Document:

Exhibit 10.4 

Confidential portions of this
document have been omitted and filed separately with the Commission. The omitted portions
have been marked as follows: “***”. 

CONFIDENTIAL

DISTRIBUTION
AGREEMENT  

        THIS
AGREEMENT made as of this 27th day of December, 2000 (the “Effective
Date”), by and between Par Pharmaceutical, Inc., a New Jersey corporation, with
offices at One Ram Ridge Road, Spring Valley, New York 10977 (hereinafter referred to as
“Par”) and Bioglan Pharma, Inc., a Delaware corporation, with offices at 7 Great
Valley Parkway, Suite 301, Malvern, PA 19355 (hereinafter referred to as
“Bioglan”).  

R E C I T A L S  

        WHEREAS,
 Par is engaged in research, development, manufacture and distribution of pharmaceutical
products and has submitted to the United States Food and Drug Administration (the
“FDA”) an abbreviated new drug application (the “ANDA”) (and/or has
compiled or intends to compile data for submission of abbreviated new drug applications)
for the Products (as hereafter defined);  

        AND
WHEREAS, Bioglan is engaged in, inter alia, manufacturing, marketing and distributing
pharmaceutical products and possesses qualified marketing and distribution systems and
organizations to enable it to effectively promote, market and distribute the Products;  

        AND
WHEREAS, Par desires to grant to Bioglan the exclusive right to purchase, market, promote
and distribute the Products in the Territory (as hereafter defined) and Bioglan desires to
accept and exercise such right, all subject to the terms and conditions set forth in this
agreement;  

        AND
WHEREAS, the parties wish to enter into this agreement to set forth herein the
arrangements regarding their respective rights and obligations with respect to the
manufacture, supply and distribution of the Products in the Territory;  

        NOW,
THEREFORE, the parties hereto agree as follows:  

ARTICLE I
EXCLUSIVE APPOINTMENT 

	1.1  	
Exclusive Distributor: Subject to the provisions of this agreement, for the ten (10) year
period January 1, 2001 through December 31, 2010, Par appoints Bioglan as its sole and
exclusive distributor of doxycycline mono tablets in dosage amounts of 50 mg and 100 mg
(the “Tablets”) for the fifty states of the United States of America, the
District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam and
Samoa (the “Territory”) and Bioglan accepts such appointment and agrees to act
as such sole distributor upon such terms and conditions. Provided that Bioglan is not in
default under this agreement, upon the expiration of the ten (10) year term, Bioglan shall
have the right to purchase the ANDA from Par for a nominal purchase price of ***. Par shall have the right to sell the Tablets outside the Territory at any time.  

	1.2  	
***  

 
	 	
	 

 

	  	
*** 

	1.3  	
First Right of Refusal: Par is currently developing for FDA approval doxycycline mono
tablets in dosage amounts of 75 mg and ***  *** (the “Additional Tablets” and,
together with the Tablets *** if Bioglan is acting as exclusive distributor
in the Territory for the Additional Tablets, the “Products”). Par agrees that,
upon receipt by it of the final approval by the FDA of the ANDA for the Additional
Tablets, it shall offer Bioglan in writing first right of refusal exercisable by written
acceptance to Par within thirty (30) days of Bioglan’s receipt of written notice of
the right to exercise such right of first refusal, to be appointed to act as sole and
exclusive distributor of the Additional Tablets for the Territory. The terms and
conditions contained in this agreement shall apply to the Additional Tablets if and when
Bioglan timely exercises its election to act as sole and exclusive distributor of the
Additional Tablets.  

	1.4  	
Bioglan’s Obligation re Sales: Bioglan shall market the Products and actively and
continuously promote the sale of the Products. Such efforts shall be not less, as
reasonably proportionate, than those used by Bioglan to promote the sale of other products
which it markets. Bioglan shall maintain an inventory of Products sufficient to maximize
their distribution. In addition, Bioglan shall be solely responsible for regulations in
that regard including, without limitation, applicable FDA regulations and guidelines.
Where Bioglan’s net sales of the Tablets and the Additional Tablets (if applicable),
at the end of any calendar year following December 31, 2003, are less than *** for
such period, Par shall have the right to manufacture and distribute a generic version of
the Tablets or the Additional Tablets, as the case may be, which is in the same dosage
form, has the same active ingredient, the same strength and is for the same indication as
the Tablets or the Additional Tablets. Par shall retain the right to manufacture and
distribute such generic version of the Products despite a purchase of the ANDA by Bioglan.  

ARTICLE 2 
PRODUCT DEVELOPMENT
AND REGISTRATION 

	2.1  	Representation
and Warranties re Status:  

	(a)  	Bioglan
represents and warrants to Par that it is not prohibited by any law,           rules or
regulation or by any order, directive or policy from selling any of the
          Tablets *** or other pharmaceutical products and that Bioglan is not a
          Person who is listed by a United States federal agency as debarred, suspended,
          proposed for debarment or otherwise ineligible for federal programs in the
          United States (an “Ineligible Person”).  

	(b)  	Par
represents and warrants to Bioglan that is not currently prohibited by any           law,
rule or regulation or by any order, directive or policy from selling the
          Tablets *** and,  

 
	 	
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upon
receipt of the ANDA for the Additional Tablets, the Additional Tablets and that Par is not
an Ineligible Person. 

	2.2  	Trademarks:  

	  	
The
parties acknowledge that Bioglan intends to develop and register with the United States
Patent and Trademark Office trademarks for the Products, and Par acknowledges and agrees
that such trademarks will be and shall remain the sole and exclusive property of Bioglan,
notwithstanding anything in this agreement to the contrary; provided,
however, that Bioglan shall not use any trademark owned by Par, or similar to a
mark owned by Par, or any mark that would infringe any existing Par trademark. 

ARTICLE 3 
MANUFACTURE AND
SUPPLY OF PRODUCT 

	3.1  	Exclusive
Supplier:  

	  	
Par
shall use commercially reasonable efforts to manufacture (or cause to be manufactured) and
supply to Bioglan, in accordance with the terms and conditions set forth herein and in a
timely fashion, reasonable quantities of Products. Bioglan shall order from Par all of its
requirements of the Products in accordance with the terms and conditions set forth herein. 

	3.2  	Manufacturing
Responsibilities:  

	  	
All
Products supplied by Par hereunder shall be manufactured (which shall include, without
limitation, all testing, bulk packaging and labeling) in an FDA approved facility and in
accordance with the following: (collectively, the “Products Manufacturing
Requirements”), (i) the specifications in the final approval of the ANDA for the
Products by the FDA (collectively, the “Specifications”), (ii) current good
manufacturing practices of the FDA (the “CGMP”) and good laboratory practices
and (iii) all other applicable rules, regulations and requirements of the FDA relative to
the manufacture of such Products. 

	  	
Products
shall be manufactured by Par through the use of Par’s approved material sources,
which sources shall be used exclusively provided (i) such sources remain GCMP compliant,
(ii) the supply flow of material remains consistent, and (iii) material prices remain
competitive. In the event that any of the above conditions are not met, Par and Bioglan
shall mutually agree upon the use of a new source and a new pricing schedule, as the case
may be. 

 
	 	
3 	 

 

	3.3  	Products
Warranty:  

	  	
Par
warrants that all Products supplied by it to Bioglan pursuant to this agreement shall be
manufactured, packaged, tested, stored and handled in accordance with the Products
Manufacturing Requirements and that at the time of the delivery of such Products to the
carrier at Par’s manufacturing facility and/or warehouse (a “Plant”), such
Products: (i) will not be adulterated or misbranded within the meaning of the Federal
Food, Drug and Cosmetic Act (the “Act”), as amended, or within the meaning of
any applicable state or municipal law in which the definitions of adulteration and
misbranding are substantially the same as those contained in the Act, as such Act and such
laws are constituted and effective at the time of delivery and (ii) will not be an article
which may not, under the provisions of Sections 404 and 505 of such Act, be introduced
into interstate commerce. PAR DOES NOT MAKE ANY REPRESENTATION THAT THE PRODUCTS ARE
USEFUL FOR THE INTENDED PURPOSE OR THAT THEY ARE FREE FROM INHERENT SIDE EFFECTS EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT. 

ARTICLE 4 
PRODUCTION
FORECASTS, ORDERS AND DELIVERIES 

	4.1  	Forecasts
and Commitments:  

	  	
To
assist Par to schedule production of the Products, Bioglan shall provide to Par quarterly
(at least 45 days in advance of the commencement of the first calendar month forecasted
thereunder), a 12 month rolling forecast of Bioglan’s estimated requirements of the
Products, which forecast shall represent a commitment of Bioglan to purchase the quantity
of Products projected for the first month thereunder and a commitment subject to a ***
variance, to purchase the quantity of Products forecasted for the second and third months
forecasted thereunder. Subject to the foregoing, all forecasts are estimates only and
Bioglan shall only be bound to purchase the Products pursuant to purchase orders
submitted, or deemed hereunder to be submitted, by it to Par (or to such person as Par may
direct). All purchase orders for Products shall specify the delivery date therefor, which
delivery date shall be no sooner than 16 weeks following the receipt of such order by Par.
All purchases made by Bioglan shall be in Par batch quantities. 

	4.2  	Purchase
Orders:  

	  	 All orders for
      Products shall be placed using Bioglan’s standard form of purchase
      order (attached as Exhibit A) and shall be invoiced using Par’s standard
      form of invoice. All purchase orders submitted by Bioglan shall specify,
      among other things, the required delivery date. In the event of any conflict
      between the terms of any purchase order and the terms of any invoice related
      thereto, the terms of this agreement shall govern (unless the parties shall
      have mutually agreed to the contrary in writing in respect of a particular
      instance). 

 
	 	
4	 

 

	4.3  	Delivery
of Products:  

	  	
Delivery
to Bioglan shall be F.O.B. Plant N.Y. Risk of loss and title shall pass to Bioglan upon
delivery to a carrier. Products shall be made available to Bioglan for pickup in bulk
containers (where applicable) at the Plant. Bioglan shall arrange for shipping and/or
transportation of the Products from the Plant to such facility of its choice and pay all
shipping, insurance and related costs. Par shall promptly notify Bioglan by fax that any
order (or part thereof) is available for pick-up at its Plant (this notice shall hereafter
be referred to as the “Availability Notice”). Bioglan shall use reasonable
commercial efforts to pick up the Products that arc the subject of an Availability Notice
within 10 business days of receipt of the Availability Notice; provided that, if such
pickup has not occurred on or prior to the expiry of such 10 day period, Bioglan shall,
for purposes of its payment obligations to Par pursuant to Sections 5.1 and 5.2 below, be
deemed to have picked up the Products which are the subject of the Availability Notice on
the last business day of such 10 day period. If the Products in question have not been
picked up by or on behalf of Bioglan within 20 business days of an Availability Notice,
Par may, but shall not be obligated to, cause the Products to be delivered to
Bioglan’s Malvern, Pennsylvania facility at Bioglan’s sole cost and expense. 

	4.4  	Inspection
and Right of Return of Products:  

	  	
If
Bioglan shall determine upon receipt and inspection of any shipment of Product that any of
such Product does not meet any of the standards warranted in Article 3, Bioglan shall
notify Par of the non-conformance within sixty (60) days of its receipt of such shipment.
Bioglan and Par shall confer on the matter and, within fifteen (15) days after receipt of
Bioglan’s notice, Par shall notify Bioglan as to whether it concurs with
Bioglan’s determination right to inspect. If Par concurs with Bioglan’s
determination (or fails to timely notify Bioglan of a disagreement with the
determination), Par shall replace the rejected Product within thirty (30) days after
receipt of Bioglan’s notice and Bioglan shall, at Par’s request, return such
rejected Product. If Par timely disagrees with Bioglan’s determination, the parties
will resolve the issue pursuant to Article 10 hereof. If Bioglan does not provide a notice
of non-conformance within sixty (60) days of receipt of shipment, Bioglan shall not have
the right to return the shipment pursuant to this Section. 

ARTICLE 5 
PAYMENTS, REPORTS
AND AUDIT 

	5.1  	Purchase
Price:  

	(a)  	The
purchase price payable by Bioglan for the Tablets supplied to it by Par
                    shall be *** per bottle of 100 tablets (50 mg dosage), *** per
bottle of                     50 tablets (100 mg dosage), *** per 1000 tablets (50 mg
dosage) in bulk                     orders in containers of 20,000 tablets and ***
per 1000 tablets (100 mg                     dosage) in bulk orders in containers of
20,000 tablets. *** 

 
	 	
5 	 

 

	  	
***. If Bioglan is acting as exclusive distributor in the Territory for the
Additional Tablets, the purchase price for the Additional Tablets shall be Par’s
costs of development (including out of pocket costs) of the Additional Tablets, which
costs of development should not exceed *** excluding the Par bio study (costs for
which would be agreed to in advance by the parties), plus prices of bulk orders pursuant
to the terms set forth in this Section 5.1. The purchase price shall be payable upon
Bioglan’s exercise of its election. 

	(b)  	In
addition to such purchase prices, Bioglan shall pay all applicable sales tax,
          use tax, consumption tax, goods and services tax, value added tax or similar
tax           levied upon the sale of the Products by Par to Bioglan whether that tax is
          levied under the laws of the jurisdiction where Bioglan or Par is located and
          whether it is currently in force or comes into force after the Effective Date
of           this agreement.  

	(c)  	Upon
request by Bioglan, Par shall provide to Bioglan samples of the Tablets *** at a one-time special price of *** per thousand
          (1,000) Tablets ***, respectively. The one-time price shall be limited
          to Bioglan’s first order for a product sample of Tablets consisting of no
          more than eighty (80) kilograms of raw material. Thereafter the price for
          Products samples shall be equal to Par’s costs, which will be determined
by           the cost of raw material for sample batches, plus  *** of such
          costs. All product samples shall be provided by Par in bulk to Bioglan. Bioglan
          shall be responsible for the packaging and labeling of all product samples.  

	5.2  	Invoicing
and Payment:  

	  	
Par
shall invoice Bioglan for the purchase price of the Products at the time such product is
picked up or is deemed to be picked up by or on behalf of Bioglan as contemplated in
Section 4.3 hereof or within a reasonable period of time thereafter. The purchase price
shall be due and payable within 30 days following the date of such invoice. Each shipment
of Products to Bioglan shall constitute a separate sale, obligating Bioglan to pay the
purchase price therefor, whether such shipment be in whole or only partial fulfillment of
any order. 

	5.3  	Additional
Consideration:  

	  	
As
additional consideration for the Tablets, Bioglan shall pay to Par ***, and
as additional consideration for the Additional Tablets, Bioglan shall pay to Par ***, of the net sales (gross sales less returns and allowances other
than allowances for bad debts or doubtful accounts) by Bioglan and its affiliates of
Products to unrelated third party customers which additional consideration shall be paid
to Par as part of the purchase price for the Products sold and shall not be treated as a
royalty or similar payment. 

	 5.4  	Payment
of Additional Consideration and Accompanying Documentation:  

	  	
Par’s
share of net sales shall be paid by Bioglan to Par quarterly, within 30 days following the
end of each calendar quarter with respect to net sales made by Bioglan of Tablets and/or
Additional Tablets during the immediately preceding calendar quarter. 

 
	 	
6 	 

 

	  	
For
purposes of this agreement a sale shall be considered to have been made at the time when
the Products are shipped by Bioglan to its customer. 

	5.5  	Exclusive
License/Transfer Fee  

	  	 An exclusive
      license/transfer fee of *** shall be paid by
      Bioglan to Par as follows: (i) *** shall be paid within sixty (60)
      days of the effective date of this agreement, (ii) *** shall be paid
      within ninety (90) days of the achievement of Par’s ability to ship commercial quantities of the Tablets, (iii) ***  shall be paid within sixty (60) days of the attainment by Bioglan of  *** in net sales
      of the Tablets, and (iv) *** shall be paid within sixty (60) days of
      the attainment by Bioglan of the earlier of (a) an annual rate of ***
      in net sales or, (b) *** in cumulative net sales from date of launch
      of the Tablets. 

	5.6  	Additional
Information:  

	  	
Bioglan
shall provide to Par promptly following a request therefor, such additional information
concerning any sales of specific Products (including, without limitation, in respect of
any sale, the date of the shipment, the name of the customer, the number of units of the
Products (by sku, if requested) sold to such customer and the invoice price charged by
Bioglan), returns and allowances relevant to the calculation of net sales and gross
profits in respect of Products, as Par may reasonably request. 

	5.7  	Maintenance
of Records:  

	  	
Each
of Par and Bioglan agrees that it shall keep complete and accurate books and records of
account containing all information required for the computation and verification of
amounts on which payments hereunder are based and shall, upon reasonable written notice
from the other, make such records available for examination by such other party or, at the
requesting party’s expense, supply copies of such records to such other party. 

	5.8  	Examination
of Records:  

	  	
Each
of Par and Bioglan shall have the right, upon reasonable written notice to the other, to
designate an independent certified public or chartered accountant (except one to whom the
other has a reasonable objection) to have access during ordinary working hours to such
records as may be necessary to audit the correctness of any invoice, report or payment
made under this agreement; provided, however, as a condition to the provision of access to
any accountant to books and records, such accountant may be required to execute a
reasonable confidentiality agreement. 

	5.9  	Survival
of Obligation:  

	  	
The
obligation to make the payments and to provide the reports contemplated in this Article 5
and the rights of Bioglan and Par to conduct audits or investigations pursuant to Section
5.8 hereof shall survive the termination or expiration of this agreement and shall apply
to all Products supplied to Bioglan notwithstanding that such Products may have 

 
	 	
7 	 

 

	  	
been
resold by Bioglan or its affiliate to its customers after the termination or expiration of
this agreement. For greater certainty, the parties acknowledge and agree that Bioglan
shall pay to Par the applicable percentage of the net sales of all Products supplied by or
on behalf of Par to Bioglan pursuant to this agreement irrespective of whether such
Products are resold by Bioglan and its affiliate prior to or subsequent to the termination
of this agreement. 

ARTICLE 6 
REPACKAGING,
DISTRIBUTION AND SUPPORT 

	6.1  	Par’s
Repackaging Responsibilities:  

	(a)  	Par shall
      repackage and relabel the Products (other than samples) into finished labeled
      units for sale in an FDA approved facility and shall be solely responsible
      for the contents of the labels and artwork on all units of finished labeled
      Products sold or otherwise released by Bioglan (except for information contained
      in such labels which arc also contained on the labels of the bulk Products
      supplied by or on behalf of Par to Bioglan pursuant hereto). In repackaging
      and relabeling the Products, Par shall comply with (i) the Specifications,
      (ii) applicable CGMP and (iii) all other applicable rules, regulations and
      requirements of the FDA and any other applicable governmental or regulatory
      bodies, agencies and officials relative to repackaging and labeling of the
      Products for sale. 

	6.2  	
Provision of Ongoing Stability: During the term of this agreement, Par agrees to support
ongoing validation and stability testing, as necessary and if requested by Bioglan. Any
extraordinary support of stability testing shall be provided by Par on a cost basis.  

ARTICLE 7 
DAMAGES,
INDEMNIFICATION AND INSURANCE 

	7.1  	
Limitation re Claims: Subject to the limitations set forth in this Section 7.1, Bioglan
and Par covenant and agree to indemnify, save harmless and compensate the other (and their
respective affiliates, for whose benefit such other party shall hold the benefit of this
provision in trust) from, against or for, as the case may be, any and all claims demands,
actions, causes of action, suits, proceedings, judgments, damages, expenses (including
reasonable attorney’s fees and expenses), losses, fines, penalties and other similar
assessments, as the case may be, (the “Damages”) relating to or arising out of a
breach by Par or Bioglan, as the case may be, of any of the representations, warranties,
covenants or agreements herein; provided that, the aggrieved party shall not be entitled
for any reason to recover from the defaulting or breaching party any lost profits or
consequential or punitive damages, including loss or damage to its goodwill or reputation.  

	7.2  	 Third Party
      Claims: In the event that the sale or other release by Bioglan or its
      affiliates of any Products supplied by or on behalf of Par to Bioglan pursuant
      to this agreement results in a third party claim:  

 
	 	
8 	 

 

	(a)  	to
the extent that the Damages awarded or incurred relate to or arise out of the
          manufacturing, testing, bulk packaging, labelling (if applicable), storage or
          handling of Products by Par or any other act by or omission of Par or any other
          persons for whose acts or omissions Par is responsible at law, Par shall be
          responsible therefor and shall defend, indemnify and hold harmless Bioglan and
          its affiliates from and against all such Damages; and  

	(b)  	to
the extent that the Damages awarded or incurred relate to or arise out of
          transporting, receiving, manufacturing (if applicable), repackaging, labelling
          (if applicable), testing, storage, handling, use, marketing, distribution, sale
          or delivery of Products by Bioglan or its affiliates or any other act by or
          omission of Bioglan, any of its affiliates or any other person for whose acts
or           omissions they or any one or more of them is responsible at law, Bioglan
shall           be responsible therefor and shall defend, indemnify and hold harmless Par
and           its affiliates from and against all such Damages;  

	  	 Upon the assertion
      of any third party claim against Par or Bioglan (or their respective affiliates)
      that may give rise to right of indemnification under this agreement, the
      Person claiming a right to indemnification (the “Indemnified Party”)
      shall give prompt notice to the Person alleged to have the duty to indemnify
      (the “Indemnifying Party”) of the existence of such claim (provided
      that the failure to give such notice in timely fashion shall not release
      the Indemnifying Party of its obligations of indemnification hereunder except
      to the extent that the Indemnifying Party has been prejudiced thereby) and
      shall give the Indemnifying Party reasonable opportunity to control, defend
      and/or settle such claim at its own expense and with counsel of its own
      selection; provided, however, that the Indemnified Party shall, at all times,
      have the right to fully participate in such defense at its own expense with
      separate counsel and, provided that both parties to the extent that they
      are not contractually or legally excluded therefrom, or otherwise prejudiced
      in a legal position by so doing, shall co-operate with each other and with
      their respective insurers in relation to the defense of such third party
      claim. The Indemnifying Party shall consult with the Indemnified Party with
      respect to settlement of any claim. The Indemnifying Party shall have the
      right to settle any claim without the consent of the Indemnified Party,
      provided that the Indemnified Party is unconditionally released from such
      claim and it is not otherwise prejudiced by the terms of the settlement.
      In the event the Indemnifying Party may not settle such claim without the
      prior written consent of the Indemnified Party, the Indemnifying Party shall
      have the right to defend, compromise or settle such claim without prejudice
      to its rights of indemnification hereunder. Notwithstanding the foregoing,
      in the event of any dispute with respect to indemnity hereunder, each party
      shall be entitled to participate in the defense of such claim and to join
      and implead the other in any such action. 

	 7.3  	Insurance:  

	  	
During
the period of time beginning with the Effective Date and continuing for the remaining term
of this agreement, Par shall maintain in force product liability insurance coverage and
shall use its best efforts to cause Bioglan to be a named insured, with commercially
reasonable limits to be agreed upon by the parties. The policy or policies 

 
	 	
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shall,
subject to customary terms from time to time, cover any liability which may arise from the
manufacture or sale of the Products in the Territory. 

ARTICLE 8 
TERM AND TERMINATION 

	8.1  	
Term: The term of this agreement shall commence on January 1, 2001 and shall terminate on
December 31, 2010, unless earlier terminated in accordance with the provisions of this
agreement.  

	8.2  	
Payment and Reporting Defaults: Par may, by notice in writing to Bioglan, terminate this
agreement or, at its option, terminate this agreement in respect of the particular
Products or Products to which the default herein contemplated relates, if Bioglan fails to
pay to Par any amount payable by it to Par hereunder as and when the same shall have
become due and payable or shall have failed to deliver (or caused to be delivered, as the
case may be), in timely fashion, the reports or information contemplated in Sections 5.4
or 5.6 hereof, and in either case, such breach shall have continued unremedied for a
period of ten (10) business days after written notice of such breach has been given by Par
to Bioglan; provided that Bioglan shall not have the right to such ten (10) business day
grace period within which to cure such default and Par shall have the immediate right to
terminate the agreement for such breach if Bioglan shall have previously breached Section
5.4 or 5.6 within the immediately preceding twelve (12) month period. In the event that
Bioglan has been given notice pursuant to this Section 8.2 and it disputes the alleged
breach, the dispute shall be submitted to arbitration pursuant to Article 10 below and
this agreement shall continue in full force until such time as the arbitrator renders his
decision. Termination of this agreement pursuant thereto shall be without prejudice to any
other right or remedy which Par may have against Bioglan arising out of the breach in
question including the right to obtain compensation for its damages (provided that such
right shall be subject to the limitations set forth in Section 7.1 hereof).  

	8.3  	
Material Breach: Subject to the provisions of Section 8.2 above, Par or Bioglan may, by
notice in writing to the other, terminate this agreement or, at its option, terminate this
agreement in respect only of those Products to which the default in question relates, if
such other party shall have breached any of its material duties or obligations under this
agreement and such default continues unremedied for a period of sixty (60) days following
receipt of notice of such default (or, if such default is capable of being remedied but is
not reasonably capable of being remedied within such sixty (60) day period, such longer
period of time as is reasonable in the circumstances, not exceeding ninety (90) days in
the aggregate, provided that the defaulting party has, within such sixty (60) day period,
commenced and thereafter actively and diligently pursues the remedying of such default).
In the event that a party has been given notice pursuant to this Section 8.3 and such
party disputes the alleged breach, the dispute shall be submitted to arbitration pursuant
to Article 10 hereof and this agreement shall continue in full force until such time as
the arbitrator renders his decision. The arbitrator shall determine whether or not there
has been a breach and/or whether or not the same has been remedied within the required
cure period. Termination of this agreement pursuant hereto shall be without prejudice to
any other right or remedy the party terminating this agreement may  

 
	 	
10 	 

 

	  	
have
against the defaulting party arising out of the breach in question including the right to
obtain compensation for its damages (provided that such right shall be subject to the
limitation set forth in Section 7.1 hereof). 

	8.4  	 Events
      of Default: In addition to other rights of termination in this Article
      8, Par shall have the right to terminate this agreement upon notice to Bioglan
      in the event that any one or more of the following events shall become applicable
      to Bioglan or any of its affiliates to whom any material duty or obligations
      of Bioglan hereunder has been delegated or assigned and Bioglan may terminate
      this agreement in the event that any one or more of the following events
      shall become applicable to Par (Bioglan, its affiliate, or Par affected
      by such event, as the case may be, being referred to as the “Party”):
       

	   	
(i)  	an
order is made or a resolution or other action of such Party is taken for the
                    dissolution, liquidation, winding up or other termination of its
corporate                     existence;  

	   	
(ii)  	the
party commits a voluntary act of bankruptcy, becomes insolvent, makes an
                    assignment for the benefit of its creditors or proposes to its
creditors a                     reorganization, arrangement, composition or readjustment
of its debts or                     obligations or otherwise proposes to take advantage
of or shelter under any                     statute in force in the United States or in
the governing jurisdiction of such                     Party for the protection of
debtors;  

	   	
(iii)  	if
any proceeding is commenced with respect to a compromise or arrangement, or
                    to have such Party declared bankrupt or to have a receiver appointed
in respect                     of such Party or a substantial portion of its property and
such proceeding is                     not fully stayed or dismissed within thirty (30)
days after such commencement;  

	   	
(iv)  	a
receiver or a receiver and manager of any of the assets of such Party is
                    appointed and such receiver or receiver and manager is not removed
within thirty                     (30) days of such appointment; or  

	   	
(v) 	such
Party ceases or takes steps to cease to carry on its business.  

	8.5  	
Ineligible Person: Par or Bioglan may terminate this agreement in respect of
Products upon thirty (30) days prior written notice to the other party if such party
(otherwise than by reason of a breach of its obligations hereunder in respect of such
Products) is legally prohibited from performing its obligations hereunder or becomes (or,
in case of Bioglan, its affiliates become) an Ineligible Person in respect of such
Products (and, where the party purporting to terminate this agreement is also the party
prohibited from performing it, or its affiliate, as hereinbefore contemplated, is the
Ineligible Person, it or such affiliate, as the case may be, has made diligent best
efforts to remove the prohibition or its status as an Ineligible Person) and such
prohibition or status as an Ineligible Person has continued uninterrupted for a period of
one hundred and twenty (120) days.  

	8.6  	Force
Majeure: Either party may terminate this agreement with respect to Products materially
affected by an event of Force Majeure in accordance with the provisions of  

 
	 	
11 	 

 

	  	
Section
11.2 hereof (but this agreement shall continue in respect of the other Products which
remain subject to this agreement and which are not effected by such Force Majeure event). 

	8.7  	Non-Competition:
Bioglan agrees not to sell new doxycycline brands in the Territory without the prior
written consent of Par during the term of this agreement and for one (1) year thereafter.  

ARTICLE 9 
CONFIDENTIALITY 

	9.1  	
Confidential Nature of Agreement: Each of the parties hereto agrees that, except as may be
required by law or court order, the existence and terms of this agreement shall remain
confidential.  

	9.2  	
Duty of Confidentiality: Bioglan shall undertake to (i) maintain confidential all
nonpublic information relating to the Products, their costs and their distribution
(“Confidential Information”) and (ii) provide for the safekeeping of and limited
access to all Confidential Information. Bioglan shall indemnify and hold harmless Par and
its affiliates for any loss or damage (including costs of litigation, counsel’s fees
and related expenses) resulting from violation of the covenants in this confidentiality
provision by Bioglan. In the event that Bioglan (or any of its affiliates) shall be
legally compelled or required by a court of competent jurisdiction to disclose all or any
part of the Confidential Information, it shall provide prompt notice to Par so that Par
may determine whether or not to seek protective order or any other appropriate remedy.  

	9.3  	
Return of Confidential Information: Upon termination of this agreement Bioglan shall
immediately return to Par all material containing or reflecting or referring to any
Confidential Information. Bioglan shall delete such Confidential Information from all of
its and its affiliates retrieval systems and data bases.  

	9.4  	Survival:
The obligations of confidentiality contained herein shall survive the termination
of this agreement.  

ARTICLE 10 
ARBITRATION 

	10.1  	
Arbitration: Any controversy or claim arising out of, or relating to, this agreement or
the breach thereof shall be referred for decision forthwith to a senior executive of each
party not involved in the dispute. If no agreement is reached within thirty (30) days of
the request by one party to the other to refer the same to such senior executive, then
such controversy or claim shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, such arbitration to
be held in New York, New York on an expedited basis. Judgment upon the award rendered by
the Arbitrator(s) may be entered in any court having jurisdiction thereof.  

 
	 	
12 	 

 

ARTICLE 11 
GENERAL
CONTRACT TERMS AND CONDITIONS 

	11.1  	
Notice: Subject to the express provisions of this agreement, any notice required or
permitted to be given under this agreement shall be sufficiently given if in writing and
delivered by facsimile (with confirmation of transmittal) or overnight courier (with
confirmation of delivery), as well as by prepaid registered mail (with return receipt
requested) or hand delivery to the appropriate party at the address set forth below, or at
such other address or to the attention of such other individual as such party may from
time to time specify for that purpose in a notice similarly give:  

	  	
To
Par at: 

	  	
One
Ram Ridge Road 
Spring Valley, New York 10977  

	  	
Attention:
Kenneth Sawyer, President/Chairman 
Fax Number: (845) 425-7922 

	  	
To
Bioglan at: 

	  	
7
Great Valley Parkway, Suite 301 
Malvern, PA 19355 

	  	
Attention:
Robert J. Moccia, President 
Fax Number: (610) 232-2026  

	  	
Any
such notice shall be effective (i) if sent by mail, as aforesaid, five (5) business days
after mailing, (ii) if sent by facsimile, as aforesaid, when sent (with confirmation of
receipt), and (iii) if sent by courier or hand delivered, as aforesaid, when received,
provided that is any such notice shall have been sent by mail and if on the date of
mailing thereof or during the period prior to the expiry of the fifth (5
th) business day following the date of mailing there shall be a
general postal disruption (whether as a result of rotating strikes or otherwise) in the
country or territory where the sender or the intended recipient is situated then such
notice shall not become effective until the fifth (5th) business day following the date of
resumption of normal mail service. 

	11.2  	
Force Majeure: Neither party shall be considered to be in default in respect of any
obligation hereunder if failure of performance shall be due to Force Majeure (as
hereinafter defined). If either party is affected by a Force Majeure event such party
shall, within ten (10) days of its occurrence, give notice to the other party stating the
nature of the event, its anticipated duration and any action being taken to avoid or
minimize its effect. The suspension of performance shall be of no greater scope and no
longer duration than is required by such Force Majeure and the non-performing party shall
use commercially reasonable efforts to remedy its inability to perform. The obligation to
pay money in a timely manner is absolute and shall not be subject to the Force Majeure
provisions, except to the extent payment is prohibited by governmental rule or  

 
	 	
13 	 

 

	  	
regulations
other than rules or regulations incident to bankruptcy or insolvency proceedings of a
party. Force Majeure shall mean an unforeseeable or unavoidable cause beyond the control
and without the fault or negligence of a party or its affiliate including, but not limited
to, explosion, flood, war (whether declared or otherwise), accident, labour strike or
other labour disturbance, inability to obtain materials or services, sabotage, acts of
God, newly enacted legislation, newly issued orders or decrees of any Court and any
binding act or order of any governmental agency. Notwithstanding anything in this Section,
the party to whom performance is owed but to whom it is not rendered because of an event
of Force Majeure as contemplated in this Section shall, after the passage of one hundred
and twenty (120) days, have the option to terminate this agreement in respect of the
Products affected by such event on thirty (30) days prior written notice to the other
party hereto. For greater certainty, Force Majeure in relation to Par’s obligation to
supply Products hereunder to Bioglan shall also include the inability to obtain the
required material from material sources for any reason other than Par’s failure to
pay its obligations. 

	11.3  	
Governing Law and Consent to Jurisdiction: This agreement shall be deemed to have been
made under, and shall be governed by, the laws of the State of New York without giving
effect to New York’s choice of law provisions.  

	11.4  	
Entire Agreement: This agreement contains the entire agreement and understanding of the
parties with respect to its subject matter and supersedes all negotiations, prior
discussions and any agreements relating to the Products. This agreement may not be amended
or modified except by a written instrument signed by the parties.  

	11.5  	
Waiver: Any waiver of, or consent to depart from, the requirements of any provision of
this agreement shall be effective only if it is in writing and signed by the party giving
it, and only in the specific instance and for the specific purpose for which it has been
given. No failure on the part of any party to exercise, and no delay in exercising, any
right under this agreement shall operate as a waiver of such right. No single or partial
exercise of any such right shall preclude any other or further exercise of such right or
the exercise of any other right.  

	11.6  	
Counterparts: This agreement may be executed in identical duplicate copies
exchanged by facsimile transmission. The parties agree to execute two identical original
copies of the agreement after exchanging signed facsimile versions. Each identical
counterpart shall be deemed an original, but all of which together shall constitute one
and the same instrument.  

	11.7  	
Severability of Provisions: If any provision of this Agreement shall be declared void by
any court or administrative body of competent jurisdiction, the validity of any other
provision which may nonetheless be given effect shall not be affected thereby.  

	11.8  	
Assignment: Neither this agreement nor rights of a party hereunder may be assigned nor may
the performance of any duties hereunder be delegated by Bioglan or by Par without the
prior written consent of the other party which consent will not be unreasonably withheld.
For greater certainty, Bioglan may not appoint any sub-licencees in the  

 
	 	
14 	 

 

	  	
absence
of Par’s prior written consent. Notwithstanding the foregoing, Par and Bioglan may
delegate or assign from time to time some of their respective, rights, duties or
obligations hereunder to any of their respective Affiliates and, in addition. Par and/or
its affiliates may subcontract the manufacturing of a Product, in whole or in part, to any
other person (whether or not an affiliate), provided that (i) such subcontracting is done
in compliance with all applicable requirements of the FDA and this agreement; (ii) prior
to any such delegation, the delegating party gives written notice thereof to the other
party hereto (indicating the duties being so delegated and the duration of such
delegation) and (iii) no such delegation or subcontracting shall relieve Par or Bioglan,
as the case may be, of any of its obligations hereunder. Subject to the foregoing this
agreement shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. 

	11.9  	
Non Contravention: Each party represents and warrants that the execution, delivery and
performance of this agreement by it will not contravene any other contract or agreement to
which it is a party or by which it is bound.  

	11.10  	
Compliance: Where, in accordance with the provisions of this agreement, the Affiliate of a
party is required to do or omit to do or use reasonable commercial (or other) efforts to
do or refrain from doing any act or thing such party shall use reasonable best commercial
efforts to cause its Affiliates to comply.  

        IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by
its duly authorized officer as of the date first above written. 

	BIOGLAN PHARMA, INC 	  	PAR PHARMACEUTICAL, INC.
        
	 	 	    	 	 
	By: 	 /s/ Robert J. Moccia
      

    	 	By:  	 /s/ Kenneth I. Sawyer
      

    
	Name: 	Robert J. Moccia
      

    	 	Name: 	 Kenneth I. Sawyer
      

    
	Title: 	President
      

    	 	Title: 	 Chairman & CEO
      

    

 
	 	
15Exhibit
10.4.1 

Confidential portions of this
document have been omitted and filed separately with the Commission. The omitted portions
have been marked as follows: “***”. 

ASSIGNMENT
  OF DISTRIBUTION AGREEMENT 

        This
  ASSIGNMENT OF DISTRIBUTION AGREEMENT (this “Assignment”) is dated
  and effective as of the Effective Time (as defined below) by and among Par Pharmaceutical,
  Inc, a New Jersey corporation (“Par”), Bioglan Pharma, Inc., a Delaware
  corporation (“Bioglan”), and Quintiles Ireland Limited, a company
  incorporated in the Republic of Ireland (“Quintiles”). 

        WHEREAS,
  Par and Bioglan are parties to the Distribution Agreement dated as of December
  27, 2000 (the “Agreement”): 

        WHEREAS,
  Bioglan has agreed to sell certain assets to Quintiles or an affiliate thereof
  (the “Asset Sale”), and in connection therewith Bioglan desires to
  assign the Agreement to Quintiles; and 

        WHEREAS,
Quintiles desires to accept such assignment, Par desires to consent to such assignment,
and the parties hereto desire to effect certain amendments to the Agreement, pursuant to
the terms and conditions of this Assignment; 

        NOW,
THEREFORE, in consideration of the foregoing premises, the agreements made herein, and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties to this Assignment hereby agree as follows: 

        1.
Effective Time. This Agreement shall be effective upon the closing of the Asset
Sale (the “Effective Time”). Quintiles shall promptly give
Par written notice of the occurrence of the Effective Time.  

        2.
Consent. Par, on behalf of itself, its successors and assigns, does
hereby irrevocably consent to (i) the assignment of the Agreement,
and all rights and obligations of Bioglan thereunder, from Bioglan to
Quintiles, and (ii) any subsequent assignment by Quintiles to any
affiliate of Quintiles.  

        3.
Assignment. Bioglan does hereby assign, transfer, convey, grant and
deliver to Quintiles all of Bioglan’s right, title and interest
in, to and under the Agreement, and Quintiles shall succeed and be
entitled to all of the past, present and future rights, privileges,
benefits and other interests of Bioglan under the Agreement.
Quintiles hereby assumes the obligations of’ Bioglan under the
Agreement arising after the Effective Time.  

        4.
Amendment. The parties to this Assignment
hereby agree that the Agreement is hereby amended as follows:  

        A.
All references in the Agreement to *** dosage amounts are hereby deleted,
                    including without limitation from Section 1.3. For the avoidance of
doubt,                     “Additional Tablets” shall refer only to 75 mg dosage
amounts.  

        B.
  The parties agree that Bioglan’s obligation to market and promote the Products
  under Section 1.4 shall be limited to Products supplied by Par. In addition,
  the fifth sentence of Section 1.4 of the Agreement is hereby amended to read
  in its entirety as follows: “Where 

 
	 	
	 

 

Bioglan’s net sales
  of the Tablets and the Additional Tablets (if applicable) supplied by Par at
  the end of any calendar year following December 31, 2003 are less than ***
  for such period, for reasons other than Par’s failure to supply Product
  in accordance with the terms and conditions of this agreement, Par shall have
  the right to manufacture and distribute a generic version of the Tablets or
  the Additional Tablets, as the case may be, which is in the same dosage form,
  has the same active ingredient, the same strength and is for the same indication
  as the Tablets or the Additional Tablets.” 

        C.
  Section 3.1 of the Agreement is hereby amended by adding the following sentences
  at the end thereof: “In the event that Par fails to supply Bioglan’s
  requirements of Products on a timely basis in accordance with the terms and
  conditions set forth in this Agreement, Bioglan may, in addition to, and without
  limitation of, any other rights Bioglan may have under this agreement or pursuant
  to applicable law, upon ninety (90) days written notice to Par, if Par has failed
  to cure such failure within such ninety (90) day period: (i) purchase the ANDA
  from Par for a purchase price of ***and Par shall execute and
  deliver such documents and instruments as Quintiles may reasonably request in
  order to effectively transfer ownership of the ANDA, and (ii) manufacture Products
  for itself and/or order and purchase Products from third parties. In the event
  that Bioglan desires to manufacture Products for itself and/or to order and
  purchase Products from third parties pursuant to the preceding sentence, at
  Bioglan’s request, Par shall, without charge, use its best efforts to facilitate
  the transfer of all applicable manufacturing technology and know-how to Bioglan
  or such third parties. Without limiting the foregoing, Par shall, without further
  consideration, take such actions (including without limitation meeting with
  Bioglan or third parties, providing instructions, data and documentation, and
  providing samples) and execute and deliver such documents and instruments as
  Bioglan reasonably may request in order to effectively accomplish the foregoing
  transfer of manufacturing technology and know-how so that Bioglan or third parties
  are able to manufacture Products in a manner substantially similar to Par. In
  addition, Par shall make known and available to Bioglan all of its sources for
  materials, ingredients, components, supplies and equipment used in connection
  with the manufacture of the Product, along with the terms thereof and any agreements
  or other arrangements relating thereto, and in the event Par fails to supply
  Bioglan’s requirements of Products on a timely basis in accordance with
  the terms and conditions set forth in this Agreement, at Bioglan’s request,
  Par shall use its best efforts to promptly assign any or all of such agreements
  and arrangements to Bioglan and to facilitate communications between Bioglan
  and the parties thereto.” 

        D.
 The third sentence of Section 5.1(a) is hereby deleted in its entirety and
                    replaced by the following sentence: “The purchase price payable
by Bioglan                     for the Additional Tablets supplied to it by Par shall be
*** per bottle of                     50 tablets (75 mg dosage) and *** per bottle
of 100 tablets (75 mg                     dosage).” 

        E.
  Section 5.1(a) of the Agreement is hereby amended by adding the following sentences
  at the end thereof: “If, and to the extent, Par’s direct, out-of-pocket,
  documented costs for raw materials has increased at the first anniversary of
  the Effective Time over the amount of such costs as of the Effective Time, upon
  reasonable prior written notice to Bioglan, Par may increase the purchase prices
  of all affected Products by the amount of such increase effective on such first
  anniversary. Par may similarly increase the product prices at each subsequent
  

 
	 	2 	 

 

anniversary of the Effective Time for
the increase in Par’s direct, out-of-pocket, documented costs for raw materials
during the prior year. 

        F.
          The third sentence of Section 5.1(c) is hereby deleted in its entirety and
          replaced by the following sentence: “Thereafter, the price for Product
          samples, including all samples of Additional Tablets, shall be equal to
          Par’s direct, out-of-pocket, documented raw material costs for such
          samples.” 

        G.
          The parties agree that the provisions of Sections 6.1 and 6.2 shall apply only
          to Products supplied by Par.  

        H.
          Section 11.1 is hereby amended to delete the notice information for Bioglan and
          to insert in lieu thereof the notice information for Quintiles as follows:  

	  	
Quintiles
Ireland Limited 
c/o Quintiles Transnational Corp. 
4709 Creekstone Drive 
Riverbirch
Building, Suite 200 
Durham, NC 27703 
Attention: Thomas C. Perkins 
Fax Number: 919-998-2090 

        5.
Payments. Within ten (10) days of the Effective Time, Quintiles shall pay
          Par ***. In addition, Quintiles
          shall pay Par *** within thirty
          (30) days after the earlier of December 1, 2002 or notice of approval from the
          FDA of Additional Tablets (75 mg strength) that comply with the
          Agreement, including without limitation the Products Manufacturing
Requirements.           Par shall use its best efforts to develop the Additional Tablets
for commercial           sale as soon as reasonably possible and to obtain all necessary
regulatory           approvals to market the Additional Tablets in the Territory,
including without           limitation final FDA approval for marketing the Additional
Tablets. Par shall be           responsible for all costs associated the development of
the Additional Tablets           up through the date on which they have been approved for
such commercial sale.  

        6.
  Miscellaneous. Capitalized terms not otherwise defined in this Assignment
  shall have the meanings given to them in the Agreement. After the Effective
  Time, references to “Bioglan” in the Agreement shall be deemed references
  to “Quintiles.” Except as amended hereby, the Agreement shall remain
  in full force and effect in accordance with its terms. Bioglan represents and
  warrants to Quintiles that the Agreement is in full force and effect and that
  Bioglan has complied with the terms of the Agreement. Par confirms and agrees
  that the Agreement is in full force and effect and to its knowledge Bioglan
  has complied with the terms of the Agreement. 

 
	 	3 	 

 

{Signature page to
Assignment of Distribution Agreement} 

        IN
WITNESS WHEREOF, Par, Bioglan and Quintiles have duly executed this Assignment. 

	 	PAR PHARMACEUTICAL, INC.  	 
	 
	 	By:	 /s/
      Kenneth I. Sawyer
      

    	 
	 	Name:	 Kenneth
      I. Sawyer
      

    	 
	 	Title:	 CEO
      

    	 
	 
	 	BIOGLAN PHARMA, INC. 
	 
	 	By:	 /s/
      Robert J. Moccia
      

    	 
	 	Name:	Robert J. Moccia
      

    	 
	 	Title:	President
      

    	 
	 
	 	QUINTILES IRELAND LIMITED 
	 
	 	By:	 
      

    
	 	Name:	 
      

    
	 	Title:	 
      

    

 
	 	4 	 

 

{Signature page to
Assignment of Distribution Agreement} 

        IN
WITNESS WHEREOF, Par, Bioglan and Quintiles have duly executed this Assignment. 

 

	 	PAR PHARMACEUTICAL, INC.  	 
	 
	 	By:	 
      

    	 
	 	Name:	 
      

    	 
	 	Title:	 
      

    	 
	 
	 	BIOGLAN PHARMA, INC. 
	 
	 	By:	 
      

    	 
	 	Name:	 

      

    	 
	 	Title:	

      

    	 
	 
	 	QUINTILES IRELAND LIMITED 
	 
	 	By:	 /s/ Ludo Reyndess
      

    
	 	Name:	 Ludo
      Reyndess
      

    
	 	Title:	 Director
      

    

 
	 	5

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