Document:

Phase III Warrant

THIS WARRANT AND THE WARRANT SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) SUCH OFFER OR TRANSFER IS MADE PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR (II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.  HEDGING TRANSACTIONS INVOLVING THIS WARRANT AND THE WARRANT SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT OF 1933.

THIS WARRANT AND THE SHARES OF CLASS A COMMON STOCK ISSUED UPON ITS EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON

             TRANSFER SET FORTH IN SECTION 7 OF THIS WARRANT        

	 	
Date of Issuance: October 12, 2007

	 	 

ALPHARMA INC.

Class A Common Stock Purchase Warrant

Alpharma Inc., a Delaware corporation (the "Company"), hereby certifies that IDEA AG, a German aktiengesellschaft, or its registered assigns (the "Registered Holder"), is entitled, subject to the terms and conditions set forth below, to purchase from the Company, at any time or from time to time on or after the Approval Date (as defined below) and on or before 5:00 p.m. (New York City time) on the Termination Date (as defined below), a number of shares of Class A Common Stock, $0.20 par value per share, of the Company ("Common Stock"), determined in accordance with Section 1, at a purchase price per share determined in accordance with Section 1.  The shares purchasable upon exercise of this Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant, are hereinafter referred to as the "Warrant Shares" and the "Purchase Price," respectively.

	Warrant Shares; Purchase Price.

	Subject to Section 1(d), the number of Warrant Shares shall be (i) $50,000,000 divided by (ii) 150% of the 30-Day Average Common Stock Trading Price (as defined below) as of the Phase III Milestone Date (as defined below); provided, however, that the number of Warrant Shares shall not, in any event, exceed 2,222,223 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after the date hereof).
	Subject to Section 1(d), the Purchase Price shall be 150% of the 30-Day Average Common Stock Trading Price as of the Phase III Milestone Date (as defined below); provided, however, that the Purchase Price shall not, in any event, be less than $22.50 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after the date hereof).
	Within 20 Business Days (as defined below) after the Phase III Milestone Date, the Company shall (unless Section 1(d) applies) deliver notice to the Registered Holder of the number of Warrant Shares and the Purchase Price as determined in accordance with Sections 1(a) and (b).  In the event that the Purchase Price would, but for the proviso in Section 1(b), be less than $22.50 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after the date hereof), the Registered Holder may, within 20 Business Days after the receipt of such notice, deliver notice to the Company that it has irrevocably elected to cause the Company to repurchase this Warrant (subject to the occurrence of the Approval Date) in exchange for a cash payment to the Registered Holder of its Proportionate Part (as defined below) of $12,500,000.  Upon delivery of such notice, the Registered Holder's sole rights upon surrender or exercise of this Warrant shall be to receive the consideration set forth in this Section 1(c).  If the Registered Holder shall have delivered such notice, the Registered Holder may, at any time during the Exercise Period, deliver to the Company the original copy of this Warrant, a duly executed written instrument acknowledging that this Warrant is being so surrendered and that it is thereafter void, and instructions as to the account to which such payment should be sent by wire transfer.  Upon delivery of this Warrant and such acknowledgement and instructions, this Warrant shall immediately terminate and be void, and the Company shall, within five Business Days thereafter, pay to the Registered Holder its Proportionate Part of $12,500,000, by wire transfer of immediately available funds to the account designated by the Registered Holder in the instructions referred to above.
	If, prior to the Phase III Milestone Date, there is consummated any reorganization, recapitalization, reclassification, consolidation or merger involving the Company in which the Common Stock will be converted into or exchanged for securities, cash or other property (other than a transaction covered by Section 4(a), 4(b) or 4(d) below) (collectively, a "Reorganization"), then, notwithstanding anything to the contrary in Sections 1(a) and 1(b):

	the Purchase Price shall equal the greater of (x) the 30-Day Average Common Stock Trading Price as of the earlier of (1) the date on which such Reorganization is first publicly announced or (2) the date on which such Reorganization was consummated (the result of this clause (x), the "Reorganization Reference Price"), or (y) $22.50 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after the date hereof), and
	the number of Warrant Shares shall equal the lesser of (1) $50,000,000 divided by 150% of the Reorganization Reference Price determined in accordance with clause (i) above and (2) 2,222,223 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after the date hereof).

For the avoidance of doubt, this Warrant will nevertheless be exercisable only during the Exercise Period (as defined below), and the cash, securities or other property receivable by the Registered Holder upon exercise of this Warrant shall be subject to adjustment as a result of such Reorganization as provided in Section 4(e).

	In the event that the Purchase Price would, but for the minimum price in clause (y) of Section 1(d)(i), have been less than $22.50 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after the date hereof), the Registered Holder may, within 20 Business Days (as defined below) after the Phase III Milestone Date, deliver notice to the Company that it has irrevocably elected to cause the Company to repurchase this Warrant (subject to the occurrence of the Approval Date) in exchange for a cash payment to the Registered Holder of its Proportionate Part (as defined below) of $12,500,000, together with the cash payment described in Section 3(e).  Upon delivery of such notice, the Registered Holder's sole rights upon surrender or exercise of this Warrant shall be to receive the consideration set forth in this Section 1(e) and in Section 3(e).  If the Registered Holder shall have delivered such notice, the Registered Holder may, at any time during the Exercise Period, deliver to the Company the original copy of this Warrant, a duly executed written instrument acknowledging that this Warrant is being so surrendered and that it is thereafter void, and instructions as to the account to which such payment should be sent by wire transfer.  Upon delivery of this Warrant and such acknowledgement and instructions, this Warrant shall immediately terminate and be void, and the Company shall, within five Business Days thereafter, pay to the Registered Holder its Proportionate Part of $12,500,000, together with the cash payment described in Section 3(e), by wire transfer of immediately available funds to the account designated by the Registered Holder in the instructions referred to above.
	As used in this Warrant, the following terms have the following meanings:

	"30-Day Average Common Stock Trading Price" means, as of any date, the average of the closing sale prices for the Common Stock on the New York Stock Exchange (or, if the Common Stock does not trade on the New York Stock Exchange during such period, on the primary national securities exchange or another nationally recognized trading system on which the Common Stock trades during such period) over the trading days included in the 30 calendar days immediately preceding such date (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring during such period); provided, however, that if the Common Stock does not trade on a national securities exchange or another nationally recognized trading system during such period, the 30-Day Average Common Stock Trading Price as of such date shall be the Fair Market Value (as defined below) of the Common Stock as of such date, determined in accordance with clause (2) of the definition of Fair Market Value set forth below.
	"Approval Date" means the date on which the $45,000,000 or $65,000,000 milestone payment is due as a result of achievement of the fourth milestone set forth in Section 3.2 of the License Agreement (as defined below).
	"Business Day" means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in New York City.
	"Exercise Period" means the period beginning on the Approval Date and ending on the Termination Date.
	"License Agreement" means the Exclusive License Agreement dated September 4, 2007, between IDEA AG and Alpharma Ireland Limited, an Irish corporation.
	"Phase III Milestone" means that the Company has publicly announced successful completion of either the Phase III trial of Diractin referred to as Trial 1 or the Phase III trial of Diractin referred to as Trial 2 in Schedule F of the License Agreement, with efficacy and safety results that the Company believes warrant proceeding (without conducting any additional or new clinical trials other than successful completion of the other of such Trial 1 or Trial 2) with the filing of a New Drug Application with the U.S. Food and Drug Administration for the approval of Diractin as a topical treatment for pain.
	"Phase III Milestone Date" means the date on which the Phase III Milestone has occurred.
	"Proportionate Part" means a fraction, the numerator of which is the number of Warrant Shares purchasable upon the exercise of this Warrant (as of the date on which the Company repurchases this Warrant pursuant to Section 1, or as of the date on which this Warrant is exercised, as applicable) by the Registered Holder (giving effect to any subdivision of this Warrant pursuant to Section 7), and the denominator of which is the aggregate number of Warrant Shares initially purchasable by all Registered Holders of this Warrant (as of the date on which the number of Warrant Shares is fixed, but subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after such date).
	"Termination Date" means the earliest to occur of (i) the fifth anniversary of the Approval Date, (ii) the tenth anniversary of the date hereof, (iii) if the License Agreement terminates prior to Approval Date, the date of such termination of the License Agreement and (iv) if the Warrant is repurchased by the Company for $12,500,000 pursuant to Section 1, the date of such repurchase.

	Exercise.

	Exercise for Cash.  The Registered Holder may, at its option, elect to exercise this Warrant, in whole or in part and at any time, or from time to time, during the Exercise Period, by surrendering this Warrant, with the purchase form appended hereto as Exhibit I duly executed by or on behalf of the Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, in lawful money of the United States, of the Purchase Price payable in respect of the number of Warrant Shares purchased upon such exercise.

	Cashless Exercise.  

	The Registered Holder may, at its option, elect to exercise this Warrant, in whole or in part and at any time or from time to time, during the Exercise Period, on a cashless basis, by surrendering this Warrant, with the purchase form appended hereto as Exhibit I duly executed by or on behalf of the Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, by canceling a portion of this Warrant in payment of the Purchase Price payable in respect of the number of Warrant Shares purchased upon such exercise.  In the event of an exercise pursuant to this Section 3(b), the number of Warrant Shares issued to the Registered Holder shall be determined according to the following formula:  

X = Y * (A-B)

A

Where:  X = the number of Warrant Shares that shall be issued to the Registered Holder; 

Y =the number of Warrant Shares for which this Warrant is being exercised (which shall include both the number of Warrant Shares issued to the Registered Holder and the number of Warrant Shares subject to the portion of the Warrant being cancelled in payment of the Purchase Price); 

A =the Fair Market Value (as defined below) of one share of Common Stock as of the Exercise Date (as defined below); and

  B =the Purchase Price then in effect.

	The Fair Market Value of any security, cash or other property as of any date shall be determined as follows:

	In the case of a security that is listed on a national securities exchange or another nationally recognized trading system as of such date, the Fair Market Value per share of one share (or other unit) of such security shall be deemed to be the average of the high and low reported sale prices per share (or other unit) of such security thereon on the trading day immediately preceding such date (provided that if no such price is reported on such day, the Fair Market Value per share of such security shall be determined pursuant to clause (2)).
	In the case of any security that is not listed on a national securities exchange or another nationally recognized trading system as of such date, the Fair Market Value per share (or other unit) as of such date shall be an amount determined by the Board of Directors of the Company (the "Board") to represent the fair market value per share (or other unit) of such security, and the exercise of this Warrant pursuant to this Section 3(b) shall be delayed until such determination is made and notice thereof is provided to the Registered Holder (whereupon the Registered Holder will be given at least three Business Days to determine whether to proceed with an exercise of this Warrant pursuant to this Section 3(b)).
	In the case of any property other than any securities or cash, the Fair Market Value of such property as of such date shall be an amount determined by the Board to represent the fair market value of such property.
	In the case of any cash, the Fair Market Value of such cash as of such date shall be the amount of such cash.

	Exercise Date.  Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 3(a) or 3(b) above (the "Exercise Date").  At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in Section 3(d) below shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.

	Issuance of Common Stock Certificates.  As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within 10 days thereafter, the Company, at its expense, will cause to be issued in the name of, and delivered to, the Registered Holder, or as the Registered Holder (upon payment by the Registered Holder of any applicable transfer or withholding taxes) may direct:

	a certificate or certificates for the number of full Warrant Shares to which the Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which the Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 5 hereof; and
	in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of Warrant Shares equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of Warrant Shares for which this Warrant was so exercised (which, in the case of an exercise pursuant to Section 3(b), shall include both the number of Warrant Shares issued to the Registered Holder pursuant to such partial exercise and the number of Warrant Shares subject to the portion of the Warrant being cancelled in payment of the Purchase Price).

	Cash Payment Following Pre-Phase III Milestone Reorganization.  If, prior to the Phase III Milestone Date, (x) there is consummated any Reorganization, (y) the Approval Date later occurs and (z) either this Warrant is thereafter exercised or the Registered Holder requires the Company to repurchase the Warrant for $12,500,000 pursuant to Section 1(e), then the Company shall pay to the Registered Holder, within three Business Days following such exercise or repurchase of this Warrant, its Proportionate Part of an amount in cash equal to the interest (and, for the avoidance of doubt, only the interest) that would accrue during the period beginning on the date of consummation of such Reorganization and ending on the Approval Date (or, if applicable, the date of consummation of such repurchase of this Warrant), based on:

	the annual interest rate publicly announced by Citibank, N.A., New York, New York, from time to time as its "prime" commercial loan rate, changing as such rate changes (and compounding annually); and
	a principal amount equal to:

	in the case of an exercise of the Warrant, the product of (x) the aggregate number of Warrant Shares with respect to which this Warrant is exercisable (as of the Approval Date, prior to giving effect to any exercise of this Warrant) and (y) the difference between (1) the Fair Market Value, as of the date of consummation of such Reorganization, of the securities, cash or other property issuable (pursuant to Section 4(e)) upon exercise of a single share of this Warrant, minus (2) the higher of (I) the Reorganization Reference Price and (II) $22.50 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting the Common Stock occurring at any time after the date hereof); and
	in the case of a repurchase of the Warrant for $12,500,000 pursuant to Section 1(e), $12,500,000.

	Adjustments.

	Adjustment for Stock Splits and Combinations.  If the Company shall at any time, or from time to time after the date on which the number of Warrant Shares is fixed effect a subdivision of the outstanding Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased.  If the Company shall at any time or from time to time after the date on which the number of Warrant Shares is fixed combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before the combination shall be proportionately increased.  Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

	Adjustment for Certain Dividends and Distributions.  In the event the Company shall, at any time or from time to time after the date on which the number of Warrant Shares is fixed, make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the Purchase Price then in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Purchase Price then in effect by a fraction:

	the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
	the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution;

provided, however, that if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Purchase Price shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends or distributions.

	Adjustment in Number of Warrant Shares.  When any adjustment is required to be made in the Purchase Price pursuant to Section 4(a) or 4(b) above, the number of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment.

	Adjustments for Other Dividends and Distributions.  In the event the Company shall, at any time or from time to time after the date on which the number of Warrant Shares is fixed, make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Company (other than shares of Common Stock) or in cash or other property (other than regular cash dividends paid out of earnings or earned surplus, determined in accordance with generally accepted accounting principles), then and in each such event provision shall be made so that the Registered Holder shall receive upon exercise hereof, in addition to the number of shares of Common Stock issuable hereunder, the kind and amount of securities of the Company, cash or other property which the Registered Holder would have been entitled to receive had this Warrant been exercised on the date of such event and had the Registered Holder thereafter, during the period from the date of such event to and including the Exercise Date, retained any such securities receivable during such period, giving application to all adjustments called for during such period under this Section 4 with respect to the rights of the Registered Holder. 

	Adjustment for Reorganization.  If there shall occur any Reorganization, then, following such Reorganization, the Registered Holder shall receive upon exercise hereof the kind and amount of securities, cash or other property which the Registered Holder would have been entitled to receive pursuant to such Reorganization if such exercise had taken place immediately prior to such Reorganization.  In any such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Purchase Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities, cash or other property thereafter deliverable upon the exercise of this Warrant.

	Certificate as to Adjustments.  Upon the occurrence of each adjustment or readjustment of the Purchase Price pursuant to this Section 4, the Company at its expense shall, as promptly as reasonably practicable but in any event not later than 30 days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Registered Holder a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property for which this Warrant shall be exercisable and the Purchase Price) and showing in detail the facts upon which such adjustment or readjustment is based.  The Company shall, as promptly as reasonably practicable after the written request at any time of the Registered Holder (but in any event not later than 30 days thereafter), furnish or cause to be furnished to the Registered Holder a certificate setting forth (i) the Purchase Price then in effect and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the exercise of this Warrant.

	Fractional Shares.  The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall pay the value thereof to the Registered Holder in cash on the basis of the Fair Market Value per share of Common Stock as of the Exercise Date.
	Investment Representations.  The initial Registered Holder represents and warrants to the Company as follows:

	Investment.  It is acquiring the Warrant, and (if and when it exercises this Warrant) it will acquire the Warrant Shares, for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act of 1933, as amended (the "Securities Act"), nor with any present intention of distributing or selling the same in violation of the Securities Act; and the Registered Holder has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the disposition thereof in violation of the Securities Act.  

	Accredited Investor.  The Registered Holder is an "accredited investor" as defined in Rule 501(a) under the Securities Act.
	Experience.  The Registered Holder has made such inquiry concerning the Company and its business and personnel as it has deemed appropriate; and the Registered Holder has sufficient knowledge and experience in finance and business that it is capable of evaluating the risks and merits of its investment in the Company. 

	Transfers, etc.

	Neither this Warrant nor the Warrant Shares shall be offered or transferred by sale, assignment, pledge or otherwise unless (i) such offer or transfer is made pursuant to registration under the Securities Act or (ii) the Company has received an opinion of counsel, which opinion is satisfactory to the Company, to the effect that such registration is not required under the Securities Act.  Without limiting the foregoing sentence, this Warrant may not be transferred by sale, assignment, pledge or otherwise, other than (x) if the Registered Holder is IDEA AG, by IDEA AG to a single transferee to whom IDEA AG has sold or assigned its right to receive payments under the License Agreement (such assignee, the "Payment Assignee"), (y) if the Registered Holder is IDEA AG or the Payment Assignee, by IDEA AG or the Payment Assignee to up to an aggregate of 40 transferees and (z) by any transferee referred to in clause (y), to a single subsequent transferee to whom such first transferee transfers such Warrant, provided that such subsequent transferee agrees in writing prior to such transfer (with a copy to the Company) to immediately exercise such Warrant upon such transfer and to immediately sell all of the underlying Warrant Shares (and provided that such transferee actually does so).  Hedging transactions involving this Warrant and the Warrant Shares may not be conducted unless in compliance with the Securities Act.
	Each certificate representing Warrant Shares shall bear a legend substantially in the following form:

"These shares have not been registered under the Securities Act of 1933.  They may not be offered or transferred by sale, assignment, pledge or otherwise unless (i) such offer or transfer is made pursuant to registration under the Securities Act or (ii) the corporation has received an opinion of counsel, which opinion is satisfactory to the corporation, to the effect that such registration is not required under the Securities Act of 1933.  Hedging transactions involving these shares may not be conducted unless in compliance with the Securities Act of 1933."

	The legend described in Section 7(b) shall be removed, at the request of the Registered Holder, upon satisfaction of the condition described in clause (i) or clause (ii) of such legend.
	The Company will maintain a register containing the name and address of the Registered Holder of this Warrant.  The Registered Holder may change its address as shown on the warrant register by written notice to the Company requesting such change.

	Notices of Record Date, etc.  In the event that, during the Exercise Period:

	the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right; or
	of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity and its Common Stock is not converted into or exchanged for any other securities or property), or any transfer of all or substantially all of the assets of the Company; or
	of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,

then, and in each such case, the Company will send or cause to be sent to the Registered Holder a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up.  Such notice shall, unless impracticable, be sent at least 10 days prior to the record date or effective date for the event specified in such notice.

	Reservation of Stock.  The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, such number of Warrant Shares and other securities, cash and/or property, as from time to time shall be issuable upon the exercise of this Warrant.

	Exchange or Replacement of Warrants.  

	Upon the surrender by the Registered Holder, properly endorsed, to the Company at the principal office of the Company, the Company will, subject to the provisions of Section 7 hereof, issue and deliver to or upon the order of the Registered Holder, at the Company's expense, a new Warrant or Warrants of like tenor, in the name of the Registered Holder or as the Registered Holder (upon payment by the Registered Holder of any applicable transfer or withholding taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock (or other securities, cash and/or property) then issuable upon exercise of this Warrant.
	Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

	Notices.  All notices and other communications from the Company to the Registered Holder in connection herewith shall be in writing and shall be sent by courier service or personal delivery to the address last furnished to the Company in writing by the Registered Holder.  All notices and other communications from the Registered Holder to the Company in connection herewith shall be shall be in writing and shall be sent by courier service or personal delivery to the Company at its principal office.  All such notices and communications shall be deemed delivered (i) if delivered by personal delivery, when delivered and (ii) if delivered by courier service guaranteeing a specific delivery date, the date on which such courier service guarantees such delivery.

	No Rights as Stockholder.  Until the exercise of this Warrant, the Registered Holder shall not have or exercise any rights by virtue hereof as a stockholder of the Company.

	Amendment or Waiver.  Any term of this Warrant may be amended or waived only by an instrument in writing signed by the party against which enforcement of the change or waiver is sought.  No waivers of any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

	Section Headings.  The section headings in this Warrant are for the convenience of the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of the parties.

	Governing Law.  This Warrant will be governed by and construed in accordance with the internal laws of the State of Delaware (without reference to any conflicts of law provisions thereof that would cause the application of the laws of any other jurisdiction).
	Currency.  All references to "$" in this Warrant refer to United States dollars.

	Facsimile Signatures. This Warrant may be executed by facsimile signature.

	Acceptance by Registered Holder.  By acquiring and accepting this Warrant, the Registered Holder shall be deemed to have agreed and accepted the terms and conditions of this Warrant.

EXECUTED as of the Date of Issuance indicated above.
ALPHARMA INC.

By: /s/ Jeffrey S. Campbell                        

     Name: Jeffrey S. Campbell

     Title:   Executive Vice President and

                Chief Financial Officer

ACCEPTED AND AGREED:

IDEA AG

By: /s/ Gregor Cevv          

      Name:  Gregor Cevc

      Title:    CEO

EXHIBIT I

PURCHASE FORM

To: Alpharma Inc.Dated:____________

The undersigned Registered Holder, pursuant to the provisions set forth in the attached Warrant, hereby elects to purchase (check applicable box):

ð
 ____ shares of the Class A Common Stock of Alpharma Inc. covered by such Warrant; or 

ð
____ shares of Class A Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 3(b).

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant.  Such payment takes the form of (check applicable box or boxes):
ð
$______ in lawful money of the United States; and/or

ð
the cancellation of such portion of the attached Warrant as is exercisable for a total of _____ Warrant Shares (using a Fair Market Value of $_____ per share for purposes of this calculation) ; and/or

ð
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 3(b), to exercise this Warrant with respect to ____  Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in Section 3(b).  

Signature:  ______________________

Address:  _______________________
_______________________Operation Services Agreement

Exhibit 10.1 - Confidential Materials Omitted And Filed Separately With The Securities And Exchange Commission.  Asterisks Denote Omissions

Final

OPERATION SERVICES AGREEMENT

THIS OPERATION SERVICES AGREEMENT (the "Agreement") is entered into in Taizhou, China on July 3, 2007 (the "Effective Date") between: 

Zhejiang Hisun Pharmaceutical Co., Ltd., 46 Waisha Road, Jiaojiang District, Taizhou City, Zhejiang, The Peoples Republic of China (hereinafter referred to as "Hisun"), whose legal representative is Mr. Bai Hua, who holds the position of President, and is of Chinese nationality; and

Alpharma (Taizhou) Pharmaceutical Co., Ltd., 56 Binhai Road, Jiaojiang District, Taizhou City, Zhejiang, The Peoples Republic of China (hereinafter referred to as "Alpharma"), whose legal representative is Mr Carl-Ake Carlsson, who holds the position of Chairman of the Board, and is of Norwegian nationality.

WHEREAS, Alpharma and Hisun have concurrently herewith entered into an Acquisition and Construction Agreement concerning Alpharma's purchase from Hisun of certain of Hisun's assets used to produce Vancomycin, including final handling, and Hisun 's construction for Alpharma of an additional manufacturing facility to produce Vancomycin;

WHEREAS, The Parties have, also concurrently herewith, entered into a Lease Agreement relating to the buildings and premises and fermentation assets and certain existing equipment used for the manufacture of Vancomycin; 

WHEREAS, Alpharma's Parent and Hisun have entered into a Manufacturing and Supply Agreement pursuant to which Hisun will manufacture and supply to Alpharma's Parent Vancomycin until such time that the new manufacturing facility has been completed and Alpharma has obtained its Pharmaceutical Manufacturing License all pursuant to the terms and conditions set forth in the Manufacturing and Supply Agreement; and

WHEREAS, Alpharma desires Hisun to perform certain services related to Alpharma's manufacture of Vancomycin in accordance with the terms and conditions of this Agreement, and Hisun desires to perform those services for Alpharma in accordance with the terms and conditions of this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED as follows:

1.Definitions
1.1Capitalized terms not defined in this Agreement shall have the meanings set forth in the Index of Definitions attached as Schedule 1 to the Acquisition and Construction Agreement.  In addition, the following terms shall have the respective meanings set forth below:

	
Agents
	
has the meaning specified in Clause 24.2.

	
Agreement
	
has the meaning specified in the preamble above.

	
Change
	
has the meaning specified in Clause 13.1.

	
****
	
has the meaning specified in Clause 14.2.

	
Environmental Permit
	
has the meaning specified in Clause 9.5.

	
Initial Term
	
has the meaning specified in Clause 25.1.

	
****
	
has the meaning specified in Clause 14.2.2.

	
****
	
has the meaning specified in Clause 14.2.

	
Production Plan
	
has the meaning specified in Clause 11.1.

	
Recipient
	
has the meaning specified in Clause 24.1.

	
Renewal Term
	
has the meaning specified in Clause 25.1.

	
Service Fee
	
has meaning specified in Clause 14.1.

	
Shared Service Fee
	
has meaning specified in Clause 6.1.

	
Term
	
means the term of the Agreement as provided in Clause 25.1.

	
Territory
	
means worldwide.

	
Trademarks
	
means the trademarks of Alpharma listed in Appendix 1.

2.Services 
2.1Hisun agrees to perform the Services from the Effective Date and during the Term in accordance with this Agreement and the Appendices. The Services will include those activities that are specified as Hisun's responsibility in the Agreement or its Appendices.  The division of responsibility between the Parties concerning the manufacturing of the Product is specified in particular in the Technical (GMP) Agreement. 

3.Services related to the Maintenance of the Manufacturing Facility; Utilities 
3.1Hisun will, at its cost, provide and make available all utilities (i.e. heating, electricity, hot and cold water, steam and any other relevant utilities) required for the manufacture of the Product in the Manufacturing Facility as requested by Alpharma. Alpharma will compensate Hisun for the costs incurred in this respect as provided in Clause 14.5 and Appendix 2. 

3.2Hisun will use reasonable commercial efforts to maintain the Manufacturing Facility in accordance with written maintenance plans to be established in writing by Alpharma.  Hisun shall carry out such maintenance plans in a timely and workmanlike manner which shall not jeopardize the continued effectiveness of the Regulatory Documents.  The costs of maintaining the Manufacturing Facility shall be divided between the Parties as set out in Clauses 3.3 and 3.4.

3.3Alpharma is responsible for the out-of-pocket costs of maintaining the Manufacturing Equipment except the Leased Manufacturing Equipment.  Alpharma shall compensate Hisun for the out-of-pocket cost incurred in this respect according to Clause 14.5 and Appendix 2, provided the costs are incurred by Hisun in accordance with the maintenance plan approved by Alpharma as provided above.  Alpharma is also responsible for the costs of obtaining any new or replacement machinery and equipment that Alpharma determines is necessary which shall be automatically considered part of the Manufacturing Equipment, and thus shall also be maintained by Hisun at Alpharma's cost.  Alpharma shall also be responsible for all maintenance costs caused directly by Alpharma's failure to use commercially reasonable efforts to follow the manufacturer's operating guidelines for the Manufacturing Equipment.

3.4Hisun is responsible for all of its obligations under the Lease Agreement, including the costs of maintaining the Leased Buildings and the Leased Manufacturing Equipment.  For the avoidance of doubt, Hisun is also responsible for maintenance cost related to any other facilities used by Hisun in the performance of the Services.

3.5All Manufacturing Equipment shall be owned by Alpharma (except for the Leased Manufacturing Equipment leased under the Lease Agreement), and Hisun must ensure that all such Manufacturing Equipment is clearly identified as such at all times by having a label clearly stating "Property of Alpharma - Not to be removed without the prior written permission of Alpharma" or such other identification reasonably requested by Alpharma. Hisun shall, at Alpharma's reasonable request, sign any documents reasonably necessary in order to secure Alpharma's title to such machinery and equipment including written acknowledgement to the effect that Alpharma owns such machinery and equipment with a detailed identification of such machinery and equipment. 

3.6Hisun undertakes to preserve and safeguard the Manufacturing Equipment owned by Alpharma at all times with at least the same degree of care as Hisun uses in respect of its own machinery and equipment and in no event less than reasonable care. Hisun agrees not to use the Manufacturing Equipment and the Leased Buildings for any purpose other than performing the Services under this Agreement without Alpharma's prior written approval.

4.Services related to Quality Control and Quality Assurance 
4.1Hisun shall perform all necessary quality control and quality assurance services and activities as specified in the Technical (GMP) Agreement provided that these services shall be provided by Hisun only for a reasonable period after the Effective Date and until Alpharma is able to perform the services itself. 

4.2The Services shall be performed in accordance with (i) the provisions of this Agreement, (ii) the Specifications, (iii) the Technical (GMP) Agreement, (iv) cGMP and (v) all other instructions, standards and specifications regarding the manufacture not inconsistent with the requirements of this Agreement as reasonably requested by Alpharma from time to time. 

4.3Hisun shall perform the Services with all reasonable skill and care and in no event with less skill and care than is required by the cGMP.

4.4Alpharma shall be responsible for release of the Product. Hisun shall perform and provide analysis and testing of the Product in this respect in accordance with the Technical (GMP) Agreement and Appendix 7. 

4.5Alpharma shall reimburse Hisun the out-of-pocket costs related to the quality control and quality assurance services in accordance with Clause 14.5. 

5.Services related to Environmental and Fire Prevention 
5.1Hisun will be responsible for compliance with Environmental, Health and Safety Laws and fire prevention laws related to the Manufacturing Facility, including establishing and maintaining the necessary plans for environmental and fire prevention matters and the implementation of such plans including regular tests and ongoing preparedness.

5.2In addition, Hisun shall be responsible for waste water discharge and solid waste disposal from the Manufacturing Facility and the other volume-dependent environmental operating costs that are specifically listed in Appendix 2.  Alpharma shall reimburse Hisun for its costs incurred in this respect according to Clause 14.5 and Appendix 2.  

5.3It is Hisun's obligation to ensure that the environmental and fire prevention plans are in compliance with all applicable laws and regulations in The Peoples Republic of China.

6.Shared Services 
6.1Hisun shall perform certain additional services that shall be performed by service providers not devoted exclusively to the Vancomycin operations such as construction and maintenance of ingress and egress roads, provision of meals, dormitories and medical treatment and commuter bus service for Alpharma Employees to the same extent as provided for similarly situated employees of Hisun, site security, gardening and other site services (the "Shared Services").  Alpharma shall compensate Hisun for providing the Shared Services by payment of **** payable as set forth in Clause 15.2 (the "Shared Services Fee").

7.Services related to purchase and storing of Raw Materials
7.1Hisun shall provide adequate storage facilities for raw materials used by Alpharma in accordance with the Technical (GMP) Agreement and Alpharma's instructions, standards and specifications at appropriate storage facilities. 

7.2Hisun will provide purchasing and procurement services related to the raw material including quality control of raw material, handling, administration of purchasing and procurement, etc., in accordance with the Technical (GMP) Agreement, Appendix 3 and Appendix 5 and any additional guidelines to be agreed between the Parties. 

7.3Alpharma will, at its own cost, be responsible for purchasing all raw materials and packaging materials required for the manufacture of the Product and for the selection of such raw materials and raw material suppliers. However, the Parties may agree that certain raw materials and packaging materials required for the manufacture and packaging of the Product may, upon the agreement of the Parties, be provided by Hisun.  In such case, Alpharma will compensate Hisun for its out-of-pocket costs incurred in this respect in accordance with Clause 14.5 and Appendix 2 unless otherwise agreed.

8.Services related to Alpharma Employees
8.1Hisun shall permit Alpharma, all Alpharma Employees and all designated consultants and agents of Alpharma full, free and unrestricted access at all times to the Leased Buildings.  If Alpharma believes that it has a need for access to other buildings within the Hisun site, Alpharma shall notify Hisun of that belief, and Hisun will agree to provide such access to other buildings provided that such access is reasonably required by Alpharma in order to manufacture the Product, and provided further that Alpharma agrees to adhere to any restrictions or guidelines for such access to other buildings set out by Hisun.

8.2Alpharma is entitled to station Alpharma Employees and other representatives at the Leased Buildings for any purposes related to the production of the Product and the operation of the Manufacturing Facility.  Hisun will provide necessary office space and equipment for the Alpharma Employees in the Leased Buildings.

8.3Hisun will provide advice to Alpharma in relation to Alpharma's performance of payroll and administration services related the Alpharma Employees for a transitional period after the Effective Date. 

8.4Hisun agrees that neither it nor its Affiliates will actively seek to employ any Alpharma Employee during the Term who is a manager or senior employee. 

9.Services related to Manufacturing Authorizations and Certificates
9.1Alpharma shall be responsible for procuring and will own or validly hold a valid Manufacturing Authorization for the Product, Certificate of Good Manufacturing Practices for Pharmaceutical Products of The People's Republic of China, relevant environmental permits and such other governmental permits, licenses and authorizations not required to be procured by Alpharma or Hisun prior to the Effective Date which are necessary to manufacture and sell the Product as contemplated by this Agreement.  In the event that Hisun becomes aware of any facts or circumstance that could adversely affect any such authorization or permits in a material way, Hisun will promptly notify Alpharma.

9.2Hisun agrees to participate, and request its counsel to participate, in the procurement and retention of the permits, licenses and authorizations referred to in Clause 9.1 to the extent reasonably requested by Alpharma.   Both parties covenant and agree that, in all contacts with governmental officials undertaken pursuant to this Agreement, it will not take any action which would cause it, the other party, or any Affiliate of either party, to be in violation of any laws applicable to either party.

9.3**** 

9.4Hisun shall have and maintain all certificates and permits required for providing the Services required under the laws of The People's Republic of China.

9.5The Environmental Permit obtained by Alpharma from Zhejiang Province Environmental Protection Bureau on ****, a copy of which is attached hereto as Appendix 8A (the "Environmental Permit") includes a term that Hisun must cease production of certain products. Hisun hereby warrants and undertakes to comply with those terms of the Environmental Permit specifically relating to Hisun including without limitation to cease production of the products specified in the Environmental Permit on the terms specified therein, and to take all such actions as reasonably required by the environmental agencies of the People's Republic of China in respect of obtaining and maintaining the Environmental Permit. In addition to the above, and without in any way limiting the obligations set forth above, Hisun hereby agrees to sign the separate letter agreement concerning waste water volumes attached as Appendix 8B attached hereto.

10Services related to Storage and Shipping of Product
10.1Upon completion of manufacture, Product manufactured in the Manufacturing Facility will be stored by Hisun in accordance with the Technical (GMP) Agreement and Alpharma's instructions, standards and specifications at appropriate warehouse facilities at **** until shipment to Alpharma's customers or Alpharma's Affiliates. Hisun shall provide the services under this Clause 10.1 only until such time as the New Facility has been delivered to Alpharma according to the Acquisition and Construction Agreement and is fully qualified and operational, as Alpharma will take over the storage of Product (but not raw materials) at the warehouse facilities at **** at such time.

10.2Alpharma is responsible for arranging for shipment of the Product to Alpharma's customers. Hisun shall assist in respect of loading, discharge and related matters in accordance with Alpharma's commercially reasonable instructions.  Alpharma shall be responsible for all logistical and sales support-related activities and all communications with its customers. Hisun will not be responsible for the loss of the Product except for that caused by the fault of Hisun during storage.

10.3For the avoidance of doubt, title to Product shall remain with Alpharma at all time and shall not at any time pass to Hisun.  

10.4Hisun will provide commercially reasonable assistance requested by Alpharma in order to enable Alpharma to supply, in a timely manner, an export Certificate of Origin for all Products requiring such a Certificate and any other supporting documentation that Alpharma may require to export the Product to any destination country.

11Production Plan 
11.1On or before 1 October of each Calendar Year, Alpharma shall submit to Hisun in writing Alpharma's non-binding estimate of quantity of Product Alpharma intends to manufacture at the Manufacturing Facility during the next Calendar Year (the "Production Plan").  Alpharma will revise and update the Production Plan before the beginning of each Calendar Quarter or more frequently if appropriate.

12.Interruptions and Delays 
12.1Hisun shall use reasonable commercial efforts to provide the Services in accordance with the Production Plan.  If any activity constituting a part of the Services becomes subject to interruption or delay that may involve a risk of delays in respect of the Production Plan, for any reason, Hisun shall provide Alpharma with prompt written Notice of each such interruption or delay.

12.2Hisun shall, contemporaneously with the Notice in Clause 12.1, give Alpharma written Notice about when it reasonably believes it will be capable again of performing the Services in accordance with the Agreement, including information on the actions Hisun will take to overcome the interruption or delay.  If the interruption or delay lasts for more than 30 (thirty) days, the Parties will review the situation and discuss possible additional measures to be taken by Hisun in order to overcome the interruption or delay and remedy the consequences thereof.  

13Change Management
13.1Alpharma may at any time during the Term request changes to the Services (hereinafter a "Change"). All Changes will be decided and implemented in accordance with the following:
13.1.1If Hisun reasonably believes that a Change requested by Alpharma will result in increased out-of-pocket costs for Hisun that should not reasonably be covered by the Service Fee, Hisun shall inform Alpharma of its belief as soon as possible after having received the Change request.  Alpharma shall then have the option of confirming or canceling the Change.  Should Alpharma confirm the Change, any actual increased out-of-pocket costs shall be charged by Hisun and paid by Alpharma pursuant to Clause 14.5 only if Hisun can establish such increased cost has been incurred.  

13.1.2Unless a requested Change cannot be implemented within a reasonable time because the Know-How or the status or condition of the Manufacturing Facility cannot support such Change, if Hisun does not implement a requested Change within a reasonable time, and the change is required by a governmental regulation or the terms of an Alpharma DMF, Alpharma is entitled to terminate this Agreement with 3 (three) months written Notice, unless Hisun implements the requested Change during such 3 (three) months' period.

13.1.3Hisun shall not make any Changes without the prior written request or consent of Alpharma.

13.2All changes to the manufacturing process or other matters that may have an impact on any Regulatory Document shall be decided and implemented in accordance with Appendix 6.  Hisun shall not make any such changes without the prior written request or consent of Alpharma. Once a Regulatory Document has been filed by Alpharma with a Governmental Agency, Hisun agrees to take no action that would invalidate, require a modification or otherwise jeopardize the information included in such Regulatory Document. 

14.Fees
14.1In consideration of the Services provided by Hisun to Alpharma under the Agreement, Alpharma shall pay the "Service Fee" specified in Clause 14.2 and reimburse certain direct costs as specified in Clause 14.5. 

14.2****

14.3****

14.4****

14.5In addition to the Services Fee and the Shared Services Fee, Alpharma shall reimburse (a) Hisun's documented actual and direct costs as specified in Appendix 2 relating to (i) the supply of utilities in accordance with Clause 3 and (ii) waste water discharge and other environmental volume-dependent operating costs expressly specified in Appendix 2 and in accordance with Clause 5.2; and (b) Hisun's documented actual and direct out-of-pocket costs relating to the following: (i) the supply of maintenance in accordance with Clause 3, (ii) quality control and quality assurance services in accordance with Clause 4.5; (iii) Changes in accordance with Clause 13.1.1 and (iv) unless otherwise agreed, any raw materials and packaging materials supplied by Hisun pursuant to Clause 7.3.

14.6Alpharma shall have reasonable access to all documentation for the calculation of the costs relating to the supply of utilities and environmental volume-dependant operating costs set forth in Appendix 2 and the out-of-pocket costs to be reimbursed according to Clause 14.5 including reasonable access to Hisun's related books, internal cost calculations and any other supporting documentation. Hisun shall make available all such information and documentation requested by Alpharma from time to time, and shall grant Alpharma officers and employees and designees including auditors, consultants and agents access to Hisun's premises and books etc. in order to verify  the costs relating to the supply of utilities and environmental volume-dependant operating costs set forth in Appendix 2 and the out-of-pocket costs to be reimbursed according to Clause 14.5.

14.7The prices and fees will not be subject to adjustment unless expressly stated in the Agreement.

14.8****

14.9All prices set forth in this Agreement are in U.S. Dollars (USD) except as otherwise specified herein.

14.10The payment of the Service Fee according to Clause 14.2, the Shared Service Fee in accordance with Clause 6.1, and the reimbursement of expenses according to Clause 14.5 shall constitute full and complete payment for Hisun's performance of all of its obligations under this Agreement. Any other costs incurred by Hisun in the performance of this Agreement shall be for Hisun's own expense except if otherwise expressly stated in the Agreement.

14.11Each Party shall be individually responsible for the payment of any taxes imposed on it under the laws of The People's Republic of China or otherwise, and this Agreement shall not shift any tax obligation between the Parties.

15Payment
15.1The Service Fee may be invoiced by Hisun at the end of each Calendar Quarter ****. 

15.2The Shared Services Fee may be invoiced by Hisun on a monthly basis. The expenses to be reimbursed according to Clause 14.5 shall be invoiced on a monthly basis covering the costs for the previous calendar month..

15.3All invoices for the Service Fee shall be expressed in US dollars and payable in the RMB-equivalent of such US dollar-denominated amount (using the RMB-US dollar conversion rate in effect on the date of the invoice according to the Financial Times).  Payment shall be made in RMB by Alpharma to Hisun to a recognized banking institution in The Peoples Republic of China nominated by Hisun.  Each of the expenses to be reimbursed under Clause 14.5 and the Shared Service Fee payable under Clause 6.1 shall be invoiced and be payable in RMB.

15.4Payment of the Service Fee, the Shared Services Fee and the reimbursement of Hisun's expenses under Clause 14.5 shall be made within 15 (fifteen) days after the date on which the invoice is received by Alpharma which shall never be earlier than the dates specified in Clause 15.1 and Clause 15.2, as the case may be.

15.5In the event Alpharma fails to pay amounts which are due in accordance with Clause 15.4, Alpharma shall pay interest at the rate of 1.0% of the overdue payment per month.

16Inspections
16.1Hisun shall, upon reasonable advance Notice during normal business hours, permit Alpharma's designated directors, officers, employees, consultants and agents to inspect the utilities, laboratory facilities, raw material storage facilities, warehouse and any other premises, buildings or facilities used by Hisun in the provision of the Services and observe their respective operations, including all aspects of Hisun's production and quality control and quality assurance activities.  Hisun shall provide such number of Hisun personnel as reasonably necessary to assist Alpharma in said inspections.

16.2Promptly after Alpharma or Hisun has received notice of an inspection of the Manufacturing Facility or the Product by any Governmental Agency, the receiving Party shall give the other Party Notice of such inspection(s) and promptly after receipt send a copy of any notices or other correspondence it receives from any other Governmental Agency relating to the Product, the Manufacturing Facility or the manufacturing process for the Product.  Each Party shall provide to the other Party for its comments a copy of any planned reply to the Governmental Agency prior to its submittal.

16.3Upon request from Alpharma, Hisun will provide assistance to Alpharma in respect of any inspection of the Manufacturing Facility by any Chinese Governmental Agency.

17Non-Compete
17.1****

17.2****

18Regulatory Documents 
18.1On or before the Effective Date, Hisun has provided Alpharma with its application for the Vancomycin DMF and all other related correspondence with or submittals to the FDA.  From and after the Effective Date, Alpharma shall own all rights to the Vancomycin DMF. Hisun hereby agrees that Alpharma may use the Vancomycin DMF in Hisun's name until such time that the Vancomycin DMF has been transferred to Alpharma's name or Alpharma has obtained a DMF for the Product in the United States in its own name.

18.2In addition to the rights set forth under Clause 18.1, Alpharma shall be responsible for submitting all other required Regulatory Documents to the FDA, the European regulatory authorities and such other relevant Governmental Agencies in countries where Alpharma decides, from time to time, to seek authority to market and sell the Product.  These Regulatory Documents shall be submitted in the name of Alpharma.

18.3Hisun shall, at its own cost, assist and co-operate with Alpharma in all matters relating to the  Vancomycin DMF and all other Regulatory Documents including procuring data and information and any reporting requested or required by any Governmental Agency.

19Grant of license to the Know-How and Regulatory Documents
19.1Alpharma hereby grants to Hisun a non-exclusive, non-transferable (and without the right to sublicense other than to Hisun's Affiliates) license to use the Know-How and the Regulatory Documents during the Term solely in connection with Services to be provided under this Agreement and not for any other purpose whatsoever.

19.2Hisun recognizes that the Know-How and the Regulatory Documents belong to Alpharma and shall continue to solely belong to Alpharma during and after the Term, subject only to Clause 26.2.2.

19.3Hisun agrees to comply in all respects with the requirements of this Agreement, including all instructions, standards and specifications prescribed for Hisun by Alpharma for manufacturing, packaging and labeling the Product using the licenses granted by Alpharma in this Agreement. Hisun acknowledges that material compliance with the foregoing is a condition for the licenses granted by Alpharma in this Agreement.

20Public Registrations and Permits 
20.1Hisun warrants and undertakes that it has already effected and obtained and/or shall promptly effect and obtain all valid and effective registrations, permits, licenses, consents and/or approvals from any state, governmental or public bodies and authorities in China which are necessary for acceptance of this Agreement by Hisun and the performance of all obligations to be performed by Hisun under this Agreement, including those in relation to the inspection, quarantine, examination and customs clearance in China and the importation into The Peoples Republic of China of any part of the Know-How.

20.2Hisun shall deliver documents evidencing its compliance with Clause 20.1 to Alpharma for its inspection and retention upon Alpharma's request.

21The Trademarks and Know-How
21.1During the Term, Hisun shall observe and comply with all reasonable requirements, procedures and directions prescribed by Alpharma with respect to the use and safeguarding of the Trademarks and the Know-How.  Hisun agrees that unless authorized or required by Alpharma, it will not, at any time, make or authorize to be made, any use, directly or indirectly, of the Trademarks or the Know-How in connection with any articles of any description other than the Product or in any manner other than as provided for herein.  Hisun shall in no way represent that it has any ownership in the Trademarks or the Know-How and specifically acknowledges that any prior use of said Trademarks or the Know-How has not created and will not hereafter create any right, title or interest therein or thereto other than as provided for in this Agreement.  Hisun agrees that it shall at no time adopt, use, register, purchase or otherwise acquire, without Alpharma's prior written consent, any word, trademark or commercial name that is the same as or similar to the Trademarks and that it shall not use any of the Trademarks as a corporate name.

21.2If Hisun becomes aware of (i) the fraudulent imitation of the Product or the infringement or potential infringement or violation of the Know-How or any Trademarks; or (ii) any claim that the manufacture, use or sale of any Product infringes or violates any trademark, patent or the know-how rights of any Person, Hisun shall promptly notify Alpharma and shall assist Alpharma or its authorized representative in defending such infringement claim. Hisun shall take no steps nor initiate any action to stop any infringement or violation of the Trademarks or Know-How without Alpharma's prior written authorization. Hisun shall be guided in its actions with respect thereto by the instructions issued by Alpharma.  Participation in an action by Hisun at Alpharma's request shall be at Alpharma's sole expense.

21.3Alpharma shall pay the fees necessary to maintain in force the Trademarks and shall pay the legal fees and incidental costs and expenses (including those reasonably incurred by Hisun) arising from the defense or enforcement of the Know-How or the Trademarks if Alpharma decides to initiate such defense or enforcement. Without limiting Hisun's obligations as to the Know-How contained in the Acquisition and Construction Agreement, Alpharma agrees to defend, indemnify and hold Hisun harmless of any Third-Party claims resulting from Hisun's use of the Trademarks and the Know-How.  Hisun and Alpharma shall co-operate in any such defense, action or enforcement of the Trademarks or the Know-How but Alpharma shall have control thereof. Any amounts payable to Alpharma and/or to Hisun as a result of a settlement, judgment or other resolution of a defense or enforcement action or claim with respect to the Trademarks or the Know-How shall be for the sole benefit of Alpharma.

22Invention and Discoveries 
22.1Any and all Inventions and Discoveries, shall belong solely to Alpharma. Alpharma hereby grants a non-exclusive, irrevocable, non-transferable (without the right to sublicense other than to Hisun's Affiliates), royalty-free license to Hisun for the use of any such Inventions or Discoveries but only for the performance of the Services during the Term.  If Hisun becomes aware of any Inventions or Discoveries covered by the above, Hisun shall inform Alpharma thereof without undue delay.

22.2Alpharma shall have the right, but not the obligation, to prepare, file, and prosecute any patent applications and maintain patents as referred to in Clause 22.1 in its own name.  The cost of preparing, filing, and prosecuting any such patent applications and maintaining such patents shall be borne and paid for by Alpharma itself; provided, however, that nothing in this Agreement shall obligate Alpharma to obtain or maintain any such patents.  Hisun, if reasonably requested to do so by Alpharma, shall afford commercially reasonable assistance to Alpharma in the preparation and prosecution of patent applications pursuant to this Clause 22.2 and the reasonable costs of such assistance shall be borne and paid for by Alpharma.

23Data and Records
23.1All data and records generated by Hisun in the performance of the Services shall be the property of Alpharma and shall be considered Confidential Information of Alpharma, provided, however, that Hisun shall be entitled to retain one copy of any such data and records for archival purposes.

24.Confidentiality 
24.1The Parties shall maintain in confidence and shall not disclose to any Third Party any Confidential Information received pursuant to this Agreement for the Term of this Agreement and for a period of 5 (five) years thereafter provided, however, that such undertakings shall not apply to information that the receiving Party ("Recipient") can prove (i) was in the public domain; or (ii) was received from a Third Party under no secrecy obligation to the other party thereto; (iii) pertains to general information about chemical manufacturing or processing that is not specific and/or material to Product; (iv) it is obligated by law to disclose, or (v) a Party needs to inform its Affiliates or any Government Agency in order to perform in accordance with this Agreement. Confidential Information may be disclosed only to those Third Parties (including Affiliates) who have a need to know the information in connection with the exercise by a Party of its rights and obligations under this Agreement and who have agreed in writing to keep the information confidential to the same extent as is required by this Agreement. A Recipient shall utilize Confidential Information received from the other Party only in connection with the performance of obligations and enjoyment of rights pursuant to this Agreement and shall take commercially reasonable steps to protect the Confidential Information received from the other Party with the same degree of care taken to protect its own confidential or proprietary information, but in no event shall the Recipient use less than a reasonable standard of care.

24.2Recipient may disclose Confidential Information only to its directors, officers, employees and agents (collectively, the "Agents") who have a reasonable need to know such information for the purpose of the implementation of this Agreement.  Recipient agrees to advise all Agents of the obligations arising under this Agreement concerning the treatment of Confidential Information and shall be responsible for enforcing the obligations set forth herein both during their employment or agency and after the termination of such employment or agency.  Further, prior to the disclosure of any of the Confidential Information to any Agent of Recipient, Recipient shall secure from such Agent a written acknowledgement of the obligations created by this Agreement. 

25Term and Termination
25.1Unless terminated earlier as provided in Clause 25.2 below, this Agreement shall remain in effect until **** after the Effective Date ("Initial Term") and will automatically renew for **** (each a "Renewal Term" and collectively with the Initial Term, the "Term") thereafter unless terminated earlier by either Party with **** written Notice prior to the end of the Initial Term or any Renewal Term.  Alpharma and Hisun hereby waive any right that either of them may claim under applicable law to require a longer notice period.

25.2This Agreement may be terminated without recourse to any court:
25.2.1By either Party upon Notice to the other Party, with immediate effect, in the event of (i) an assignment by the other Party for the benefit of creditors; (ii) the admitted insolvency of the other Party; (iii) the institution of voluntary or involuntary proceedings by or against the other Party in bankruptcy, insolvency, moratorium or for a receivership, or for a winding-up or for the dissolution or reorganization of the other Party (other than a solvent reorganization); or (iv) the taking of any action by the other Party under an act for relief from creditors; in all cases to the extent permitted by applicable law.

25.2.2By either Party, in case of a Material Breach by the other Party of its obligations under this Agreement upon 60 (sixty) days' written Notice specifying the Material Breach to the other Party, unless in case the breach is curable such breach is cured or the Parties have reached agreement on a plan to achieve a cure of such breach prior to the end of such 60 (sixty) day period.

25.2.3By Alpharma, upon 30 (thirty) days written Notice to Hisun with immediate effect if the Product infringes an intellectual property right of a Third Party or any Governmental Agency prohibits the Product from being manufactured, shipped, sold or marketed in the US, EU or The Peoples Republic of China.  

25.2.4By Alpharma, immediately by written Notice to Hisun in the event an FDA or European Governmental Agency inspection of the Manufacturing Facility or any other facilities used for the manufacture of the Product results in the inability to continue to produce and sell the Product in the United States or the European Union and the Manufacturing Facility is unable to resume such production and selling within **** of such inspection due to Hisun's failure to perform its obligations or services hereunder. 

25.2.5****

25.2.6By either Party due to a Force Majeure Event as provided in Clause 29.2

25.2.7By Alpharma as provided in Clause 13.1.2.

26.Effect of Termination
26.1Upon the expiration or termination of this Agreement, regardless of the reason for termination, the following shall apply:
26.1.1each Party shall promptly return to the other Party all Confidential Information of the thereof;

26.1.2Hisun shall promptly cease all use of Alpharma's name or Trademarks; and

26.1.3Hisun will hand over all property of Alpharma in its possession including all Products manufactured by Alpharma and stored at the Hisun warehouse in accordance with Clause 10.1 as well as raw materials and packaging materials provided by Alpharma or for which Hisun was reimbursed by Alpharma.

26.2Upon termination of the Agreement by Hisun according to Clause 25.2.1 or 25.2.2 or upon termination of the Agreement by Alpharma **** in accordance with Clause 25.2.5, the following shall apply:
26.2.1****

26.2.3****

26.2.3****

26.3Upon the expiration of this Agreement or upon termination of this Agreement for any reason other than the reasons specified in Clause 26.2, the following shall apply:
26.3.1The Lease Agreement shall terminate on the same date as this Agreement provided that Alpharma will have **** to remove the Manufacturing Equipment (other than the Leased Manufacturing Equipment, which it leases and does not own) from the Leased Buildings.

26.3.2Hisun and its Affiliates shall not be entitled to use the Know-How, Inventions and Discoveries or Regulatory Documents for the manufacture or sale of Vancomycin or any Vancomycin Derivative to any Third Party anywhere in the world or for any other purpose whatsoever.

26.4Upon termination or expiration of this Agreement, each of the Parties agrees to execute such documents and obtain any required Third-Party consents required in order to effectuate the matters set forth in Clause 26.1-26.3.

26.5The following Clauses shall survive termination or expiration of this Agreement: Clause 19 (Grant of License to Know-How and Regulatory Documents), Clause 21 (Trademark and Know-How), Clause 22 (Inventions and Discoveries); Clause 24 (Confidentiality), Clause 26 (Effect of Termination), Clause 28 (Limitations on Liability), Clause 30 (Governing Law and Arbitration).

27Additional Warranties
27.1Hisun and Alpharma warrant to the other that it has all rights and authority necessary to perform its respective obligations under this Agreement.

27.2Hisun warrants that it is not party to any other agreement with any Third Party for the sale of Product in the Territory.

27.3Hisun warrants that it will comply in all respects with all laws of The Peoples Republic of China and all laws, rules and regulations of or administered by any Governmental Agency which has issued a Regulatory Document with respect to the performance of its obligations under this Agreement.

28.Limitations on Liability
28.1Neither Party shall be liable to the other Party, its Affiliates or their respective officers, directors, employees, and agents for any indirect damages, including without limitation, consequential damages, incidental damages, lost profits, loss of opportunity suffered by the other Party whether in contract, tort or otherwise except to the extent that such damages are awarded to a Third Party in an action related to the Product (other than lost profits or loss of opportunity which shall never be recoverable hereunder).

29Force Majeure
29.1Neither Party will be deemed to be in breach of this Agreement, or otherwise be liable to the other, for any delay in the performance or the non-performance of any of its obligations under this Agreement, to the extent that the delay or non-performance is caused by a Force Majeure Event, and the circumstances constituting such Force Majeure Event were promptly provided to the other Party, provided that the Party subject to such Force Majeure Event takes all reasonable steps to resolve the circumstances constituting such Force Majeure Event as soon as reasonably possible.

29.2Upon the occurrence of a Force Majeure Event, the Parties agree to discuss the matter within 48 (forty-eight) hours and if, and the extent to which, performance by the affected Party may be resumed.  If the Force Majeure Event has lasted more than three (3) months, calculated from the beginning of the Force Majeure Event, the Party whose performance is not affected by such Force Majeure Event may terminate the Agreement.

29.3****

30Governing Law and Arbitration
30.1This Agreement shall be governed by the substantive laws of The People's Republic of China, without regard to its conflicts of law rules.

30.2The Parties shall attempt to resolve any dispute arising out of or relating to the implementation of this Agreement through friendly consultation.  Such consultation shall begin immediately after one Party has delivered to the other Party written Notice of a request for such consultation.  On proposal of a Party and consent of the other Party, the dispute may also be mediated by a Third Party designated by the Parties.

30.3In the event that a dispute or alleged breach of this Agreement arises between the Parties, the Parties shall work together in good faith to resolve the matter internally (including the involvement of such representatives of the Parties that have the authority to finally settle such dispute).  If the Parties are unable to resolve any dispute within 30 (thirty) days from written Notice from the other Party of the institution of the dispute, the dispute shall be promptly submitted to arbitration pursuant to this Clause 30.4.

30.4Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force except as otherwise provided in this Clause 30.  The appointing authority shall be the Hong Kong International Arbitration Centre ("HKIAC"), and the place of arbitration shall HKIAC in Hong Kong.  There shall be only one arbitrator, unless either Party requests that there shall be three arbitrators in which case there shall be three.  Any such arbitration shall be administered by HKIAC in accordance with HKIAC Procedures for the Administration of International Arbitration in force at the date of this Agreement including such additions to the UNCITRAL Arbitration Rules as are therein contained.  The language of the arbitration shall be English. The arbitration award shall be final and binding on both Parties.

30.5During arbitration proceedings, the Parties shall continue to perform their respective responsibilities under this Agreement.

30.6Each Party shall bear its own costs and expenses and an equal share of the arbitrator's and administrative fees of arbitration.

31.Remedies not Exclusive
31.1Exercise by a Party of any right of termination or any other remedy available to it under this Agreement shall not constitute a waiver of any right of a Party for recovery of any monies due under the Agreement or any other right or remedy, which the Party may have under this Agreement or according to law, unless it is specifically stated that the remedy is sole and exclusive.

32.Cooperation and Assignment
32.1Each Party will reasonably cooperate with the other in the performance of its respective obligations under the Agreement, including the collection and supply of data.  Hisun agrees to assist Alpharma in obtaining and maintaining all permits necessary to produce the Product. 

32.2Neither Party shall make an Assignment without the prior written consent of the other Party.  In the event of any Assignment, unless expressly agreed otherwise between the Parties, the assigning Party shall remain primarily liable for performance of this Agreement.  

32.3The covenants, agreements, terms, and conditions contained in this Agreement shall apply to, inure to the benefit of, and be binding upon, the Parties hereto and upon their respective Affiliates, subsidiaries, heirs, executors, administrators, assigns, and successors in interest.

33.Notices
33.1All Notices shall be provided in writing.

33.2Any Notice shall be addressed as provided in Clause 33.3 or to such other address of which any Party hereto may from time to time give Notice, and if so addressed shall be deemed to have been duly given and made as follows:
33.2.1if sent by personal delivery mail service (e.g. FedEx or similar recognized courier service), upon delivery at the address of the relevant Party always provided that delivery takes place during normal business hours on a Business Day;

33.2.2if sent by fax, two (2) hours after its dispatch always provided (i) that the transmission is successful according to usual fax receipt, (ii) that such time is within normal business hours on a Business Day, (iii) that the recipient has not notified the sender that the fax was illegible (provided that such Notice is given on the same day) and (iv) that the Notice is at the same time forwarded by personal delivery mail service to the relevant Party.

33.3The relevant addresses and fax numbers of each Party for the purpose of this Agreement are as follows:

	
If to Hisun, addressed to:

Zhejiang Hisun Pharmaceutical Co., Ltd.

46 Waisha Road, Jiaojiang District

Taizhou City, Zhejiang Province

People's Republic of China

Attention: Mr. Bai Hua, President

FAX 86 576 882 7887

	
with a copy to: 

Drug Service Company, LLC

Hong Kong New World Tower

Room 5004

300 Central Huai Hai Road

Shanghai 200021

People's Republic of China

Attention: Richard Hung, COO

FAX 86 21 6467 6063

	 	 
	
If to Alpharma, addressed to:

Alpharma AS

Harbitzalleen 3, PO Box 158 Skoyen, 

0212 Oslo, 

Norway

Attention: President, API division.

Telefax: +47 2252 2949 
	
with a copy to: 

Alpharma ApS

Dalslandsgade 11

2300 Copenhagen S 

Denmark

Attention: Legal Department

Telefax:  +45 3264 5501

33.4Notwithstanding this Clause 33, routine instructions, requests, directions and notices dealing with day to day operations under this Agreement may be given in such manner to such persons as may be agreed by the Parties is reasonable and practicable.

34.Entire Agreement, Amendments, Severability, No Waiver 
34.1This Agreement constitutes the full understanding of the Parties, a complete allocation of risks between them, and a complete and exclusive statement of the terms and conditions of their agreement with respect to the matters set forth herein.  This Agreement supersedes all prior agreements between the Parties, whether written or oral, relating to the same or similar subject matter including Addendum No. 1 to Transaction Documents by and between Hisun and Alpharma dated April 26, 2007.  For the avoidance of doubt, the Manufacturing and Supply Agreement between Hisun and Alpharma's Parent shall not be superseded by this Agreement provided, however, that the amendments to the previously agreed-upon but unsigned version of this Agreement, contained in Sections 9.5, 9.6 and 9.7 of the Manufacturing and Supply Agreement are incorporated into this Agreement and are, thus, superseded by this Agreement, whereas for the avoidance of doubt the amendments to this Agreement contained in Section 9.8 of the Manufacturing and Supply Agreement shall continue to be applicable and are, thus, not superseded by this Agreement..

34.2No change or amendments to this Agreement shall be binding unless made in writing and signed by the Party to be bound.

34.3No waiver by either Party with respect to any breach or default, or enforcement of any right or remedy, and no course of dealing shall be deemed to constitute (i) a waiver of a subsequent breach or default of the same or a different provision, (ii) a waiver of subsequent enforcement of any right or remedy, or (iii) a continuing waiver of any kind, unless such waiver is expressed in a writing signed by the Party to be bound.

34.4In case any provision of this Agreement is declared invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

35.Relationship between the Parties.
35.1The Parties agree that the relationship created by this Agreement is that of independent contractors. Nothing in this Agreement shall create, or be deemed to create, a partnership or the relationship of principal and agent between Alpharma and Hisun or their respective Affiliates; nor shall the Parties be deemed joint venturers for any purpose.

36.Interpretation
36.1This Agreement is executed in the Chinese and English languages. Each version shall be equally authentic.  In the event of an inconsistency between such versions, the English language version shall have priority.

36.2The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent and no rule of strict construction against either Party shall apply to any term or condition of this Agreement.

36.3The headings to this Agreement are for ease of reference only and shall not be used to construe any provision.

36.4The word "including" shall not limit a more general preceding phrase and the word "hereof" shall refer to this Agreement as a whole.

37.Counterparts.
37.1This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement.

IN WITNESS WHEREOF, Hisun and Alpharma have caused this Agreement to be duly signed in duplicate originals by their duly authorized representatives as of the day and year first above written.

ZHEJIANG HISUN PHARMACEUTICAL CO., LTD.

By:/s/ Bai Hua

Name:Bai Hua

Title:President

ALPHARMA (TAIZHOU) PHARMACEUTICAL CO., LTD.

By:/s/ Kenneth Stokholm

Name:Kenneth Stokholm

Title:General Manager

**** Indicates that material has been omitted and filed separately with the Securities and Exchange Commission.

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