Document:

Exhibit 10.33(b)

 

SECOND AMENDMENT TO AGREEMENT OF LEASE

 

THIS SECOND AMENDMENT TO
AGREEMENT OF LEASE (“Second Amendment”)
is made this 7th day of October, 2004, by and between THE REALTY ASSOCIATES FUND V, L.P., a Delaware limited
partnership, successor in interest to OP & F Bernards – 78, L.L.C. (“Landlord”)
and RELIANT PHARMACEUTICALS, INC.,
a Delaware corporation, formerly known as Reliant Pharmaceuticals, LLC (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, OP & F Bernards – 78, L.L.C., Landlord’s predecessor in interest,
and Tenant entered into that certain Agreement of Lease dated February 5, 2001
(the “Original Lease”), as amended by that certain First Amendment to Agreement
of Lease dated November 5, 2003 (the “First Amendment”) (the Original Lease and
the First Amendment are collectively referred to herein as the “Lease”)
pursuant to which Tenant leased that certain premises in the building located
at 110 Allen Road, Liberty Corner, Bernard Township, New Jersey 07938 (the “Building”),
said premises containing approximately Seventy-Two Thousand Seven Hundred
(72,700) rentable square feet in the aggregate comprised of approximately
Fifty-Two Thousand Four Hundred Seventeen (52,417) rentable square feet of
office space on the fourth floor (the “Original Premises”) and Twenty Thousand
Two Hundred Eighty-Three (20,283) rentable square feet on the first floor (the “Additional
Premises”) (collectively, the “Demised Premises”);

 

WHEREAS, Landlord and Tenant desire to amend the Lease to (i) increase the square
footage of the Demised Premises, and (ii) amend certain other terms and
conditions of the Lease as herein provided.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
to the following:

 

1.             Recitals. The recitals set forth above are incorporated herein by this reference
with the same force and effect as if fully set forth hereinafter.

 

2.             Capitalized Terms. Capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Lease. From and after the date hereof, the Original
Lease, the First Amendment and this Second Amendment shall be known collectively
as the “Lease”.

 

3.             Demised Premises.

 

a.             Effective October 1, 2004, (the “Effective Date”), the rentable square
footage of the Demised Premises shall be increased by Twenty-Three Thousand
Five Hundred Sixty (23,560) rentable square feet of space on the first floor of
the Building as shown on the floor plan attached hereto as Exhibit A-3
(the “Second Additional Premises”) to Ninety-Six Thousand Two Hundred Sixty
(96,260) rentable square feet. Tenant shall,

 

1

 

within
five (5) days after Landlord’s request, complete and execute the letter
attached hereto as Exhibit B-2 and deliver it to Landlord.

 

b.             As of the Effective Date, Paragraph 1 of the Basic Lease Provisions and
Definitions contained in the Preamble of the Lease, as amended by Paragraph 4b.
of the First Amendment (the “Basic Lease Provisions”) shall be deleted in its
entirety and the following Paragraph 1 substituted in lieu thereof:

 

“1.           Premises or Demised Premises: The Demised Premises
contains 96,260 rentable square feet of space in the aggregate consisting of
the following: (i) the “Original Premises” consisting of approximately 52,417
rentable square feet located on the fourth floor in the east and west wings, as
outlined in red on the floor plan annexed to the Lease and made a part thereof
as Exhibit A), (ii) the “Additional Premises” consisting of
approximately 20,283 rentable square feet located on the first floor (as shown
on the floor plan annexed to the First Amendment and made a part thereof as Exhibit
A-2), and (iii) the “Second Additional Premises” consisting of
approximately 23,560 rentable square feet located on the first floor (as shown
on the floor plan annexed to this Second Amendment and made a part hereof as Exhibit
A-3) together with all fixtures, equipment, improvements and installations
attached to the Original Premises, the Additional Premises and the Second
Additional Premises in the building located at 110 Allen Road, Liberty Corner,
Bernards Township, New Jersey 07938 (the “Building”) located on the parcel of
land more particularly described in Exhibit A-1 attached to the Lease and made
a part thereof (the “Land”). The Building and the Land are referred to
collectively in the Lease as the “Property.” 
The Original Premises, the Additional Premises and the Second Additional
Premises are referred to collectively in the Lease as the “Demised Premises.”

 

c.             From and after the Effective Date, except as otherwise provided herein,
all references in the Lease to the Demised Premises shall refer collectively to
the Original Premises, the Additional Premises and the Second Additional
Premises.

 

4.             Term. The Term of the Lease with respect to the Second Additional Premises
shall be coterminous with the Term of the Lease with respect to the Demised
Premises and, accordingly, shall commence on the Effective Date and expire July
31, 2011 (inclusively, the “Second Additional Premises Term”), unless
terminated sooner pursuant to the provisions of the Lease or hereof.

 

5.             Fixed Rent.

 

a.             Throughout the Term of the Lease, Tenant shall continue to pay Fixed Rent
with respect to the Demised Premises in the amounts set forth in Paragraph 6 of
the Basic Lease Provisions and Exhibit F attached to the Lease, as amended by
Paragraph 6 of the First Amendment.

 

b.             In addition to the Fixed Rent payable under the Lease with respect to the
Demised Premises, as of the Effective Date, Tenant shall pay Fixed Rent with
respect

 

2

 

to
the Second Additional Premises, at the times and in the manner set forth in
Paragraph 2 of the Lease, according to the following schedule:

 

Additional
Premises Fixed Rent

 

	
  Lease Period

  	
   

  	
  Annual Fixed Rent

  	
   

  	
  Monthly Fixed Rent

  	
   

  
	
  Effective
  Date-5/31/06

  	
   

  	
  $

  	
  647,900.04

  	
  *

  	
  $

  	
  53,991.67

  	
   

  
	
  6/1/06-1/31/09

  	
   

  	
  $

  	
  671,460.00

  	
  *

  	
  $

  	
  55,955.00

  	
   

  
	
  2/1/09-7/31/11

  	
   

  	
  $

  	
  695,019.96

  	
  *

  	
  $

  	
  57,918.33

  	
   

  

 

*annualized amounts

 

c.             Notwithstanding anything to the contrary contained herein, no Fixed Rent
shall be paid by Tenant with respect to the Second Additional Premises for the
first seven (7) full consecutive calendar months of the Second Additional
Premises Term. No other amounts due to Landlord under this Lease other than the
Fixed Rent with respect to the Second Additional Premises shall be abated,
except as expressly provided herein. In the event Tenant defaults hereunder and
fails to cure such default within any applicable notice or cure period, Tenant
shall not be entitled to any further abatement of Fixed Rent with respect to
the Second Additional Premises and all Fixed Rent with respect to the Second
Additional Premises previously abated shall be immediately paid by Tenant to
Landlord.

 

d.             Fixed Rent payable with respect to the Second Additional Premises shall be
net of electricity, which shall be a separate charge paid by Tenant in
accordance with Paragraphs 15(d) through (o) of the Lease.

 

6.             Base Rent Paid Upon Execution. Upon Tenant’s execution of this Second Amendment, Tenant shall deposit
with Landlord the sum of Fifty-Three Thousand Nine Hundred Ninety-One and
67/100 Dollars ($53,991.67) for the first full month’s Fixed Rent due with
respect to the Second Additional Premises, notwithstanding any abatement of
Fixed Rent pursuant to Paragraph 5(c) above. The Fixed Rent deposited by Tenant
pursuant to this Paragraph 6 shall be applied to the Fixed Rent due with
respect to the Second Additional Premises for the first full calendar month of
the Second Additional Premises Term for which Fixed Rent is due hereunder
(i.e., the eighth (8th) full calendar month of the Second Additional
Premises Term).

 

7.             Security Deposit. The Security Deposit held by Landlord pursuant to the Lease shall not be
increased in connection with Tenant’s lease of the Second Additional Premises.

 

8.             Tenant’s Proportionate Share
of Expenses. As of the Effective
Date, Paragraph 9 of the Basic Lease Provisions, as amended by Paragraph 9 of
the First Amendment, shall be deleted in its entirety and the following
Paragraph 9 substituted in lieu thereof:

 

“9.           Tenant’s Proportionate Share of Expenses:  48.06% comprised of 26.17% with respect to
the Original Premises, 10.13% with respect to the Additional Premises and
11.76% with respect to the Second Additional Premises, arrived at by dividing
the square footage of the Demised Premises (which for purposes of the Lease, is
agreed to be 96,267 rentable square feet in the aggregate consisting of

 

3

 

the
Original Premises containing 52,417 rentable square feet, the Additional
Premises containing 20,283 rentable square feet and the Second Additional
Premises containing 23,560 rentable square feet) by (ii) the Total Square
Footage of the Building (which for purposes of this Lease is agreed to be
200,270 square feet).”

 

9.             Parking. As of the Effective Date, Paragraph 13 of the Basic Lease Provisions, as
amended by Paragraph 10 of the First Amendment, shall be deleted in its
entirety add the following Paragraph 13 substituted in lieu thereof:

 

“13.         Number of Tenant Allocated Parking Spaces:  Twenty
(20) covered reserved spaces (“Reserved Spaces”) and Tenant shall be permitted
to use its pro rata share of unreserved space in common with other Tenants of
the Building.”

 

10.           Operating Expense Base. The “Operating
Expense Base” (as that term is defined in Paragraph 3(a) of the Lease) with
respect to the Second Additional Premises shall be the calendar year 2004. The “Initial
Year” (as that term is defined in Paragraph 3(a) of the Lease) with respect to
the Second Additional Premises shall mean the period of time from the Effective
Date until the end of the calendar year 2004. The “Real Estate Taxes Base” (as
that term is defined in Paragraph 3(a) of the Lease) with respect to the Second
Additional Premises shall be the calendar year 2004. The Operating Expense
Base, Initial Year and Real Estate Taxes Base with respect to the Original
Premises and the Additional Premises shall remain as stated in the Original
Lease and the First Amendment and shall not be modified hereby.

 

11.           Tenant Improvements.

 

a.             Tenant
acknowledges that Landlord has met its obligations to construct tenant
improvements or provide an allowance for Tenant to construct tenant
improvements with respect to the Original Premises and the Additional Premises
pursuant to Exhibit B of the Original Lease and Paragraph 2 of the First
Amendment.

 

b.             Tenant
hereby agrees to accept the Second Additional Premises in its “as-is” condition
existing on the date hereof and Landlord shall have no obligation to construct
any tenant improvements to the Second Additional Premises on behalf of Tenant.

 

c.             Tenant shall construct tenant improvements (“Improvements”) for the Second
Additional Premises in accordance with the plans (the “Plans”), which shall be
prepared by Tenant and approved in final form by Landlord, which approval shall
not be unreasonably withheld. The Plans shall include items and information as
Landlord shall reasonably require to evaluate Tenant’s work. All Improvements
shall be constructed in a good and workmanlike manner using new materials and
in accordance with all applicable laws, codes and regulations, including the
Americans with Disability Act (“ADA”) and in accordance with Paragraph 6 of the
Lease (except that the first sentence of Paragraph 6(b) of the Lease shall not
apply with respect to the Improvements). It is expressly agreed that (a) Tenant
shall not commence any such work until said Plans have been approved by
Landlord, and (b) the Plans which have been so approved by Landlord have been
used by Tenant, if applicable, to obtain all permits that are necessary to
construct the Improvements. Tenant acknowledges that Landlord’s review and
approval of the Plans is not conducted for the purpose of determining the
accuracy and completeness of the Plans, their compliance with applicable codes
and governmental regulations including ADA, or their sufficiency for purposes
of obtaining a building permit, all of which shall remain the

 

4

 

responsibility
of Tenant and Tenant’s architect. Accordingly, Landlord shall not be
responsible for any delays in obtaining the building permit due to the
insufficiency of the Plans or any delays due to changes in the Plans required
by the applicable governmental regulatory agencies reviewing the Plans. If, as
a result of any proposed Improvements made by Tenant to the Second Additional
Premises, Landlord is obligated to comply with the ADA or any other law or
regulation and such compliance requires Landlord to make any improvement or
alteration to any portion of the Building, as a condition to Landlord’s
approval, Landlord shall have the right to require Tenant to pay to Landlord
prior to the construction of any such Improvement by Tenant, the entire cost of
any improvement or alteration Landlord is obligated to complete by such law or
regulation.

 

d.             Tenant shall provide Landlord with a breakdown of the estimated total cost
of the Improvements (“Cost Breakdown”), including, without limitation:
construction cost of the Improvements; architectural and engineering fees
relating to the preparation and review of the space plan and the Plans
(inclusive of the initial space plan and all design work above and below the
ceiling); governmental agency plan check, permit and other fees; sales and use
taxes; testing and inspection costs; and construction fees (including general
contractor’s overhead and supervision fees and the construction supervisory fee
referred to in subparagraph (i) hereof). In connection thereto, Landlord hereby
grants to Tenant an “Improvement Allowance” of up to Twenty and 75/100 Dollars
($20.75) per rentable square foot of space in the Second Additional Premises
(i.e., 23,560 rentable square feet multiplied by $20.75 = $488,870.00). The
Improvement Allowance shall be disbursed to Tenant not more frequently than
once per month based on disbursement requests submitted by Tenant to Landlord
and certified by Tenant’s architect. Such disbursement request shall set forth
the total amount incurred, expended and/or due for each requested item less
prior disbursements and a description of the work performed, and materials
supplied and/or costs incurred or due with respect to each item for which
disbursement is requested. Each such disbursement request shall be accompanied
by invoices, vouchers, statements, affidavits, payroll records and/or other
documents reasonably requested by Landlord, which substantiate costs incurred
to justify such a disbursement, together with lien waivers for those
contractors and materialmen providing construction services or materials. In
addition, each disbursement shall be subject to inspection and approval of
completed work by Landlord’s construction engineer. In the event the Cost
Breakdown exceeds the Improvement Allowance, Tenant shall pay from another
source of funds the amount by which the Cost Breakdown exceeds the Improvement
Allowance prior to any disbursement of the Improvement Allowance by Landlord. In
the event the actual cost of the Improvements is less than the Improvement
Allowance, the unused portion of the Improvement Allowance shall not be paid or
refunded to Tenant or be available to Tenant as a credit against any
obligations of Tenant under the Lease, except that up to thirty-three percent
(33%) of the Improvement Allowance (i.e., $488,870.00 multiplied by .33 =
$161,327.10) may be used to reimburse Tenant for its documented, third-party
out-of-pocket expenses incurred in connection with its installation of its data
and voice cabling and wiring at the Second Additional Premises. The Improvement
Allowance must be expended on or before the expiration of the twelve (12)
calendar month period following the Effective Date. If the Improvement
Allowance is not expended on or before such date, the Improvement Allowance
shall no longer be available to Tenant and Landlord shall have no further
obligation to provide such Improvement Allowance to Tenant.

 

e.             Tenant shall obtain Landlord’s approval of Tenant’s contractor, which
approval shall not be unreasonably withheld provided (i) such contractor’s primary business

 

5

 

is the construction of
tenant/interior finish work in commercial office buildings; (ii) such
contractor is licensed to do business in Somerset County, New Jersey, and (iii)
such contractor is not a contractor with whom Landlord or its agent has had
unsatisfactory dealings in the past. Landlord hereby agrees that if Tenant
elects to use Gale Construction Company, LLC or DDB Interior Contracting as
Tenant’s contractor, such contractors are pre-approved and shall not require
any additional approvals by Landlord. Additionally, Tenant
shall submit a copy of the proposed construction contract to Landlord for
Landlord’s approval. Landlord’s approval, which shall not be unreasonably
withheld, shall be given or denied (as applicable) within ten (10) business
days of receipt of the necessary information from Tenant. Tenant’s contractors
and subcontractors shall be required to provide the following types of
insurance, in the minimum amounts indicated, naming Landlord (and Landlord’s
mortgagee, if required by Landlord) as additional insured:

 

(i)            Workmen’s Compensation with full statutory limits for employer’s
liability.

 

(ii)           Commercial General Liability Insurance including direct and contingent
liability in the aggregate amount of One Million and No/100 Dollars
($1,000,000.00) combined single limit coverage per occurrence for personal
injury, death or property damage.

 

(iii)          The Liability Policy shall include coverage for Broad Form Hold Harmless
Agreement as is contained in the standard contract.

 

(iv)          Automobile Liability Insurance with bodily injury limits of $250,000 per
person, $500,000 per accident, and $50,000 per accident for Property Damage.

 

Certificates of insurance for
all of the foregoing insurance coverages shall be delivered to Landlord before
construction of the improvements is started and before Tenant’s contractor’s
equipment is placed upon the Second Additional Premises. In all other respects,
the insurance coverage above mentioned shall comply with the Lease provisions.

 

f.              It is agreed that Tenant assumes the entire responsibility and liability
due to its negligence, including statutory or common law, for any and all
injuries or death of any or all persons, including its contractor,
subcontractors and employees, and for any and all damages to property caused by
or resulting from or arising out of any act or omission on the part of Tenant,
its contractor, subcontractors or employees, in the prosecution of the work
thereunder. With respect to such work Tenant agrees to indemnify and save
harmless Landlord, its mortgagee, architect, engineers and their employees and
all other tenants of the Property from and against all losses and expense,
including legal fees, which they may suffer or pay as the result of claims or
lawsuits due to, because of or arising out of any and all such injuries, death
or damage, whether real or alleged, and Tenant, its contractor and
subcontractors shall assume and defend at their own expense all such claims or
lawsuits, unless caused by the gross negligence or willful misconduct of
Landlord. Tenant agrees to insure this assumed liability in its Comprehensive
General Liability Policy and the original or copy of the policy delivered to
Landlord shall indicate this contractual coverage.

 

6

 

g.             For and during the period of construction, Tenant shall provide and pay
for all utilities consumed upon the Second Additional Premises during said
period and for the removal of all temporary connections.

 

h.             Tenant shall endeavor to cause the contractor to substantially complete
construction of the Improvements in a diligent manner. It shall be the sole
responsibility of Tenant to file all drawings and specifications, pay all fees
and obtain all permits and applications from any governmental authorities
having jurisdiction, and to obtain any certificates or approvals, including a
certificate of occupancy, required to enable Tenant to occupy the Second
Additional Premises. Upon completion of the Improvements, Tenant’s contractors
and/or subcontractors shall provide Landlord, without cost to Landlord, with
one (1) set of transparent “as built” drawings. No delay in completion of
construction of the Improvements shall delay the Effective Date beyond the date
specified herein.

 

12.           Option
to Renew. The Option to Renew
contained in Paragraph 24 of the Lease shall apply with respect to the Second
Additional Premises, it being understood that Tenant must exercise the Option
to Renew with respect to the entire Demised Premises (i.e., the Original Premises,
the Additional Premises and the Second Additional Premises) and not merely a
part thereof.

 

13.           Generator.            Landlord
agrees to permit Tenant, at Tenant’s sole cost and expense, to install, operate
and maintain a generator and related facilities and equipment (collectively,
the “Generator”) in a location to be mutually agreed upon by Landlord and
Tenant. The plans and specifications for the Generator shall be subject to the
prior written approval of Landlord, which shall not be unreasonably withheld,
conditioned or delayed. Tenant shall install the Generator in a good and safe
manner in accordance with the terms and conditions of the Lease. Tenant shall
provide reasonable notice to Landlord of the time and date upon which it
desires to install the Generator. Landlord shall have the right to have a
representative present at the installation of the Generator in order to approve
the methods of installation and performance thereof. The Generator shall be
screened in a manner and design acceptable to Landlord in its sole but
reasonable discretion. Tenant shall have the responsibility to secure all
necessary approvals relating to the installation and operation of the Generator
from state, federal and other governmental authorities and shall provide copies
of all such approvals to Landlord prior to installation and operation of such
Generator. Further, Tenant shall construct, operate and maintain such
facilities in accordance with all applicable laws, including all environmental
laws, ordinances, rules and regulations and in compliance with the reasonable
requirements of the insurers of the Building. Tenant hereby agrees to indemnify
Landlord from and against any breach by Tenant of the obligations stated in the
preceding sentence, and agrees to defend and hold Landlord harmless from and
against any and all claims, judgments, damages, penalties, fines, costs,
liabilities, or losses (including, without limitation, diminution in value of
the Building, damages for the loss or restriction or use of rentable space or
of any amenity of the Building, damages arising from any adverse impact on
marketing of space in the Building, sums paid in settlement of claims,
reasonable attorneys’ fees, consultant fees and expert fees) which arise during
or after the Term of this Lease as result of such breach. In addition, Tenant
shall indemnify, defend and hold Landlord, its principals, officers, directors,
agents, employees and servants harmless from and against any liability, loss,
costs, claims, damage and expense of whatever kind arising directly or
indirectly from the installation, operation, maintenance, repair, and removal
of such Generator, including, but not limited to, reasonable attorneys’ fees
and court costs, except where such liability, loss, costs, claims, damage or
expense arises directly from the gross negligence or willful misconduct of
Landlord, its principles, officers, directors, agents, employees and servants. At
the expiration or earlier

 

7

 

termination of the Lease, at Landlord’s option, the Generator shall be
removed from its location at Tenant’s sole cost and Tenant shall restore such
area to the condition existing prior to such installation, and any damage
caused by such removal shall be repaired at Tenant’s sole cost. If Landlord has
required Tenant to remove the Generator and Tenant fails to so remove the
Generator within ten (10) days of the termination of this Lease, Tenant hereby
authorizes Landlord to remove and dispose of the Generator and charge Tenant
for all costs and expenses incurred. Tenant agrees that Landlord shall not be
liable for any property disposed of or removed by Landlord pursuant to the
immediately preceding sentence. Tenant’s obligations hereunder shall survive
the expiration or earlier termination of the Lease.

 

14.           Brokers. Tenant represents and warrants to Landlord that Tenant has not had any
dealings or entered into any agreements with any person, entity, realtor,
broker, agent or finder in connection with the negotiation of this Second Amendment
other than Kwartler Associates, Inc. and GVA Williams (collectively, the “Brokers”).
Tenant shall indemnify and hold Landlord harmless from and against any loss,
claim, damage, expense (including costs of suit and reasonable attorneys’ fees)
or liability for any compensation, commission or charges claimed by any other
realtor, broker, agent or finder claiming to have dealt with Tenant in
connection with this Second Amendment. Landlord shall be responsible for
payment of the brokers’ fees to the Brokers pursuant to the terms of a separate
agreement.

 

15.           Reaffirmation
of Terms. Except as modified
herein, all of the terms, covenants and provisions of the Lease are hereby
confirmed and ratified and shall remain unchanged and in full force and effect.

 

16.           Representations. Tenant hereby represents and warrants to Landlord that Tenant (i) is not
in default of any of its obligations under the Lease and that such Lease is
valid, binding and enforceable in accordance with its terms, (ii) has full
power and authority to execute and perform this Second Amendment, and (iii) has
taken all action necessary to authorize the execution and performance of this
Second Amendment.

 

17.           Counterpart
Copies. This Second
Amendment may be executed in two or more counterpart copies, each of which
shall be deemed to be an original and all of which counterparts shall have the
same force and effect as if the parties hereto had executed a single copy of
this Second Amendment.

 

[SIGNATURES
APPEAR ON FOLLOWING PAGE]

 

8

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Amendment as of the day
and year first above written.

 

 

	
   

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE REALTY ASSOCIATES FUND V, L.P.,

  
	
   

  	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Fund V LLC, a Massachusetts

  limited liability company,

  
	
   

  	
   

  	
   

  	
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Realty Associates Advisors LLC,

  
	
   

  	
   

  	
   

  	
   

  	
  a Delaware limited liability company,

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Realty Associates Advisors Trust, a

  Massachusetts business trust, sole

  member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Heather L. Hohenthal

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Fund V Texas Corporation, a

  Texas corporation, general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Heather L. Hohenthal

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RELIANT PHARMACEUTICALS, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph J. Krivulka

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
											

 

9

 

EXHIBIT
A-3

 

THE SECOND ADDITIONAL PREMISES

 

(Floor Plan)

 

 

 

 

 

 

 

A-2-1

 

EXHIBIT B-2

 

VERIFICATION LETTER

 

RELIANT PHARMACEUTICALS, INC., a Delaware corporation, (“Tenant”) hereby certifies that it has entered
into a lease amendment with THE REALTY ASSOCIATES FUND
V, L.P., a Delaware limited partnership (“Landlord”) and verifies
the following information as of the                  day
of                     ,
20    :

 

	
  Number of Rentable Square Feet in Second Additional Premises:

  	
   

  
	
   

  	
   

  
	
  Second Additional Premises Commencement
  Date:                  

  	
   

  
	
   

  
	
  Lease Termination Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tenant’s Share:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Initial Base Rent:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Federal Tax I.D. No.:

  	
   

  	
   

  
				

 

Tenant acknowledges and agrees that all
tenant improvements Landlord is obligated to make to the Second Additional
Premises, if any, have been completed and that Tenant has accepted possession
of the Second Additional Premises and that as of the date hereof, there exist
no offsets or defenses to the obligations of Tenant under the Lease. Tenant
acknowledges that it has inspected the Second Additional Premises and found
them suitable for Tenant’s intended commercial purposes.

 

	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  RELIANT PHARMACEUTICALS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph J. Krivulka

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  

 

[SIGNATURES
CONTINUE ON NEXT PAGE]

 

B-1-1

 

	
  ACKNOWLEDGED AND
  AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE REALTY ASSOCIATES FUND V, L.P.,

  	
   

  	
   

  
	
  a Delaware limited
  partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Realty Associates Fund V LLC, a

  	
   

  	
   

  
	
   

  	
  Massachusetts limited liability company,

  	
   

  	
   

  
	
   

  	
  general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Realty Associates Advisors LLC,

  	
   

  	
   

  
	
   

  	
   

  	
  a Delaware limited liability company,

  	
   

  	
   

  
	
   

  	
   

  	
  Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Advisors Trust,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  a Massachusetts business trust,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  sole member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Realty Associates Fund V Texas Corporation,

  	
   

  	
   

  
	
   

  	
  a Texas corporation, general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer

  	
   

  	
   

  
							

 

B-1-2Exhibit
10.34

 

SUPPLY AGREEMENT

 

SUPPLY AGREEMENT (“Agreement”) dated as of
September 23, 2003, (“Effective Date”) between RELIANT PHARMACEUTICALS, LLC, a
Delaware limited liability company (“Reliant”), and AUSTIN SHASUN, LLC, an
Illinois limited liability company (“ASL”).

 

WHEREAS, ASL and Reliant desire to enter into
this Agreement which will set forth the terms and conditions under which ASL
shall supply to Reliant bulk quantities of the Active Ingredient (as
hereinafter defined) for use in the manufacture of the Products (as hereinafter
defined);

 

NOW THEREFORE, in consideration of the mutual
covenants and consideration set forth herein, the parties hereto agree as
follows:

 

SECTION 1

 

DEFINITIONS

 

SECTION 1.1.      As used herein, the
following defined terms shall have the definitions set forth below:

 

(a)           “Act” shall mean the Federal Food Drug and
Cosmetic Act (21 U.S.C. §301 et seq) as amended from time to time and the
regulations promulgated thereunder and corresponding legislation in any other
country where the Active Ingredient is manufactured.

 

(b)           “Active Ingredient” or “API” shall mean
isradipine.

 

(c)           “Adverse Events” shall mean any serious or
unexpected side effect, injury, toxicity, or sensitivity reaction, or any
adverse drug reaction reports and the severity thereof associated with the
Product where the term “serious” as used in this Section refers to an
experience which results in death, permanent or substantial disability, a
vegetative state, inpatient hospitalization or prolongation of hospitalization,
a congenital anomaly, cancer, an overdose, or is life threatening. The term “unexpected”
as used in this definition means an adverse drug experience that is not listed
in the then current labeling for the Product and includes an event that may be
symptomatically or pathophysiologically related to an event listed in the
labeling, but differs from the event because of greater severity or
specificity.

 

(d)           “Affiliate” shall mean all corporations or
business entities which, directly or indirectly, are controlled by, control or
are under common control by any of ASL or Reliant, as the case may be. For this
purpose, “control” shall mean the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a person or
entity, whether through the ownership of at least fifty percent (50%) of the
voting shares or interest of such person or entity, by contract or otherwise.

 

(e)           “Agreement Year” shall mean each twelve (12)
month period of the term of this Agreement beginning on the first day of the
calendar year except for the “First Agreement Year”

 

 

which shall
mean the period commencing on the Effective Date and ending on December 31,
2003.

 

(f).           “Annual Payment Amount” shall have the
meaning set forth in Section 2.7(c).

 

(g)           “Annualized Purchase Amount” shall have the
meaning set forth in Section 2.7(d).

 

(h)           A “Bankruptcy Event” shall have occurred
when the person or entity in question becomes insolvent, or voluntary or
involuntary proceedings by or against such person or entity are instituted in
bankruptcy or under any insolvency law, or a receiver or custodian is appointed
for such person or entity, or proceedings are instituted by or against such
person or entity for corporate reorganization or the dissolution of such person
or entity, which proceedings, if involuntary, shall not have been dismissed
within one hundred and twenty (120) days after the date of filing, or such
person or entity makes an assignment for the benefit of its creditors, or
substantially all of the assets of such person or entity are seized or attached
and not released within one hundred and twenty (120) days thereafter.

 

(i)            “Claims” shall have the meaning ascribed in
Section 2.9.

 

(j)            “Designated Facility” shall mean a location
in the Territory set forth by Reliant in the applicable purchase order.

 

(k)           “Drug Master File” or “DMF’ means a
submission to the FDA by ASL that may be used to provide confidential detailed
information about facilities, processes or articles used in the manufacturing,
processing, packaging and storing of the Active Ingredient.

 

(l)            “DynaCirc” shall mean isradipine capsules
(2.5 mg and 5 mg) marketed by Reliant pursuant to the NDA under the brand name
DynaCirc®.

 

(m)          “DynaCirc CR” shall mean controlled release
isradipine capsules (5 mg and 10 mg) marketed by Reliant pursuant to the NDA
under the brand name DynaCirc CR®.

 

(n)           “Effective Date” shall mean the date first
shown above.

 

(o)           “FDA” shall mean the United States Food and
Drug Administration or any successor entity performing similar functions.

 

(p)           “First Commercial Sale” shall mean the date
on which Reliant (or any Affiliate of Reliant) sells the first Product to an
unaffiliated third party utilizing API supplied by ASL pursuant to this
Agreement.

 

(q)           “GMP” shall mean current Good Manufacturing
Practice as defined in 21 CFR §210.211 as may be amended from time to time.

 

(r)            “Improvements” shall mean any improved
Products, line extensions, modified Products or similar items which contain the
Active Ingredient and which Reliant obtains rights to, develops or sells during
the course of this Agreement.

 

2

 

(s)            “Initial Forecast” shall have the meaning
ascribed in Section 2.8(a).

 

(t)            “Initial Products” shall mean DynaCirc and
DynaCirc CR manufactured using bulk amounts of the Active Ingredient supplied
by ASL.

 

(u)           “Losses” shall have the meaning ascribed in
Section 3.2.

 

(v)           “NDA” shall mean the New Drug Applications,
19-596 (DynaCirc) and 20-336 (DynaCirc CR) as amended and supplemented, to
market the Products and any materials, documents or information referred to or
relied upon therein.

 

(w)          “Process Description” shall mean, with
respect to the Active Ingredient, good manufacturing procedures (including, but
not limited to, FDA quality system requirements and procedures), as well as
such other know-how, technical specifications, instructions, processes and
other intellectual property and information Reliant shall possess and as shall
be necessary in order to allow ASL to manufacture and/or have manufactured the
Active Ingredient.

 

(x)           “Products” shall mean the Initial Products,
and any Improvements thereto including all formulations containing Active
Ingredient in all strengths, dosage forms and presentations.

 

(y)           “Product Quality Complaint” shall mean any
complaint that questions the purity, identity, potency or quality of the Active
Ingredient.

 

(z)           “Purchase Price” shall have the meaning
ascribed in Section 2.7.

 

(z2)         “Quality Agreement” refers to the form of Quality
Agreement attached as Exhibit C.

 

(z3)         “Quarterly Forecast” shall have meaning
ascribed in Section 2.8(a).

 

(aa)         “Receipt Date” shall mean the earliest date on
which a party or its Affiliate first becomes aware of the Adverse Event.

 

(bb)         “Regulatory Approval” shall mean, with respect
to the Products, the FDA’s regulatory approval of the amendment to the NDA
authorizing the use of Active Ingredient manufactured by ASL in the Initial
Products.

 

(cc)         “Regulatory Filings” shall mean all
applications, filings, materials, studies, data and documents of any nature
whatsoever (including any supporting information related thereto) filed with,
or prepared in connection with, the Regulatory Approval.

 

(dd)         “Specifications” shall have the meaning
ascribed in 2.2.

 

(ee)         “Term” shall have the meaning ascribed in 3.5.

 

(ff)          “Territory” shall mean the United States, its
territories and possessions including Puerto Rico.

 

3

 

SECTION 2

 

SUPPLY AGREEMENT

 

SECTION 2.1.      Supply of the Active
Ingredient.

 

(a)           During the term of this Agreement, and
subject to the other terms and conditions hereof, ASL shall supply and sell to
Reliant and Reliant shall purchase from ASL all of Reliant’s requirements for
the Active Ingredient pursuant to the terms of this Agreement. Notwithstanding
the preceding sentence, Reliant’s obligation to purchase all of its
requirements of API from ASL is contingent upon ASL’s ability to manufacture
all Reliant’s requirements, receipt by Reliant of Regulatory Approval and is
further subject to Reliant’s obligations to purchase minimum quantities of
Active Ingredient from Novartis pursuant to that certain Supply Agreement by
and between Reliant and Novartis dated January 10, 2003.

 

(b)           During the term of this Agreement and
provided that Reliant complies with its purchase obligations set forth herein,
ASL shall not supply or sell the Active Ingredient to any other purchaser in
the Territory or outside the Territory for sale of any product containing the
Active Ingredient inside the Territory without the prior written consent of
Reliant (provided, however, that nothing herein shall affect ASL’s ability to
manufacture products which are not the Active Ingredient).

 

(c)           ASL shall supply Reliant with Active
Ingredient meeting the Specifications. All Active Ingredient supplied by ASL to
Reliant hereunder shall be consistent with the DMF and NDA and produced in a
facility and in a manner compliant with GMP and all other applicable laws, and
shall not be adulterated or misbranded within the meaning of the Act and will
have expiration dating of at least twenty four (24) months from the date of
manufacture. Each shipment of Active Ingredient from ASL to Reliant shall be
sampled and analyzed by ASL to determine if the shipment of Active Ingredient
meets the Specifications. ASL shall deliver with each shipment of the Active
Ingredient a certificate of analysis stating that the Active Ingredient meets
the Specifications. ASL shall not relocate or otherwise transfer the site of manufacture
of API without the express prior written approval of Reliant in the absence of
a force majeure event or unremedied audit deficiencies under Section 2.3 below.
Upon delivery to the Designated Facility, title to the Active Ingredient so
delivered will be free and clear of any security interest or other encumbrance
created by ASL.

 

SECTION 2.2.      Specifications.

 

(a)           The specifications (“Specifications”) for
the Active Ingredient are set forth on Exhibit A.

 

(b)           All Active Ingredient supplied to Reliant
hereunder shall be supplied in bulk form in drums and on pallets or as
otherwise agreed by the parties. The packaging requirements shall be specified
in the Specifications.

 

(c)           No changes to the Specifications or to the
Active Ingredient shall be made by ASL without the prior written approval of
Reliant unless expressly required either under GMP or the Act. In addition, any
changes to the Active Ingredient, the Specifications or the

 

4

 

manufacturing
process which may require the submission of any amendment, filing or other
documentation with the FDA and could potentially impact the NDA or other
Regulatory Filings shall be identified, reviewed and require the written
approval of Reliant. To the extent reasonably practicable, Reliant shall
provide a response to any such proposed changes within twenty (20) business
days after receipt

 

SECTION 2.3.      Audit of Manufacturing
Facility.

 

(a)           Reliant or its representatives shall have
the right, upon not less than five (5) business days advance notice and during
regular business hours, to inspect and audit any facilities being used by ASL
and any of its Affiliates, subsidiaries, joint ventures or other entities for
the manufacture, production or supply or storage of the Active Ingredient (“Supply
Facilities”) including all documentation related thereto to assure compliance
by ASL or its suppliers with the terms of this Agreement, applicable US laws,
rules and regulations including GMP and the prevailing FDA quality system
requirements. Such inspection and audit shall be limited to those portions of
such Supply Facilities as are involved in the production of the Active
Ingredient, and shall be, conducted in a manner so as to minimize disruption of
ASL’s and the inspected facilities’ business operations. ASL shall ensure
Reliant has access to all such Supply Facilities (including, but not limited
to, any third party facilities) in accordance with the foregoing in order for
Reliant to conduct such audits; provided, however, that Reliant shall be
subject to such reasonable confidentiality obligations as may be required by
such third party in order to protect any proprietary information.

 

(b)           If any of such audits reveal that the Supply
Facilities do not satisfy the requirements of this Agreement or the Act, then
Reliant shall provide written notice of such fact, which notice shall contain
in reasonable detail (including reference to the applicable standard or
criteria which has not been met) the deficiencies found in the Supply
Facilities and, if practicable, those steps which should be undertaken in order
to remedy such deficiencies. ASL shall within thirty (30) days remedy any
deficiencies from any such audit which have been provided to ASL in writing. In
the event that ASL does not remedy, or is incapable of remedying, any of such
deficiencies within such thirty (30) day period, ASL shall have the option to
locate and qualify alternate GMP qualified Supply Facilities from which to
perform its supply obligations under this Agreement. Should ALSA not locate and
qualify such alternate GMP qualified Supply Facilities within 90 days of
receiving Reliant’s notice, then Reliant shall be entitled to terminate this
Agreement upon written notice to ASL, in which event ASL shall provide Reliant
at ASL’s cost such assistance and any other information (including the Process
Descriptions) as shall be necessary in order for Reliant to manufacture or have
manufactured the Active Ingredient at another facility.

 

(c)           ASL acknowledges that the provisions of this
Section 2.3 granting Reliant certain audit rights shall in no way relieve ASL
of any of its obligations under this Agreement, nor shall such provisions
require Reliant to conduct any such audits.

 

SECTION 2.4.      Notice of Audit.

 

(a)           Notice. ASL shall give Reliant
immediate notice of any impending FDA or other governmental audit of ASL as it
relates to the manufacture, production or testing storage of

 

5

 

Active
Ingredient supplied to Reliant pursuant to this Agreement and shall provide
Reliant with any documentation provided to it relating to such audit. ASL shall
provide Reliant the opportunity for a 15-day, or a mutually-agreed timeline for
review, prior to submission, any documentation prepared in response to such
governmental audit and shall promptly provide Reliant with the results of such
audit following its conclusion.

 

(b)           Inspection Reports. ASL shall
promptly provide to Reliant copies of any FDA or other US governmental
inspection reports it receives from the FDA or other US governmental agency
with jurisdiction over the manufacturing facility with respect to the
manufacturing facilities which supply the Active Ingredient.

 

(c)           Regulatory Inspections. ASL shall
promptly notify Reliant of any FDA or other US regulatory inspections of the
facilities which supply the Active Ingredient.

 

SECTION 2.5.      Notice of Regulatory
Action.

 

ASL shall provide Reliant with immediate
notification of its receipt of any of the following related to the manufacture,
production or testing storage of the Active Ingredient; a copy of any list of
observations (Form FD483), Warning Letters, Information Letters, Regulatory
Letters or the like issued by the FDA as well as provide Reliant an opportunity
to review any written response prior to submission to the FDA. ASL shall
maintain sole responsibility for any matter pertaining to such inspections.

 

SECTION 2.6.      Recordkeeping.

 

ASL shall keep and maintain all production,
batch, control laboratory and other records in accordance with all applicable
FDA laws, roles and regulations including but not limited to GMP. Such records
shall be made available to Reliant or its representatives upon request.

 

SECTION 2.7.      Orders, Prices and Terms.

 

(a)           Purchase Price. The purchase price (“Purchase
Price”) for the Active Ingredient purchased from ASL for a period of three (3)
years from the date of Regulatory Approval for either of the Initial Products
(the “Initial Pricing Period”) shall be as set forth on Exhibit B hereto. In
the event that Reliant fails to order at least [***] kgs of Active Ingredient
(the “Minimum”) in any year of the Initial Pricing Period (excluding the “First
Agreement Year”), and fails to cure such failure in the Quarterly Forecast for
the succeeding Agreement Year, ASL shall have the right to renegotiate the
Purchase Price. Price increases will be limited to ASL’s direct incremental
price increase for raw materials directly attributable to the lower than
expected volume purchases of raw materials by ASL as demonstrated from ASL’s
records. The Purchase Price for each purchase order shall be determined by the
relevant Tier on Exhibit B according to the aggregate number of kilograms of
API purchased to date within the relevant Agreement Year. The Purchase Price
set forth on Exhibit B may be renegotiated at any time and from time to time
after expiration of the Initial Period. Any change in the Purchase Price of

 

[***]:  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.

 

6

 

Active
Ingredient following expiration of the Initial Pricing Period provided,
however, that the Purchase Price for Active Ingredient shall not be increased
greater than the annual increase in any Agreement Year during the Term by
greater than the annual increase in the Producer Price Industry Data figure for
pharmaceutical preparations [***] as published by the US Department of Labor.

 

(b)           Effect of Specification Changes on
Purchase Price. Notwithstanding the foregoing, in the event that Reliant
requests a change to the Specifications, ASL shall notify Reliant within 30
days of ASL’s receipt of such request whether the requested change will result
in a material increase or decrease in the direct cost of manufacture of the
Active Ingredient and ASL’s estimate of the cost of implementing the change. If
Reliant then confirms to ASL that it wants to have the change implemented, then
Reliant shall reimburse ASL for the estimated costs of implementing the change
and pay such increased or decreased price, as the case may be, for API in an
amount that enables ASL to pass through its consequent direct cost increases or
decreases

 

(c)           Quarterly Reconciliation. Within
thirty-(30) days of the last day of each calendar quarter, a quarterly
reconciliation shall be calculated by multiplying the total number of kgs
purchased by Reliant in such quarter by the cost/kg in the relevant Tier in
Exhibit B, and subtracting such amounts invoiced Reliant during such quarter
(the difference is the “the Quarterly Payment”). If the Quarterly Payment
Amount is less than zero ($0.00), ASL shall credit Reliant that entire amount
by way of a volume rebate in Kgs in the next invoice to Reliant for purchases.

 

(d)           Annual Reconciliation: During each
Agreement Year, ASL shall invoice Reliant for purchases as set forth in Exhibit
B. Within 30-days of the last day of each Agreement Year, an annual
reconciliation will be calculated by multiplying the total number of kilograms
of API purchased for the relevant agreement year by the relevant price in
appropriate Tier in Exhibit B, and subtracting the total invoiced amount in
dollars for such Agreement Year (the difference is the “Annual Payment Amount”).
If the Annual Payment Amount is less than zero ($0.00), ASL shall credit
Reliant that entire amount by way of a volume rebate in Kgs (the “Volume Rebate”)
in the next invoice to Reliant for purchases.

 

(e)           Invoices and Payments. ASL will
invoice Reliant within thirty-(30) days after delivery and acceptance of each
shipment of Active Ingredient to Reliant or Designated Facility. Reliant shall
pay ASL for API accepted within thirty-(30) days of receipt of the relevant
invoice. All payments shall be made in U.S. dollars without deduction of any
kind such as for withholding taxes or claims of set-off other than in the case
of a bona fide dispute with respect to this Agreement. If Reliant has not paid
the invoice within such thirty (30) day period (other than amounts related to
amounts subject to bona fide dispute), Reliant shall pay interest on any unpaid
and undisputed amounts at the rate of 1 1⁄2% per month or the maximum rate
allowed by law whatever is lower until paid in full, and, if the dispute is
resolved in ASL’s favor, Reliant shall pay interest at such rate on the
disputed amount until paid in full.

 

[***]:  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

 

SECTION 2.8.      Forecasts and Purchase
Orders.

 

(a)           Following Regulatory Approval of one of the
Initial Products during the term of this Agreement, Reliant shall provide to
ASL no later than the first day of the first month of each calendar quarter a
non-binding good faith estimate (“Quarterly Forecast”) by quarter of Reliant’s
requirements for the Active Ingredient for the calendar quarter and the succeeding
three (3) calendar quarters. Reliant will be obligated to purchase 75% of the
quantities of API forecasted for the first two (2) succeeding calendar quarters
of each Quarterly Forecast. Within (30) days of Regulatory Approval, Reliant
shall provide an initial forecast (“Initial Forecast”) for the four calendar
quarters following Regulatory Approval.

 

(b)           Reliant shall place binding purchase orders
for Active Ingredient by written or electronic purchase order (or by any other
means agreed to by the parties) to ASL, which shall be placed at least ninety
(90) days prior to desired date of delivery.

 

(c)           ASL shall be obligated to supply Active
Ingredient as ordered by Reliant. To the extent purchase orders in any calendar
month exceed One Hundred Fifty percent (150%) of the Quarterly Forecast for the
relevant quarter, ASL shall use its best efforts to supply 125% of the quantity
ordered.

 

 (d)          ASL shall maintain
minimum inventory levels equal to the binding portion of the then current
Quarterly Forecast. The Active Ingredient shall be shipped C.I.F. Duty Unpaid
to a Designated Facility or other location agreed by the parties. Active
Ingredient shall be shipped upon completion of production in
temperature-controlled vehicles in accordance with the specifications including
light protecting containers and the Quality Agreement in order to maintain the
quality of the Active Ingredient. Carriers selected by ASL must be commercially
reputable, able to track shipments and fully insured with adequate coverage to
replace the value of the goods shipped. Title and risk of loss pass on delivery
to the Designated Facility.

 

(e)           All shipments of Active Ingredient shall be
accompanied by a packing slip and a certificate of analysis which describes the
Active Ingredient, states the purchase order number, confirms that the Active
Ingredient conforms in all ways with the Specifications, the Process
Description and was manufactured in accordance with GMP and all other
requirements of the Act. To the extent of any conflict or inconsistency between
this Agreement and any purchase order, purchase order release, confirmation,
acceptance or any similar document, the terms of this Agreement shall govern.

 

(f)            Reliant shall notify ASL of any
short-shipment claims within thirty (30) days of receipt of a shipment of
Active Ingredient.

 

(g)           ASL shall not be obligated to accept any
returns of Active Ingredient other than as a result of such Active Ingredient
failing to meet the Specifications in accordance with Section 2.9(a), was not
manufactured in accordance with GMP, or does not otherwise comply with the
manufacturing, storage and/or transportation requirements of the Act.

 

8

 

SECTION 2.9.      Product Claims.

 

(a)           After delivery of a shipment of any Active
Ingredient to Reliant, Reliant shall have sixty (60) days to examine the Active
Ingredient to determine if it conforms to the Specifications and, on the basis
of such examination, to accept or reject such shipment. Any claims for failure
to so conform (“Claims”) shall be made by Reliant in writing within such sixty
(60) day period to ASL, indicating the nonconforming characteristics of the
Active Ingredient.

 

(b)           If ASL agrees with such Claim, then as
promptly as possible after the submission of a Claim by Reliant, ASL shall, at
Reliant’s option, provide Reliant (i) with a credit against future billings
equal to the full amount paid by Reliant for such Active Ingredient or (ii)
replacement Active Ingredient free of charge. ASL shall pay for all shipping
costs of returning or destroying Active Ingredient that are the subject of such
accepted Claims. ASL shall bear the risk of loss for such Active Ingredient,
beginning at such time as they are taken at Reliant’s premises for return
delivery.

 

(c)           If ASL does not agree with such Claim, then
the parties shall submit the Active Ingredient in question to an independent
party with validated analytical methods (such as Metrics, Inc.) of testing the
Active Ingredient to determine whether or not it complies with the
Specifications. In the event the parties cannot agree upon such independent
party, or in the event it is not possible to acquire the services of such an
independent party, then such dispute shall be resolved pursuant to Section
4.15.

 

SECTION 2.10.    Additional Obligations of
ASL.

 

ASL shall:

 

(a)           Manufacture the Active Ingredient in
accordance with the Specifications and the Quality Agreement for sale to
Reliant taking care to adhere to GMP, and all applicable FDA and other
applicable US laws, rules and regulations including but not limited to the Act
and FDA Guides to Inspections of Bulk Pharmaceutical Chemicals.

 

(b)           Ship all Active Ingredient to Reliant with a
remaining shelf life of at least equal to the approved stability dating as set
forth in the NDA as may be amended from time to time from date of shipment and
perform annual stability testing on the API to support the expiration dating
used on the API and affix lot numbers on the containers of Active Ingredient on
each shipping carton in accordance with applicable US laws. Once expiration
dating of at least thirty six (36) months is assigned to the Active Ingredient,
all Active Ingredient supplied by ASL hereunder will have a remaining shelf
life of at least twenty four (24) months from the date of shipment.

 

(c)           On not less than five (5) business days
notice, afford representatives of Reliant, the FDA and any other United States
authority access to its facilities and that of its subcontractors for the
purpose of inspecting and approving the facilities used to manufacture the
Active Ingredient.

 

(d)           No later than forty five (45) days of
completion of test results on thirty (30) day accelerated stability on the
first validation batch of API, ASL will take all actions necessary to establish
a DMF with FDA as may be required by the rules and regulations of the FDA and
to make all filings necessary to maintain the DMF including, but not limited
to, any necessary updates following the completion of the stability report on
the ninety (90) day accelerated

 

9

 

stability test
on the first validation batch of API. In addition, ASL shall take all action
necessary to provide Reliant with access to the DMF such that the NDA may
reference the DMF for the purposes of this Agreement.

 

(e)           In the event any shipment of the Active
Ingredient fails to conform to the Specifications, GMP, or any applicable FDA
or other US governmental regulation, ASL shall, without charge, promptly
replace any such Active Ingredient with a non-defective, conforming Active
Ingredient. ASL shall promptly investigate the cause of such nonconformance or
defect and shall report back to Reliant with respect to such investigation no
later than seven (7) calendar days after notification or discovery of such
nonconformance or defect.

 

(h)           Neither ASL nor its subcontractors shall
initiate any contact with the FDA or any other US regulatory agency in
connection with the subject matter of this Agreement without the prior written
approval of Reliant. ASL and/or such subcontractor shall inform Reliant, via
same-day telephone and by receipt of written notice within one day thereafter,
of any contacts of ASL or such subcontractor by the FDA or any other US
regulatory agencies in connection with the subject matter of this Agreement,
and ASL or such subcontractor shall prepare and submit to Reliant for its
approval a written record of all such contacts. Reliant shall have the right to
have a representative present at any time the FDA or other US governmental
authority shall elect to conduct an inspection of any site at which a
manufacturing or other investigation of API is being conducted. ASL or such
subcontractor shall forward to Reliant any notice relating to such inspection,
immediately upon receipt thereof.

 

SECTION 2.11.    Adverse Events; FDA Audits;
Etc.

 

(a)           Each party agrees to cooperate with the
other party in the exchange of information concerning Adverse Events associated
with the use in humans of the Products which Reliant or any its Affiliates
manufactures or has manufactured, markets, and distributes from the Active
Ingredient supplied by ASL under this Agreement. Each party shall notify the
designated party of the other set forth in Section 2.13 within one (1) working
day of the Receipt Date. Unless otherwise required by law, Reliant will retain
exclusive authority and responsibility for the reporting of any Adverse Events
to the FDA.

 

(b)           Each party shall notify the designated
Quality Assurance Manager of the other by e-mail, fax or by telephone within one
(1) working day of receipt of any product complaint report received relating in
any manner to the Products which may meet FDA Field-alert Report criteria
codified at 21 CFR 314.81(b)(1)) with an original copy of the report sent by
overnight courier the same day. ASL shall investigate all such complaints
associated with the Active Ingredient and provide a written response to such
complaints with a copy to Reliant. Reliant shall investigate all such
complaints associated with Product (other than complaints associated with the
Active Ingredient)) and provide a written response to the FDA (if required by
applicable laws) to such complaints with a copy to ASL. Each party shall
provide the other with a preview copy of its written responses and consult with
the other regarding such responses prior to filing the responses with the FDA.

 

(c)           Reliant shall have the right to have a
representative present at any time the FDA or other US governmental authority
shall elect to conduct an inspection of any site at which a

 

10

 

manufacturing
or other investigation of the Active Ingredient is being conducted. ASL or such
subcontractor shall forward to Reliant any notice relating to such inspection,
immediately upon receipt thereof.

 

SECTION 2.12.    Product Quality Complaints.

 

(a)           Complaints that concern any incident that
causes the Product or its labeling to be mistaken for, or applied to, another
article or any bacteriological contamination, or any significant chemical,
physical, or other change or deterioration in the Product, or any failure of
one or more distributed batches of the Product to meet the Specifications shall
be telephoned to both parties promptly upon receipt.

 

(b)           The relevant contact person with respect to
Adverse Events shall be:

 

	
   

  	
  If to ASL:

  
	
   

  	
   

  
	
   

  	
  Facsimile No.:  (847) 520 9160

  
	
   

  	
  Telephone No.:  (847) 520 9600

  
	
   

  	
  E-mail:                @austinchemical.com

  
	
   

  	
   

  
	
   

  	
  If to Reliant:  Reliant Medical Affairs

  
	
   

  	
   

  
	
   

  	
  Fax:

  	
  1-877-311-8160

  
	
   

  	
  Tel:

  	
  1-908-580-1200

  
	
   

  	
   

  	
  1-877-311-7515

  

 

SECTION 2.13.    Government Agency Recalls.

 

(a)           Each of the parties agree to maintain or
cause to be maintained such traceability records as are necessary to permit a
recall, withdrawal, field alert or field correction of Active Ingredient or
Product.

 

(b)           In the event any governmental agency having
applicable jurisdiction shall order any corrective action with respect to
Product containing Active Ingredient supplied hereunder such as customer
notice, restriction, change, corrective action or market action or any Product
change, and the cause of basis of such corrective action is due to the actions
or inactions of ASL under this Agreement including without limitation the
failure of the API to meet the Specifications or a breach by ASL of Section
3.1(a) below, then ASL shall be liable to Reliant to credit or replace such API
as required by Section 2.9(b), including paying all costs of returning or
destroying such API.

 

(c)           Reliant shall have the right to determine
that a recall of any portion of Product is necessary or appropriate at any
time, and to design, administer and control the recall process (provided,
however, that at the request of ASL, ASL shall have the right to consult with
Reliant prior to determining that a recall is necessary). If a recall is determined
to be necessary or appropriate due to ASL’s breach of any of its obligations
under this Agreement, ASL shall be

 

11

 

liable for
replacing the Active Ingredient used to manufacture the recalled Product. For
purposes of this Section, “recall” means a firm’s removal or correction (e.g.,
repair, modification, adjustment, re-labeling, destruction or inspection
(including patient/consumer marketing) of a product without its physical
removal to some other location) of a marketed Product that there are reasonable
grounds to believe could be considered by the FDA to be in violation of the Act
or against which the FDA could initiate legal action.

 

SECTION 2.14.    Annual Review. The
parties agree to establish an annual business review process pursuant to which
the parties will review (either in person, by telephone, videoconference or
other mutually agreeable means) Active Ingredient quality, cycle time,
manufacturing capacity, projected market needs, and delivery.

 

SECTION 3

 

GENERALLY APPLICABLE TERMS

 

SECTION 3.1.      Representations and
Warranties.

 

(a)           ASL to the best of its knowledge represents
and warrants to Reliant that:

 

(i)         the Active IngredientS
supplied by ASL will be manufactured in accordance with the Specifications GMP,
the DMF and all applicable FDA and other US governmental regulations;

 

(ii)        the Active Ingredient
supplied by ASL are being sold to Reliant free and clear of all liens, claims
and encumbrances of any nature;

 

(iii)       attached as Exhibit C is a
true and correct copy of the Quality Agreement as executed by the parties;

 

(iv)       to the best of its
knowledge after diligent inquiry, the Active Ingredient, and its manufacture or
use by ASL, does not violate any patents, patent rights, patent applications,
inventions, copyrights, confidential information, trade secrets, proprietary
rights or processes of any other person in the country where such Active
Ingredient is manufactured or in the Territory;

 

(v)        there are no pending or
threatened suits, claims, or actions of any type whatsoever against ASL with
respect to the Active Ingredient or the manufacture thereof;

 

(vi)       all necessary corporate and
other authorizations including all necessary approvals, licenses and
authorizations from FDA or other US governmental entities, consents and
approvals which are necessary or required for ASL to enter into this Agreement
have been duly obtained and are in and will remain in full force and effect;

 

(vii)      the entering into of this
Agreement (including the Quality Agreement) by ASL will not (i) violate any
provision of law, statute, rule or regulation or any ruling, writ, injunction,
order, judgment or decree of any court, administrative agency or other
governmental body or (ii) conflict with or result in any breach of any of the
terms,

 

12

 

conditions or
provisions of, or constitute a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties
or assets of ASL, under its organizational documents, as amended to date, or
any material note, indenture, mortgage, lease, agreement (including the Quality
Agreement), contract, purchase order or other instrument, document or agreement
to which ASL is a party or by which it or any of its properties or assets is
bound or affected;

 

(viii)     ASL shall, and shall cause
its Affiliates, subcontractors, joint venture partners, and any other person or
entity performing services under this Agreement to, comply with all applicable
United States laws, rules and regulations applicable to their manufacture or
sale of the Active Ingredient (this warranty does not and is not intended to
address third party proprietary rights); and

 

(ix)       ASL has not been debarred
and ASL has not and will not use in any capacity in connection with the
performance of its obligations under this Supply Agreement the services of any
individual or person known by ASL to be debarred in each case by the FDA under
the provisions of the Generic Drug Enforcement Act of 1992, as amended, or
other applicable

 

The foregoing warranties extend only to
Reliant and its Affiliates, contract manufacturers, corporate partners and/or
other persons who collaborate with Reliant in the production of Product from
the Active Ingredient. THE FOREGOING WARRANTIES SHALL NOT COVER AND ASL MAKES
NO WARRANTIES WITH RESPECT TO: (A) ANY ACTIVE INGREDIENT THAT HAS BEEN SUBJECT
TO; (I) ABUSE, MISUSE, MISAPPLICATION, NEGLECT, ALTERATION OR ACCIDENT AFTER
DELIVERY AND ACCEPTANCE OF THE API BY RELIANT: (II) IMPROPER OR INCORRECT
STORAGE AFTER DELIVERY AND ACCEPTANCE BY RELIANT; OR (; OR (III) ANY MATERIALS,
PARTS, GOODS OR OTHER COMPONENTS NOT SUPPLIED BY ASL WHICH ARE USED BY RELIANT
IN CONNECTION WITH THE PRODUCT.

 

(b)           Reliant represents and warrants to ASL that:

 

(i)         all necessary corporate
and other authorizations, consents and approvals which are necessary or
required for Reliant to enter into this Agreement have been duly obtained;

 

(ii)        the entering into of this
Agreement (including the Quality Agreement) by Reliant will not (i) violate any
provision of law, statute, rule or regulation or any ruling, writ, injunction,
order, judgment or decree of any court, administrative agency or other
governmental body or (ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default (or give rise to
any right of termination, cancellation or acceleration) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Reliant under its organizational documents, as amended
to date, or any material note, indenture, mortgage, lease, agreement, contract,
purchase order or other instrument, document or

 

13

 

agreement in
which Reliant is a party or by which it or any of its properties or assets is
bound or affected;

 

(iii)       Reliant shall not, during
the course of any manufacturing, marketing or selling by it of the Products,
engage in any act which results in the Products being adulterated or misbranded
within the meaning of the Act, or any regulation promulgated thereunder;

 

(iv)       Reliant shall comply with
all applicable laws, rules and regulations applicable to their importation,
manufacture, use or sale of the Product in the Territory;

 

(v)        To the best of its
knowledge, the Product, and its manufacture, use or sale by Reliant and/or its
Affiliates, will not violate any patents, patent rights, patent applications,
inventions, copyrights, confidential information, trade secrets, proprietary
rights or processes of any other person;

 

(c)           THE WARRANTIES CONTAINED IN THIS SECTION 3.1
ARE THE EXCLUSIVE WARRANTIES MADE BY THE PARTIES IN RESPECT OF THE ACTIVE
INGREDIENT AND PRODUCT, AND ALL OTHER WARRANTIES RELATING THERETO, EXPRESS,
STATUTORY OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE, AND MERCHANTABILITY ARE HEREBY WAIVED AND EXCLUDED;
PROVIDED HOWEVER THAT NOTHING IN THIS SECTION 3.1 SHALL BE DEEMED OR CONSTRUED
TO LIMIT ASL’s OBLIGATIONS UNDER SECTION 2.10.

 

SECTION 3.2.      Indemnification. In
order to distribute among themselves the responsibility for claims arising out
of this Agreement, and except as otherwise specifically provided for herein,
the parties agree as follows:

 

(a)           ASL shall defend and indemnify and hold
Reliant (and its Affiliates, and their respective officers, directors and
employees) harmless against any and all claims, suits, proceedings, expenses,
recoveries and damages, including court costs and reasonable attorneys fees and
expenses (collectively, “Losses”), arising out of, based on, or caused by (A)
the breach by ASL of any representation or warranty contained in this Agreement,
(B) any failure of ASL to comply with any applicable US law in connection with
performing its obligations under this Agreement or (C) any negligence or
intentional misconduct by ASL in connection with performing its obligations
under this Agreement in each case except to the extent that such Losses arise
from or are aggravated by the grossly negligent acts of or failure to act by
Reliant or its Affiliates. Reliant will promptly notify ASL of any such Losses
which come to its attention.

 

(b)           Reliant shall defend and indemnify and hold
ASL (and its Affiliates, and their respective officers, directors and
employees) harmless against any and all Losses, arising out of, based on, or
caused by (A) statements, whether written or oral, made or alleged to be made by
Reliant or its Affiliates on the packaging or labeling of any of the Products,
or in the advertising, manufacturing (other than the manufacturing of the
Active Ingredient), promotion, use or sale of any of the Products, (B) the
storage, sale, shipment, promotion or distribution of the Products by Reliant
or its Affiliates, or (C) the breach by Reliant of any representation or
warranty contained

 

14

 

in this
Agreement, in each case except to the extent that such Losses arise from or are
aggravated by the grossly negligent acts of or failure to act by ASL or its
Affiliates. ASL will promptly notify Reliant of any such Losses which comes to
its attention.

 

(c)           In the event either party becomes aware of
any product liability claims from third parties with respect to the Products
(whether related to the safety or efficacy of the Product, or arising out of
alleged defects in materials, design or workmanship of the Product or
otherwise, (hereinafter, a “Product Liability Claim”), it shall promptly notify
the other of such matter, and provide copies of any notices, claims, letters or
other information which such party has received or possesses in connection with
such Product Liability Claim. Each party shall reasonably cooperate with the
other with respect to the defense and resolution of any such Product Liability
Claim. Reliant shall have responsibility for controlling any litigation,
defense or settlement of any such Product Liability Claims.

 

SECTION 3.3.      Infringement
Indemnification.

 

(a)           ASL shall defend and indemnify and hold
Reliant (and its Affiliates and the respective officers, directors and
employees) harmless against any and all claims, suits, proceedings, expenses,
recoveries and damages, including court costs and reasonable attorneys fees and
expenses arising from or relating to claims that the formulation or manufacture
of Active Ingredient or other activities of ASL under this Agreement infringe
on the patent or other intellectual property rights of a third party within the
Territory.

 

(b)           Reliant shall defend and indemnify and hold
ASL (and its Affiliates and the respective officers, directors and employees)
harmless against any and all claims, suits, proceedings, expenses, recoveries
and damages, including court costs and reasonable attorneys fees and expenses
arising from or relating to claims that the Products manufactured using the API
supplied or its use or sale infringes on the patent or other intellectual
property rights of a third party.

 

SECTION 3.4.      Insurance.

 

(a)           Reliant and ASL shall each at its own
expense obtain and maintain insurance of the type and amount described in
Section 3.4(b). Neither party shall do or omit to do any act, matter or thing
which could prejudice or render voidable any such insurance.

 

(b)           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:

 

(i)         General liability
insurance with combined limits of not less than $1,000,000 per occurrence and
$1,000,000 per accident for bodily injury, including death and property damage.

 

(ii)        product liability
insurance with combined limits of not less than $3,000,000 per occurrence and
$3,000,000 per accident for bodily injury, including death and property damage.

 

15

 

(c)           Each party will provide to the other party
evidence of its insurance naming the other as an additional insured and
containing a waiver of subrogation against the other and thirty (30) days prior
written notice of any cancellation of its coverage or reduction in coverage
from the requirements stated herein.

 

SECTION 3.5.      Term.

 

(a)           This Agreement shall remain in effect from
the Effective Date for a period of seven (7) years from the receipt of the
first Regulatory Approval for either of the Initial Products (the “Initial Term”).
Unless sooner terminated, this Agreement shall be renewed automatically for
successive terms of two (2) years unless either party provides notice to the
contrary within one hundred twenty (120) days prior to the end of the Initial
Term or any such additional term.

 

(b)           Notwithstanding any other provision of this
Agreement, either Reliant or ASL may terminate this Agreement by notice in
writing to the other upon the occurrence of any of the following events:

 

(i)         if the other commits a
breach of this Agreement (other than a breach by Reliant of Section 2.8 hereof)
that the notified party fails to remedy within thirty (30) days of the receipt
by the other of a notice identifying the breach and requiring its remedy; or

 

(ii)        if the other is subject to
a Bankruptcy Event.

 

(c)           Reliant may terminate this Agreement
immediately upon written notice to ASL if:

 

(i)         the FDA prohibits the
Product(s) from being manufactured, shipped, sold or marketed, in which event
all outstanding or unfinished purchase orders (including any firm order
obligations pursuant to any forecasts) shall be cancelled;

 

(ii)        in the absence of a force
majeure event under Section 4.10 below, ASL is unable to supply API in
sufficient quantities to meet purchase orders submitted in accordance with
Section 2.8 hereunder for a period of six (6) months in any twelve (12) month
period or, taking into account any such force majeure event, ASL is unable to
meet such purchase orders for a continuous period of six (6) months; or

 

(iii)       any representation or
warranty made herein by ASL proves to be incorrect in any material respect when
made.

 

(d)           ASL may terminate this Agreement upon
written notice to Reliant if any representation or warranty made herein by
Reliant proves to be incorrect in any material respect when made.

 

SECTION 3.6.      Effect of Termination.

 

(a)           If this Supply Agreement is terminated for
any reason other than Reliant’s failure to make payment under this Agreement,
ASL shall complete the manufacture of any binding

 

16

 

purchase order
for Active Ingredient and ship such Active Ingredient pursuant to the terms of
this Agreement.

 

(b)           The termination or expiration of this
Agreement will not release either party from the obligation to pay any sum that
may be owing to the other party (whether then or thereafter due) to operate any
liability or obligation that had been incurred by either Party prior to any
such termination.

 

SECTION 4

 

MISCELLANEOUS

 

SECTION 4.1.      Confidentiality; Press
Releases.

 

(a)           Reliant and ASL will be exchanging
confidential and proprietary information relating to the Active Ingredient and
Products and their respective businesses at the inception of and from time to
time during the term of this Agreement. The party receiving such information
will maintain the information in confidence using the same standard of care it
uses to maintain its own information in confidence. Such obligation of
confidentiality shall not apply to information which (i) is known to the
receiving party prior to the disclosure, (ii) is publicly known as of the date
of the disclosure, (iii) becomes publicly known after the date of disclosure
through no fault of the receiving party, (iv) is received from a third party
who has no obligation of confidentiality to the disclosing party or (v) is
developed independently by or for the receiving party. Such obligation of
confidentiality shall continue for a period of five (5) years from the date of
termination of this Agreement.

 

(b)           Notwithstanding the foregoing Section
4.1(a), (i) Reliant shall be permitted to disclose to its manufacturers,
subcontractors, wholesalers, other direct customers, investment bankers and/or
financing sources such confidential information relating to the Products and
this Agreement as Reliant shall reasonably determine to be necessary in order
to effectively market and distribute the Products or otherwise engage in a bona
fide financing transaction and (ii) ASL shall be permitted to disclose to its
Affiliates, manufacturers, subcontractors, wholesalers, other direct customers,
investment bankers and/or financing sources such confidential information
relating to the Active Ingredient and Products as ASL may reasonably determine
to be necessary to perform its obligations under this Agreement, provided that
such entities undertake the same confidentiality obligation as the disclosing
party has with respect to the other’s confidential information and provided
that ASL and its Affiliates may disclose the fact of the Agreement for purposes
of marketing its services.

 

(c)           Except as may be required by applicable
laws, rules or regulations (including in connection with a public offering of
securities), neither party will originate any publicity, news release, or other
public announcement, written or oral, whether to the public press or otherwise,
relating to this Agreement, any amendment hereto or to performance hereunder,
or the existence of an arrangement between the parties, without the prior
written approval of the other party, which consent shall not be unreasonably
withheld or delayed (it being understood that such obligation is not intended
to restrict either party’s ability to promote, market and sell the Products or
its services in a commercially reasonable manner). In the event disclosure is

 

17

 

required by
applicable law, rules or regulations, then the party required to so disclose
such information shall, to the extent possible, provide to the other party for
its approval (such approval not to be unreasonably withheld) a written copy of
such public announcement at least ten (10) business days prior to disclosure. In
the absence of a communication approving or disapproving of the public
announcement from the party with the right of approval by the end of such ten
(10) day period, such party shall be deemed to have approved the public
announcement.

 

SECTION 4.2.      Survival. Those
provisions of this Agreement dealing with rights and obligations upon and/or
after termination of this Agreement including but not limited to Sections 1.1
(to the extent necessary to give effect to the Articles and Sections enumerated
in this Section 4.2), 2.6, 2.7(d), 2.8(d), 2.8(e), 2.8(f), 2.10, 2.11.2.12,
2.13, 3.2, 3.3, 3.4, 3.6, 4.3, 4.9, 4.15, 4.16 and 4.17 shall survive
termination of this Agreement to the extent necessary to give effect to such
provisions.

 

SECTION 4.3.      Penalties. If either
party terminates this Agreement in accordance with the terms herein the
terminating party shall owe no penalty to the terminated party on account of
such termination.

 

SECTION 4.4.      Independent Contractor
Status. Neither party shall have any authority to obligate the other in any
respect nor hold itself out as having any such authority. All personnel of ASL
shall be solely employees of ASL and shall not represent themselves as
employees of Reliant, and all personnel of Reliant shall be solely employees of
Reliant and shall not represent themselves as employees of ASL.

 

SECTION 4.5.      Binding Effect; Benefits.
This Agreement shall endure to the benefit of and be binding upon the parties
and their respective permitted successors and assigns. Nothing contained herein
shall give to any other person any benefit or any legal or equitable right,
remedy or claim.

 

SECTION 4.6.      Assignment.

 

Neither party may assign this Agreement or
any of its rights hereunder or delegate its performance of its obligations
hereunder without the express prior written consent of the other party, except
that either party may assign or delegate any of its rights or obligations under
this Agreement to an Affiliate or subsidiary; provided that the assigning party
shall be made liable for all obligations and liabilities of the assignee
following such assignment. Notwithstanding the foregoing (a) each party may
assign this Agreement to any purchaser of all or substantially all of its
assets or to any successor entity resulting from any merger or consolidation of
such party with or into such entity AND (b) Reliant may assign its rights and
obligations hereunder to an acquirer of all or substantially all of Reliant’s
assets relating to one or more of the Products. The (i) conversion of either
party from a limited liability company to a corporation and/or (ii) issuance by
either party of securities in connection with any financing transaction or
public offering shall not be deemed an assignment and shall be permitted
without notice to or consent from the other party or its Affiliates. My
attempted assignment in violation of this provision shall be deemed a material
breach of this Agreement.

 

18

 

SECTION 4.7.      Entire Agreement;
Amendments. The parties acknowledge that this Agreement sets forth the
entire agreement and understanding of the parties as to the subject matter of
this Agreement, and supersedes any prior verbal, written or other
understandings of the parties with respect to the subject matter of this
Agreement. This Agreement shall not be subject to any change or modification
except by the execution of a written instrument subscribed to by the parties. To
the extent of any conflict or inconsistency between this Agreement and any
purchase order, purchase order release, confirmation, acceptance or any similar
document, the terms of this Agreement shall govern.

 

SECTION 4.8.      Severability. In the
event that any provision of this Agreement would be held in any jurisdiction to
be invalid, prohibited or unenforceable for any reason, such provision, as to
such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such provision in any other jurisdiction. Notwithstanding the foregoing, if
such provision could be more narrowly drawn so as not to be invalid, prohibited
or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

 

SECTION 4.9.      Remedies; Etc. Unless
otherwise expressly provided, all remedies hereunder are cumulative, are in
addition to any other remedies provided for by law and may, to the extent permitted
by law, be exercised concurrently or separately, and the exercise of any one
remedy shall not be deemed to be an election of such remedy or to preclude the
exercise of any other remedy.

 

SECTION 4.10.    Force Majeure.

 

The obligations of ASL and Reliant hereunder
shall be subject to any delays or non-performance caused by acts of God,
earthquakes, fires, floods, explosion, sabotage, riot, accidents; orders of, or
failure to issue all necessary permits or licenses by, regulatory,
governmental, or military authorities; strikes, lockouts or labor trouble;
perils of the sea; or any other similar cause beyond the reasonable control of
either party, and each party shall be under no liability to the other for
anything which would constitute a breach of this Agreement arising by reason of
such matters. The party which is not performing its obligations under this
Agreement as a result of an event of force majeure shall use diligent efforts
to resume compliance with this Agreement as soon as possible. Should the event
of force majeure continue unabated for a period of sixty (60) days or more, the
parties shall enter into good faith discussions with a view to alleviating its
affects or to agreeing upon such alternative arrangements as may be fair and
reasonable having regard to the circumstances prevailing at that time. In the
event that such alternative arrangements cannot be agreed upon within thirty
(30) days after the expiration of such initial sixty (60) day period, then the
non-performing party shall continue to diligently attempt to alleviate such
event of force majeure until it is removed or eliminated.

 

SECTION 4.11.    Notices. Any notice,
request, consent or communication (collectively, a “Notice”) under this
Agreement shall be effective if it is in writing and (i) personally delivered,
(ii) sent by certified or registered mail, postage prepaid, return receipt
requested, (iii) sent by an internationally recognized overnight delivery
service, with delivery confirmed, or (iv) e-mail,

 

19

 

telexed or
facsimile, with receipt confirmed, addressed as set forth in this Section or to
such address as shall be furnished by either party hereto to the other party
hereto. A Notice shall be deemed to have been given as of (i) the date when
personally delivered, (ii) five (5) business days after being deposited with
the United States Postal Service, certified or registered mail, properly
addressed, return receipt requested, postage prepaid, (iii) one business day
after being delivered to said overnight delivery service properly addressed, or
(iv) confirmation of receipt of the e-mail, telex or facsimile, as the case may
be. All Notices shall specifically state: (i) the provision (or provisions) of
this Agreement with respect to which such Notice is given, and (ii) the
relevant time period, if any, in which the party receiving the Notice must
respond.

 

	
   

  	
  If to ASL:

  	
  Austin Shasun LLC

  
	
   

  	
   

  	
  1565 Barclay Boulevard

  
	
   

  	
   

  	
  Buffalo Grove, IL 60089-4537

  
	
   

  	
   

  	
  Attn:                    

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile: (847) 520 9160

  
	
   

  	
  E-mail:                  @austinchemical.com

  
	
   

  	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  if to Reliant to:

  	
  Reliant Pharmaceuticals, LLC

  
	
   

  	
   

  	
  110 Allen Road

  
	
   

  	
   

  	
  Liberty Corner, New Jersey 07938

  
	
   

  	
   

  	
  Attn: Joseph Krivulka, President

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  (908) 542-4400

  
	
   

  	
  Fax:

  	
  (908) 542-9406

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Reliant Pharmaceuticals, LLC

  
	
   

  	
   

  	
  110 Allen Road

  
	
   

  	
   

  	
  Liberty Corner, New Jersey 07938

  
	
   

  	
   

  	
  Attn: Michael J. Lerner, General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  (908) 542-4408

  
	
   

  	
  Fax:

  	
  (908) 542-9406

  
					

 

SECTION 4.12.    Waivers. The failure of
either party to assert a right hereunder or to insist upon compliance with any
term or condition of this Agreement shall not constitute a waiver of that right
or excuse a similar subsequent failure to perform any such term or condition by
the other party.

 

SECTION 4.13.    Counterparts. This
Agreement may be executed in any number of counterparts, and execution by each
of the parties of any one of such counterparts will constitute due execution of
this Agreement. Each such counterpart shall be deemed to be an original
instrument, and all such counterparts together shall constitute but one
agreement.

 

20

 

SECTION 4.14.    Headings. The article
and section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.

 

SECTION 4.15.    Governing Law; Dispute
Resolution.

 

(a)           This Agreement shall be construed, governed,
interpreted and applied in accordance with the laws of the State of New York,
U.S.A. without regard to the conflict of law principles thereof, and the United
Nations Convention on Contracts for the International Sale of Goods is
expressly disclaimed.

 

(b)           Excepting only actions and claims relating
to actions commenced by a third party against ASL or Reliant (including,
without limitation, actions for injuries caused by a Product, or in respect to
a patent infringement claim), any controversy or claim arising out of or
relating to this Agreement, or the parties’ decision to enter into this
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the arbitration American Arbitration Association, and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.

 

(c)           The arbitration shall be held before a
single arbitrator, to be selected by ASL and Reliant or, if ASL and Reliant
cannot agree on such arbitrator, in accordance with the applicable arbitration
rules provided that the arbitrator shall have significant pharmaceutical
manufacturing and supply experience. Arbitration shall be in the State of New
York and the arbitrator shall apply the substantive law of the State of New
York. It shall be the duty of the arbitrator to set dates for preparation and
hearing of any dispute and to expedite the resolution of such dispute. The
arbitrator shall permit and facilitate discovery, taking into account the needs
of the parties and the desirability of making discovery expeditious and
cost-effective. The arbitrator will set a discovery schedule with which the
parties will comply and attend depositions if requested by either party. The
arbitrator will entertain such presentation of sworn testimony or evidence,
written briefs and/or oral argument as the parties may wish to present;
however, no testimony or exhibits will be admissible unless the adverse party
was afforded an opportunity to examine such witness and to inspect and copy
such exhibits during the pre-hearing discovery phase. The arbitrator shall among
his other powers and authorities, have the power and authority to award interim
or preliminary relief.

 

(d)           The arbitrator shall not award either
parties punitive damages and the parties shall be deemed to have waived any
right to such damages. A qualified court reporter will record and transcribe
the proceedings. The decision of the arbitrator will be in writing and judgment
upon the award by the arbitrator may be entered into any court having
jurisdiction thereof. Prompt handling and disposal of the issue is important. Accordingly,
the arbitrator is instructed to assume adequate managerial initiative and
control over discovery and other aspects of the proceeding to schedule
discovery and other activities for substantially continuous work, thereby
expediting the arbitration as much as is deemed reasonable to him, but in all
events to effect a final award within three hundred sixty five (365) days of
the arbitrator’s selection or appointment and within twenty (20) days of the
close of evidence.

 

21

 

(e)           The proceedings shall be confidential and
the arbitrator shall issue appropriate protective orders to safeguard both
parties’ confidential information. The fees of the arbitrator shall be paid by
the losing party, which shall be designated by the arbitrator. If the
arbitrator is unable to designate a losing party, he shall so state and the
fees shall be split equally between the parties.

 

(f)            Each party is required to continue to
perform its obligations under this Agreement pending final resolution of any
such dispute.

 

(g)           The procedures specified in this Section
4.15 shall be the sole and exclusive procedures for the resolution of disputes
between the parties arising out of or relating to this Agreement; provided
however, that a party, without prejudice to the above procedures, may seek
injunctive relief or other provisional judicial relief, if in its sole
judgment, such action is necessary to avoid irreparable damage.

 

SECTION 4.16.    Consequential Damages. Neither
Reliant nor ASL (which for the purposes of this Section 4.16 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, specialty, incidental,
consequential or indirect damage 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 forecasted;
providing that such limitations shall not apply in the case of (a) fraud, (b)
intentional misconduct or (c) any damages claimed by or paid to a third party
in a third party action.

 

SECTION 4.17.    Limitation of Liability.
Except in the cases of fraud, gross negligence or intentional misconduct ASL’s
aggregate liability to Reliant under this Agreement for any calendar year
during the term of this Agreement shall not exceed the net amounts paid by
Reliant (amounts paid less the Annual Payment Amount rebated) under Section 2.7
above with respect to that calendar year.

 

SECTION 4.18     Conversion to Non-Exclusive. Following the Initial Period, in
the event that Reliant fails to purchase the Minimum in any two (2) consecutive
calendar quarters pursuant to Section 2.8 hereof, ASL as its sole remedy
hereunder shall on thirty (30) days written notice shall be relieved of the
restriction on sales to third parties of Active Ingredient set forth in Section
2.1(b) hereof. Reliant, however, shall have the option during the thirty days
following notice from ASL to purchase such amounts of API as necessary to
satisfy the Minimum for the calendar quarters in question in which case the
restriction on sales of Active Ingredient to third parties set forth in Section
2.1(b) shall remain in full force and effect.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

22

 

IN WITNESS WHEREOF, duly authorized
representatives of the parties hereto have duly executed this Agreement as of
the date first above written.

 

	
   

  	
  RELIANT PHARMACEUTICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AUSTIN SHASUN, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  

 

23

 

Exhibit A

 

SPECIFICATIONS

 

[TO BE SUPPLIED]

 

24

 

Exhibit A

 

Isradipine API Specifications

 

	
   

  	
   

  	
  Tests

  	
   

  	
  Limits

  
	
  1

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  2

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  3

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  4

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  5

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  6

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  7

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  8

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  9

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  10

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  11

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

[***]:  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.

25

 

Exhibit B

 

Pricing

 

The purchase
price (“Purchase Price”) for Active Ingredient purchased from ASL shall be as
follows:

 

Non-Commercial
Use – [***]

 

Commercial
Use:

 

	
  Kilos Purchased (Annualized)

  	
   

  	
  Cost/Kg

  
	
  Tier 1

  	
  [***]

  	
   

  	
  [***]

  
	
  Tier 2

  	
  [***]

  	
   

  	
  [***]

  
	
  Tier 3

  	
  [***]

  	
   

  	
  [***]

  

 

[***]:  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.

 

26

 

Exhibit C

 

QUALITY AGREEMENT

 

 

27

 

COMMERCIAL

QUALITY AGREEMENT

 

 

Between

 

 

And

 

SHASUN CHEMICALS AND DRUGS LTD.

 

 

For the manufacture of:

 

Nizatidine Active Pharmaceutical Ingredient

DMF # 13192

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  I

  	
  QUALITY AGREEMENT AND TERM

  	
  1

  
	
   

  	
   

  	
   

  
	
  II

  	
  PRODUCTS

  	
  1

  
	
   

  	
   

  	
   

  
	
  III

  	
  CONTACT INFORMATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  IV

  	
  MANUFACTURING COMPLIANCE

  	
  2

  
	
   

  	
  1.

  	
  Premises

  	
  2

  
	
   

  	
  2.

  	
  Equipment

  	
  2

  
	
   

  	
  3.

  	
  Personnel

  	
  2

  
	
   

  	
  4.

  	
  Materials

  	
  3

  
	
   

  	
  5.

  	
  Documentation

  	
  3

  
	
   

  	
  6.

  	
  Lot Numbers and Expiration

  	
  4

  
	
   

  	
  7.

  	
  Product Storage and Shipment

  	
  4

  
	
   

  	
   

  	
   

  
	
  V

  	
  QUALITY CONTROL

  	
  4

  
	
   

  	
  1.

  	
  Premises

  	
  4

  
	
   

  	
  2.

  	
  Equipment

  	
  5

  
	
   

  	
  3.

  	
  Vendor Approval

  	
  5

  
	
   

  	
  4.

  	
  Personnel

  	
  5

  
	
   

  	
  5.

  	
  Out-of-Specification (OOS)
  Investigations

  	
  5

  
	
   

  	
  6.

  	
  Reference Standards

  	
  5

  
	
   

  	
  7.

  	
  Product Release

  	
  5

  
	
   

  	
  8.

  	
  Stability

  	
  5

  
	
   

  	
   

  	
   

  
	
  VI

  	
  QUALITY ASSURANCE

  	
  6

  
	
   

  	
  1.

  	
  Documentation

  	
  6

  
	
   

  	
  2.

  	
  Samples

  	
  6

  
	
   

  	
  3.

  	
  Change Control

  	
  6

  
	
   

  	
  4.

  	
  Product Complaints or Adverse
  Events

  	
  7

  
	
   

  	
  5.

  	
  Product Quality Review

  	
  7

  
	
   

  	
  6.

  	
  Product Recalls

  	
  8

  
	
   

  	
  7.

  	
  Audits by Reliant
  Pharmaceuticals

  	
  8

  
	
   

  	
   

  	
   

  
	
  VII

  	
  REGULATORY

  	
  8

  
	
   

  	
  1.

  	
  Inspections by Regulatory
  Agencies

  	
  8

  
	
   

  	
  2.

  	
  Annual Reports

  	
  9

  
	
   

  	
  3.

  	
  Drug Listing

  	
  9

  
	
   

  	
   

  	
   

  
	
  VIII

  	
  VALIDATION

  	
  9

  
	
   

  	
  1.

  	
  Process

  	
  9

  
	
   

  	
  2.

  	
  Equipment Cleaning Validation

  	
  9

  
	
   

  	
  3.

  	
  Analytical Test Methods

  	
  10

  
	
   

  	
  4.

  	
  Computer

  	
  10

  
	
   

  	
   

  	
   

  
	
  IX

  	
  REVISION HISTORY AND APPROVAL

  	
  11

  

 

i

 

I               QUALITY
AGREEMENT AND TERM

 

1.                                       It
is deemed necessary by Reliant Pharmaceuticals, Inc. (“Reliant”) and Shasun
Chemicals and Drugs Ltd. (“Shasun”) to allocate the responsibilities of current
good manufacturing practice (cGMP), as defined in ICH Guidance for Industry Q7A
Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients, and
FDA Guide for Manufacturing, Processing and Holding APIs, by which Nizatidine
API shall be manufactured and provided to Reliant.

 

2.                                       This
agreement, in conjunction with the Supply Agreement between Reliant and Shasun,
dated August 4, 2004 (the “Supply Agreement”), shall define the
responsibilities of the panties involved, and the levels of interaction
necessary for the delivery of compliant product.

 

3.                                       This
Quality Agreement shall expire with the termination of the Supply Agreement.
The Quality agreement can be modified with the written approval of Reliant and
Shasun. Such revisions shall supercede previous quality commitments in the
Supply Agreement. A revision history shall be maintained as part of the Quality
Agreement.

 

II             PRODUCTS

 

Shasun has
agreed to manufacture Nizatidine API in accordance with all cGMP’s, Product
Specifications and all applicable federal, state, and local laws and
regulations.

 

III            CONTACT
INFORMATION

 

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

 

	
  DEPARTMENT

  	
   

  	
  RELIANT CONTACT

  	
   

  	
  SHASUN CONTACT

  
	
  QUALITY

  	
   

  	
  Name

  Phone

  Fax

  e-mail

  	
  Keith
  Bowen

  (908) 542-4432

  (908) 542-4460

  kbowen@reliantrx.com

  	
   

  	
  Name

  Phone

  Fax

  e-mail

  	
  v.Rajasekaran
  / V. Sundaramoorthy

  00 91 44 22452864

  00 91 44 22452462

  vrajasekaran@shasun.com

  moorthy@shasun.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OPERATIONS

  	
   

  	
  Name

  Phone

  Fax

  e-mail

  	
  Christopher
  Campbell

  (908) 542-4425

  (908) 542-9405

  ccampbell@reliantrx.com

  	
   

  	
  Name

  Phone

  Fax

  e-mail

  	
  A.Chandrasekar

  

  

  chandru@shasun.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REGULATORY

  	
   

  	
  Name

  Phone

  Fax

  e-mail

  	
  Paulette Kosmoski

  (908) 542-4403

  (908) 542-4460

  pkosmoski@reliantrx.com

  	
   

  	
  Name

  Phone

  Fax

  e-mail

  	
  S.Jayanthi

  00 91 44 22452846

  00 91 44 22452462

  jayanthi@shasun.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NON-MEDICAL
  CUSTOMER COMPLAINTS

  	
   

  	
  Name

  Phone

  	
  Medical
  Affairs

  (908) 580-1200

  	
   

  	
  Name

  Phone

  Fax

  e-mail

  	
  B.Saravanakumar

  

  

  saravanan@shasun.com

  

 

1

 

IV                                   MANUFACTURING
COMPLIANCE

 

The Product
will be manufactured by Shasun pursuant to the Supply Agreement at the Shasun facility(s)
located at A-1/B, Sipcot Industrial Complex, Kudikadu Village, Cuddalore 607
005 (FDA facility registration # 3003585876). All manufacturing activities
shall conform to the requirements of ICH Guidance for Industry Q7A Good
Manufacturing Practice Guidance for Active Pharmaceutical Ingredients, and FDA
Guide for Manufacturing, Processing and Holding APIs.

 

1.                                      Premises

 

1.1                                 The
manufacturing facility(s) shall comply with all aspects of ICH Q7A section 4
Buildings and Facilities, as well as all additional requirements detailed in
the DMF and Supply Agreement.

 

2.                                      Equipment

 

2.1                                 Equipment
used to manufacture the Product shall comply with Q7A section 5 Process
Equipment, as well as all additional requirements detailed in DMF # 13192.

 

2.2                                 Shasun
shall maintain written records for usage, cleaning, maintenance, and
calibration of all equipment used in the processing of the Products 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. Shasun
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 (1Q)/ operational qualification (OQ)/ performance qualification
(PQ) shall be performed on all equipment used in analysis of the Products, and
the same equipment shall be placed on a calibration and/or preventive
maintenance schedule, as appropriate.

 

2.4                                 Shasun
shall only use the major equipment detailed in the DMF for the processing and
manufacture of the Product. Product manufactured in equipment other than that
stipulated in the filed Master Batch production records shall not be accepted.

 

3.                                      Personnel

 

3.1                                 Personnel
used to manufacture the Product shall comply with Q7A section 3 Personnel, as
well as any additional requirements defined by procedure. These
responsibilities shall be defined in written procedures.

 

3.2                                 The
training of personnel used to process the Product shall be appropriately
documented and available for review. Training shall be conducted on a
continuing basis by qualified individuals.

 

2

 

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

 

4.                                      Materials

 

4.1                                 Control
of materials used to process the Product shall comply with Q7A section 7
Materials Management, as well as all additional requirements detailed in DMF,
or required by written procedures.

 

4.2                                 Shasun
shall use production materials from approved suppliers as detailed in the DMF,
and required by ICH Q7A section 16 Contract Manufacturers.

 

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

 

4.4                                 Shasun
shall store all packaging materials, production materials, and finished API 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 shall be generated, as
required for Reliant, for finished API.

 

4.5                                 All
production materials used in the manufacture of the Products shall be tested in
accordance with Shasun standard operating procedures, using approved methods
and specifications.

 

5.                                      Documentation

 

5.1                                 Documentation
used to support the manufacture of the Product shall comply with Q7A section 6
Documentation and Records, as well as all additional requirements detailed in
DMF or required by Shasun.

 

5.2                                 Shasun
shall follow written documentation in the form of a Maste Batch Record for all
processes used in the manufacture of the Products. These records shall be made
available during any compliance audit of the site.

 

5.3                                 Shasun
shall maintain and follow all Standard Operating procedures (SOPs) required to
manufacture, package, analyze, release, and store the Product as detailed in
the DMF, and required by ICH Q7A.

 

5.4                                 Shasun
shall follow a suitable, internal, change control procedure for all
documentation. All changes to batch records, manufacturing specifications, test
methods, or sources of intermediates which have direct impact on the Safety,
Identity, Purity, or Quality of the API must be submitted to Reliant QA for
review and approval prior to implementation.

 

3

 

6.                                      Lot
Numbers and Expiration

 

6.1                                 Shasun
shall assign unique lot numbers finished API to ensure complete product
traceability.

 

6.2                                 The
Product lot retest period will be based on approved procedures and the approved
retest period as filed to the DMF.

 

7.                                      Product
Storage and Shipment

 

7.1                                 Storage
and shipment of the Product shall comply with Q7A section 10 Storage and
Distribution, section 17 Agents, Brokers, Traders, Distributors, Repackers, and
Relabellers, as well as all additional requirements detailed in DMF, or required
by Shasun.

 

7.2                                 Shasun
shall store all finished product in suitable containers, labeled with lot
specific information, as required by the DMF, and as detailed in the Supply
Agreement, and in a controlled environment under appropriate temperature and
humidity conditions.

 

7.3                                 Only
finished Product having an approved Certificate of Analysis may be shipped by
Shasun to a Reliant specified address. Reliant QA is the only agent authorized
to release the finished pharmaceutical product into commercial distribution.
Materials may be shipped under Quarantine from time-to-time as warranted, but
only upon the request of Reliant and with the prior written consent from the
Quality Departments from Reliant and Shasun. It is anticipated that Quarantine
shipments will have a low frequency of occurrence.

 

7.4                                 Shasun
shall segregate product by lot number prior to shipment.

 

V                                       QUALITY CONTROL

 

All testing
shall be done in accordance with the filed DMF, and all additional requirements
detailed in ICH Guidance for Industry Q7A Good Manufacturing Practice Guidance
for Active Pharmaceutical Ingredients, and FDA Guide for Manufacturing,
Processing and Holding APIs

 

1.                                      Premises

 

1.1                                 The
quality control laboratory shall comply with all aspects of ICH Q7A section 11
Laboratory Control as well as all additional requirements detailed in the DMF.

 

2.                                      Equipment

 

2.1                                 Installation
qualification (IQ)/operational qualification (OQ)/performance qualification
(PQ) shall be performed on all equipment used

 

4

 

in analysis of the Product, and the same equipment shall be placed on a
calibration and/or preventive maintenance schedule, as appropriate.

 

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

 

3.                                      Vendor
Approval

 

3.1                                 Shasun
shall suitably qualify all vendors from which materials are sourced for use in
the finished drug product. This includes, but is not limited to excipients,
API, container closure systems, printed commodities, etc. For those materials
provided to Shasun by Reliant (i.e. labels, cartons, and package inserts),
Reliant shall have the responsibility for qualification, if these vendors are
not already approved Shasun vendors.

 

4.                                      Personnel

 

4.1                                 Personnel
used to test and release the Product shall comply with Q7A section 3 Personnel,
as well as any additional requirements defined by procedure. These
responsibilities shall be defined in written procedures, and shall demonstrate
that individuals understand the methods and techniques they utilize. Training
shall be documented and is open for review. Training shall be conducted on a
continuing basis by qualified individuals.

 

5.                                      Out-of-Specification
(OOS) Investigations

 

5.1                                 Shasun
is responsible for following its SOP to investigate any test results that fail
to meet specifications.

 

6.                                      Reference
Standards

 

6.1                                 Shasun
shall use appropriately qualified reference standards that comply with current
ICH guidelines to release the Product.

 

7.                                      Product
Release

 

7.1                                 Reliant
shall only accept finished APIt that complies with the DMF and with the Supply
Agreement.

 

8.                                      Stability

 

8.1                                 Materials
shall be placed on stability per an approved protocol and shall be conducted in
accordance with Shasun Standard Operating Procedures.

 

5

 

VI                                   QUALITY
ASSURANCE

 

Shasun shall
maintain a quality department that complies with all aspects of ICH Q7A section
2 Quality Management to assure that the Product was manufactured, tested,
released, and stored in accordance with all requirements detailed in the DMF, and
as required by ICH and FDA.

 

1.                                      Documentation

 

1.1                                 Documentation
used to support the processing, testing and release of the Product shall comply
with ICH Q7A section 6 Documentation and Records, as well as all additional
requirements detailed in DMF or required by Shasun.

 

1.2                                 Shasun
shall provide a Certificate of Analysis indicating all regulatory test results
and their specifications, and a Certificate of Compliance indicating the drug
product has been manufactured, tested, and stored according to cGMP’s and all
requirements as detailed in the DMF. These two documents can be combined into
one, per current Shasun format.

 

2.                                      Samples

 

2.1                                 Shasun’s
Quality Unit shall assure that all samples are taken in accordance with ICH Q7A
section 8 Production and In-Process Controls, approved SOP’s and as detailed in
the DMF.

 

2.2                                 Shasun
shall maintain finished Product Reserve samples for a period of not less than
one year past the expiration date of the batch, or for 3 years after distribution
of the batch, whichever is longer. At least twice as much material shall be
retained as is needed to conduct all specification release testing.

 

2.3                                 Reserve
samples shall be retained and stored under conditions consistent with product
labeling. The reserve sample shall be stored in the same immediate container-closure
system in which the Product is marketed or in one that has essentially the same
characteristics.

 

3.                                      Change
Control

 

3.1                                 Shasun
shall follow a suitable change control process as defined by ICH Q7A section 13
Change Control. All Changes that impact the specifications, yield, quality, etc
of the API must be submitted to Reliant QA for review and approval prior to
implementation as such changes may require a Prior Approval Supplement to the
affected NDA.

 

3.2                                 Reliant
shall have seven business days from the date of submission of a change request
from Shasun in which to review the documentation and provide Shasun with
comment or approval. Any supporting documentation

 

6

 

requested by Reliant to determine acceptability of the change request
shall be provided by Shasun.

 

3.3                                 Shasun
must provide Reliant with acceptable supporting data and documentation to
support any filing to the approved NDA. Such documentation shall meet all FDA
and ICH criteria.

 

3.4                                 The
change may be implemented upon approval of the change to the NDA by FDA.

 

4.                                      Product
Complaints or Adverse Events

 

4.1                                 API
individuals reporting a finished pharmaceutical product related complaint
should be immediately directed to contact Reliant’s Customer Complaints Group
at 908-580-1200.

 

4.1.1                        Reliant
shall maintain a system to receive, log, evaluate, categorize, communicate, and
follow-up each complaint received.

 

4.2                                 Shasun
shall maintain a system as required by ICH Q7A section 15 Complaints and
Recalls, to handle product complaints.

 

4.2.1                        Shasun
shall notify Reliant QA of any complaint received by Shasun that may have
impact on the quality of API distributed to Reliant within 2 business days of
receipt of such complaint.

 

4.2.2                        Shasun
shall provide a final investigation report to Reliant QA for complaints on lots,
or complaints that may affect lots received by Reliant.

 

4.3                                 API
individuals reporting an Adverse Event (AE) should be immediately directed to
contact Reliant’s Medical Affairs Department at 908-580-1200.

 

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

 

4.5                                 Should
Reliant discover a product related problem, Reliant Quality Department shall
provide a written complaint notification to Shasun within 1 business day of the
occurrence.

 

5.                                      Product
Quality Review

 

5.1                                 Shasun
shall perform an annual product review as required by ICH Q7A section 2 part E
Product Quality Review. A copy of the summary of the product quality review
shall be provided to Reliant QA.

 

7

 

6.                                      Product
Recalls

 

6.1                                 Shasun
shall notify Reliant within two business days of an event that may necessitate
a product recall as define in ICH Q7A section 17 part G Handling Complaints and
Recalls. It shall be the sole responsibility of Reliant to issue a FDA Field Alert
Notification pertaining to a finished pharmaceutical product quality issue
discovered by Shasun or Reliant. An alert shall only be issued with substantive
evidence of a quality issue. Shasun shall provide Reliant with a written report
detailing the quality issue for which a product recall action was initiated.

 

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                                 Reliant
Pharmaceuticals shall have the right to perform audits of departments
responsible in the manufacture of the Products at least annually. Shasun shall
provide Reliant Quality, or representative, access to all facilities and records
pertaining to the manufacture of the product.

 

7.2                                 Reliant
Quality shall provide 20 business days notification for a routine audit, and
five business days’ notification for a ‘for cause’ audit pertaining to product
quality or safety.

 

7.3                                 Reliant
Quality, or representative, shall provide an exit meeting to Shasun management
to detail significant observations. A written report of observations shall be
issued to Shasun QA.

 

7.4                                 Shasun
shall provide a written response to the audit observations within 20 business
days. 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.

 

VII                               REGULATORY

 

All final,
Regulatory assessments pertaining to the manufacture, release, and distribution
of the finished pharmaceutical products shall be the responsibility of Reliant’s
Regulatory Affairs group.

 

1.                                      Inspections
by Regulatory Agencies

 

1.1                                 Shasun
shall inform Reliant Pharmaceuticals of any Regulatory Agency performing an
inspection relating to the Product(s), or a facilities inspection affecting the
Product(s) within two business day of notification.

 

8

 

1.2                                 All
Product(s) specific regulatory correspondence, or facilities correspondence
affecting the manufacturing of the Product(s) shall be conveyed to Reliant
Quality Department within 2 business days of receipt. For any response specific
to a Reliant Product, Shasun shall provide written responses to observations
for Reliant review prior to commitment to any regulatory authority.

 

1.3                                 Shasun
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 or facility to Reliant Quality Department within two business days of
receipt. A redacted copy may 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 finished pharmaceutical Product as outlined in ICH and FDA
regulatory guidance documents. All necessary supporting CMC documents be
provided to Reliant Regulatory by Shasun

 

3.                                      Drug
Listing

 

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

 

VIII                           VALIDATION

 

Shasun shall
assure that all systems used to manufacture, test, release, and distribute the
Product shall comply with ICH Q7A section 12 Validation, as well as additional
in-house requirements. All systems will have been appropriately transferred,
qualified, and/or validated prior to using that system in the processing of the
Product. All such records are open for review during an audit.

 

1.                                      Process

 

1.1                                 Shasun
shall be responsible for performing and documenting process validation to
comply with cGMP’s and to ensure consistency of quality Product.

 

2.                                      Equipment
Cleaning Validation

 

2.1                                 Shasun
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. Shasun shall

 

9

 

demonstrate, through approved protocol and final report, that cleaning
validation has been performed for the Product(s).

 

3.                                      Analytical
Test Methods

 

3.1                                 Shasun
shall be responsible for demonstrating the validity of all methodology used for
in-process control, and release of process materials, intermediates, and API.
This validation shall be established, through approved protocol and final
report, based on the current ICH and FDA validation guidance documents. Method
validation shall be performed consistent with Shasun-approved procedures.

 

4.                                      Computer

 

4.1                                 Shasun
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, components, and API as
prescribed by 21 CFR part 11, and any other current, approved FDA Guidance
requirements.

 

10

 

REVISION HISTORY

 

	
  Revision Date

  	
   

  	
  Revision Description

  
	
  August 2004

  	
   

  	
  New Document

  

 

APPROVALS

 

	
  Reliant Pharmaceuticals, Inc. 

  	
   

  	
  Shasun Chemicals and Drug, Ltd.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  Date

  	
  Signature

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  
	
  Godfrey Baker

  Associate Director, QA/QC

  	
   

  	
  V.Rajasekaran

  Head – Quality

  	
   

  
						

 

11

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