novartis’ sole judgment are due and owing. Novartis shall comply in a
timely manner with all of its obligations hereunder, including the filing of
all necessary reports and other required documentation with the FDA. Nothing
herein shall obligate Novartis to seek FDA approval for additional Product
indications. Nothing herein shall relieve Reliant of its obligations pursuant
to this Agreement, including, but not limited to, Article 4.10.

 

5.4           Intentionally
Omitted.

 

5.5           Training.
During the Term, Novartis will have no obligation to train the Sales Force;
provided, however, that from time to time Novartis may request that Reliant’s
training and/or Promotional Materials be updated within sixty (60) days of such
request to reflect new developments in connection with the Product, and Reliant’s
consent to make any 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

18

 

such updates shall
not be unreasonably withheld or delayed. Reliant may request Novartis’
assistance in training on new developments in connection with the Product. Any
such request shall be made with reasonable notice to Novartis, and any
additional training pursuant to this Article 5.5 shall be entirely at
Reliant’s expense. Novartis shall use commercially reasonable efforts to comply
with any such request by Reliant.

 

5.6           Sales;
Pricing. Novartis shall book all sales of the Product in the Territory, and
shall be responsible for the pricing of the Product, including, but not limited
to, the timing of pricing changes and any discounting, shall be at Novartis’
sole discretion; provided, however, that in establishing the price of the
Product, Novartis will attempt to price the Product in such a way as to ensure
that it remains competitive in the marketplace; and provided, further, that the
Product will not be bundled or integrated with other products or services in a
way which does not result in the Product being sold for its fair arm’s length
market value. Reliant will be notified by Novartis of any price changes prior
to such changes becoming effective. During the Term, Novartis will notify
Reliant promptly, but in any event at least seven (7) business days prior to
the effective date of any new pricing for the Product. With regard to managed
care/institutional contracting, Novartis’ obligation under the preceding
sentence shall be discharged when Novartis provides to the Marketing Committee
the range of discounted pricing that its National Account Managers are
authorized to provide to managed care and other institutional customers.

 

5.7           Sales
Reports. During the Term, Novartis shall provide Reliant with the following
reports:

 

(a)           A
Monthly update of Net Sales in Novartis’ standard accounting format (a sample
of which is attached hereto as Schedule 5.7(a)),
as it becomes available to Novartis’ employees with responsibility for the
Product and this Agreement in the normal course of business, but in no event
later than the 7th
day of the Month immediately following the Month in which the Net Sales that
are the subject of the update were booked;

 

(b)           No
later than seven (7) days after
the close of each Month, Novartis shall provide Reliant with a report in
electronic format in the forms attached hereto as Schedules 5.7(b), which reports will summarize
instances in which the Product has remained on backorder for at least [***]
successive weeks;

 

(c)           No
later than seven (7) days after
the close of each Month, Novartis shall provide Reliant with a report in
electronic format in the forms attached hereto as Schedules 5.7(c), which reports will set forth (i)
the net sales price per tablet for the Product during the immediately preceding
Month and (ii) the shipments and Net Sales by SKU for the Product during the
immediately preceding Month; and

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

19

 

(d)           No
later than one (1) business day following each day on which Novartis books
sales of the Product, Novartis shall provide Reliant with a report in
electronic format in the form attached hereto as Schedule 5.7(d), which report will set for the Net
Sales for the immediately preceding day.

 

5.8           Intentionally
Omitted.

 

5.9           Sales
Force. Reliant shall select the name and the logo for the Sales Force and
shall own all title and interest in and to such name and/or logo.

 

5.10         Samples.
Novartis will provide Product samples to Reliant at the net costs set forth on Exhibit 3 attached hereto. Novartis
will ship, at Reliant’s cost, samples to a warehouse facility designated by
Reliant upon receipt of a purchase order from Reliant. A batch quantity of
Product samples will be the minimum requirement specified on each purchase
order. For the purposes of this Article 5.10 batch quantities shall mean
the following: (i) 20 mg — [***] capsules, (ii) 40 mg — [***]
capsules and (iii) 80 mg XL — [***] tablets.

 

5.11         Exclusivity.
During Agreement Year 2005 and in the event that this Agreement is terminated
by Reliant during Agreement Year 2005 pursuant to Articles 7.1, 7.2, 7.3, 7.4,
7.5 or 7.7, for a period of two (2) years from such termination (the “Exclusivity Period”), other than with respect to the OTC
Product and the Product (which during the Term shall be limited to the extent
required and/or permitted under this Agreement), Novartis shall not, directly
or indirectly, develop, seek to develop, manufacture, cause to manufacture, market,
promote or otherwise sell in the Territory, any product containing fluvastatin
nor during such period shall any successor to Novartis or any business
enterprise acquired by Novartis after the Effective Date (whether by merger or
asset acquisition or otherwise) develop, seek to develop, manufacture, cause to
manufacture or market in the Territory any product containing fluvastatin not
approved by the FDA as of the date of the merger or acquisition. In the event
that any Affiliate of, or successor to Novartis takes any action during the
Exclusivity Period that is prohibited by the foregoing (other than with respect
to the development, manufacture or marketing of any non-branded product) it
shall constitute a breach of this Agreement to the same extent as if Novartis
had taken such action itself. From and after the end of the Exclusivity Period,
Novartis, itself or through any of its Affiliates or any third party within and
without the Territory, shall have the right to develop, seek to develop,
manufacture, cause to manufacture, market, promote or otherwise sell products
containing fluvastatin, and Reliant shall have no rights with respect to any
such products other than the rights of Reliant specifically provided herein
with respect to the Product.

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

20

 

ARTICLE VI

COMPENSATION

 

6.1           Intentionally
Omitted.

 

6.2           Compensation
to Reliant.

 

(a)           Agreement
Year 2005. For Agreement Year 2005, subject to Article 6.2(b), Reliant
shall be compensated based upon a percentage of incremental Net Sales achieved
above a pre-set and fixed Annual Net Sales Baseline. Exhibit 1 outlines the Annual Net
Sales Baseline for Agreement Year 2005 and the agreed percentage of Net Sales
above the baseline that will be paid to Reliant by Novartis for Agreement Year
2005. Exhibit 2
presents a Seasonalized Net Sales Baseline on a Monthly basis for Agreement
Year 2005. During Agreement Year 2005, Reliant will be compensated on a Monthly
basis for Net Sales above the Seasonalized Net Sales Baseline using the annual
percentages outlined in Exhibit 1
(each a “Monthly Payment”), as
further described in Article 6.3 hereof.

 

(b)           After
Agreement Year 2005 and/or Termination. From and after the earlier to occur
of the date of the termination of this Agreement (subject to the last sentence
of this Article 6.2(b)) or December 31, 2005, Novartis shall continue to
compensate Reliant at the rate of twenty percent (20%) of Net Sales in the
first twelve (12) months after such date and ten percent (10%) of Net Sales in
the subsequent twelve (12) months after such date. For purposes of calculating
the compensation to Reliant payable pursuant to this Article 6.2(b), Net Sales
shall include VA Net Sales. Payment of such compensation for all such periods
shall be made within thirty (30) days following the end of each Month during
such periods by wire transfer of immediately available funds to an account
designated by Reliant. Thereafter, Novartis will not be obligated to further
compensate Reliant, except as otherwise set forth herein. The foregoing
notwithstanding, (i) in the event that this Agreement is terminated by Novartis
under Article 7.5 or 15.7 hereof prior to December 31, 2005, the compensation
amounts due to Reliant under this Article 6.2(b) shall be calculated by
multiplying the amount otherwise due under this Article 6.2(b) by a
fraction the numerator of which equals the number of months elapsed since the
Effective Date as of the date of termination and the denominator of which
equals sixty (60) and (ii) Reliant shall not be entitled to any compensation
under this Article 6.2(b) following the termination of this Agreement
prior to December 31, 2005 in the event that prior to December 31, 2005 (A)
Reliant has not performed all material duties and obligations under this
Agreement or (B) this Agreement was terminated by Novartis pursuant to
Article 7.1, 7.2 or 7.4 or by either party pursuant to Article 7.3
hereof.

 

(c)           VA
Net Sales. Until the earlier to occur of the date of the termination of
this Agreement or December 31, 2005, unless the VA Contract is earlier
terminated, 

 

21

 

Reliant shall
receive additional compensation in an amount equal to [***] percent ([***]%) of
VA Net Sales. For the avoidance of doubt, other than with respect to Article
6.2(b) above, the amount of VA Net Sales will be excluded from the calculation
of Net Sales and will not entitle Reliant to receive any other compensation
pursuant to this Article VI. Payment of such compensation shall be made
within thirty (30) days following the end of each Month during the Term by wire
transfer of immediately available funds to an account designated by Reliant. Such
monthly payments shall be calculated based on the VA claims made during the
applicable Month, with a “true-up” to occur, for a period of six (6) months
following the earlier of the termination of the VA Agreement or the expiration
of the Term, with respect to each such Month to account for any lag in
chargeback submissions. Any such “true-up” amounts due hereunder shall be paid
by Reliant to Novartis within thirty (30) days following invoice by Novartis. The
parties acknowledge that Reliant owes Novartis an amount equal to $[***] with
respect to VA Net Sales for periods prior to March 1, 2005, as provided on Schedule 6.2(c) attached hereto. Novartis
shall have the right to offset said amount against any Monthly Payment Amount
calculated and payable following the New Effective Date pursuant to Article
6.3(a) below. Such offset by Novartis shall be the sole recourse by Novartis in
respect of such $[***] unless this Agreement is terminated before such amount
is offset in full, in which event the unpaid balance of such amount shall be
payable in full by Reliant within thirty (30) days following the date of
invoice by Novartis.

 

6.3           Payment
in Agreement Year 2005.

 

(a)           For
the first two Months of each Quarter during Agreement Year 2005, the Monthly
Payment will be calculated according to the following formula:  [***] (the “Reliant
Split Percentage”)} = the “Monthly
Payment Amount”. If the Monthly Payment Amount is negative, no
Monthly Payment Amount will be paid to Reliant or Novartis. Each Monthly
Payment Amount will be paid by Novartis to Reliant within thirty (30) days of
the last day of each Month.

 

(b)           Within
fifteen (15) days of the last day of each Quarter of Agreement Year 2005, a
quarterly reconciliation will be calculated according to the following
formula:  [***] (the “Quarterly Total Net Compensation”) less
(the sum of Monthly Payment Amounts 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

22

 

paid by Novartis
to Reliant with respect to the first two Months of the relevant Quarter) (the “Quarterly Payment Amount”). The Quarterly
Payment will be made by Novartis to Reliant, if the Quarterly Payment Amount is
greater than zero ($0.00). The Quarterly Payment Amount will be paid by Reliant
to Novartis, if the Quarterly Payment Amount is less than zero ($0.00) (the “Quarterly Shortfall Payment Amount”),
provided that such Quarterly Shortfall Payment Amount, which shall be deemed to
be a positive number, will be capped at an amount equal to the sum of
(i) the Monthly Payment Amounts paid by Novartis to Reliant with respect
to the first two Months of the relevant Quarter, if any, and (ii) the
Quarterly Reserve Account balance (as defined below) as of the beginning of the
relevant Quarter. Any Quarterly Payment Amount or Quarterly Shortfall Payment
Amount due hereunder shall be paid within thirty (30) days of the last day of
the relevant Quarter.

 

(i)            Creation
of the Quarterly Reserve Account. In the first Quarter of 2002, Reliant
will create a notional reserve account (the “Quarterly
Reserve Account”) to be used for purposes of determining the payment
obligation, if any, to Novartis in subsequent Quarters as a result of the
Quarterly Payment Amount calculation yielding an amount less than zero ($0.00).
As of the end of the first Quarter of 2002, the Quarterly Reserve Account will
be deemed to have an initial balance equal to the lesser of (i) $[***],
and (ii) [***]

 

(ii)           Mechanism
for Adjusting the Quarterly Reserve Account Balance. At the end of the
second Quarter of 2002, and at the end of each Quarter thereafter, the maximum
possible balance in the Quarterly Reserve Account (the “Maximum Quarterly Reserve Account Balance”)
will be equal to the greater of (i) $[***]and (ii) [***]

 

Beginning with the second Quarter of 2002, and in each
Quarter thereafter, in the event the balance in the Quarterly Reserve Account
at the beginning of the relevant Quarter is less than the Maximum Quarterly
Reserve Account Balance as updated at the end of such Quarter, the balance in
the Quarterly Reserve Account will be increased at the end of such Quarter by
an amount equal to the lesser of (a) the Quarterly Total Net Compensation
due to Reliant for the relevant Quarter, if a positive number, otherwise $0.00,
and (b) an amount equal to the difference between the Maximum Quarterly
Reserve Account Balance as updated at the end of such Quarter and the Quarterly
Reserve Account balance at the beginning of such Quarter. Any compensation due
Reliant in the relevant Quarter in excess of the amount required to increase
the balance in the Quarterly Reserve Account to the Maximum Quarterly Reserve
Account Balance will be irrevocably earned by Reliant.

 

Beginning with the
second Quarter of 2002, and in each Quarter thereafter, to the extent a
Quarterly Shortfall Payment Amount is due from Reliant to Novartis, the
Quarterly Reserve Account balance as of the beginning of the relevant Quarter
will be reduced at the end of such Quarter by the amount by which the Quarterly
Shortfall Payment Amount exceeds the sum of Monthly Payment Amounts paid by
Novartis to Reliant during the first two months of such Quarter, if any;
provided, 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

23

 

however, that in
no event shall the balance in the Quarterly Reserve Account at the end of such
Quarter be less than zero ($0.00).

 

(c)           Within
thirty (30) days after the earlier of December 31, 2005 or the last day of the
Month in which this Agreement is terminated, a final reconciliation will be
calculated according to the following formula: 
{[(Net Sales for the Quarter in which such expiration or termination
occurs up to and including the date of such expiration or termination (the “Termination Date”)) [***] less (the sum of
the Monthly Payment Amounts paid by Novartis to Reliant in the relevant
Quarter) (the “Termination Payment Amount”).
The Seasonalized Net Sales Baseline for the Month in which the Termination Date
occurs will be prorated for the number of days in the Month in which the
Termination Date occurs. The Termination Payment Amount will be paid by
Novartis to Reliant, if the Termination Payment Amount is greater than zero
($0.00). The Termination Payment Amount will be paid by Reliant to Novartis, if
the Termination Payment Amount is less than zero ($0.00) (the “Termination Shortfall Payment Amount”),
provided that such Termination Shortfall Payment Amount, which shall be deemed
to be a positive number, will be capped at an amount equal to the sum of
(i) the Monthly Payment Amounts paid by Novartis to Reliant with respect to
the first two Months of the relevant Quarter, if any, and (ii) the
Quarterly Reserve Account balance as of the beginning of such Quarter. Any
Termination Payment Amount or Termination Shortfall Payment Amount due
hereunder shall be paid within forty-five (45) days of the last day of such
Quarter.

 

6.4           Record
Keeping. Novartis shall keep full and accurate books, records and invoices
with respect to Net Sales and the amount of compensation payable to Reliant
hereunder for no less than three (3) years after the end of the last year in
which compensation is payable pursuant to this Article VI. Novartis shall
permit Reliant, at Reliant’s expense, to have such books and records examined
by an independent auditor retained by Reliant and acceptable to Novartis,
during regular business hours and upon reasonable advance notice, but no later
three (3) years following the rendering of such reports, accounting and
payments, and no more often than two (2) times per Agreement Year during the
Term or calendar year thereafter. Such independent auditor shall keep
confidential any information obtained during such examination, shall report to
Reliant only the Net Sales and the amounts of compensation that the independent
auditor believes to be due and payable thereunder and shall not unreasonably
interfere with Novartis’ operations. Any such information so reviewed and any
such information reported to Reliant shall be considered the Proprietary
Information of Novartis. The fees and expenses relating to the services of the
said independent auditor in accordance with this Article 6.4 shall be
borne by Reliant, provided however that Novartis shall reimburse Reliant, for
such fees and expenses in the event the audit reveals an error equal to or
exceeding five percent (5%) of Net Sales or amounts of compensation due to
Reliant, so long as the amount of the error exceeds fifty thousand dollars
($50,000).

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

24

 

6.5           Intentionally
Omitted.

 

6.6           Adjustment.

 

(a)           Upon
the occurrence of any of the events set forth in clauses (i) through (vii) of
this Article 6.6(a), and upon Reliant’s request therefor, members of
senior management of each of Reliant and Novartis will convene without undue
delay to assess in good faith the impact of such event and, if deemed
necessary, attempt to agree on equitable adjustments to the Annual Net Sales
Baseline for Agreement Year 2005, compensation to Reliant in respect of Net Sales,
PSME levels, the Staffing Baseline and/or required Details provided for in
Articles 4.3 and 4.5, commensurate with the parties’ projected assessment
of such impact. In the event that Reliant and Novartis are unable to reach
agreement with respect to such equitable adjustments (including, without
limitation, whether any such adjustments are necessary) within ten (10)
business days of Reliant’s request for a meeting pursuant to this
Article 6.6(a), then the matters still in dispute shall, not later than twenty
(20) business days after the first date on which one of the parties
affirmatively terminates discussions in writing with respect to such equitable
adjustments (the “Negotiation Termination
Date”), be submitted for resolution to one of the entities listed on
Schedule 6.6(a)
attached hereto as selected by Novartis (the “Expert”)
who, acting as an expert and not as an arbitrator, shall resolve the matters
still in dispute. Any reference to the Expert shall be deemed to include a
reference to any member or employee thereof that such firm may designate as the
Expert to act on its behalf. In the event that Novartis fails to notify Reliant
in writing of its selection of Expert from the choices set forth in this
Article 6.6(a) within five (5) business days following the Negotiation
Termination Date, then Reliant shall select the Expert by written notice to
Novartis. The Expert’s resolution of the matters in dispute shall be final and
binding on the parties. The Expert shall make a determination as soon as practicable
and in any event within thirty (30) days (or such other time as the parties
hereto shall agree in writing) after its engagement. The fees and expenses of
the Expert shall be divided equally between Reliant and Novartis. Reliant and
Novartis shall each make readily available to the Expert all relevant books and
records requested by the Expert and shall otherwise cooperate with the Expert
in connection with the resolution of any matters in dispute arising under this
Article 6.6(a). In the event that the Expert shall be unable or unwilling
to perform the services called for under this Article 6.6(a), the Expert
shall be selected in accordance with the commercial rules of the American
Arbitration Association.

 

(i)            Any
contracts of the type described in Article 3.1(i) to which Novartis
is a party on the New Effective Date are (A) terminated by Novartis,
(B) terminated by any other party to such contract due to a breach by
Novartis of such contract or (C) not renewed by Novartis in accordance
with their terms;

 

(ii)           An
OTC Product is commercialized by or on behalf of Novartis or pursuant to a
license to the Patents granted by Novartis;

 

25

 

(iii)          Clinical studies are published by or on
behalf of Novartis that reveal results materially different from the data
submitted to the FDA in support of the NDA;

 

(iv)          An
amendment to the Product label required by the FDA and involving a so-called
Black Box Warning;

 

(v)           Novartis
materially increases or expands its discounting practices with respect to the
Product;

 

(vi)          Novartis
elects to reduce the price (Wholesale Acquisition Cost [WAC]) of the Product
below a price equal to the price for such Product on the Effective Date;

 

(vii)         Novartis bundles or integrates the Product with
other products in a way that results in the Product being sold a price which is
less than its fair arm’s length market value.

 

(b)           In
the event that, at any time during the Term, Reliant or Novartis develops a
good faith belief that the requirements for staffing, Primary Detail
Equivalents and/or PSME commitments pursuant to Articles 4.3 and 4.5
should be adjusted downward in order to optimize (right-size) Reliant’s
promotional effort for the Product, then upon such party’s request, members of
senior management of each of Reliant and Novartis will convene without undue
delay to assess in good faith such party’s belief and attempt to agree on
appropriate adjustments to any or all of the requirements for staffing, Primary
Detail Equivalents and/or PSME commitments pursuant to Articles 4.3 and
4.5. In the event that Reliant and Novartis are unable to reach agreement with
respect to such downward adjustments (including, without limitation, whether
any such adjustments are necessary) within ten (10) business days of the
request for a meeting pursuant to this Article 6.6(b), then Novartis shall
retain the right to ultimately determine whether any such adjustments shall be
made and the extent of such adjustments.

 

ARTICLE VII

TERMINATION

 

7.1           Termination
for Material Breach. Either party may terminate this Agreement in the event
that the other party materially breaches or materially fails to perform any
material covenants, duties or obligations under this Agreement, where such
breach remains uncured, or such failure to perform continues, for at least
sixty (60) days after the aggrieved party shall have given written notice of
the breach or failure to perform to the other party. If, after the sixty (60)
day period for cure and/or performance, such breach remains uncured or such
failure to perform continues, the aggrieved party may provide written notice to
the other party of termination of this Agreement (“Notice of Termination”). Such termination shall be effective
seven (7) days from receipt of said Notice of Termination.

 

26

 

7.2           Termination
for Failure to Make Payments. Either party may terminate this Agreement in
the event that the other party fails or refuses to pay amounts due to such
other party as and when due, which failure or refusal to pay is not cured
within thirty (30) days after the other party gives written notice of
non-payment to the defaulting party.

 

7.3           Termination
for Withdrawal. Each party agrees to notify the other immediately of any
pending or threatened event of which the party is aware, which may lead to
withdrawal of the Product from the market, including without limitation:
(a) actual or threatened regulatory action by the FDA or other
governmental entity; (b) safety concerns relating to the Product; or
(c) entry of an injunction or other court order prohibiting or enjoining
Novartis or Reliant from marketing the Product in the Territory. The final
decision as to whether to withdraw the Product shall be within Novartis’ sole
discretion, although Reliant may make recommendations regarding any such
proposed action. This Agreement may be terminated at any time with written
notice by either party if the Product is withdrawn from the market in the
Territory, but, in any such event, settlement of any amounts owed by either
party to the other shall be promptly made. Any such withdrawal and/or
termination shall not impact on either party’s rights and/or remedies accrued
prior thereto.

 

7.4           Termination
for Breach of Warranty. Either party may terminate if any representation or
warranty made herein by the other party proves to be materially false or
misleading when made.

 

7.5           Termination
for Insolvency, etc. Either party may terminate this Agreement effective
immediately upon written notice in the event (a) a court of competent
jurisdiction enters a decree or order of relief appointing a receiver,
liquidator, assignee, trustee or similar official of the other party or any
substantial part of its assets and such decree or order is consented to by the other
party or continues unstayed and in effect for a period of seventy five (75)
days, (b) the other party files a voluntary petition or acquiesces in or
commences a case, proceeding or other action or fails to contest an involuntary
petition, case, proceeding or other action under any bankruptcy, insolvency,
reorganization or similar law, (c) an insolvency petition, case,
proceeding or other action is filed against the other party under any
bankruptcy, insolvency, reorganization or similar law which is not dismissed
within seventy five (75) days, (d) the other party makes a general
assignment for the benefit of its creditors or (e) the other party is
dissolved or liquidated.

 

7.6           Termination
Without Cause. Either party may terminate this Agreement without cause as
of January 1, 2006 or any date thereafter during the Term upon at least ninety
(90) days prior written notice specifying the date of termination, which notice
may be given prior to January 1, 2006.

 

7.7           Additional
Termination Rights. This Agreement may be terminated by Reliant upon the
occurrence of any one or more of the following:

 

(a)           Novartis’
rights to use the Trademarks (or any of them if there are more than one) is
lost, diminished, limited or restricted in any way and such loss, diminution,
limitation or restriction is materially detrimental to Reliant;

 

27

 

(b)           Novartis
is enjoined, prohibited or restricted from making, using or selling a Product
or granting Reliant the rights granted to it by Novartis hereunder, in any such
case, pursuant to an award, judgment, decree or other order of any court or
other governmental, administrative or regulatory authority;

 

(c)           Reliant
is enjoined or prohibited from marketing the Product in the Territory (and such
injunction or prohibition was not caused by an action or omission of Reliant);

 

(d)           One
or more patents issue in the United States that prohibit, limit or otherwise
adversely impact the Net Sales of the Product;

 

(e)           Novartis
is (i) unwilling or (ii) unable (other than as a result of an event
that qualifies as a force majeure event under Article 15.7 hereof), to
perform its obligations under Article 5.1(a) and or (b) hereof (which
is not cured within fifteen (15) days following written notice thereof by Reliant
to Novartis); provided that for the purposes of this Article 7.7, Novartis’
obligation shall not be qualified by “commercially reasonable efforts”; and/or

 

(f)            Novartis
or an Affiliate of Novartis fails to take reasonable action within a reasonable
period of time to abate the infringement by a third party of any Patent and/or
any Trademark, and such failure is materially detrimental to Reliant’s exercise
of its rights or performance of its obligations under this Agreement.

 

Reliant shall provide written notice to Novartis of
its intent to terminate under this Article 7.7, which termination shall become
effective thirty (30) days after delivery of such notice; provided that such
notice delivered in connection with Article 7.7(e) shall become effective fifteen
(15) days after delivery of such notice.

 

7.8           Effect
of Reliant Termination. In the event Reliant elects to terminate this
Agreement prior to December 31, 2005 pursuant to Article 7.1, 7.4 or 7.7,
Novartis shall, upon demand, pay to Reliant (a) all amounts due to Reliant
under Article VI hereof and (b) the Make Whole Amount. For the
purposes of this Article 7.8, the “Make
Whole Amount” means an amount equal to [***] dollars ($[***])
multiplied by a fraction the numerator of which equals the number of months
left in the period from the date of termination through December 31, 2005,
including the month in which the termination occurs and the denominator of
which equals sixty (60).

 

7.9           Obligations
Upon Termination or Expiration. Upon termination or expiration of this
Agreement, the mutual rights and obligations of the parties hereunder shall
forthwith terminate; provided, however, that (a) no such expiration or
termination shall terminate or otherwise affect any right or obligation
accruing hereunder prior to such expiration or termination, or accruing
thereafter in respect of any event occurring prior thereto and (b) except
if this Agreement is terminated by Novartis pursuant to Article 7.1, 7.2 or
7.4, 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

28

 

Reliant shall have
the right to sell to Novartis and Novartis shall purchase from Reliant, at
Reliant’s cost, Reliant’s existing inventory of sample Product (including
sample Product ordered prior to termination but delivered after termination). Upon
termination of this Agreement, Reliant shall deliver to Novartis all Promotional
Materials developed pursuant to this Agreement.

 

7.10         Ownership
of Name of Sales Force. Upon termination or expiration of this Agreement,
Reliant shall retain ownership of the name and logo of the Sales Force.

 

ARTICLE VIII

WARRANTIES, REPRESENTATIONS AND COVENANTS

 

8.1           Representations
and Warranties of Novartis. Novartis hereby represents and warrants to
Reliant as of the New Effective Date as follows:

 

(a)           Organization.
Novartis is (i) a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, and (ii) has
all necessary corporate power and corporate authority to own its properties and
to conduct its business, as currently conducted.

 

(b)           Authorization.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby are within the corporate power of Novartis,
have been duly authorized by all necessary corporate proceedings of Novartis,
and this Agreement has been duly executed and delivered by Novartis.

 

(c)           Execution
and Delivery. Neither the execution of this Agreement nor the consummation
of the transactions contemplated herein: 
(i) requires Novartis to obtain any material approval, consent or
withholding of objections on the part of any regulatory or governmental body or
any other third party (including, without limitation, any Affiliate of
Novartis), other than those already obtained by Novartis; (ii) will result
in any violation or breach of any term or provision of Novartis’ Certificate of
Incorporation, Bylaws or similar charter documents; (iii) will constitute
a breach or default under any material indenture, mortgage, deed of trust,
license agreement or other contract or agreement to which Novartis or any
Affiliate of Novartis may be subject, which breach or default would have a
material adverse effect on the Product, the Novartis IP or Reliant’s ability to
exploit the rights granted to it under this Agreement; or (iv) will
violate any provision of any judicial, governmental or administrative order,
writ, injunction, award, judgment or decree applicable to Novartis or any
Affiliate of Novartis.

 

(d)           Binding
Obligation. This Agreement constitutes the valid and binding obligation of
Novartis, enforceable against Novartis in accordance with its terms, subject to
bankruptcy, reorganization, insolvency and other similar laws affecting the
enforcement of creditors’ rights in general and to general principles of equity
(regardless of whether considered in a proceeding in equity or an action at
law).

 

29

 

(e)           Broker.
Neither Novartis nor any officer, director or agent of Novartis has employed
any broker, finder, or agent with respect to this Agreement or the transactions
contemplated hereby.

 

(f)            Patents
and Trademarks. The trademark Lescol is the only Trademark under which the
Product is being marketed, promoted, detailed or sold in the Territory. The
Lescol Trademarks are currently being used commercially by Novartis, and with
the exception of any trade names included in the definition of Trademarks have
been properly filed and registered with the U.S. Patent and Trademark Office
and are valid and in full force and effect. The Patents that cover or the
Products and, to Novartis’ knowledge, the other Patents that relate to the
Products are valid and in full force and effect.

 

(g)           Product
Related Intellectual Property. (i) Novartis owns or possesses adequate
licenses or other valid rights to use all Patents, patent applications, patent
rights, Trademarks, trademark rights, trade names, trade dress, trade name
rights, copyrights and copyright registrations and applications, copyright
rights, service marks, trade secrets, applications for trademarks and for
service marks, know-how and other proprietary rights and information used or
held for use in connection with the Products that are necessary to permit
Novartis to discharge its obligations under this Agreement with respect to the
Products, including, without limitation, granting the rights and licenses
granted to Reliant under this Agreement (collectively, the “Novartis IP”), free and clear of  any liens, licenses, obligations, transfer
agreements, transfer restrictions, enforceable claims, royalties or
encumbrances that would prevent Novartis from discharging its obligations under
this Agreement for the Products, and (ii) Novartis is unaware of any
assertion or claim challenging the ownership, use or validity of any of the
foregoing. Any licenses associated with the Novartis IP are valid and binding
and are enforceable in accordance with their respective terms, and there are no
material breaches or defaults thereunder. To the extent that any of the Patents
and Trademarks are not owned by Novartis, such Patents and Trademarks are owned
by an Affiliate of Novartis, and Novartis licenses or has the right to use such
Patents and Trademarks from such Affiliate of Novartis. Novartis will not take
any action to terminate, and Novartis will prevent its Affiliates from taking
any action to terminate, any license or grants of rights from an Affiliate of
Novartis to Novartis with respect to the Patents and Trademarks. Novartis has
the right to grant to Reliant all of the rights and licenses granted to Reliant
under this Agreement.

 

(h)           No
Infringement. The manufacture, use or sale of the Product by Novartis or
the use of the Trademarks and any other Novartis IP used to promote the Product
in the Territory for the sale of the Product do not and to Novartis’ knowledge
will not infringe any valid rights of any third party including inter  alia
intellectual property rights (other than such rights as to which Novartis is
directly or indirectly licensed). To Novartis’ knowledge, at the New Effective
Date, Novartis is unaware of any third party infringement of the Patents,
Trademarks or other intellectual property 
rights relating to the Product.

 

30

 

(i)            Adverse
Drug Experiences. Novartis has informed Reliant of all relevant adverse
drug experiences related to the Product of which it has knowledge.

 

(j)            Litigation.
Except as set forth on Schedule 8.1(j),
there is no litigation, arbitration proceeding, governmental investigation,
action or claims of any kind, pending or, to the knowledge of Novartis,
threatened, (collectively “Novartis Claims”),
by or against Novartis or any of its Affiliates relating to the Product,
including, without limitation, any Claims regarding breach of express or
implied warranty or representation or failure to warn or relating to personal
injury, property damage or other liability arising from or caused by the
Product which would in anyway impede, impair, restrict or interfere with the
rights granted Reliant hereunder or the ability of Reliant or Novartis to
perform their respective obligations hereunder.

 

(k)           Promotional
Materials. All Promotional Materials relating to the Product supplied by
Novartis are in material compliance with all applicable laws and regulations.

 

(l)            Regulatory
Approvals. Novartis has obtained and will obtain all material regulatory
approvals, licenses and permits which are required to be obtained for in order
to permit (i) sales of the Product in the Territory and (ii) Novartis
to discharge its obligations hereunder.

 

8.2           Representations
and Warranties of Reliant. Reliant hereby represents and warrants to
Novartis as of New Effective Date as follows:

 

(a)           Organization
and Conversion. Reliant is (i) a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and (ii) has all necessary corporate power and corporate authority to own
its properties and to conduct its business, as currently conducted. Following
the conversion of Reliant from a limited liability company to a corporation,
the equityholders of Reliant immediately prior to such conversion held shares
in the resulting corporation in approximately the same relative proportions as
they did in the pre-conversion entity.

 

(b)           Authority.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby are within the corporate power of Reliant,
have been duly authorized by all necessary corporate proceedings of Reliant,
and this Agreement has been duly executed and delivered by Reliant.

 

(c)           Execution
and Delivery. Neither the execution of this Agreement nor the consummation
of the transactions contemplated hereby: 
(i) requires Reliant to obtain the approval, consent or withholding
of objection on the part of any regulatory or governmental body or any other
third party (including, without limitation, any Affiliate of Reliant);  (ii) will result in any violation or
breach of any term or provision of Reliant’s Certificate of Incorporation,
Bylaws or similar charter documents; (iii) will constitute a default under
any material indenture, 

 

31

 

mortgage, deed of
trust, license agreement, or other contract or agreement to which Reliant is a
party, which breach or default would have a material adverse effect on Reliant’s
ability to perform its obligations under this Agreement; or (iv) will
violate any provision of any judicial, governmental or administrative order,
writ, injunction, award, judgment or decree applicable to Reliant.

 

(d)           Binding
Obligation. This Agreement constitutes the valid and binding obligation of
Reliant, enforceable against Reliant in accordance with its terms, subject to
bankruptcy reorganization, insolvency and other similar laws affecting the
enforcement of creditors’ rights in general and to general principles of equity
(regardless of whether considered in a proceeding in equity or an action at
law).

 

(e)           Broker.
Neither Reliant nor any officer, director or agent of Reliant, has employed any
broker or finder with respect to this Agreement or the transactions
contemplated hereby.

 

(f)            Adverse
Drug Experiences. Reliant has informed Novartis of all relevant adverse
drug experiences related to the Product of which it has knowledge.

 

(g)           Litigation.
Except as set forth on Schedule 8.2(g),
there is no litigation, arbitration proceeding, governmental investigation,
action or claims of any kind, pending or, to the knowledge of Reliant,
threatened, (collectively “Reliant Claims”),
by or against Reliant or any of its Affiliates relating to the Product,
including, without limitation, any Reliant Claims regarding breach of express
or implied warranty or representation or failure to warn or relating to
personal injury, property damage or other liability arising from or caused by
the Product.

 

8.3           Covenants.

 

(a)           Compliance
with Laws. Each party covenants to the other that it will comply with all
applicable local, state and federal laws and regulations in carrying out its
obligations pursuant to this Agreement.

 

(b)           Quality
Control. Novartis covenants that the Product to be manufactured, packaged,
distributed and sold by Novartis will, at the time of shipment by or on behalf
of Novartis, not be misbranded or adulterated under the terms of the Act.

 

(c)           Cooperation.
Each party covenants that it will use its commercially reasonable efforts,
consistent with applicable law, to maximize Net Sales by supporting and
cooperating with the other party in its efforts under this Agreement. Novartis
further agrees that in the event Novartis elects to (i) stop or slow
shipping of Product, (ii) ”load” sales of the Product, (iii) encourage
or require customers to “buy in” Product, in each case, during the fourth
Quarter of any Agreement Year in a manner that could reasonably be expected to
have the effect of reducing or increasing Net Sales and thereby disadvantage
Reliant under this Agreement, then for the purposes of this Agreement, such
reduced or increased sales will be deemed booked by Novartis in a manner that
does not so detriment Reliant.

 

32

 

(d)           Compliance
with Certain Agreements. Novartis shall comply with, and shall cause its
Affiliates to comply in all material respects with the terms of any agreements
through which Novartis or its Affiliates are granted rights or licenses
relating to the Novartis IP, except where the failure to so comply with such
agreements could not reasonably be expected to adversely effect Reliant’s
ability to perform its obligations under this Agreement. Novartis shall use
commercially reasonable efforts to (i) cause the counterparty to any such agreements
to perform under such agreements and (ii) retain its rights to the
Novartis IP to the extent necessary to discharge its obligations under this
Agreement with respect to the Products, including, without limitation, granting
the rights and licenses granted to Reliant under this Agreement.

 

8.4           Novartis
Disclaimer. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, NOVARTIS DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH
REGARD TO THE PRODUCT, INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF
MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.

 

8.5           Reliant
Disclaimer. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, RELIANT DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED.

 

ARTICLE IX

INTELLECTUAL PROPERTY

 

9.1           Maintenance.
Novartis shall be responsible for and promptly pay when due, all fees necessary
to maintain the Patents and Trademarks in full force and effect during the Term.
Novartis shall promptly inform Reliant of any re-examination, reissue, term
extension or other proceeding of similar force and effect relating to the
Patents or Trademarks.

 

9.2           Notice
of Infringement. If either party shall learn of a claim or assertion that
the manufacture, use or sale of the Product in the Territory infringes or
otherwise violates the intellectual or industrial property rights of any third
party, or that any third party violates the intellectual or industrial property
rights of Novartis in the Product in the Territory, then the party becoming so
informed shall promptly, but in all events within fifteen (15) business days
thereof, notify the other party to this Agreement of the claim or assertion.

 

9.3           Infringement
of Third Party Intellectual Property by Novartis. In the event a claim of
infringement of a third party’s intellectual property right arising out of (i) the
promotion, marketing, Detailing, manufacture, distribution, use or sale of
Product by Novartis, its Affiliates or Agents (other than Reliant, its
Affiliates and agents) or (ii) to the extent such claim arises as a result
of the fact that Reliant, its Affiliates or agents are promoting, marketing or
Detailing the Product or using the Novartis IP (but expressly excluding claims
arising from the techniques or systems not included in the Novartis IP that are
used to promote, market or Detail the Product (“Reliant Promotion Techniques”)) is brought by a third party
against either party (together, “Novartis
Indemnified Claims”)), 

 

33

 

Novartis shall
defend such action at its own cost and expense and, at its own cost and
expense, indemnify and hold harmless Reliant, its Affiliates, officers,
managers, employees, representatives, consultants and agents (the “Reliant Infringement Indemnitees”) as set
forth in Article 9.5 below.

 

9.4           Infringement
of Third Party Intellectual Property by Reliant. In the event a claim of
infringement of a third party’s intellectual property right arising out of the
promotion, marketing and Detailing of Product by Reliant is brought by a third
party against either party to the extent arising on account of Reliant’s, its
Affiliate’s or agents (other than Novartis, its Affiliates and agents) use of
Reliant Promotion Techniques (“Reliant
Indemnified Claims”), Reliant shall defend such action at its own
cost and expense and, at its own cost and expense, indemnify and hold harmless
Novartis, its Affiliates, officers, managers, employees, representatives,
consultants and agents (the “Novartis
Infringement Indemnitees”) as set forth in Article 9.6 below.

 

9.5           Infringement
Indemnification by Novartis. Notwithstanding any other provisions of this
Agreement, but subject to Article 10.4, Novartis will defend, indemnify
and hold harmless the Reliant Infringement Indemnitees from and against any and
all liabilities, losses, damages, actions, claims and expenses suffered or
incurred by Reliant Infringement Indemnitees (including reasonable attorneys’
fees, court costs and expert witnesses’ fees) resulting from any Novartis
Indemnified Claims so long as any such claim does not arise from Reliant’s
breach of this Agreement, violation of law or its negligent or intentionally
wrongful conduct (it being expressly understood that Reliant’s reasonable
exercise of its rights hereunder in accordance with this Agreement shall not be
deemed a violation of law or its negligent or intentional wrongful conduct as
pertaining to violation of another party’s intellectual property rights).

 

9.6           Infringement
Indemnification by Reliant. Notwithstanding any other provisions of this
Agreement, but subject to Article 10.4, Reliant will defend, indemnify and
hold harmless the Novartis Infringement Indemnitees from and against any and
all liabilities, losses, damages, actions, claims and expenses suffered or
incurred by Novartis Infringement Indemnitees (including reasonable attorneys’
fees, court costs and expert witnesses’ fees) resulting from any Reliant
Indemnified Claims so long as any such claim does not arise from Novartis’
breach of this Agreement, violation of law or its negligent or intentionally
wrongful conduct (it being expressly understood that Novartis’ reasonable
exercise of its rights hereunder with respect to the use of any Reliant
intellectual property in accordance with this Agreement shall not be deemed a
violation of law or its negligent or intentional wrongful conduct as pertaining
to violation of another party’s intellectual property rights).

 

9.7           Third
Party Infringement. In the event either party believes that a third party
is infringing or otherwise violating Novartis’ intellectual or industrial
property rights in the Product (a “Third
Party Infringement”), Novartis and Reliant shall consult with each
other and their respective counsel in order to develop a strategy for
addressing the Third Party Infringement. In the event the parties agree to take
legal action to stop the Third Party Infringement, they shall agree upon legal
counsel to prosecute such action. Unless the parties agree upon a different
formula for sharing the expenses (including attorney and 

 

34

 

expert fees) of
such action and for sharing any award or settlement, they shall share them
equally. In the event that one of the parties does not desire to participate in
the action (the “Nonparticipating Party”),
the other shall be free to bring the action in its own name, at its own expense
and retain any award or settlement in its entirety. If necessary, the
Nonparticipating Party shall join as a party to the suit but shall be under no
obligation to participate except to the extent that such participation is
required as the result of being a named party to the suit. The Nonparticipating
Party shall offer reasonable assistance in connection therewith at no charge to
the other party except for reimbursement of reasonable out-of-pocket expenses
including reasonable attorney’s fees. If either party desires to retain counsel
independently, at its own expense, the party may do so, but it shall not
relieve the party of its obligations under this Article.

 

ARTICLE X

INDEMNITIES

 

10.1         Indemnification
of Reliant. Novartis will defend, indemnify and hold harmless Reliant and
its Affiliates, officers, directors, agents, representatives, consultants and
employees (individually, a “Reliant
Indemnified Party,” and collectively, the “Reliant Indemnified Parties”), from and
against any and all liabilities, losses, damages, actions, claims and expenses,
including reasonable attorneys’ fees, court costs and expert witnesses’ fees,
(individually, a “Liability,” and
collectively, the “Liabilities”)
suffered or incurred by the Reliant Indemnified Parties that result from, or
arise out of: (a) the manufacture, storage, packaging, production,
transportation, distribution, sale or other disposition of the Product by
Novartis, including, without limitation, liability related to or arising out of
product liability and/or product tampering claims; (b) the acts or
omissions of Novartis or any of its affiliates with respect to the manufacture
or quality of the Product supplied by Novartis and/or its affiliates;
(c) breach by Novartis of any representation, warranty, covenant or
agreement contained in this Agreement; (d) any recall of the Product, or
any seizure of the Product by any governmental agency, in either case, arising
out of, relating to, or occurring as a result of, any failure of Novartis to
manufacture or package the Product in accordance with any applicable government
regulation or current Good Manufacturing Practices (cGMP’s); (e) Novartis’
failure to comply with any applicable law or regulation and (f) Novartis’
intentionally wrongful or negligent act, except to the extent any such
Liability arises from (i) Reliant’s intentional malfeasance or negligence,
(ii) Reliant’s breach of this Agreement or (iii) Reliant’s violation
of any applicable law or regulation. The foregoing right of indemnification
will not limit Novartis’ rights under Articles 9.6 and 10.2.

 

10.2         Indemnification
of Novartis. Reliant will defend, indemnify and hold harmless Novartis and
its Affiliates, directors, officers, agents, representatives, consultants and
employees (individually, a “Novartis
Indemnified Party,” and collectively, the “Novartis Indemnified Parties”), from and
against any and all Liabilities suffered or incurred by the Novartis
Indemnified Parties that result from or arise out of (a) breach by Reliant
of any representation, warranty, covenant or agreement contained in this
Agreement; (b) Reliant’s failure to comply with any applicable law or
regulation or (c) Reliant’s intentionally wrongful or negligent act,
except to the extent any such Liability arises from 

 

35

 

(i) Novartis’
intentional malfeasance or negligence, (ii) Novartis’ breach of this
Agreement or (iii) Novartis’ violation of any applicable law or regulation.
The foregoing right of indemnification will not limit Reliant’s rights under
Articles 9.5 and 10.1.

 

10.3         Conditions
of Indemnification. The obligations of Novartis and Reliant under this
Article X shall be subject to the following terms and conditions:

 

(a)           The
party claiming a right to indemnification shall, within ten (10) business days
of receipt of any claim, charge, suit or other action, give, in accordance with
Article XII, written notice to the indemnifying party, of any such claim,
charge, suit or other action received from a third party which is governed by
the indemnity obligations of this Agreement;

 

(b)           The
indemnifying party shall conduct, at its own expense, but in consultation with
the other party, the defense of any and all such claims, charges, suits or
other actions by a third party;

 

(c)           Neither
party shall settle or admit liability with respect to any such claims, charges,
suits or other actions which could result in liability to the other party
without the prior written consent of the other party, which consent shall not
be unreasonably withheld or delayed;

 

(d)           If
the indemnifying party does not take the steps necessary against any such
claims, charges, suits or other action by a third party, the party claiming
indemnification may defend against or settle such claims, charges, suits or
other action provided that that party may not settle such claims, charges,
suits or other action without the prior written consent of the indemnifying
party which consent shall not be unreasonably withheld or delayed; however, the
defense and/or settlement under this Article 10.3(d) shall not act as a
waiver of rights to indemnification under this Agreement, or any other rights
or remedies of a party claiming indemnification and shall not excuse the
indemnifying party from its obligations hereunder and all reasonable costs and
expenses incurred by the party claiming indemnification shall be subject to
indemnity by the indemnifying party; and

 

(e)           Each
party will offer reasonable assistance to the other party in defending or
settling the claim, at the expense of the indemnifying party.

 

10.4         Consequential
Damages. Neither Reliant nor Novartis (which for the purposes of this
Article 10.4 shall include their respective Affiliates, directors,
managers, officers, employees, consultants, equity holders, representatives and
agents) shall have any liability to the other for any punitive damages,
special, incidental, consequential or indirect damages, relating to or arising
from the loss of commercial or business opportunity, revenue or profit, in
connection with or arising out of this Agreement, even if such damages may have
been foreseeable; provided that such limitation shall not apply in the case of
(a) fraud, (b) intentional misconduct and (c) any damages
(including, 

 

36

 

without
limitation, the types enumerated in this Article 10.4) claimed by or paid
to a third party in a third party action.

 

ARTICLE XI

CONFIDENTIALITY

 

11.1         Proprietary
Information. Pursuant to this Agreement, a party receiving Proprietary
Information from the other, directly or indirectly, will treat such Proprietary
Information as confidential, will use such Proprietary Information only for the
purposes of this Agreement and will not disclose, and will take all reasonable
precautions to prevent disclosure of, such Proprietary Information to third
parties or to any of its officers, directors, managers, equity holders,
employees, agents, representatives, Affiliates or consultants who are not
required to know such Proprietary Information or who are not bound by a like
obligation of confidentiality.

 

11.2         Exemptions.
Nothing contained herein will in any way restrict or impair each party’s right
to use, disclose or otherwise deal with any information deemed by the other
party to be Proprietary Information which:

 

(a)           at
the time of disclosure is publicly available or in the public knowledge;

 

(b)           after
disclosure, lawfully becomes part of the public knowledge through publication
or otherwise, but through no fault of either party;

 

(c)           the
receiving party possesses at the time of disclosure by the other party and
which was not acquired, directly or indirectly, from the other party;

 

(d)           is
acquired by the receiving party from a third party who has a right to disclose
such Proprietary Information;

 

(e)           as
evidenced by written records, is independently developed by the receiving party
without use of the Proprietary Information; or

 

(f)            is
compelled to be disclosed by legal process, provided the party so compelled
shall notify the other party and cooperate in any judicial proceeding initiated
to contest compelling such disclosure.

 

11.3         Return
of Proprietary Information. Each party agrees, at the request of the other
party, at the end of the Term to either:

 

(a)           return
to the other party all originals and copies of the other party’s Proprietary
Information; or,

 

(b)           at
the other party’s option, destroy all originals and copies of the other party’s
Proprietary Information and to certify in writing such destruction to the other
party.

 

37

 

11.4         Maintenance
of Copies. Each party may maintain one (1) copy of any document containing
Proprietary Information in its Law Department or with its outside legal counsel
solely for archival purposes.

 

11.5         Expiration.
The obligations of this Article XI shall expire ten (10) years after the
end of the Term.

 

ARTICLE XII

NOTICES

 

12.1         Notices.
All notices required or permitted hereunder shall be given in writing and sent
by facsimile transmission, or mailed postage prepaid by certified or registered
mail (return receipt requested), or sent by a nationally recognized express
courier service, or hand-delivered at the following address:

 

Novartis Pharmaceuticals
Corporation

59 Route 10

East Hanover, New Jersey  07936

ATTN:  Larry Perlow, Senior Vice
President and General Manager

 

With a copy to:

Novartis Pharmaceuticals Corporation

59 Route 10

East Hanover, New Jersey  07936

ATTN:  General Counsel

 

Reliant Pharmaceuticals,
Inc.

110 Allen Road

Liberty Corner, New Jersey  07938

ATTN:  Chief Operating Officer

 

With a copy to:

Latham & Watkins LLP

Sears Tower, Suite 5800

Chicago, Illinois  60606

ATTN:  Michael A. Pucker

 

All notices shall be deemed made upon receipt by the
addressee as evidenced by the applicable written receipt.

 

38

 

ARTICLE XIII

PUBLICITY

 

13.1         Disclosure
of Agreement Terms. Novartis and Reliant agree not to issue any press
releases or public announcements concerning this Agreement without the prior
consent of the other party to the form, timing and content of any such release
or announcement, except as such release or announcement may be required by law.
A party who desires to issue a press release or make any other public
disclosure relating to this Agreement shall notify the other in writing at
least ten (10) business days (or such shorter period where legally required)
before the time of the proposed release. Such notice shall include the exact
text of the proposed release and the time and manner of the release. The
non-disclosing party shall respond promptly to the disclosing party with
respect to such press release or other disclosure, and neither party shall
unreasonably withhold its consent to any such press release or disclosure. This
Article 13.1 applies to all disclosures concerning this Agreement
including, without limitation, by way of the following: press releases,
educational and scientific conferences, governmental filings, discussions with
investment bankers (except for either party’s financial advisors who are
obligated to keep the information confidential) public officials and the media.
Novartis and Reliant recognize that disclosure of the terms of this Agreement
to the IRS and other tax authorities may be required, and Novartis and Reliant
each waives the requirements of this Article 13.1 with respect to
disclosure to such entities. In disclosing any information covered by this
Article 13.1 pursuant to a requirement of law, each party will use its
reasonable efforts to secure confidential treatment from the applicable
governmental authority when requested by either party.

 

13.2         Disclosure
of Financial Terms. Except (i) as required by law, (ii) subject
to the next sentence of this Article 13.2, to another Person in connection
with a proposed merger, acquisition, or sale of all or substantially all of the
assets of the disclosing party, and/or (iii) subject to the next sentence
of this Article 13.2, to investment bankers and/or financing sources in
connection with bona fide financing transactions involving Reliant or an
Affiliate, neither party shall disclose to any third party, whether publicly or
otherwise, any financial terms of this Agreement which have not been previously
disclosed publicly pursuant to this Article 13.2 without the prior written
consent of the other party, which consent shall not be unreasonably withheld or
delayed. Notwithstanding anything to the contrary in this Agreement, under no
circumstances shall Reliant directly or indirectly disclose any financial terms
of this Agreement, which have not been previously disclosed publicly pursuant
to this Article 13.2, (A) to any Competitor, or (B) to any
pharmaceutical contract sales force organization. In disclosing any information
covered by this Article 13.2(a) pursuant to a requirement of law, whether
in connection with an Approved Transaction or otherwise, each party will notify
the other of the proposed disclosure and each party will use its reasonable
efforts to secure confidential treatment from the applicable governmental
authority when requested by such other party and (b) in connection with
disclosure permitted by clauses (ii) and/or (iii) of this
Article 13.2, Reliant will require the party to whom it discloses such
information to enter into a confidentiality agreement including terms with
respect to disclosure of the financial terms of this Agreement not less strict
than those set forth in 

 

39

 

Schedule 13.2
attached hereto for a period ending not earlier than termination or expiration
of the Term. Reliant will use reasonable commercial efforts to enforce its
rights under any such confidentiality agreement.

 

ARTICLE XIV

INSURANCE

 

14.1         Insurance.
Reliant and Novartis shall each at its own expense obtain and maintain insurance
of the type and amount described in Article 14.2. Neither party shall do
or omit to do any act, matter or thing which could prejudice or render voidable
any such insurance. The insurance obligations hereunder may be met by a program
of self-insurance.

 

14.2         Amount
of Insurance. The parties agree that each will maintain during the
performance of this Agreement the following insurance in amounts no less than
that specified for each type:

 

(a)           General
liability insurance with combined limits of one million dollars ($1,000,000)
per occurrence and one million dollars ($1,000,000) per accident for bodily
injury, including death and property damage;

 

(b)           Worker’s
Compensation and disability insurance in the amount required by the law of the
State in which the Reliant employees are located and employers liability
insurance with limits of one million dollars ($1,000,000) per occurrence;

 

(c)           Auto
liability insurance with combined limits of 
one million dollars ($1,000,000) per occurrence and one million dollars
($1,000,000) per accident for bodily injury, including death and property
damage; and

 

(d)           Excess
liability insurance with combined limits of five million dollars ($5,000,000)
per occurrence and five million dollars ($5,000,000) per accident for bodily injury,
including death and property damage.

 

14.3         Evidence
of Insurance. Each party will provide to the other party reasonable
evidence of its insurance and thirty (30) days prior written notice of any
cancellation of its coverage or reduction in coverage from the minimum
requirements stated herein.

 

ARTICLE XV

MISCELLANEOUS

 

15.1         Headings.
The titles, headings or captions and paragraphs in this Agreement are for
convenience only and do not define, limit, extend, explain or describe the
scope or extent of this Agreement or any of its terms or conditions and
therefore shall not be considered in the interpretation, construction or
application of this Agreement.

 

40

 

15.2         Invalid
Provisions. Whenever possible, each provision or condition of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision or condition of this Agreement
should be prohibited or invalid under applicable law, such provision or condition
shall be considered separate and severable from this Agreement to the extent of
such prohibition or invalidity without invalidating the remaining provisions
and conditions of this Agreement, so long as the remaining Agreement reflects
the economic intentions of the parties as evidenced by this Agreement as a
whole.

 

15.3         Entire
Agreement. Subject to the last sentence of this Article 15.3, this
Agreement (including all schedules and exhibits attached hereto, which are
incorporated herein by this reference) sets forth the entire agreement between
the parties hereto pertaining to the subject matter hereof and supersedes the
Original Promotion Agreement and all negotiations, preliminary agreements,
memoranda or letters of proposal or intent, discussions and understandings of
the parties hereto in connection with the subject matter hereof. Subject to the
last sentence of this Article 15.3, all discussions between the parties have
been merged into this Agreement and neither party shall be bound by any definition,
condition, understanding, representation, warranty, covenant or provision other
than as expressly stated in or contemplated by this Agreement or as
subsequently shall be set forth in writing and executed by a duly authorized
representative of the party to be bound thereby. Notwithstanding anything in
this Agreement, (i) all of the terms and provisions of the Original Promotion
Agreement shall continue to apply with respect to any period prior to the New
Effective Date and (ii) nothing herein shall relieve either party for failure
to comply with the Original Promotion Agreement prior to the New Effective
Date.

 

15.4         Amendments.
No amendment, change or modification of any of the terms, provisions or
conditions of this Agreement shall be effective unless made in writing and
signed on behalf of the parties hereto by their duly authorized
representatives.

 

15.5         Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original document, but all such separate counterparts shall
constitute only one and the same instrument.

 

15.6         Waiver.
No waiver of any term, provision, or condition of 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 or other term,
provision, or condition of this Agreement.

 

15.7         Force
Majeure. Neither party shall be liable hereunder to the other party nor
shall be in breach for failure to perform its obligations caused by circumstances
beyond the control of either party, including, but not limited to, acts of God;
fires; earthquakes; floods; riots; wars; civil disturbances; sabotage;
accidents; labor disputes; shortages; government actions (including, but not
limited to, priorities, requisitions, allocations and price adjustment
restrictions). In the case of any such event, the affected party shall promptly
notify the other party, and shall keep the other party informed of the efforts
to resume performance. After sixty (60) days of such inability to perform, the
parties agree to meet 

 

41

 

and in good faith
discuss how to proceed. In the event that the affected party is prevented from
performing its obligations pursuant to this Article 15.7 for a period of
six (6) months, the other party shall have the right to terminate this
Agreement.

 

15.8         Successors
and Assigns. Subject to Article 15.9, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns permitted under this Agreement.

 

15.9         Assignment.
Except as expressly provided below, neither party may assign this Agreement or
delegate the performance of its obligations hereunder without the express prior
written consent of the other party, except to an Affiliate of the assigning
party, provided, however, that the assignor shall remain liable, together with
the assignee, for the fulfillment of any and all obligations assigned. Any
attempted assignment in violation of this provision shall be null and void. For
the purposes of this Agreement, none of the following transactions (each an “Approved Transaction”) shall constitute an
assignment or a delegation, but shall require prior written notice to
Novartis:  (a) issuance by Reliant
of securities in connection with any financing transaction or public offering,
(b) Reliant consummating a Change of Control transaction and/or
(c) assignment, transfer or delegation of this Agreement or Reliant’s
obligations hereunder to one or more of the following persons or entities:  (A) PharmBay Investors, LLC,
(B) Bay City Capital Fund II, L.P. or (C) any of the lineal
descendants of Nicholas J. Pritzker, deceased, trusts primarily for the benefit
of such lineal descendants, entities controlled by such lineal descendants
and/or trusts for their benefit, in each case described in clauses (a),
(b) and (c) so long as any such party agrees to be bound by all the terms and
conditions of this Agreement and Reliant also remains responsible to Novartis
for such party’s performance hereunder. During Agreement Year 2005, nothing
herein shall preclude Reliant from entering into agreements with third parties
to co-promote or assist Reliant in the marketing or promotion of the Product,
including, without limitation, engaging a contract sales organization; provided
that the foregoing shall not relieve Reliant of any of its obligations
hereunder.

 

15.10      Survival.
The provisions of Articles 3.2, 3.3, 3.4, 3.6, 4.10, 4.11, 4.12, 5.11, VI, VII,
IX, X, XI, XII, XIII, XIV and XV shall survive, and remain in effect, after
termination or expiration of this Agreement.

 

15.11       Construction. This Agreement has been
prepared jointly and shall not be strictly construed against either party.

 

15.12       Governing Law. This Agreement shall be
interpreted under and governed by the laws of the State of New Jersey, without
giving effect to the conflicts of laws provisions thereof.

 

15.13       Relationship Between Parties. In the
performances of the Services hereunder, Reliant shall be deemed to be and shall
be an independent contractor and, as such, Reliant employees shall not be
entitled to any benefits applicable to employees of Novartis. No provision of
this Agreement shall be deemed to create or imply any contract of employment
between Novartis and any employee of Reliant. None of the provisions of this
Agreement are intended (i) to be for the benefit of any creditor or other
person 

 

42

 

(including any
employee of Reliant) to whom any debts, liabilities or obligations are owed by
any party hereto, or (ii) to create any debt, liability or obligation in
favor of any creditor or other person (including any employee of Reliant),
except the parties hereto. No such creditor or other person shall obtain any
benefit from the provisions of this Agreement or shall, by reason of any such
provisions, make any claims in respect of any debt, liability or obligation
against any of the parties hereto or the Affiliates of either of them. Nothing
contained in this Agreement shall be deemed to create any association,
partnership, joint venture, or other relationship of principal and agent or
master and servant between the parties to this Agreement or Affiliates thereof,
or to provide either party with the right, power or authority, whether express
or implied, to create any such duty or obligation on behalf of the other party.

 

15.14       Compliance with Laws. Reliant and
Novartis agree to undertake all their respective obligations under this
Agreement in material conformance with all applicable local, state and federal
laws and regulations, as amended, including the Food Drug and Cosmetics Act,
Section 1128B(b) of the Social Security Act, the Prescription Drug
Marketing Act and similar state laws. By entering into this Agreement, it is
not the intent of the parties to enter into any financial relationship or
arrangement prohibited under state or federal fraud or abuse regulations,
including but not limited to Sec. 1128B(b) of the Social Security Act, and
any regulations promulgated thereunder, nor do the parties hereto have any
belief that the relationship and compensation arrangement provided in this
Agreement is prohibited. Neither party shall assert against the other that the
compensation arrangement provided in this Agreement is grounds for voiding the
Agreement or rendering the Agreement unenforceable.

 

15.15       Dispute Resolution. Subject to
Articles 3.5(d) and 6.6(a), the parties will use their commercially
reasonable efforts to resolve any disputes arising from this Agreement by good
faith negotiation and mutual discussion for a period of thirty (30) days. Thereafter,
each party shall be entitled to seek any remedy with respect to such dispute,
whether pursuant to this Agreement, at law, equity or otherwise. During the
pendency of any bona fide dispute, the parties shall continue to perform their
respective obligations under this Agreement until such time as (i) the
matter in dispute is finally resolved or (ii) this Agreement is terminated
in accordance with its terms.

 

[Remainder of Page Intentionally Left Blank]

 

43

 

IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed in duplicate on the day and year first above written.

 

	
  RELIANT PHARMACEUTICALS, INC.

  	
  NOVARTIS PHARMACEUTICALS

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

44

 

Exhibit 1:  Compensation to Reliant for Agreement Year
2005

 

	
  AGREEMENT YEAR

  	
   

  	
  Annual Net Sales Baseline

  ($ MILLIONS)

  	
   

  	
  Annual Net Sales Forecast

  ($ MILLIONS)

  	
   

  	
  Compensation to Reliant of Actual

  NET SALES ABOVE ANNUAL NET SALES

  BASELINE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  

 

[***]:  Certain
information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has
been requested with respect to the omitted portions.

 

1

 

Exhibit 2:  Seasonalization of Baseline 

 

	
   

  	
   

  	
  Actual TRXs

  	
   

  	
  Actual Net Sales

  	
   

  
	
  Month

  	
   

  	
  2004
  (000’s)

  	
   

  	
  % of
  Total

  	
   

  	
  2003 +
  2004 (000’s)

  	
   

  	
  % of
  Total

  	
   

  
	
  JAN

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
   [***]

  	
   

  	
  [***]

  	
  %

  
	
  FEB

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
   [***]

  	
   

  	
  [***]

  	
  %

  
	
  MAR

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  APR

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  MAY

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  JUN

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  JUL

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  AUG

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  SEP

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  OCT

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  NOV

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  DEC

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  

 

Annual Net Sales Baseline $ :

 

	
   

  	
   

  	
  2005

  	
   

  
	
   

  	
   

  	
  $

  	
  [***]

  	
   

  
					

 

	
  Month

  	
   

  	
   

  	
   

  
	
  JAN

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  FEB

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  MAR

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  APR

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  MAY

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  JUN

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  JUL

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  AUG

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  SEP

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  OCT

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  NOV

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  DEC

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  Total

  	
   

  	
  $

  	
  [***]

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

2

 

Exhibit 3:  Sample Costs

 

Cost per unit of Product delivered to Reliant in 2005:

 

	
  Unit

  	
   

  	
  Cost per Unit

  	
   

  
	
  [***]

  	
   

  	
  $[***]

  	
   

  
	
  [***]

  	
   

  	
  $[***]

  	
   

  

 

Cost per unit of Product
delivered to Reliant in 2005 and in each subsequent Agreement Year will be [***]

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

1

 

Schedule
1.40

 

Patents

 

	
  Patent No.

  	
   

  	
  Inventor

  	
   

  	
  Assignee

  	
   

  	
  Date Filed

  	
   

  
	
  4,571,428

  	
   

  	
  Prasad K.
  Kapa

  	
   

  	
  Novartis
  Pharmaceuticals Corp.

  	
   

  	
  July 8, 1983

  	
   

  
	
  4,739,073

  	
   

  	
  Faizulla G.
  Kathawala

  	
   

  	
  Novartis
  Pharmaceuticals Corp.

  	
   

  	
  March 4,
  1985

  	
   

  
	
  5,118,853

  	
   

  	
  George T.
  Lee and Oljan Repic

  	
   

  	
  Novartis AG

  	
   

  	
  February 26,
  1991

  	
   

  
	
  5,189,164

  	
   

  	
  Prasad K.
  Kapa and Kau-Ming Chen

  	
   

  	
  Novartis AG

  	
   

  	
  February 20,
  1990

  	
   

  
	
  5,290,946

  	
   

  	
  George T.
  Lee, Prasad K. Kapa and Oljan Repic

  	
   

  	
  Novartis AG

  	
   

  	
  November 23,
  1992

  	
   

  
	
  5,354,772

  	
   

  	
  Faizulla G.
  Kathawala

  	
   

  	
  Novartis
  Pharmaceuticals Corp.

  	
   

  	
  November 24,
  1993

  	
   

  
	
  5,356,896

  	
   

  	
  Mohan B.
  Kabadi and Richard V. Vivilecchia

  	
   

  	
  Novartis AG

  	
   

  	
  December 22,
  1992

  	
   

  

 

1

 

Schedule
1.73

 

Trademarks

 

	
  Word Mark

  	
   

  	
  Registrant

  	
   

  	
  Registration No.

  	
   

  	
  Filing Date

  	
   

  
	
  LESCOL

  	
   

  	
  Novartis AG

  	
   

  	
  1639501

  	
   

  	
  June 8, 1990

  	
   

  
	
  LESCOL (Stylized)

  	
   

  	
  Novartis AG

  	
   

  	
  2171358

  	
   

  	
  June 26,
  1997

  	
   

  

 

1

 

Schedule 1.76

 

VA Contract

 

 

DEPARTMENT OF VETERANS AFFAIRS

Office of Acquisition and Material Management

National Acquisition Center

P.O. Box 76

Hines IL 60141

 

July 28, 2003

 

Serafina Oxner, Director

Novartis Pharmaceuticals Corporation

One Health Plaza

East Hanover, NJ  07936

 

Dear Ms. Oxner:

 

Your firm’s offer, dated June 30, 2003, in response to Solicitation No.
RFP-797-NC-03-0022, for Fluvastatin Capsules, and Final Proposal Revision
submission of July 16, 2003, are accepted. Contract number V797P-9110, has been
assigned. This contract has a total yearly estimated value of $[***], for the
base contract performance period of 8/7/03 – 8/6/04, and the contract includes
four one-year options. Below is a list of the bottle sizes for all strengths
and bottle prices that will be posted to the PPV and the field:

 

 

	
  20 mg, Caps, 100s

  	
   

  	
  00078-0176-05

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  20 mg, Caps, 30s

  	
   

  	
  00078-0176-15

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  40 mg, Caps, 100s

  	
   

  	
  00078-0234-05

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  40 mg, Caps, 30s

  	
   

  	
  00078-0234-15

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  80 mg, Caps, 100s

  	
   

  	
  00078-0354-05

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  80 mg, Caps, 30s

  	
   

  	
  00078-0354-15

  	
   

  	
  $

  	
  [***]

  	
   

  

 

 

These prices awarded in this National Contract apply to purchases made
by all facilities purchasing through the VA PPV Program:

 

a)             All
Department of Veterans Affairs (DVA) facilities

b)            All
Indian Health Service (IHS) Regions

c)             All
Bureau of Prisons (BOP) facilities

d)            Department
of Health & Human Service Supply Service Center at Perry Point (HHS)

e)             All
Option 2 State Veteran Homes (see paragraph 2.2 State Veteran Homes).

 

[***]:  Certain information on
this page has been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

1

 

Upon mutual agreement between your company and the Government, other
Government entities (OGA), such as Immigration and Naturalization Services
(INS), may be added to the contract by contract modification. A list of the
facilities currently eligible for contract pricing can be accessed at the
following address http://www.va.gov/pa&mm/nac/pharm/pharmpv.htm.

 

As with your FSS contract, quarterly sales reports (form available
electronically), need to be submitted for the items purchased against this
national contract, 60 days after completion of the applicable quarter, however,
no IFF is collected on National Contract sales. The Government’s fiscal year is
October 1st through September 30th, therefore, your first
report will be for sales of August (4th Quarter of 2003), and is due no later
than October 31, 2003.

 

Please do not hesitate to call me if you have any questions regarding
this award.

 

Sincerely,

 

 

Pharmaceutical Team

National Contract Service (049A1N2PH)

 

2

 

SOLICITATION/CONTRACT ORDER FOR COMMERCIAL
ITEMS

 

2.             Contract
No.: V797P-9110

 

3.             Award
Effective Date:

 

4.             Order
Number:

 

5.             Solicitation
Number:  RFP-797-NC-03-0022

 

a.             Solicitation
Issue Date:  6/2/03

 

7.             For Solicitation
Information Call:                  Name:  Deborah Koval

 

8.             Offer
Due Date Local Time:  7/2/03  4:00 PM

 

9.             Issued By:                                    Code:  797

VA National Acquisition Center, PO Box 76, Hines, IL  60141

Handcarried bids may be delivered to the front

desk of the location indicated in Block 16

 

10.           This Acquisition Is:                                                                                       SIC:  325412

Size Standard:  [***]

 

11.           Delivery
for FOB Destination Unless Block is Marked: 
See Schedule

 

12.           Discount
Terms:  None

 

13.           Deliver
to:                                         DVA
Pharmaceutical Prime Vender (See Attachment “A”)

 

16.           Administered By:                                                     VA
National Acquisition Center

National Contract Service (049AIN2PH)

1st Avenue, 1 Block North of Cermak Rd., Bldg 37

Hines, IL  60141

 

17A.        Contractor  Offeror:                                        DUNS
# 002147023

Novartis Pharmaceuticals Corporation

One Health Plaza

East Hanover, NJ  07936

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

3

 

18A.        Payment
Will Be Made By:                Pharmaceutical
Prime Vender

(See PPV Address – Attachment “A”)

 

	
  19.

  Item 

  No.

  	
   

  	
  20.

  Schedule of Supplies/Service

  	
   

  	
  21.

  Quantity

  	
   

  	
  22.

  Unit

  	
   

  	
  23.

  Unit Price

  	
   

  	
  24.

  Amount

  	
   

  
	
  1.

  	
   

  	
  Fluvastatin

  	
   

  	
  Weighted Avg.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1a.

  	
   

  	
  20 mg. Cap

  	
   

  	
  [***]

  	
  %

  	
  Tab. 100’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  30’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Package Sizes 100, 30

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NDC#s        00078-0176-05

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  00078-0176-15

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1b

  	
   

  	
  40 mg. Cap

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Package Sizes 100, 30

  	
   

  	
  [***]

  	
  %

  	
  Tab. 100’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  NDC#s        00078-0234-05

  	
   

  	
   

  	
   

  	
  30’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  00078-0234-15

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1c

  	
   

  	
  80 mg. XLTab.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Package Sizes: 100, 30

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NDC#         00078-0354-05

  	
   

  	
  [***]

  	
  %

  	
  Tab. 100’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  00078-0354-15

  	
   

  	
   

  	
   

  	
  30’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  

 

28.           Contractor
Is Required To Sign This Document and Return                        1              Copies

 

29.           Award
of Contract:   Reference Original Officer
Dated    6/30/03   and FPR dated 7/16/03

... is accepted as to items    1a,
1b, & 1c

 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

4

 

Summary of Award

 

Page 1(a)

ADDENDA TO CONTRACT SF-1449

 

Company Name:  Novartis
Pharmaceuticals Corporation

Contract Number:  V797P-9110

 

The following are incorporated into and made a part of this Award:

 

1.             Standard
Form 1449 and Summary of Award

 

2.             Novartis’
Offer dated 6/30/03.

 

3.             Final
Proposal Revision dated 7/16/03

 

4.             Part
I – Continuation of Standard Form 1449

 

5.             Part
II – All Contract Terms and Conditions of Solicitation RFP-797-NC-03-0022,
whether in full or by reference

 

6.             Performance
Period of this contract shall be for one year, August 7, 2003, through August
6, 2004, plus 4 one-year option years.

 

7.             Novartis’
Company-wide Subcontracting Plan for the period of 10/1/02 – 9/30/03.

 

Contract Administrator(s):

 

Paul Hiley, Manager, Government Contracting

Novartis Pharmaceuticals Corporation

One Health Plaza

East Hanover, NJ  07936

 

5

 

Schedule 4.10(b)(i)

 

Form of Reliant Status Report

 

	
  Summary Information

  Schedule 4.10(b)(i)

  	
   

  
	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  PSME Spend

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advertising and Promotion

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  # Sales Representative

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  # of Reps in Field

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Avg. Days in Field/Rep

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % Rep Turnover

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total # Territory

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Number Vacant

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  # of Days Vacant

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Territory 1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Territory 2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Territory 3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  etc...

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

Lescol Sample Information Month XX

 

Lescol Actual Number of Samples

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lescol Samples Planned

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

Lescol Sample Information Month xx
(continued)

 

Lescol Sample % Achieved

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

3

 

Lescol Physicians Reach

 

Schedule 4.10(b)(i)  (continued)

 

Lescol P1 Physicians Contacted

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  # P1 Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  %
  Achieved

  	
   

  	
  # P1
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  %
  Achieved

  	
   

  	
  # P1
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  %
  Achieved

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Number
  Contacted

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % Contacted
  Targets

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lescol P2 Physicians Contacted

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  # P2
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  % Achieved

  	
   

  	
  # P2
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  % Achieved

  	
   

  	
  # P2
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  % Achieved

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Number
  Contacted

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % Contacted
  Targets

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

4

 

Lescol Frequency of Calls

 

Schedule 4.10(b)(i)  (continued)

 

Lescol Actual Number of Calls

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Calls

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lescol Call Planned

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Calls

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

5

Lescol Frequency of Calls (continued)

 

Lescol Plan Achieved

 

	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Calls

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

6

 

Schedule 4.10(b)(ii)

 

Form of Reliant Physician Level Data
Report

 

Physician Level Xponent Data with Call and Sample Information

Schedule 4.10(b)(ii)

 

	
  IMS # or ME Num

  	
   

  	
  Product
  {i} TRx by Month

  	
   

  	
  Product
  {i} NRx Month

  	
   

  	
  Lescol
  Calls P1 by Month

  	
   

  	
  Lescol
  Calls P2 by Month

  	
   

  	
  Lescol
  Samples by Month

  	
   

  
	
  Unique Physician identifier

  	
   

  	
  TRx for Competitive products (ex. Lipitor etc.) and
  Lescol

  	
   

  	
  NRx for Competitive products (ex. Lipitor etc.) and
  Lescol

  	
   

  	
  Lescol P1 Calls made by Sales Rep by month

  	
   

  	
  Lescol P2 Calls made by Sales Rep by month

  	
   

  	
  Lescol Samples by month

  	
   

  

 

1

 

Schedule
4.14

 

Sample
Accountability

 

Practitioner Validation

If Novartis directs the
distribution to a select group or target of practitioners, Novartis will
pre-validate the licensing status of those practitioners.  If Novartis simply selects a specific
specialty or classification, then Reliant must validate practitioners
consistent with Novartis criteria.

Product Shipments

Novartis will maintain
records of all BULK sample shipments and quantities sent to and received by
Reliant. It will be the responsibility of Reliant to ship samples to its representatives.
Novartis will NOT ship product directly to Reliant Sales Representatives.  Reliant will maintain sample shipment records
of each representative by account and territory number for the current year plus
3 previous years.  The information maintained
must include the following:

•               Product Code, Name & Strength

•               Lot/Batch # and Quantity Shipped

•               Shipment Date & Carrier

•               Proof of Delivery

Distribution to
Practitioners

Reliant will maintain
records of physician validation and sample fulfillment receipts.  Reliant will notify Novartis of any loss,
theft, violations, investigations of violations, convictions, etc. specific to
the Novartis Product.

Annual Physical
Inventories

Annually Reliant will
provide Novartis results of the annual physical inventory and reconciliation
relative to Novartis’ Product for Reliant Sales Representative.

Closing Inventories

At the completion of the
Agreement and after the generation of close-out reports, Reliant will provide
to Novartis the results of all close-out inventory with reconciliation’s and
discrepancies noted.  The status reports
will be generated and sorted by Reliant’s organizational levels, e.g.,
national, regional, districts and down to the individual Sales Representative
level.  Outstanding discrepancies will
require further investigation.

All outstanding samples
will be returned to Novartis.

Storage

Reliant’s procedures will
be consistent with the federal regulations that ensure proper storage of
Novartis Product.  Storage location
records will be judiciously maintained and Reliant will make them available to
Novartis immediately upon request.

Product Recalls and
Investigations

Novartis will be
responsible to implement any product recall and direct all agency
investigations involving Novartis products.

 

1

 

Significant Loss or Theft

Novartis will be
immediately notified of any significant losses and all thefts experienced by
Reliant including FDA correspondence and police reports relative to the
Novartis sample Product.  Novartis will
define significant loss threshold.

Returns/Disposal

All returns of Product
samples will be returned to Novartis distribution facilities.  Reliant may not dispose of the Novartis
Product samples in any other manner unless previously agreed to by Novartis.

Documentation Storage

Reliant must maintain all
signed receipts and related documentation required by federal regulations for
three years plus current year regardless of contract status (active, expired or
previously terminated).  Such documents
include Practitioner Signature Forms, (documenting the distribution of Product
to customers), Rep Inventories, Transfers, Returns, Shipments and other
associated (e.g. theft/loss of product) forms. 
These forms and other reports (Reconciliation) will be made available to
Novartis upon request regardless of the contract status.

Document  Retrieval

Reliant agrees to
retrieve all Sample documents within 48 hours of Novartis request.  This survives the term of the contract by
three years plus the current year.

Audits

Novartis retains the right to
audit the Sample Accountability practices, procedures, and documentation of
Reliant at any time during the term of the Agreement.

 

 

2

 

Schedule
5.1

 

Novartis’
Standard Sales Terms and Conditions

 

	
  WHOLESALER
  Cost prices

  	
   

  	
  a.) To sell
  to WHOLESALER and those of its divisions, branches and/or subsidiaries,
  [***].

  
	
   

  	
   

  	
   

  
	
  2% 30, net
  31 days, d.o.i.

  	
   

  	
  b.) To allow
  to WHOLESALER a discount of 2% of the invoice, 30 days from the date of
  invoice; Net 31 days, for all invoices in any given month. Invoices payable
  on a Saturday or Sunday for discount purposes become payable on the following
  Monday to be eligible for the 2% cash discount. Invoices payable for discount
  purposes on a Friday or Monday which is a national legal holiday shall become
  payable on the next regular working day to be eligible for the 2% cash
  discount.

  
	
   

  	
   

  	
   

  
	
  Recall
  Policy

  	
   

  	
  c.) Credit
  will be issued to the WHOLESALER at the [***].

  
	
   

  	
   

  	
   

  
	
  Freight
  prepaid

  	
   

  	
  d.) [***]:

  
	
   

  	
   

  	
   

  
	
  f.o.b.
  origin bases

  	
   

  	
  e.) To ship
  all merchandise f.o.b. origin. East Hanover, NJ, or whichever warehouse is
  the shipping origin selected by NOVARTIS. In all cases, title to merchandise
  shipped by NOVARTIS shall pass to WHOLESALER upon delivery by NOVARTIS to
  common carrier and delivery by NOVARTIS to the carrier shall constitute full
  and complete performance by NOVARTIS of its obligations to ship said goods to
  WHOLESALER.

  
	
   

  	
   

  	
   

  
	
  Drop
  shipments

  	
   

  	
  f.) [***].

  
	
   

  	
   

  	
   

  
	
  Extended
  terms, bonus goods, etc.

  	
   

  	
  g.) To
  notify WHOLESALER, in writing, from its East Hanover, NJ headquarters of any
  offer involving any extended or special terms, prices or discounts, bonus or
  sample merchandise, etc.

  
	
   

  	
   

  	
   

  
	
  Minimum
  quantities

  	
   

  	
  h.) To
  supply most products packaged as [***].

  
	
   

  	
   

  	
   

  
	
  Order
  filling and shipping

  	
   

  	
  i.) [***].

  
	
   

  	
   

  	
   

  
	
  Catastrophic
  Policy

  	
   

  	
  j.) May
  provide some protection for the uninsurable loss of a WHOLESALER'S inventory
  of NOVARTIS products destroyed in the event of a flood, cyclone, hurricane,
  or riot. Insurable losses, such as those due to fire, vandalism, etc. are not
  provided protection under this policy. Each claim will be handled on an
  individual basis.

  
	
   

  	
   

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

1

 

	
  Warranty

  	
   

  	
  k.) [***].

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
           EXCEPT FOR THE ABOVE, NOVARTIS
  DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH REGARD TO
  THE NOVARTIS PRODUCTS PURCHASED BY WHOLESALER OR OTHER ENTITY PURSUANT TO THE
  AGREEMENT, INCLUDING THE WARRANTY OR MERCHANTABILITY AND THE WARRANTY OF
  FITNESS FOR A PARTICULAR PURPOSE. UNDER NO CIRCUMSTANCES SHALL NOVARTIS BE
  LIABLE TO BUYER FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES.

  
	
   

  	
   

  	
   

  

 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

2

 

Schedule
5.7(a)

Standard Sales Reporting Format

 

	
  MONTHLY NET SALES

  	
   

  	
  200X

  Actual

  January

  	
   

  	
  200X

  Actual

  February

  	
   

  	
  200X

  Actual

  March

  	
   

  	
  200X

  Actual

  April

  	
   

  	
  200X

  Actual

  May

  	
   

  	
  200X

  Actual

  June

  	
   

  	
  200X

  Actual

  July

  	
   

  	
  200X

  Actual

  August

  	
   

  	
  200X

  Actual

  September

  	
   

  	
  200X

  Actual

  October

  	
   

  	
  200X

  Actual

  November

  	
   

  	
  200X

  Actual

  December

  	
   

  	
  Total

  Jan Dec

  	
   

  
	
  Lescol Net Sales 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $          0
  

  	
   

  
	
  Lescol XL Net
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $          0

  	
   

  
	
  Total
  Net Sales

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $          0

  	
   

  
	
  Contract Net
  Sales Baseline

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $          0

  	
   

  
	
  Net
  Sales Above Baseline

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $          0

  	
   

  
	
  Compensation Rate

  	
   

  	
  00

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  
	
  Compensation to
  Reliant

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $          0

  	
   

  

 

1

 

Schedules
5.7(b)

Example of Backorder Reporting Format

 

	
  SKU

  	
   

  	
  No. of Units

  	
   

  	
  Net Sales Value of Units

  	
   

  	
  Date of Back Order

  	
   

  	
  Estimated Fill Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

Schedules
5.7(c)

Example of Monthly Sales Reporting Format

 

	
  MONTHLY NET SALES

  	
   

  	
  2005 Actual

  January

  	
   

  	
  2005 Actual

  February

  	
   

  	
  2005 Actual

  March

  	
   

  	
  2005 Actual

  April

  	
   

  	
  2005 Actual

  May

  	
   

  	
  2005 Actual

  June

  	
   

  	
  2005 Actual

  July

  	
   

  	
  2005 Actual

  August

  	
   

  
	
  Lescol

  	
   

  	
  Nets Sales

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lescol XL

  	
   

  	
  Net Sales

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Net
  Sales

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

1

 

Schedule
5.7(d)

Example of Daily Sales Reporting Format

 

 

Lescol/XL Net Sales - MTD
January 2005

 

	
   

  	
   

  	
  Lescol

  	
   

  	
  Lescol XL

  	
   

  
	
  1/3/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/4/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/5/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/6/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/7/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/8/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/9/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/10/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/11/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/12/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/13/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/14/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/15/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/16/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/17/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/18/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/19/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/20/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/21/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/22/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/23/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/24/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/25/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/26/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/27/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/28/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/29/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/30/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/31/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MTD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

	
  PL Profit Center

  	
   

  	
  LESCOL Total

  	
   

  	
  LESCOL XL Total

  	
   

  
	
  Posting date

  	
   

  	
  Balance Units

  	
   

  	
  Balance Units

  	
   

  
	
  1/3/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/4/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/5/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/6/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/7/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/10/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/11/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/12/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/13/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/14/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/17/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/18/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/19/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/20/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/21/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/24/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/25/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/26/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/27/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/28/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/31/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Overall Result

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

1

 

Schedule
6.2(c)

 

Amount
Owed by Reliant 

with Respect to VA Net Sales

 

	
  Agreement Year

  	
   

  	
  Total Reliant Compensation

  	
   

  	
  Revised Compensation

  with VA 

  adjustment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2003

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  2004

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  2005

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  

 

The above represents the agreed final one time
adjustment for VA Net Sales with respect to calendar years 2003, 2004, and
through February 28, 2005.

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

1

 

Schedule
6.6(a)

 

Dispute
Resolution Experts

 

McKinsey & Co.

 

Boston Consulting Group (BCG)

 

Bain & Company

 

1

 

Schedule
8.1(j)

 

Threatened
Claims by or Against Novartis

Relating to the Products

 

[***]

 

[***]:  Certain information on
this page has been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

1

 

Schedule
8.2(g)

 

Threatened
Claims by or Against Reliant

Relating to the Products

 

Reliant
Pharmaceuticals, Inc. v Rx Hope and Anthony Maris  Superior Court of New Jersey, Somerset
County Docket No. SOM-L-1363-04-Action to recover approximately $750,000 from
vendor in connection with Lescol Coupon Program. Matter has been settled,
subject to execution of settlement agreement, for $600,000 to be received prior
to July 15, 2005.  If defendant defaults
on settlement $750,000 judgment to be entered against Rx Hope.

 

2

 

Schedule
13.2

 

Confidentiality
Provisions

 

In
order to allow you to evaluate a possible negotiated business transaction (a “Transaction”) involving Reliant
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), you have requested certain information concerning
the Company.

 

As a
condition to your being furnished such information, you agree to treat any
information concerning the Company, its affiliates and subsidiaries that has
been or is furnished to you by or on behalf of the Company, at any time or in
any form, together with all notes, interpretations, analyses, compilations,
studies or other documents prepared by you or any of your directors, officers,
employees, agents or advisors (including, without limitation, attorneys,
accountants, consultants, bankers, financial advisors and any representatives
of your advisors) (collectively, “Representatives”)
that contain or otherwise reflect or are based, in whole or in part, on such
information (collectively referred to as the “Evaluation
Material”), in accordance with the provisions of this agreement.
“Evaluation Material” does not include information that (a) was or becomes
generally available to the public other than as a result of a disclosure by you
or your Representatives or (b) was or becomes available to you on a
non-confidential basis from a source other than the Company, or its advisors,
provided that such source was not known by you to be bound by any agreement
with the Company to keep such information confidential or to be otherwise
prohibited from transmitting the information to you by a contractual, legal or
fiduciary obligation.

 

You
hereby agree that the Evaluation Material will be used solely for the purpose
of evaluating a possible Transaction and that such information will be kept
confidential. You and your Representatives shall not disclose any portion of
the Evaluation Material to any person in any manner whatsoever, except to the
extent that disclosure of such information is required by law, regulation,
supervisory authority or other applicable judicial or governmental order. You
may disclose the Evaluation Material to your representatives on a need to know
basis, however, they should be informed of and bound to this agreement, and you
agree to be responsible for any breach hereof on their part. You agree, at your
sole expense, to take all reasonable measures (including but not limited to
court proceedings) to restrain your Representatives from prohibited or
unauthorized disclosure or use of the Evaluation Material.

 

In
addition, without the prior written consent of the Company, you will not, and
will direct your Representatives not to, disclose to any person (i) that
the Evaluation Material has been made available to you or your Representatives,
(ii) that discussions or negotiations are taking place concerning a
possible transaction involving the Company and you, or (iii) any terms,
conditions or other facts with respect to any such possible Transaction,
including the status thereof. Such facts will be deemed to be included in the
Evaluation Material for all purposes of this agreement.

 

In the
event that you are requested or required by law, regulations or applicable
judicial or governmental order to disclose any Evaluation Material, you will
provide the Company with prompt written notice of such request or requirement.
If, failing the entry of a protective order, you are, in the reasonable opinion
of your counsel, legally compelled to disclose any portion of the Evaluation Material,
you may disclose to the entity compelling such 

 

i

 

disclosure only that portion of the Evaluation
Material that your counsel advises that you are compelled to disclose, provided
that you will exercise reasonable efforts to obtain assurance that confidential
treatment will be accorded to that portion of the Evaluation Material that is
being disclosed and you will cooperate with any action by the Company to obtain
an appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Evaluation Material.

 

All
Evaluation Material disclosed by or on behalf of the Company shall be and shall
remain the property of the Company. As soon as reasonably practicable after being
so requested in writing by the Company, you shall return or destroy all
Evaluation Material, whether in printed or electronic form (and any copies
thereof). Any destruction of Evaluation Material shall be confirmed by you in
writing to the Company.

 

You
understand and acknowledge that any and all information contained in the
Evaluation Material is being provided without any representation or warranty,
express or implied, as to the accuracy or completeness of the Evaluation
Material, on the part of the Company. You agree that none of the Company or any
of its affiliates or representatives shall have any liability to you or any of
your Representatives. It is understood that the scope of any representations
and warranties to be given by the Company will be negotiated along with other
terms and conditions in arriving at a mutually acceptable form of definitive
agreement should discussions progress to such a point and only those
representations and warranties shall have any legal effect.

 

It is
understood and agreed that money damages would not be a sufficient remedy for
any breach of this agreement by you or your Representatives, that any such
breach would result in ongoing and irreparable harm to the Company and that the
Company shall be entitled to specific performance and injunctive or other
equitable relief as a remedy for any such breach and you further agree to waive
any requirement for the security or posting of any bond in connection with any
such remedy. Such remedy shall not be deemed to be the exclusive remedy for
breach of this agreement but shall be in addition to all other remedies
available at law or in equity to the Company. In the event of litigation
relating to this agreement, the prevailing party shall be entitled to be paid
by the other party all reasonable legal fees and other expenses such prevailing
party has incurred in connection with such litigation, including any appeal
therefrom.

 

This
agreement is governed by the laws of the State of [            ]
without regard to conflict of laws principles. You hereby irrevocably and
unconditionally consent to submit to the non-exclusive jurisdiction of the
courts of the State of [        ] and
the United States of America located in the State of New Jersey for any action,
suit or proceeding arising out of or relating to this letter agreement or the
transactions contemplated hereby.

 

This agreement may not be
amended except in writing signed by both parties hereto. No failure or delay by
the Company in exercising any right, power or privilege hereunder or any
partial exercise thereof shall operate as a waiver thereof or preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege hereunder. The invalidity or unenforceability of any provision of
this agreement shall not affect the validity or enforceability of any other
provisions of this agreement, which shall remain in full force and effect. For
purposes of this agreement, the term “person” shall be broadly interpreted to
include the media 

 

ii

 

and any individual,
corporation, partnership, group or other entity. This agreement may be executed
in counterparts, each of which will be deemed to be an original, but all of
which constitute the same agreement. Please confirm that the foregoing is in
accordance with your understanding of our agreement by signing and returning to
us a copy of this letter. This agreement shall terminate and be of no further
force or effect from and after [     ] from the date
hereof.

 

iii

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