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                                                                                                                                                                     Exhibit 10.1

CERTAIN PORTIONS OF THIS EXHIBIT (INDICATED BY [*]) HAVE BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10) OF REGULATION S-K BECAUSE THEY ARE BOTH NOT MATERIAL AND ARE THE TYPE THAT THE COMPANY TREATS AS PRIVATE AND CONFIDENTIAL.

									
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SETTLEMENT AGREEMENT
This Settlement Agreement (collectively with Exhibits A through C, “Settlement Agreement”) is made and entered into as of the 5th day of April, 2017 (the “Execution Date”) by and between, on the one hand, Jazz Pharmaceuticals, Inc. and Jazz Pharmaceuticals Ireland Limited (collectively, “Jazz,” or each separately, a “Jazz Party”), and on the other hand, Roxane Laboratories, Inc., West-Ward Pharmaceuticals Corp., Eurohealth (USA), Inc., and Hikma Pharmaceuticals PLC (collectively, “Roxane,” or each separately, a “Roxane Party”) (collectively, the “Parties,” or each separately, a “Party”).
RECITALS
WHEREAS, Jazz owns the Licensed Patents covering XYREM® brand 500 mg/mL sodium oxybate oral solution, a pharmaceutical product which is sold in the Territory under NDA No. 21-196;
WHEREAS, pursuant to ANDA No. 202090, Roxane has sought and obtained marketing authorization from the FDA to Market a generic sodium oxybate oral solution 500 mg/mL product indicated for the treatment of cataplexy and excessive daytime sleepiness in narcolepsy in the United States;
WHEREAS, actions for patent infringement are pending in the United States District Court for the District of New Jersey (the “Court”) in relation to the Roxane ANDA and the proposed generic product set forth therein, captioned Jazz Pharmaceuticals, Inc. v. Roxane Laboratories, Inc., Civil Action No. 10-6108, Jazz Pharmaceuticals, Inc., et al. v. Roxane Laboratories, Inc., Civil Action No. 15-1360, and Jazz Pharmaceuticals, Inc. v. Roxane Laboratories, Inc., et al., Civil Action No. 16-4971 (collectively with any related proceedings, the “Actions”); and
WHEREAS, the Parties are willing to settle the Actions on the terms set forth in this Settlement Agreement.
NOW THEREFORE, in consideration of the promises and mutual covenants set forth herein, the sufficiency of which is hereby acknowledged, the Parties hereby agree as follows.
The capitalized terms in this Settlement Agreement are defined in Exhibit C.
1.Dismissal of the Actions.
In consideration of the mutual benefits of entering into this Settlement Agreement, the Parties shall enter into and cause to be filed with the Court, within three (3) business days of the Execution Date, a stipulation and order of dismissal substantially in the form annexed hereto as Exhibit A (“Stipulation and Order of Dismissal”).  If the Court does not grant the Stipulation and Order of Dismissal substantially in the form filed by the Parties, the Parties agree to confer in good faith and revise that document consistent with the terms of this Settlement Agreement and the requirements of the Court.  The date upon which the last of the Actions has been dismissed by the Court shall be the “Effective Date”.  

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2.License Agreement and AG Agreement.  
Contemporaneously with the execution of this Settlement Agreement, Jazz and certain of the Roxane Parties are entering into a license agreement (the “License Agreement”) and an authorized generic agreement (the “AG Agreement”).  Such agreements are being executed contemporaneously herewith and shall be deemed effective on the Effective Date.  
3.Legal Fees.
Within three (3) business days of the Effective Date, Jazz shall make a one-time payment of [*] by wire transfer to an account designated by Roxane, in recognition of the savings inuring to Jazz in terms of the avoidance of costs and expenditure of time and resources associated with prosecuting the Actions.
4.Legal Compliance. 
The Parties shall submit this Settlement Agreement to the U.S. Federal Trade Commission (“FTC”) and the Antitrust Division of the U.S. Department of Justice (the “DOJ”) as soon as practicable after the Effective Date and in no event later than ten (10) business days after the Effective Date pursuant to Section 1112(a), Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066, 2461-62 (2003).  
5.Released Claims; Covenants.  In addition to the dismissal of the Actions, as set forth in the Stipulation and Order of Dismissal, each Party shall make the following releases, which shall be effective upon the Effective Date.  
(a)    Each Roxane Party, for itself and its Affiliates, and each of their respective successors, hereby releases and forever discharges each Jazz Party and each of its Affiliates and each of their respective representatives, shareholders, members, trustees, officers, directors, managers, employees, agents, attorneys, partners, divisions, distributors, suppliers, manufacturers, customers, REMS administrators and REMS vendors, or any heirs, administrators, executors, predecessors, successors, or assigns of the foregoing, from any and all past and present (on or before the Execution Date) claims, counterclaims, demands, obligations, actions, causes of action, wrongful death claims, rights, damages, liabilities, costs, losses, losses of services, expenses, obligations, and liabilities of any nature whatsoever, whether based on a tort, contract or other theory of recovery, whether known or unknown, that each Roxane Party or any of its Affiliates asserted or could have asserted from any occurrence on or prior to the Execution Date, including without limitation, claims and counterclaims that each Roxane Party or any of its Affiliates in each case asserted or could have asserted in the Actions, or in any judicial, United States Patent and Trademark Office (“USPTO”), or any other legal proceeding relating to any or all of the Licensed Patents, asserting that any or all of the Licensed Patents are unenforceable, unpatentable, invalid or not infringed by the filing of the Roxane ANDA and/or Roxane’s manufacture, use, sale, offer for sale or importation of the Roxane Generic Product in the Territory (all of the above, collectively, “Roxane’s Released Claims”).  For clarity, Roxane’s Released Claims do not preclude Roxane from asserting any claim arising in connection with this Settlement Agreement, the AG Agreement (including any agreement 
									
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contemplated thereby, such as a supply agreement and a services agreement), or the License Agreement.  
(b)    Each Jazz Party, for itself and its Affiliates, and each of their respective successors, hereby releases and forever discharges each Roxane Party and each of its Affiliates and each of their respective representatives, shareholders, members, trustees, officers, directors, managers, employees, agents, attorneys, partners, divisions, distributors, suppliers, manufacturers, importers, customers, REMS administrators and REMS vendors, or any heirs, administrators, executors, predecessors, successors, or assigns of the foregoing, from any and all past and present (on or before the Execution Date) claims, counterclaims, demands, obligations, actions, causes of action, wrongful death claims, rights, damages, liabilities, costs, losses, losses of services, expenses, obligations, and liabilities of any nature whatsoever, whether based on a tort, contract or other theory of recovery, whether known or unknown, that each Jazz Party or any of its Affiliates asserted or could have asserted from any occurrence on or prior to the Execution Date, including without limitation, claims and counterclaims that each Jazz Party or any of its Affiliates in each case asserted or could have asserted in the Actions, or in any judicial, USPTO, or any other legal proceeding relating to any or all of the Licensed Patents, asserting that any or all of the Licensed Patents are or would be infringed by the filing of the Roxane ANDA and/or Roxane’s manufacture, use, sale, offer for sale or importation of the Roxane Generic Product in the Territory (all of the above collectively, “Jazz’s Released Claims”).  Jazz’s Released Claims do not preclude Jazz from asserting any or all of the Licensed Patents against: (i) any ANDA or ANDAs other than the Roxane ANDA and/or (ii) any product or products, including a Roxane product, other than the Roxane Generic Product.  For clarity, Jazz’s Released Claims do not preclude Jazz from asserting any claim arising in connection with this Settlement Agreement, the AG Agreement (including any agreement contemplated thereby, such as a supply agreement and a services agreement), or the License Agreement. 
(c)    Subject to the terms of this Settlement Agreement and Roxane’s compliance with the terms of the Settlement Agreement, the License Agreement and the AG Agreement (including any agreement contemplated thereby, such as a supply agreement and a services agreement), each Jazz Party, for itself and its Affiliates, covenants to Roxane that it will not sue, assert any claim or counterclaim against, or otherwise participate in any action or other judicial or legal proceeding against, any Roxane Party or any of its Affiliates or any of their respective representatives, shareholders, members, licensees, sublicensees, trustees, officers, directors, managers, employees, agents, attorneys, partners, divisions, distributors, customers, suppliers, importers, manufacturers, distributors, or insurers, or any patients, physicians, pharmacists, REMS administrators, REMS vendors or other health care providers or entities, or any heirs, administrators, executors, predecessors, successors, or assigns of the foregoing, or cause, assist, or authorize any person or entity to do any of the foregoing, in each case claiming or otherwise asserting that the filing of the Roxane ANDA, the labeling for the Roxane ANDA as of the Execution Date and any Permitted Minor Modifications thereafter, and/or Roxane’s manufacture, use, sale, distribution, marketing, offer for sale or importation of the Roxane Generic Product in the Territory infringes the Licensed Patents or any other U.S. patents or patent applications owned, licensed or controlled by a Jazz Party or any of its Affiliates either on the Execution Date or thereafter (the “Jazz Covenant Not to Sue”).  Jazz shall impose the Jazz Covenant Not to Sue on any Third Party to which any Jazz Party or any of its Affiliates may after the Effective 
									
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Date of this Settlement Agreement assign, license or otherwise transfer or grant any rights under any Licensed Patents.
(d)    Subject to the terms of this Settlement Agreement and Jazz’s compliance with the terms of the Settlement Agreement, the License Agreement and the AG Agreement (including any agreement contemplated thereby, such as a supply agreement and a services agreement), each Roxane Party, for itself and its Affiliates, covenants to Jazz that it will not sue, assert any claim or counterclaim against, or otherwise participate in any action or in any judicial, USPTO, or other legal proceeding against, any Jazz Party or any of its Affiliates or any of their respective representatives, shareholders, members, licensees, sublicensees, trustees, officers, directors, managers, employees, agents, attorneys, partners, divisions, distributors, customers, suppliers, importers, manufacturers, distributors, or insurers, or any heirs, administrators, executors, predecessors, successors, or assigns of the foregoing, or cause, assist, or authorize any person or entity to do any of the foregoing, in each case claiming or otherwise asserting that any or all of the Licensed Patents are invalid, unpatentable, or unenforceable, or that the filing of the Roxane ANDA and/or Roxane’s manufacture, use, sale, offer for sale, or importation of the Roxane Generic Product  in the Territory does not or would not infringe valid claims of any or all of the Licensed Patents or any other U.S. patents or patent applications owned, licensed or controlled by a Jazz Party or any of its Affiliates either on the Execution Date or thereafter (the “Roxane Covenant Not to Sue”) unless the Licensed Patents or any other U.S. patents or patent applications owned, licensed or controlled by a Jazz Party or any of its Affiliates or assignees or grantees is asserted against a Roxane Party.  Each Roxane Party, for itself and each of its Affiliates, further agrees that, except for safety-related reasons or in response to labeling changes effectuated by Jazz after the Execution Date, it will not request labeling for the Roxane Generic Product with “Indications and Usage” and “Dosage and Administration” sections that deviate from the “Indications and Usage” and “Dosage and Administration” labeling sections for the NDA Product as of the Execution Date, unless required to effectuate Permitted Minor Modifications.  Each Roxane Party for itself and each of its Affiliates shall impose the Roxane Covenant Not to Sue on any Third Party to which any Roxane Party or any of its Affiliates may after the Effective Date assign, license or otherwise transfer or grant any rights under the Roxane ANDA.  
(e)    This Settlement Agreement shall constitute a final settlement of the Actions between the Parties, and, except as required by Laws or compelled by legal process, neither any Roxane Party nor any of its respective Affiliates shall assist or cooperate with, or permit any agent or consultant it controls to assist or cooperate with, any Third Party in, or participate in, any litigation before a court, or any Inter Partes review, Covered Business Method review, Post-Grant review, or any other proceeding before the USPTO, or any similar adversarial proceeding against any Jazz Party or any of its Affiliates, or any licensees or sublicensees thereof, involving any product for which Xyrem® is the reference listed drug.  Nothing in the foregoing shall be construed as preventing any Roxane Party or any of its Affiliates from assisting or cooperating with any Third Party, or from itself participating in, any action brought by a Jazz Party or any of its Affiliates against the FDA or others (i) pertaining to the safety of the NDA Product or Generic Equivalent, (ii) pertaining to the Xyrem REMS, (iii) with respect to the FDA’s issuance of a waiver releasing Roxane and any of its Affiliates from the requirement to participate with any Jazz Party or any of its Affiliates in a single, shared system of Elements to Assure Safe Use 
									
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or any subsequent FDA action or step relating thereto, or (iv) pertaining to any REMS program associated with a waiver contemplated by the preceding subclause (iii).
(f)    The Parties, and their agents and consultants under their control, shall continue to maintain the confidentiality of any non-public information exchanged between them in the Actions to the extent required by the terms of the Discovery Confidentiality Order in the Actions (if any) or District of New Jersey Local Rule 5.3(b), or any other applicable confidentiality restriction, unless so ordered by the Court or compelled by law or regulation.
(g)    Except as provided below in this subsection (g), Roxane agrees that, as of the Effective Date, other than in accordance with all of the terms and conditions of this Settlement Agreement, the AG Agreement (including any agreement contemplated thereby, such as a supply agreement and a services agreement) and the License Agreement, Roxane will not, directly or indirectly, alone or in cooperation with any other person or entity, make, have made, use, sell, ship or offer to sell, import or distribute, or authorize, permit or solicit others to make, have made, use, sell, ship or offer to sell, import or distribute, or participate in the profits of others arising from, the sale of any Generic Equivalent or any Authorized Generic.  Notwithstanding the foregoing, the provisions of this subsection 5(g) shall not be construed as applying to Roxane’s ongoing participation in the planning, development, construction, implementation, testing, or any similar activities relating to any separate shared REMS system in accordance with the FDA’s approval of Roxane’s ANDA and issuance of a waiver from the requirement to participate with any Jazz Party or any of its Affiliates in a single, shared system of Elements to Assure Safe Use; nor shall the provisions of this subsection 5(g) apply to the Roxane Generic Product and/or any Generic Equivalent following the earlier of (A) the date of the expiration of the last to expire of the Licensed Patents, including any extensions and pediatric exclusivities, or (B) the date of a Final Decision that all of the asserted claims of all of the asserted Licensed Patents are invalid and/or unenforceable.
(h)    Nothing in this Section 5 (including but not limited to Roxane’s Released Claims and/or the Roxane Covenant Not To Sue), or elsewhere in this Settlement Agreement, shall preclude Roxane from: (i) maintaining any Paragraph IV Certification(s) in the Roxane ANDA; (ii) supplementing or amending the Roxane ANDA to include certifications (including Paragraph IV certification(s)) to any patents that may be listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) for Xyrem® after the Effective Date; (iii) challenging the validity, enforceability or infringement of any patent that Jazz or any Jazz Affiliate asserts against Roxane or any Roxane Affiliate in relation to any Roxane product other than the Roxane Generic Product; or (iv) in relation to any Roxane product other than the Roxane Generic Product, making a Paragraph IV certification or otherwise challenging the validity, enforceability or infringement of any patent that Jazz or any Jazz Affiliate lists in the Orange Book in connection with any product other than Xyrem®.
(i)    Subject to Roxane’s compliance with the terms of this Settlement Agreement, the License Agreement and the AG Agreement, and except as provided below, no Jazz Party or any of its Affiliates shall threaten, commence, pursue, or maintain, or encourage, finance, or otherwise support any Third Party to engage in, any activity (including, but not limited to, the submission of any Citizen Petition(s) or filing of any claim against or involving the FDA) that, if successful, would reasonably be expected to interfere with Roxane’s effort or ability to: (1) 
									
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obtain or maintain FDA approval for the Roxane ANDA and any associated REMS program; or (2) Market the Roxane Generic Product as provided in the License Agreement.  In addition, with respect to Permitted Minor Modifications, Jazz and its Affiliates hereby waive any and all regulatory exclusivities that may inhibit the Marketing of the Roxane Generic Product in the Territory as of the Launch Date, and will, in response to a request from FDA or a commercially reasonable request from Roxane to enable compliance with applicable Laws, submit appropriate and reasonable documentation to FDA to assist Roxane in effectuating the license grants, waivers and covenants contained in the Settlement Agreement, the License Agreement, and the AG Agreement.  Nothing in this Settlement Agreement shall be construed as preventing any Jazz Party or any of its Affiliates from assisting or cooperating with any Third Party, or from itself initiating or participating in, any activity (including but not limited to the submission of any Citizen Petition(s) or filing of any claim against or involving the FDA or others), (i) pertaining to the safety of the NDA Product or Generic Equivalent, (ii) pertaining to the Xyrem REMS, (iii) with respect to the FDA’s issuance of a waiver releasing Roxane and any of its Affiliates from the requirement to participate with any Jazz Party or any of its Affiliates in a single, shared system of Elements to Assure Safe Use or any subsequent FDA action or step relating thereto, or (iv) pertaining to any REMS program associated with a waiver contemplated by the preceding subclause (iii).  
(j)     Subject to Roxane’s compliance with this Settlement Agreement, the License Agreement and the AG Agreement, and except as provided below, no Jazz Party or any of its Affiliates shall take any action, or have any interaction, with the Drug Enforcement Agency (DEA) that would reasonably be expected to interfere with Roxane’s efforts or ability to (1) obtain or maintain FDA approval for the Roxane ANDA and any associated REMS program; or (2) market the Roxane Authorized Generic Product as set forth in the AG Agreement or Roxane Generic Product as set forth in the License Agreement, including but not limited to obtaining DEA quota for sodium oxybate or materials needed for the manufacture of Roxane’s ANDA product, provided however that nothing in the foregoing shall be construed as preventing any Jazz Party, or any of its Affiliates, from assisting or cooperating with any Third Party, or from itself initiating or participating in, any action or interaction with the DEA (i) pertaining to the safety of the NDA Product or Generic Equivalent, (ii) pertaining to the Xyrem REMS, (iii) with respect to the FDA’s issuance of a waiver releasing Roxane and any of its Affiliates from the requirement to participate with any Jazz Party or any of its Affiliates in a single, shared system of Elements to Assure Safe Use or any subsequent FDA action or step relating thereto, or (iv) pertaining to any REMS program associated with a waiver contemplated by the preceding subclause (iii). 
(k)    The Parties hereby agree to confer [*] if necessary, for the purpose of discussing in good faith whether there is a reasonable possibility that the AG Launch Date could be accelerated to a date within the three-month period immediately following the Parties’ discussion.  If the Parties agree there is a reasonable possibility that the AG Launch Date may be so accelerated, Jazz agrees that it will, within [*] of any such discussion, make all necessary filings with the FDA regarding NDA No. 21-196 to amend or modify the Xyrem REMS (as defined in the AG Agreement) for the Roxane Authorized Generic Product to be sold under the Xyrem REMS.  If the Parties are not able to reach agreement regarding whether 
									
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there is a reasonable possibility that the AG Launch Date may be so accelerated, then either Party shall have the right to submit such matter to the dispute resolution procedures set forth in Exhibit B of this Settlement Agreement.  If the Parties do not identify an event that is reasonably likely to accelerate the AG Launch Date by [*], Jazz will make all necessary filings with the FDA regarding NDA No 21-196 to amend or modify the Xyrem REMS (as defined in the AG Agreement) by no later than [*].  Nothing in this subsection (k) should be construed to impede or delay Jazz from making all necessary filings with the FDA regarding NDA No 21-19 to amend or modify the Xyrem REMS (as defined in the AG Agreement) for the Roxane Authorized Generic to be sold under the Xyrem REMS.  
6.Acknowledgement and California Civil Code Section 1542 Waiver.
(a)    ROXANE ACKNOWLEDGES THAT IT MAY HEREAFTER DISCOVER CLAIMS OR FACTS IN ADDITION TO OR DIFFERENT FROM THOSE WHICH IT NOW KNOWS OR BELIEVES TO EXIST WITH RESPECT TO ROXANE’S RELEASED CLAIMS, THE FACTS AND CIRCUMSTANCES ALLEGED IN THE ACTIONS AND/OR THE SUBJECT MATTER OF THIS SETTLEMENT AGREEMENT, WHICH, IF KNOWN OR SUSPECTED AT THE TIME OF EXECUTING THIS SETTLEMENT AGREEMENT, MAY HAVE MATERIALLY AFFECTED THIS SETTLEMENT AGREEMENT.  NEVERTHELESS, UPON THE EFFECTIVENESS OF THE RELEASE OF ROXANE’S RELEASED CLAIMS AS SET FORTH IN SECTION 5 ABOVE, ROXANE HEREBY ACKNOWLEDGES THAT ROXANE’S RELEASED CLAIMS INCLUDE WAIVERS OF ANY RIGHTS, CLAIMS OR CAUSES OF ACTION THAT MIGHT ARISE AS A RESULT OF SUCH DIFFERENT OR ADDITIONAL CLAIMS OR FACTS.  ROXANE ACKNOWLEDGES THAT IT UNDERSTANDS THE SIGNIFICANCE AND POTENTIAL CONSEQUENCES OF SUCH A RELEASE OF UNKNOWN UNITED STATES JURISDICTION CLAIMS AND OF SUCH A SPECIFIC WAIVER OF RIGHTS.  ROXANE INTENDS THAT THE CLAIMS RELEASED BY IT UNDER THIS RELEASE BE CONSTRUED AS BROADLY AS POSSIBLE TO THE EXTENT THEY RELATE TO UNITED STATES JURISDICTION CLAIMS.  ROXANE IS AWARE OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her, must have materially affected his or her settlement with the debtor.”
ROXANE AGREES TO EXPRESSLY WAIVE ANY RIGHTS IT MAY HAVE UNDER THIS CODE SECTION OR UNDER FEDERAL, STATE OR COMMON LAW STATUTES OR JUDICIAL DECISIONS OF A SIMILAR NATURE, AND KNOWINGLY AND VOLUNTARILY WAIVES SUCH UNKNOWN CLAIMS.  
(b)    JAZZ ACKNOWLEDGES THAT IT MAY HEREAFTER DISCOVER CLAIMS OR FACTS IN ADDITION TO OR DIFFERENT FROM THOSE WHICH IT NOW KNOWS OR BELIEVES TO EXIST WITH RESPECT TO JAZZ’S RELEASED CLAIMS, THE FACTS AND CIRCUMSTANCES ALLEGED IN THE ACTIONS AND/OR THE SUBJECT MATTER OF THIS SETTLEMENT AGREEMENT, WHICH, IF KNOWN OR 
									
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SUSPECTED AT THE TIME OF EXECUTING THIS SETTLEMENT AGREEMENT, MAY HAVE MATERIALLY AFFECTED THIS SETTLEMENT AGREEMENT.  NEVERTHELESS, UPON THE EFFECTIVENESS OF THE RELEASE OF JAZZ’S RELEASED CLAIMS AS SET FORTH IN SECTION 5 ABOVE, JAZZ HEREBY ACKNOWLEDGES THAT JAZZ’S RELEASED CLAIMS INCLUDE WAIVERS OF ANY RIGHTS, CLAIMS OR CAUSES OF ACTION THAT MIGHT ARISE AS A RESULT OF SUCH DIFFERENT OR ADDITIONAL CLAIMS OR FACTS.  JAZZ ACKNOWLEDGES THAT IT UNDERSTANDS THE SIGNIFICANCE AND POTENTIAL CONSEQUENCES OF SUCH A RELEASE OF UNKNOWN UNITED STATES JURISDICTION CLAIMS AND OF SUCH A SPECIFIC WAIVER OF RIGHTS.  JAZZ INTENDS THAT THE CLAIMS RELEASED BY IT UNDER THIS RELEASE BE CONSTRUED AS BROADLY AS POSSIBLE TO THE EXTENT THEY RELATE TO UNITED STATES JURISDICTION CLAIMS.  JAZZ IS AWARE OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: 
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her, must have materially affected his or her settlement with the debtor.”
JAZZ AGREES TO EXPRESSLY WAIVE ANY RIGHTS IT MAY HAVE UNDER THIS CODE SECTION OR UNDER FEDERAL, STATE OR COMMON LAW STATUTES OR JUDICIAL DECISIONS OF A SIMILAR NATURE, AND KNOWINGLY AND VOLUNTARILY WAIVES SUCH UNKNOWN CLAIMS. 
7.Competition-Related Claims.  The Parties shall use reasonable efforts to defend against any investigation, administrative proceeding or litigation brought by a government entity or Third Party related to the Settlement Agreement, the AG Agreement, the License Agreement or other related agreements, including any claim of unfair competition (which may also include claims of untrue, false or misleading advertising), and shall discuss in good faith whether to enter into a joint defense agreement, and whether to share in the costs and/or expenses incurred by either Party arising out of such response or defense (including reasonable attorneys' fees).  Regardless of any such agreement, the Parties will be deemed to have a common legal interest for purposes of asserting any applicable privilege (including, but not limited to, the attorney-client privilege) unless such common interest is explicitly repudiated.  Nothing in this Settlement Agreement, however, shall prevent the Parties, whether collectively or individually, from entering into settlement negotiations with a Third Party or governmental entity, provided that, to the extent permitted by law, if either Party enters into discussions related to a settlement negotiation or consent agreement, such Party shall provide notice to the other Party of such discussions within five (5) business days after the initiation of such discussions.  Subject to the foregoing, each Party shall have the right to defend itself against such investigation, administrative proceeding or litigation, including by settlement or other consensual resolution, as it sees fit in the exercise of its sole discretion; provided however, to the extent permitted by law, that neither Party shall enter into a settlement agreement or consent order with a Third Party or government entity without providing to the extent practicable ten (10) business days’ prior written notice thereof to the other Party, or to the extent such settlement agreement or consent 
									
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order includes terms or admissions that are reasonably likely to materially adverse to the other Party’s interests, other than a general admission of liability of such Party.
8.Confidentiality.
The terms of this Settlement Agreement, the AG Agreement (including any agreement contemplated thereby, such as a supply agreement and a services agreement) and the License Agreement shall be maintained in strict confidence by the Parties except:  (i) as provided by Section 4 of this Settlement Agreement; (ii) that any Party or any of its Affiliates may disclose such terms as may be necessary in connection with any litigation or other legal proceeding relating to any of the Licensed Patents, provided that such disclosure is made subject to a protective order or confidentiality agreement and that such Party first provides the other Party with  reasonable notice of the intended disclosure and provides the other Party with a reasonable period of time in which to assert an objection to the intended disclosure, in each case to the extent reasonably obtainable by the disclosing Party; (iii) that any Party or any of its Affiliates may disclose such terms of this Settlement Agreement, the License Agreement, and the AG Agreement (including any agreement contemplated thereby, such as a supply agreement and a services agreement), including but not limited to the Launch Date, the AG Launch Date and the Royalty, if and as reasonably determined by such Party or any of its Affiliates to be required by law or regulation, including, without limitation, reporting requirements of the U.S. Securities and Exchange Commission, or by the rules or regulations of any stock exchange to which such Party is subject including, with respect to Jazz and its Affiliates, in a filing on Form 8-K with the U.S. Securities and Exchange Commission with substantially the content provided by Jazz to Roxane prior to the execution of this Settlement Agreement; (iv) that any Party or any of its Affiliates may disclose such terms to the extent necessary to allow attorneys, auditors and advisors, who agree, or have a professional responsibility, to keep such terms confidential, to render professional services to the Parties or their Affiliates; (v) that the Parties or any of either of their Affiliates may each (x) issue a press release with respect to the matters contemplated by this Settlement Agreement, the License Agreement, and the AG Agreement (including any agreement contemplated thereby, such as a supply agreement and a services agreement) in substantially the forms agreed between the Parties prior to the execution of this Settlement Agreement, (y) provide other information consistent with talking points provided by Jazz to Roxane prior to the execution of this Settlement Agreement and (z) provide such other information to the extent approved by the other Party, which approval shall not be unreasonably withheld, conditioned, or delayed; (vi) that the Parties or any of their Affiliates may communicate with the FDA on a confidential basis concerning this Settlement Agreement, the License Agreement and the AG Agreement and the licenses, authorizations, and waivers provided for herein and therein; (vii) that either Party or any of its Affiliates may disclose such terms as needed to perform under this Settlement Agreement, the License Agreement, and the AG Agreement (and any agreement contemplated thereby), including any subcontractor of a Party’s obligations thereunder; and (viii) that either Party or any of its Affiliates may disclose such terms to actual or potential investors, acquirors and other financial partners solely for the purpose of evaluating or carrying out an actual or potential investment, acquisition or other transaction, provided that in each such case such recipients are bound by appropriate confidentiality and non-use obligations.  Notwithstanding the foregoing, each Party or any of its Affiliates may disclose publicly or to a Third Party without the consent of the other Party any 
									
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information previously disclosed in any press release made pursuant to clause (v) or filing required of the U.S. Securities and Exchange Commission made pursuant to clause (iii) above, provided that such information remains accurate as of such time. The Parties acknowledge and agree that, upon its filing with the Court, the Stipulation and Order of Dismissal will be a matter of public record and shall not be subject to any confidentiality restrictions.  The Parties further agree that, upon the filing of the Stipulation and Order of Dismissal with the Court, the fact that the Parties have settled the Actions will be a matter of public record and shall not be subject to any confidentiality restrictions, but the terms of such settlement shall be maintained in confidence as provided by this Section 7. 
9.Term and Termination.
This Settlement Agreement shall continue from the Execution Date until the earlier of:  (a) the expiration of the last to expire of the Licensed Patents; or (b) the date of a Final Decision that all of the asserted claims of all of the asserted Licensed Patents are invalid and/or unenforceable.  The releases and discharges set forth in Section 5 and Section 6 shall survive the termination of this Settlement Agreement, and the confidentiality obligations set forth in Section 7 shall survive for a period of seven (7) years from the expiration or termination of the Settlement Agreement.  
10.No Assignment.
This Settlement Agreement shall not be assignable in whole or in part by any Party to any Third Party without the prior written consent of the other Parties, such consent not to be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, either Party may assign this Settlement Agreement to any of its Affiliates or to any successor to all or substantially all of the assets, business or operating business unit or division of such Party through which such Party (i) with respect to Roxane, operates its U.S. generic oral pharmaceuticals business in the ordinary course of business prior to such assignment and (ii) with respect to Jazz, performs its obligations under this Settlement Agreement in the ordinary course of business prior to such assignment, in the case of clause (i) or (ii) above, whether through a merger, consolidation, sale of stock, or otherwise, provided that such successor agrees in writing to assume all of the obligations of such Party hereunder.  Any purported assignment, delegation or other transfer in violation of the preceding sentences shall be null and void.  Subject to the foregoing, this Settlement Agreement shall be binding upon, and inure to the benefit of, the permitted successors and assigns of each Party.
11.Notice.
All notices, requests, claims, demands and other communications under this Settlement Agreement shall be in writing and shall be given by delivery by hand, by facsimile, by registered or certified mail (postage prepaid, return receipt requested), or by email to the respective Parties at the following addresses (or at such other address for a Party as shall be specified by like notice). 
									
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	If to Jazz, to:	Jazz Pharmaceuticals, Inc.
3180 Porter Drive
Palo Alto, California 94304
Attn: General Counsel
Facsimile: (650) 496-3781
Email:  jazz_notices@jazzpharma.com

		
	with a copy to:	Nick Cerrito
Quinn Emanuel Urquhart & Sullivan, LLP
51 Madison Avenue
22nd Floor
New York, New York 10010
Facsimile: (212) 849-7100
Email: nickcerrito@quinnemanuel.com

		
	If to Roxane, to:	West-Ward Pharmaceuticals Corp.
401 Industrial Way West
Eatontown, NJ  
Attn: General Counsel
Facsimile: 732-720-2872
Email: dberger@west-ward.com

		
	with a copy to:	Alan Clement
Locke Lord LLP
200 Vesey Street
New York, NY 10281
Facsimile: 212-812-8378
Email: aclement@lockelord.com

		

Any such notice shall be deemed to have been received on the date actually received.  Either Jazz or Roxane may change its address by giving the other Party written notice delivered in accordance with this Section. 
12.Severability.
If any provision of this Settlement Agreement is declared illegal, invalid or unenforceable by a court having competent jurisdiction, it is mutually agreed that this Settlement Agreement shall endure except for the part declared invalid or unenforceable by order of such court; provided, however, that in the event that the terms and conditions of this Settlement Agreement are materially altered, the Parties will, in good faith, renegotiate the terms and conditions of this Settlement Agreement (including Section 5 hereof) to reasonably replace such invalid or 
									
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unenforceable provisions in light of the intent of this Settlement Agreement; provided further that if the Parties do not succeed in reaching mutually acceptable modifications to this Settlement Agreement within thirty (30) calendar days of such material alteration, then the Parties agree to comply with the Dispute Resolution Provisions in accordance with the terms set forth in Exhibit B in order to reach agreement on an appropriate modification of this Settlement Agreement.
13.Amendment.  
This Settlement Agreement may not be changed, waived, discharged, or terminated except by an instrument in writing signed by the Parties and making specific reference to this Section 12 and signed by a duly authorized officer of each Party.
14.Superiority of Agreements.
The Parties agree that the provisions of this Settlement Agreement, together with the License Agreement and the AG Agreement, and when executed and delivered by all parties thereto, the Supply Agreement and the Master Services Agreement, and any permitted amendments to any such agreement, supersede and shall prevail over any inconsistent statements, understandings, promises, or provisions contained in any prior discussions, arrangements, or communications between the Parties or in any documents passing between the Parties.  Notwithstanding anything herein to the contrary, the Settlement Agreement, this License Agreement, and the AG Agreement shall be construed together in a consistent manner as reflecting a single intent and purpose.  Except as otherwise set forth herein, nothing in this Settlement Agreement is intended to, and shall not, confer upon any Third Party any rights or remedies. 
15.Governing Law.
This Settlement Agreement shall be governed, interpreted, and construed in accordance with the laws of the State of New Jersey, without giving effect to choice of law principles.  The Parties expressly exclude application of the United Nations Convention for the International Sale of Goods.  If a dispute arises between the Parties concerning this Settlement Agreement, then the Parties will confer, as soon as practicable, in an attempt to resolve the dispute.  If the Parties are unable to resolve such dispute amicably, then the Parties irrevocably agree that the federal district court in the State of New Jersey shall have exclusive jurisdiction to deal with any disputes arising out of or in connection with this Settlement Agreement and that, accordingly, any such proceeding arising out of or in connection with this Settlement Agreement shall be brought in the United States District Court for the District of New Jersey.  Notwithstanding the foregoing, if there is any dispute for which the federal district court in the State of New Jersey does not have subject matter jurisdiction, the state courts in New Jersey shall have jurisdiction.  In connection with any dispute arising out of or in connection with this Settlement Agreement, each Party hereby expressly consents and submits to the personal jurisdiction of the federal and state courts located in the State of New Jersey. 
16.Headings.  
The article and section headings contained in this Settlement Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Settlement 
									
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Agreement.
17.Interpretation.  
References in this Settlement Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa.  The words "include", "includes" and "including" when used in this Settlement Agreement shall be deemed to be followed by the phrase "without limitation".  Unless the context otherwise requires, references in this Settlement Agreement to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Settlement Agreement.  Unless the context otherwise requires, the words "hereof", "hereby" and "herein" and words of similar meaning when used in this Settlement Agreement refer to this Settlement Agreement in its entirety and not to any particular Article, Section or provision of this Settlement Agreement.  All references to contracts, agreements, or other arrangements shall refer to oral as well as written matters.
18.Construction.
The Parties expressly agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be applied in the construction or interpretation of this Settlement Agreement.
19.Waiver.
A waiver by either Party of any of the terms and conditions of this Settlement Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any other term or condition hereof.  All rights, remedies, undertakings, obligations and agreements contained in this Settlement Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party. 
20.Counterparts.
This Settlement Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. Delivery of an executed counterpart of a signature page of this Settlement Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this Settlement Agreement.
21.Representations and Warranties. 
Each Party represents and warrants to the other Parties that the execution and delivery by such Party of this Settlement Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate action and will not (i) violate any provision of Laws or any ruling, writ, injunction, order, judgment or decree of any court, administrative agency or other governmental body to which such Party is subject, (ii) conflict with or result in any breach of any of the terms, conditions or provisions of any agreement to which such Party or any of its Affiliates is a party or by which it or any of its Affiliates or any of its or their properties or assets is bound or affected, or (iii) violate or conflict with any provision of the organizational documents of such Party.
*          *          *          *          *

									
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IN WITNESS WHEREOF, this Settlement Agreement has been executed by the duly authorized representatives of the Parties.
						
	JAZZ PHARMACEUTICALS, INC.
		
	By:	/s/ Suzanne Sawochka Hooper
	Name:	Suzanne Sawochka Hooper
	Title:	Executive VP & General Counsel
		
	JAZZ PHARMACEUTICALS IRELAND LIMITED
		
	By:	/s/ Hugh Kiely
	Name:	Hugh Kiely
	Title:	Director

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IN WITNESS WHEREOF, this Settlement Agreement has been executed by the duly authorized representatives of the Parties.

						
	ROXANE LABORATORIES, INC.
		
	By:	/s/ Brian Hoffman
	Name:	Brian Hoffman
	Title:	President
		
	WEST-WARD PHARMACEUTICALS CORP.
		
	By:	/s/ Brian Hoffman
	Name:	Brian Hoffman
	Title:	President
		
	EUROHEALTH (USA), INC.
		
	By:	/s/ David Berger
	Name:	David Berger
	Title:	Secretary
		
	HIKMA PHARMACEUTICALS PLC
		
	By:	/s/ Said Darwazah
	Name:	Said Darwazah
	Title:	Chairman and Chief Executive

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Exhibit A 

Stipulation And Order of Dismissal

UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 

									
	

JAZZ PHARMACEUTICALS, INC.,

      Plaintiff,

v.

ROXANE LABORATORIES, INC.,

      Defendant.
	)
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)
)
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Civil Action No. 10-6108 (ES)(JAD)
CONSOLIDATED

(Filed Electronically)
	

JAZZ PHARMACEUTICALS, INC. and JAZZ PHARMACEUTICALS IRELAND
LIMITED,

      Plaintiffs,

v.

ROXANE LABORATORIES, INC.,

      Defendant.
	)
)
)
)
)
)
)
)
)
)
)
)	

Civil Action No. 15-1360 (ES)(JAD)
CONSOLIDATED

(Filed Electronically)
	

JAZZ PHARMACEUTICALS, INC.,

      Plaintiff,

v.

ROXANE LABORATORIES, INC., WESTWARD PHARMACEUTICALS CORP., EUROHEALTH (USA), INC., and
HIKMA PHARMACEUTICALS PLC,

      Defendant.
	)
)
)
)
)
)
)
)
)
)
)
)	

Civil Action No. 16-4971 (ES)(JAD)

(Filed Electronically)

STIPULATION AND ORDER OF DISMISSAL

A-1

Pursuant to Federal Rules of Civil Procedure 41(a)(1)(A)(ii) and 41(c), and by agreement between Plaintiffs Jazz Pharmaceuticals, Inc. and Jazz Pharmaceuticals Ireland Limited (collectively, “Plaintiffs”) and Defendants Roxane Laboratories, Inc., West-Ward Pharmaceuticals Corp., Eurohealth (USA), Inc., and Hikma Pharmaceuticals PLC (“Roxane,” and together with Plaintiffs, the “Parties”), the Parties hereby stipulate and agree that all claims, counterclaims and affirmative defenses asserted by the Parties against each other in the above-captioned actions (the “Actions”) are hereby dismissed without prejudice and, except as specifically provided by agreement, without costs, disbursements, or attorneys’ fees to any party.  It is further stipulated that the U.S. District Court for the District of New Jersey retains jurisdiction to enforce and resolve any disputes related to the parties’ resolution of the Actions.
A-2

SO STIPULATED:
Dated: _____________, 2017

									
	SAUL EWING LLP		SILLS CUMMIS & GROSS P.C.
			
			
	Charles M. Lizza 
William C. Baton 
One Riverfront Plaza, Suite 1520 
Newark, New Jersey 07102-5426 
(973) 286-6700 
clizza@saul.com 
 
Attorneys for Plaintiffs 
Jazz Pharmaceuticals, Inc. and 
Jazz Pharmaceuticals Ireland Limited
		Beth S. Rose 
The Legal Center 
One Riverfront Plaza 
Newark, New Jersey 07102 
(973) 643-7000 
 
Attorney for Defendants 
Roxane Laboratories, Inc., 
West-Ward Pharmaceuticals Corp., 
Eurohealth (USA), Inc., and Hikma Pharmaceuticals PLC

						
	SO ORDERED:	
		
	This _____day of _________________, 2017	
		
		
		Hon. Esther Salas, U.S.D.J.

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Exhibit B
Dispute Resolution Provisions
Any dispute arising under the Settlement Agreement that refers to dispute resolution as set forth in this Exhibit B shall be determined by the following dispute resolution procedure, with all references to days being to calendar days.  All negotiations and communications pursuant to this process will be confidential and shall be treated as compromise and settlement negotiations for purposes of the applicable rules of evidence, including Federal Rule of Evidence 408.
(a)For purposes of these Dispute Resolution Provisions, “Agreement” or “Agree” shall mean confirmation in writing by all Parties to the dispute that the dispute has been resolved.
(b)To initiate this dispute resolution procedure, any Party shall give written notice to any other Party of a dispute setting forth the agreement at issue, nature of the dispute, including an identification of the facts and legal claims at issue, and a summary of the arguments supporting the notifying Party’s position.
(c)Within fourteen (14) days of receipt of notice, an attorney for a Jazz Party and an attorney for a Roxane Party must confer in good faith either in person or telephonically in order to attempt to reach an Agreement regarding the dispute.  
(d)If Agreement is not reached within fourteen (14) days through the process described in Exhibit B, paragraph (c) above then the Parties will have fourteen (14) days during which an in-house attorney for a Jazz Party and an in-house attorney for a Roxane Party must confer in good faith either in person or telephonically in order to attempt to reach an Agreement regarding the dispute.
(e)If Agreement is not reached within fourteen (14) days through the process described in Exhibit B, paragraph (d) above, then the Parties will have fourteen (14) days during which an executive for any Jazz Party having a rank or title not less than that of a vice president (or an equivalent thereof) and an executive for any Roxane Party having a rank or title not less than that of a vice president (or an equivalent thereof) must confer in good faith either in person or telephonically in order to attempt to reach an Agreement regarding the dispute.
(f)If Agreement is not reached within fourteen (14) days through the process described in Exhibit B, paragraph (e) above, then the Parties will have fourteen (14) days during which the chief executive officer for Jazz and chief executive officer for Roxane must confer in good faith either in person or telephonically in order to attempt to reach an Agreement regarding the dispute.
(g)If an Agreement is not reached upon completion of the process set forth in paragraphs (b) through (f) above of the foregoing dispute resolution procedures, either Party may initiate litigation by filing a complaint and avail itself in full of all available legal action and remedies.  
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(h)A Party may designate the same individual to confer for more than one of the procedures set forth in paragraphs (c) through (f) above so long as the individual otherwise meets the criteria set forth in that paragraph.
(j)The Parties agree that they will not use this dispute resolution process, including either the fact that a Party engaged in the process or the substance of the discussions that take place during this process, for purposes of supporting or otherwise advancing any defense or position in any litigation that may follow.  
(k)Any deadline set forth in the foregoing Dispute Resolution Provisions may be shortened or extended by written agreement of all Parties.

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Exhibit C 
Defined Terms
1.“Affiliate” shall mean, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party.  For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of fifty percent (50%) or more of the voting stock or other equity interest of such entity, or by contract or otherwise.  For clarity, a person or other entity shall be deemed an Affiliate only for so long as this definition is satisfied with respect to such person or entity.  
2.“AG Agreement” shall have the meaning set forth in Section 2 of the Settlement Agreement.
3.“AG Launch Date” shall mean the date on which Roxane is permitted to Market the Roxane Authorized Generic pursuant to the AG Agreement.
4.“ANDA” shall mean an Abbreviated New Drug Application.  
5.“Authorized Generic” shall mean any generic product that:  (a) contains the Compound as the sole active ingredient; (b) is Marketed in the Territory without use of the Trademark; and (c) is authorized by Jazz to be Marketed in the Territory pursuant to NDA No. 21-196.  
6.“Compound” shall mean 500 mg/mL sodium oxybate oral solution.  
7.“DOJ” shall have the meaning set forth in Section 4 of the Settlement Agreement.
8.“Effective Date” shall have the meaning set forth in Section 1 of the Settlement Agreement.
9.“FDA” shall mean the U.S. Food and Drug Administration and any successor agency thereto.  
10.“Final Decision” shall mean the issuance of a final decision from a district court or from the Patent Trial and Appeal Board of the United States Patent and Trademark Office (in either case from which no appeal can be taken), or a mandate from a court of appeals from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) can be taken.  
11.“FTC” shall have the meaning set forth in Section 4 of the Settlement Agreement.
12.“Generic Equivalent” shall mean a pharmaceutical product that has received FDA approval for sale pursuant to an ANDA or 505(b)(2) filing as an AB-rated equivalent to the NDA Product.  
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13.“Jazz Covenant Not to Sue” shall have the meaning set forth in Section 5(c) of the Settlement Agreement.
14.“Jazz’s Released Claims” shall have the meaning set forth in Section 5(b) of the Settlement Agreement.
15.“Launch Date” shall mean the date on which Roxane is permitted to Market the Roxane Generic Product pursuant to the License Agreement.
16.“Laws” shall mean all applicable international, supranational, national, federal, state, provincial, regional and local laws, statutes, ordinances, codes, rules, regulations, orders, decrees or other pronouncements of any governmental, administrative or judicial authority in the Territory.  
17.“License Agreement” shall have the meaning set forth in Section 2 of the Settlement Agreement.
18.“Licensed Patents” shall mean [A] U.S. Patent Nos. 6,472,431, 6,780,889, 7,262,219, 7,851,506, 8,263,650, 8,324,275, 8,461,203, 7,668,730, 7,765,106, 7,765,107, 7,895,059, 8,457,988, 8,589,182, 8,731,963, 8,772,306, 8,859,619, 8,952,062, 9,050,302, 9,486,426, and 9,539,330 including any divisionals, continuations, continuations-in-part, reexaminations, or reissues thereof, and all patent term extensions and any pediatric exclusivities applicable to the corresponding NDA Product, in each case whether granted or allowed prior to or after the Execution Date and [B] any other U.S. patents owned by or licensed to any Jazz Party or any of its Affiliates that become listed in the Orange Book after the Effective Date in connection with the NDA Product, solely to the extent and for the sole purpose of any FDA requirement that Roxane file a certification pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV) with respect to the Roxane ANDA, and subject to Roxane filing such a Paragraph IV certification with respect to such patents that become listed in the Orange Book in connection with the NDA Product after the Effective Date.  
19.“Market” shall mean to use, advertise, market, offer, sell, offer to sell, or to otherwise commercialize a pharmaceutical product, and “Marketing” shall have a corresponding meaning.  For the avoidance of doubt, Market and Marketing shall include “commercial marketing” as defined in 21 C.F.R. §314.3(b), as that regulation exists as of the Effective Date.  
20.“NDA Product” shall mean the branded product that: (a) contains the Compound as the sole active ingredient; (b) is Marketed with use of the Trademark in the Territory; and (c) is approved for Marketing in the Territory pursuant to NDA No. 21-196.  
21.“Permitted Minor Modification” shall mean any modification to ANDA No. 202090 (as supplemented or amended as of the Execution Date or, solely to incorporate any modifications described in this definition, thereafter) that does not materially change the active ingredient, concentration, dosage form, indication, reference listed drug (unless the reference listed drug is first changed for the NDA Product), or AB rating of any generic product defined by such ANDA and/or does not add one or more additional active ingredients to any generic product defined by such ANDA.  For the avoidance of doubt, a modification of such ANDA to add a second active ingredient to any generic product defined by such ANDA, to materially change 
C-2

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any generic product covered by such ANDA to a different dosage form, to materially change any generic product covered by such ANDA to a different salt, or to materially change any generic product covered by such ANDA to add any approved new indication for the NDA Product after the Execution Date for which such ANDA has not sought approval as of the Execution Date are not Permitted Minor Modifications.  Any modification of such ANDA for the purpose of modifying any approved indication for the generic product covered by such ANDA as of the Execution Date, or any other labeling-related modification, is not a Permitted Minor Modification unless such modification to such approved indication or other labeling-related modifications are both (i) first made to the NDA Product and (ii) required by the FDA or reasonably necessitated by Laws to maintain approval of the Roxane ANDA.  
22.“Roxane ANDA” shall mean Roxane’s ANDA No. 202090 as supplemented or amended as of the Execution Date, or, solely to incorporate any Permitted Minor Modification, thereafter.  
23.“Roxane Authorized Generic” shall mean a generic product that: (a) contains the Compound as the sole active ingredient; (b) is Marketed in the Territory without use of the Trademark, except as otherwise provided herein (including in any agreement contemplated hereby, such as the Supply Agreement and the Master Services Agreement), or in the Settlement Agreement; (c) is Marketed by Roxane in the Territory pursuant to NDA No. 21-196; and (d) is supplied by or on behalf of Jazz to Roxane under the terms and conditions of the AG Agreement and the Supply Agreement.  
24.“Roxane Covenant Not to Sue” shall have the meaning set forth in Section 5(d) of the Settlement Agreement.
25.“Roxane’s Released Claims” shall have the meaning set forth in Section 5(a) of the Settlement Agreement.
26.“Royalty” shall mean the royalty payable under the AG Agreement.  
27.“Stipulation and Order of Dismissal” shall have the meaning set forth in Section 1 of the Settlement Agreement.
28.“Territory” shall mean the United States of America, including its territories, districts, and possessions, including the Commonwealth of Puerto Rico.
29.“Third Party” shall mean any person or entity other than the Parties and each of their Affiliates.
30.“USPTO” shall have the meaning set forth in Section 5(a) of the Settlement Agreement.
31.“Xyrem REMS” means the Risk Evaluation and Mitigation Strategy (“REMS”) program approved by the FDA on February 27, 2015 under NDA No. 21-196 (as it may be modified from time to time). 
C-3Document

Exhibit 10.2

CERTAIN PORTIONS OF THIS EXHIBIT (INDICATED BY [*]) HAVE BEEN EXCLUDED PURSUANT TO ITEM 601(B)(10) OF REGULATION S-K BECAUSE THEY ARE BOTH NOT MATERIAL AND ARE THE TYPE THAT THE COMPANY TREATS AS PRIVATE AND CONFIDENTIAL.

CLINICAL AND COMMERCIAL MANUFACTURING
AND SUPPLY AGREEMENT

THIS CLINICAL AND COMMERCIAL MANUFACTURING AND SUPPLY AGREEMENT (this “Agreement”) is made effective as of the 22nd day of December, 2010 (“Effective Date”) by and between BAXTER ONCOLOGY GmbH, with an address at Kantstrasse 2, 33790 Halle / Westphalia, Germany (“Baxter”) and CELATOR PHARMACEUTICALS, INC., a Delaware corporation, having offices at 303B College Road East, Princeton, New Jersey 08540 (“Celator”).

RECITALS

1.    Celator is among other pharmaceutical activities engaged in the development of pharmaceutical products;

2.    Baxter is among other pharmaceutical activities engaged in the formulation, filling, inspection, labeling and packaging of pharmaceutical products for various pharmaceutical companies, including competitors of Celator and Baxter;
    
3.    Celator and Baxter desire to have Baxter formulate, fill, inspect, package, label, and test the pharmaceutical product, CPX-351, for Celator for clinical and/or commercial use.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, Celator and Baxter, hereinafter sometimes referred to as “Party” or “Parties”, agree as follows:

Article 1, DEFINITIONS

1.1    As used in this Agreement, the following words and phrases shall have the following meanings:

“Active Pharmaceutical Ingredient” or “API” shall collectively refer to cytarabine and daunorubicin.

“Affiliate” shall mean any corporation or other business entity directly or indirectly controlled by, controlling, or under common control with a Party or its parent corporation, the term “control” (including, with correlative meaning, the terms “controlled by,” “controlling” and “under common control with”) means: (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of shares of capital stock having the right to vote for the election of directors, or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Party, whether through the ownership of voting securities, by contract or otherwise, or such other relationship as, in fact, constitutes actual control.
1
                                                                         CONFIDENTIAL

“Annual Obligation” shall be defined as set forth in Article 4.

“Batch” shall mean a specific quantity of a Product comprising a number of Units mutually agreed upon in writing between the Parties in the Product Master Plan, and that (a) is intended to have uniform character and quality within specified limits, and (b) is Produced according to a single manufacturing order during the same cycle of Production.

“Baxter SOPs” shall mean Baxter’s Standard Operating Procedures relating to the Product, which shall be reviewed and approved by Celator prior to entering into the Product Master Plan.  Celator shall have the right to access and inspect SOPs during annual audits and may request and review specific SOPs at any time.

“Baxter-supplied Components” shall mean all Components other than Celator-supplied Components.

“Celator-supplied Components” shall mean API, DSPC and DSPG supplied by Celator to Baxter.

“Clinical Product” means vials of Product Produced by Baxter for clinical use by Celator as set forth in a Product Master Plan.

“Celator Trademarks” shall mean the proprietary mark(s) for Product owned by Celator.

“Commercial Product” means vials of Product Produced for commercial sale.

“Components” shall mean all components, including the Raw Materials and Packaging Materials, used by Baxter in the Production of Product under this Agreement.  Components are listed in the Product Master Plan.

“Component Specifications” shall mean the specifications and testing to be performed for the Components, as set forth in the Product Master Plan.

“Confidential Information” shall be defined as set forth in Article 18.

“Contract Year” shall be defined as (i) the calendar year in which Celator obtains Regulatory Approval allowing the commercialization of Product in the United States or Europe and (ii) each successive year of the Term.  

“Current Good Manufacturing Practices” or “cGMP” shall mean (a) the good manufacturing practices required by the Regulatory Authorities and set forth in the applicable law, policies or guidelines, 
2

in effect at any time during the term of this Agreement, for the Production and testing of pharmaceutical materials as applied solely to Product.

“DSPC” shall mean the excipient, distearoylphosphatidyl choline.

“DSPG” shall mean the excipient, distearoylphosphatidyl glycerol.
  
“Effective Date” shall mean the date first set forth above.

“FDA” shall mean the United States Food and Drug Administration or any successor entity thereto.

“FD&C Act” shall mean the United States Federal Food and Cosmetic Act, as amended, or any corresponding Act in each jurisdiction.

“Firm Purchase Order” shall be defined as set forth in Section 4.4.

“Intellectual Property” shall mean ideas, concepts, discoveries, inventions, developments, know-how, trade secrets, techniques, methodologies, modifications, innovations, improvements, writings, documentation, data and rights (whether or not protectable under state, federal or foreign patent, trademark, copyright or similar laws) or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which contained and whether or not patentable or copyrightable.

“Inventions” shall mean any inventions, discoveries, innovations, methods, improvements, processes, techniques or other valuable developments, whether patentable or copyrightable or not, relating to a Product, the API or their manufacture, arising out of the performance of services under this Agreement by Baxter and/or any use of either the Celator Intellectual Property and/or the API.  For the avoidance of doubt, Inventions include Process Inventions, as defined below.

“Long Range Forecast” shall be defined as set forth in Section 4.2.

“Master Batch Record” or “MBR” shall mean, with respect to each Presentation of Clinical Product or Commercial Product to be Produced hereunder, a formal set of instructions for the Production of each Presentation of such Product.  The MBR shall be developed and maintained in Baxter’s standard format by Baxter, using Celator’s master formula and technical support.

“Maximum Supply Obligation” shall mean Baxter’s supply obligation as set forth in Article 4.

“NDA” shall mean the FDA-required New Drug Application (applicable for U.S. production only).

3

“Packaging Materials” as used in this Agreement shall mean material employed in the packaging of the Product, including the Baxter standard packaging material for outer packaging used for transportation or shipment to a distributor.  Packaging Materials are referred to as primary or secondary according to whether or not they are intended to be in direct contact with the Product.  All Packaging Materials are listed in the Product Master Plan.

“Pick-Up Date” shall mean the date that Product is Released by Baxter to Celator and made available to Celator or its designated carrier for pick-up at Baxter’s facility.

“Presentation” shall mean the specific formula and Components for the Product.

“Process Inventions” shall mean any Inventions that are new manufacturing technologies, methods, processes or techniques, or are improvements to existing manufacturing technologies, methods, processes or techniques, and that are broadly applicable to pharmaceutical products in general.  For purposes of clarity, Process Inventions shall not include such Inventions that (i) are applicable only to Product and/or the API and/or (ii) require the use of Product and/or the API.

“Produce” or “Production” shall mean the formulation, filling, packaging, inspecting, labeling, and testing of Product by Baxter.

“Product” shall mean Clinical Product or Commercial Product, as the case may be, and as further specified in the Product Master Plan.

“Product Master Plan” shall mean a written plan executed by the Parties in conjunction with this Agreement relating to Product Produced hereunder, which may include, without limitation, Product, Product Specifications, Components, Component Specifications, Regulatory Authorities, the countries where such Product will be used in clinical trials or sold commercially, Presentations, and pricing for such Product Produced under this Agreement.

“Production Price” shall be defined as set forth in Section 5.1.

“Product Specifications” shall mean, with respect to Product, the specifications and testing to be performed for the Raw Materials, the Product, and/or the stability program that are set forth in Baxter’s SOPs and the Master Batch Records.  The Product Specifications include all tests that Baxter is required to conduct or cause to be conducted as specified in the Product Master Plan.  The Product Specifications may be modified from time to time only by a written agreement of Celator and Baxter.

“Purchase Order” shall mean written orders from Celator to Baxter which shall specify (a) the quantity of Product ordered, (b) shipping instructions (e.g., choice of container, temperature requirements), (c) requested pick-up dates, and (d) delivery destinations.

4

“Purchase Price” shall be defined as set forth in Section 5.1.

“Qualified Person” or “QP” shall mean the person designated by Directive 2001/83/EC Article 48-52.

“Quality Agreement” shall mean a written agreement executed by the Parties in conjunction with this Agreement, under which the Parties allocate the pharmaceutical responsibilities.

“Raw Materials” shall mean all materials used by Baxter in the Production of Product under this Agreement with the exception of Packaging Materials.  All Raw Materials are listed in the Product Master Plan.

“Regulatory Approval” shall mean all authorizations by the appropriate Regulatory Authority for use of Product in clinical trials and/or as necessary for commercial sale in a jurisdiction, including without limitation, approval of labeling, price, reimbursement and Production.

“Regulatory Authority” shall mean the FDA, the EMA, the BfArM in Germany and the respective Regulatory Authorities in other European countries, in Japan, in Canada and in such other jurisdictions as are set forth in the Product Master Plan or any successor entity thereto.  

“Released” or “Release” shall mean Baxter’s release to Celator of a Batch of Product by a Baxter Qualified Person. 

“Released Executed Batch Record” shall mean the completed batch record and associated deviation reports, investigation reports, certificates of compliance and certificates of analysis created for each Batch of Product as specified in the Product Master Plan.

“Reservation Fees” shall be the fees payable by Celator for modification or cancellation of a Firm Purchase Order as set forth in the Product Master Plan.

“Rolling Forecast” shall mean Celator’s projected requirements for Product for each of the upcoming [*].

“Term” shall be defined as set forth in Section 8.1 of this Agreement

“Testing Standards and Procedures” shall mean, with respect to Product Produced hereunder, the written standards and procedures for evaluating compliance with the applicable Product Specifications, as mutually agreed upon in writing by Celator and Baxter, and incorporated in the Product Master Plan.

“Unit” shall mean an individually packaged dose of a Product, including by way of example only, vial, as specified in the Product Master Plan.
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Article 2, PRODUCT MASTER PLAN AND QUALITY AGREEMENT

2.1    Product Master Plan.  For Clinical Product or Commercial Product to be Produced by Baxter hereunder, the Parties have agreed in writing upon a Product Master Plan.  Baxter shall not be required to schedule any Production until a Product Master Plan for such Product has been approved in writing by both Baxter and Celator.

2.2    Quality Agreement.  For the Production by Baxter hereunder, the Parties have entered into a Quality Agreement to allocate and coordinate the pharmaceutical responsibilities.  The Parties agree that Production will not be scheduled until a Quality Agreement has been signed by both Celator and Baxter.

2.3    Amendment.  This Agreement, the Quality Agreement and the Product Master Plan may be amended from time to time upon mutual written agreement of the Parties.  The Quality Agreement and the Product Master Plan shall be deemed to be incorporated herein by reference and made an integral part of this Agreement.  In case of any inconsistencies between this Agreement and the Quality Agreement or the Product Master Plan, the terms and provisions of the Quality Agreement shall prevail for matters of quality and the terms and provisions of this Agreement shall prevail for all other matters.

2.4    Effect of Failure to Execute Plans or Addendum.  Failure to execute a Quality Agreement or Product Master Plan with respect to the Product will not relieve either Party of any obligation accruing with respect to such Product prior to such failure to execute.  In the event of such failure, if this Agreement shall therefore be terminated, Celator shall reimburse Baxter for all non-cancelable costs incurred by Baxter for work performed and Baxter-supplied Components ordered with respect to such Product.  
                

Article 3, PURCHASE AND SUPPLY OF PRODUCT

3.1    Agreement to Purchase and Supply.  Pursuant to the terms and conditions of this Agreement, Celator will purchase Product from Baxter in accordance with Article 4, and  Baxter shall Produce and deliver to Celator the Product in accordance with Article 4 of this Agreement.

3.2    Reproduction, Rework or Reprocessing.  If, during the Production of any Batch of Product, any reprocessing, rework, reproduction, or change is required in order to meet the Product Specifications, or if Celator requests any change with respect to any matter set forth in the Product Master Plan, Baxter shall conduct such reprocessing, rework, or reproduction and implement such change in compliance with cGMP’s.  Any reprocessing, rework, reproduction or change, concerning compounding, aseptic filling, or capping must be approved in writing by Celator prior to implementation unless immediate action is required.  Celator shall promptly reimburse Baxter for all costs and expenses incurred in connection with such reprocessing, rework, reproduction, or change, except that in the event that any 
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such reprocessing, rework, reproduction, or change results solely from Baxter’s failure to Produce Products according to Product Requirements or Baxter’s negligence or willful misconduct, Baxter shall be responsible for, and promptly reimburse Celator for, [*] in connection with such reprocessing, rework, reproduction, or change.  

3.3    Components.  As set forth in the Product Master Plan, Celator shall purchase and supply Celator-supplied Components which Celator, at its sole cost and expense (including, without limitation, shipping costs), shall supply to Baxter, in a timely manner, required to satisfy the terms of this Agreement.  Baxter shall procure, in a timely manner, and have available for Production of Product Baxter-supplied Components, at its sole cost and expense (including, without limitation, shipping costs), required to satisfy the terms of this Agreement.  On receipt of the Components, Baxter shall test such materials as set forth in the Product Master Plan.  If, notwithstanding such testing, Celator determines to assert a claim against a supplier of a Baxter-supplied Component because Celator discovers a defect in or adulteration of such Baxter-supplied Component that was not discovered by Baxter, Baxter agrees to provide Celator with all information regarding such Baxter-supplied Component and the supplier thereof as Celator shall reasonably request and to cooperate with Celator in the assertion of each such claim. 

3.3.1    Vendor/Supplier Qualification.  The responsibility for vendor/supplier qualification is set forth in the Quality Agreement.  

3.4    Importer of Record.  In the event any material or equipment to be supplied by Celator in accordance with the Product Master Plan is imported into Germany for delivery to Baxter (“Imported Goods”), such Imported Goods shall be imported DDP Halle/Künsebeck (Incoterms 2000).  Celator shall be the “Importer of Record” of such Imported Goods.  As the Importer of Record, Celator shall be responsible for all aspects of the Imported Goods including, without limitation (a) customs and other regulatory clearance of Imported Goods, (b) payment of all tariffs, duties, customs, fees, expenses and charges payable in connection with the importation and delivery of the Imported Goods, and (c) keeping all records, documents, correspondence and tracking information required by applicable laws, rules and regulations arising out of or in connection with the importation or delivery of the Imported Goods.

3.5    Storage

3.5.1    Product Storage.  Baxter will store Product at its facility after Product has been Released for up to thirty (30) calendar days free of charge.  After thirty (30) calendar days from the Product Release, Baxter may charge storage fees as set forth in the Product Master Plan.  

3.5.2    Third Party Storage.  After the time frame set forth in Section 3.5.1, Baxter shall be permitted to store Product in third party storage facilities qualified by Baxter; such qualified facilities shall be at the discretion of Baxter; provided however that, prior to storing any Product at a third party storage facility, Baxter shall notify 
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Celator in writing of Baxter’s intent to do so and shall provide the name of the third party and the location of the storage facility.   

Article 4, FORECASTS, ORDERS AND CAPACITY

4.1    Forecasts for Clinical Product.  Commencing on the Effective Date of this Agreement and prior to the tenth (10th) calendar day of each month thereafter, Celator will provide Baxter in writing with a Rolling Forecast.  The first [*] months of the Rolling Forecast for Clinical Product shall be binding for the Parties.  It is understood by the Parties that forecasting of Clinical Product requirements is difficult and unforeseen issues can occur; therefore, it is understood that Baxter will use reasonable efforts to accommodate changes to the first [*] months of the Rolling Forecast if able to do so.  In the event that Celator requests cancellation or rescheduling of a Firm Order for Production of Clinical Product, Baxter shall use good faith efforts to fill the open capacity resulting from the cancellation or rescheduling.  In the event Baxter is unable to fill such open capacity, Baxter may charge Celator a Reservation Fee as set forth in the Product Master Plan.   

4.2    Forecasts for Commercial Product.  Commencing no less than [*] months prior to the date of the Production of the first Batch of Commercial Product, and prior to the first day of July of each year thereafter during the Term, Celator will provide to Baxter in writing a forecast of Celator’s estimated requirements for Commercial Product for each of the upcoming [*] years (the “Long Range Forecast”).  Commencing with the first regulatory filing for marketing approval of the Product in any major market, and prior to the tenth (10th) calendar day of each month thereafter, Celator will provide Baxter in writing a Rolling Forecast of Celator’s estimated contract requirements for Commercial Product.  Baxter specifically agrees that such Long Range Forecasts and Rolling Forecasts submitted by Celator will be for general planning purposes only, and shall not be binding on either Party, except as provided below in Section 4.3.  

4.3    Annual Obligation for Commercial Product and Maximum Supply Obligation.  Celator shall be obligated, upon receiving Regulatory Approval of the Product in the United States or Europe, to purchase from Baxter a minimum number of Batches of Commercial Product in each calendar year during the Term of this Agreement (the “Annual Obligation”) as set forth in Exhibit A, which Annual Obligation shall be prorated for any partial calendar year.  For any volume shortfall under and below the contractual Annual Obligation, Celator will pay an indemnity per Batch as set forth in the Product Master Plan.  In any calendar year during the Term of this Agreement, in no event shall Baxter be obligated to Produce more than the number of Batches set forth in Exhibit B (“Maximum Supply Obligation”).  If changes (increase/decrease) in the annual order volume require changes in equipment and/or process, Celator will cover the costs of such changes.  

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4.3.1    For any Contract Year following the last Contract Year identified in Exhibits A and B or as further set forth in a Product Master Plan, no less than [*] prior to the end of the last Contract Year, the Parties shall mutually agree on Celator’s Annual Obligation and Baxter’s Maximum Supply Obligation for any upcoming Contract Year(s) and such Annual Obligation and Maximum Supply Obligation will be set forth in the Product Master Plan signed by both Parties.  In the event the Parties are unable to reach mutual agreement on an Annual Obligation and/or Maximum Supply Obligation [*] prior to the end of the last Contract Year, this Agreement shall terminate in accordance with Section 8.1 and shall be subject to Section 8.4.    
    
4.4    Purchase Orders.  Celator shall submit Purchase Orders to Baxter covering Celator’s purchases of Product pursuant to this Agreement.  Celator shall not, without the written consent of Baxter, designate a requested pick-up date in a Purchase Order earlier than [*] months from the date Celator submits the Purchase Order. 

Baxter shall provide a confirmation of receipt of each Purchase Order setting forth the Pick-Up Date that Baxter will meet and setting forth Baxter’s filling date for such order within ten (10) business days of receiving Celator’s Purchase Order.  Upon sending of the confirmation, such Purchase Order shall become a “Firm Purchase Order”.  

If Baxter is unable to meet the requested pick-up date specified by Celator, Baxter shall so notify Celator within ten (10) business days of receiving Celator’s Purchase Order and provide to Celator an alternative Pick-Up date, which shall not be more than [*] later than the initial requested pick-up date designated by Celator in its Purchase Order.  

In the event that Celator modifies or cancels a Firm Purchase Order without Baxter’s written consent, Celator shall pay the Reservation Fees as set forth in the Product Master Plan.  To the extent of any conflict between Purchase Orders submitted by Celator and this Agreement, this Agreement shall control.

Celator shall order full batches of Product on a single Purchase Order.

4.5    Component Delivery Delays.  Timely delivery of Celator-supplied Components shall mean that the respective Component and the documents required under the Product Master Plan arrive at Baxter at least thirty (30) business days prior to the scheduled manufacturing date of such Product, as determined by the date set forth in the Firm Purchase Order.  Notwithstanding anything in this Agreement to the contrary, in the event that Baxter receives such Celator-supplied Components and associated cGMP documents for the Production of Product from Celator less than thirty (30) business days prior to the scheduled manufacturing date of such Product, Baxter shall use commercially reasonable efforts to reschedule Batch within [*] days after receipt. Baxter shall use good faith efforts to fill the open capacity resulting from the rescheduling.  In the 
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event Baxter is unable to fill such open capacity, Baxter may charge Celator a Reservation Fee as set forth in the Product Master Plan.  

Article 5, PRICE

5.1    Purchase Price.  The Purchase Price of Product is the sum of the price to be paid by Celator for the Production of Product (the “Production Price”) set forth in the Product Master Plan and Baxter’s actual cost of Baxter-supplied Components.  

5.2    Production Price Adjustment for Commercial Product.  Upon the first anniversary of the Effective Date of this Agreement and on each anniversary thereafter, Baxter shall adjust the Production Price of such Commercial Product to reflect changes in Baxter’s actual costs since the date on which the Production Price was last established, but in no event shall the Production Price be increased by a percentage that exceeds the percentage change in the Index of Producer Prices of Industrial Products during the previous twelve (12)-month period, as published by the Federal Statistical Office of Germany (www.destatis.de).  

Article 6, SHIPMENT AND INVOICING 

6.1    Delivery Terms.  Product shall be delivered to Celator or to a location designated by Celator in the Purchase Order EXW (Incoterms, 2000) Baxter’s facility in Halle/Künsebeck, Westphalia, Germany freight collect, by a common carrier designated by Celator in a Purchase Order.  Celator shall procure, at its cost, insurance covering damage or loss to the Product during shipping from Baxter’s facility.

6.2    Subsequent Export.  Celator agrees and represents that Celator is the owner of the goods that are consigned to Baxter for contract manufacturing services and warrants that Celator is responsible for any subsequent export or re-export and will comply with all applicable laws and regulations relating to the export or re-export, including the prohibition against unlawful transshipments.  Further, where such goods are destined for export or re-export, Celator agrees and accepts that it shall act as the exporter of record, and warrants that as the exporter of record, it will assume all attendant responsibilities associated with the export or re-export, including obtaining any necessary export licenses.  Celator further agrees to defend Baxter against any civil action, civil or criminal, private or public, in connection with the subsequent export or re-export by Celator of the goods. 

6.3    Foreign Corrupt Practices Act.  Celator acknowledges it is not the agent of Baxter and represents and warrants that it has not, and covenants that it will not pay anything of value to any government employee in connection with the sale of the Product.

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6.4    Payment Terms.  For Commercial and Clinical Product, Baxter will issue an invoice for payment upon the date of Baxter’s disposition of the Batch.  Payments shall be made by wire transfer to a bank account specified by Baxter within [*] days of the date of Baxter’s invoice by wire transfer to a bank account specified by Baxter.  Each invoice shall be payable by Celator in accordance with the terms noted above.  Celator is obliged to confirm to Baxter in writing the receipt of the invoice without any delay.  All prices quoted by Baxter, e.g., in the Product Master Plan, shall be ex value added taxes and denominated in Euros.  Any payment due under this Agreement not received within the time noted above shall bear interest of [*] per month on the outstanding balance compounded monthly.  

6.5    Default in Undisputed Payment Obligations.  In addition to all other remedies available to Baxter in the event of a Celator default, if Celator fails to make any undisputed payment when due and payable hereunder, Baxter may refuse all further Purchase Orders, refuse to Produce any Product until Celator’s account is paid in full, modify the foregoing terms of payment, place the account on a letter of credit basis,  require full or partial payment in advance, suspend deliveries of Product until Celator provides assurance of performance reasonably satisfactory to Baxter, and/or take other reasonable means as Baxter may determine.  In the event Celator has a good faith dispute of an invoice amount, Celator shall promptly notify Baxter within fifteen (15) days from the date of invoice.  Each Party agrees to use good faith efforts to resolve any disputes of an invoice amount within thirty (30) days of notification of such dispute.

Article 7, ACCEPTANCE OF PRODUCT

7.1    Product Conformity.  Within fifteen (15) business days from the date of shipment of Product to Celator or the receipt of the Released Executed Batch Record, as defined in Product Master Plan, whichever is later, Celator shall determine whether such Product and related documentation conforms to the Product Specifications, Master Batch Record, and Baxter SOPs (collectively, the “Product Requirements”); provided, however, that Celator shall have the right to revoke acceptance if, within thirty (30) business days of receipt of the Batch, Celator discovers a latent defect or adulteration not reasonably discoverable at time of delivery.    

7.1.1    If (a) any Product conforms to the Product Requirements, or (b) Celator fails to notify Baxter in accordance with the procedures set forth in Section 7.1 that any Product does not conform to the Product Requirements, then Celator shall be deemed to have accepted the Product and waived its right to revoke acceptance.

7.1.2    If Celator believes Product does not conform to the Product Requirements, it shall notify Baxter by telephone including a detailed explanation of the non-conformity and shall confirm such notice in writing via international courier service.  Upon receipt of such notice, Baxter will investigate such alleged non-conformity, and (i) if Baxter agrees such Product is non-
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conforming, Baxter and Celator will mutually determine a corrective action plan within sixty (60) calendar days after receipt of Celator’s written notice of non-conformity, or such additional time as is reasonably required if such investigation or plan requires data from sources other than Celator or Baxter, or (ii) if Baxter disagrees with Celator’s determination that the shipment of Product is non-conforming, Baxter shall so notify Celator by telephone within a ten (10) calendar day period and confirm such notice in writing by overnight delivery to Celator.

7.1.3    If the Parties dispute whether Product is conforming or non-conforming to the Product Requirements, the Product will be submitted to a mutually acceptable laboratory or consultant for resolution, whose determination of conformity or non-conformity, and the cause thereof of non-conformity, shall be binding upon the Parties.  Notwithstanding the foregoing, Celator may not release a Batch of Product that Baxter has reasonably rejected in good faith.  The costs of such laboratory or consultant are to be borne by the Party whose determination was incorrect.

7.2A    Remedies for Non-Conforming Clinical Product.

7.2.1A    Celator shall pay for all Clinical Product, including replacement Clinical Product and the cost of the API therefor, except as specifically set forth in Section 7.2.2A.

7.2.2A    In the event Baxter agrees that Clinical Product is non-conforming to the Product Requirements, or the laboratory or consultant determines that such Clinical Product is non-conforming, solely as a result of the negligence or willful misconduct of Baxter, Baxter shall replace such non-conforming Clinical Product within thirty (30) days assuming sufficient API is available or will be provided by Celator at no charge to Baxter in due time to carry out the Production.  Baxter is not responsible for defects in Celator-supplied Components including without limitation API.  

7.2.3A    Notwithstanding anything to the contrary in the foregoing, Baxter shall have no obligation to replace the non-conforming Clinical Product if the process provided by Celator is not sufficient to Produce conforming Clinical Product.  Baxter agrees that a conclusion that the Celator-provided process is not sufficient to Produce conforming Clinical Product cannot reasonably be made if such process has previously resulted in conforming Clinical Product at Baxter.

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7.2B    Remedies for Non-Conforming Commercial Product.

7.2.1B    Celator shall pay for all Commercial Product, including replacement Commercial Product and the cost of the API therefor, except as specifically set forth in Sections 7.2.2B and 7.2.3B.

7.2.2B    In the event Baxter agrees that Commercial Product is non-conforming to the Product Requirements, or the laboratory or consultant determines that such Commercial Product is non-conforming, Celator shall provide replacement API to Baxter and Baxter shall replace such non-conforming Commercial Product as soon as possible assuming sufficient API is available or will be provided by Celator in due time to carry out the Production.  Baxter is not responsible for non-conforming Commercial Product that is caused by Celator-supplied Components including without limitation API.

7.2.3B    In the event Baxter agrees that Commercial Product is non-conforming to Product Requirements, or the laboratory or consultant determines that Commercial Product is non-conforming to the Product Requirements solely as a result of the negligence or willful misconduct of Baxter, Baxter shall (i) incur the cost of Production of the replacement Commercial Product, and (ii) reimburse Celator for its actual cost of Celator-supplied Components including without limitation the API for the replacement Commercial Product, which cost shall not exceed [*].  

7.2C    Disposal of Non-Conforming Product.  All non-conforming Products shall be returned to Baxter for disposal.  If the non-conforming Product was solely due to Baxter’s negligence or willful misconduct or solely due to Baxter’s breach of its representations and warranties under this Agreement, Baxter shall be responsible for the costs of disposal.

7.3    Exceptions.  Production deviations and investigations which occur during Production of Product and which do not cause the Production to be non-compliant with cGMP or with Specifications shall not, in and of themselves, be deemed to cause such Product to be non-conforming.  Should the Parties disagree that a Production deviation should be cause for rejection of Product, the Parties shall agree to a mutually acceptable third party Qualified Person to make the determination regarding disposition of the Batch.

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Article 8, TERM AND TERMINATION

8.1    Term.  Unless terminated pursuant to Section 8.2 herein, this Agreement shall commence on the Effective Date and will continue until the development and clinical Production have been completed, as described in the Product Master Plan for clinical Production, (the “Clinical Term”) and shall continue in effect thereafter for commercial Production until such time as one Party provides at least twenty-four  (24) months’ prior written notice to the other Party of the notifying Party’s determination to terminate this Agreement, which notice shall specify the termination date (the “Commercial Term”).  The Clinical Term and the Commercial Term are collectively referred to as the “Term”.  

8.1.1    Expiration of Term.  In the event that first Regulatory Approval for commercialization of Product in the United States or Europe is not obtained within thirty-six (36) months from the date of last regulatory submission of Product in the United States or Europe, then either Party shall have the right to terminate this Agreement upon ninety (90) days notice if such notice is sent no later than forty-eight months from the last date of regulatory submission.  

8.2    Termination for Breach.  Either Party may terminate this Agreement upon the breach of any provision of this Agreement by the other Party if such breach is not cured by the breaching Party within thirty (30) calendar days for monetary defaults, and sixty (60) calendar days for non-monetary defaults, after receipt by the breaching Party of written notice from the other Party of such default.  A monetary default shall be deemed to occur if an undisputed payment is not made by the date such payment is due and payable under the terms of this Agreement or the Product Master Plan.  In the event of any termination for breach, upon Celator’s request, any and all Celator-supplied Components held by Baxter shall be made available for pick-up by Celator at Baxter’s facility.

8.3    Termination for Financial Matters.  This Agreement may be terminated immediately by either Party by giving the other Party written notice thereof in the event such other Party makes a general assignment for the benefit of its creditors, or proceedings of a case are commenced in any court of competent jurisdiction by or against such Party seeking (a) such Party’s reorganization, liquidation, dissolution, arrangement or winding up, or the composition or readjustment of its debts, (b) the appointment of a receiver or trustee for or over such Party’s property, or (c) similar relief in respect of such Party under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debt, and such proceedings shall continue undismissed, or an order with respect to the foregoing shall be entered and continue unstated, for a period of more than ninety (90) days.

8.4    Non-cancelable Costs and Expenses.  In the event of the termination of this Agreement, except by Celator as a result of a breach by Baxter under Section 8.2, Celator shall (a) reimburse Baxter for all Baxter-supplied Components ordered prior to termination and not cancelable without cost to Baxter or, if less, at Celator’s option shall
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reimburse Baxter for the costs of cancellation, and (b) pay Baxter for any open Firm Purchase Orders.  Moreover, Celator agrees to purchase from Baxter at cost all semi-finished and finished Products in stock.  Baxter shall promptly deliver to Celator, at Celator’s cost, all Components, semi-finished and finished Products for which Celator reimburses Baxter pursuant to this Section 8.4.  Baxter shall use commercially reasonable efforts to mitigate the costs and expenses of Celator under this Section 8.4.  Celator shall make payment for all expenses described in this Section 8.4 thirty (30) days after the invoice date, which date shall not be earlier than the date of delivery of any related materials to Celator.  

8.5    Payment on Termination of Commercial Production.  In addition to the costs and expenses payable in Section 8.4, in the event of termination of this Agreement, except by Celator as a result of a breach by Baxter under Section 8.2 or expiry of the Term of this Agreement, Celator shall pay Baxter (a) the difference, if any, between the Production Price of Product actually ordered and purchased by Celator in the calendar year in which termination occurs and, the greater of the (i) Production Price of the Annual Obligation and (ii) Production Price of the Annual Obligation, as defined in Section 4.3, in such calendar year, (b) as liquidated damages and not as a penalty, [*] of the Production Price of the Annual Obligation for the next succeeding calendar year after the calendar year in which termination occurs.  

8.6    Procedure in case of Expiry of Agreement.  In the event the Agreement expires pursuant to Section 8.1, Celator is obliged to buy from Baxter all Baxter-supplied Components reasonably ordered by Baxter during the normal course of business unless Baxter can reasonably use these materials otherwise.

8.7    Transfer of Technology. 

8.7.1    On termination or expiration of this Agreement through any means and for any reason, the right of Baxter to make Product hereunder shall terminate, and except for termination by Baxter due to a breach by Celator under Section 8.2, Baxter shall reasonably cooperate with Celator by providing to Celator, at Celator’s cost, copies or drafts of the following items, to the extent they exist, within sixty (60) days of termination or expiration:

8.7.1.1 Baxter’s Manufacturing Batch Records for the Product;

8.7.1.2     Pertinent analytical reports, and manufacturing development and validation reports of studies used to determine and justify the final manufacturing process related to the Product; and  

8.7.1.3    Any and all Celator-supplied Components in storage at Baxter which shall be made available for pick-up by Celator at Baxter’s facility; and 

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[*]

8.8    Survival.  Termination, expiration, cancellation or abandonment of this Agreement through any means or for any reason, except as set forth in Section 13.1, shall be without prejudice to the rights and remedies of either Party with respect to any antecedent breach of any of the provisions of this Agreement.  The provisions of Articles 12, 13, 14, 15, 16, 17 and 18 hereof, and such other provisions of this Agreement that, by their terms, are intended to continue beyond the Term of this Agreement, shall survive expiration or termination of this Agreement.

Article 9, PRODUCTION OF PRODUCT

9.1    Production.  Baxter shall Produce Product in accordance with cGMP and all other applicable laws or regulations as set forth in the Product Master Plan.  At no additional cost and at times mutually agreed to by the Parties, Celator shall have the right to have a representative of Celator in the facility to observe Production.

9.2    Audits.  Celator shall have the right to audit Baxter’s facilities to determine compliance with (i) cGMP and (ii) applicable laws and regulations.  Such audits shall be scheduled at mutually agreeable times upon reasonable advance written notice to Baxter.  Except for the first audit under this Agreement, audits shall be at Celator’s expense at one (1) audit every [*] with the exception of any audits arising from a reasonable basis for concern (such as Baxter’s compliance status) shall be at Baxter’s expense as detailed in Product Master Plan.  If Celator requests additional audits which are not due to Baxter’s compliance status and Baxter agrees to such audits, Celator will incur fees as reasonably determined by Baxter.  Such fees shall be paid promptly upon completion of such audits.  In connection with performing such audits, Celator shall comply with all reasonable rules and regulations promulgated by Baxter; provided, however, that such rules and regulations shall not hinder Celator’s ability to conduct the audits.  All information disclosed or reviewed in such inspections shall be deemed to be the property of Baxter and Baxter Confidential Information.      

9.3    Testing.  Baxter shall test, or cause to be tested by third party testing facilities qualified by Baxter, in accordance with the Product Specifications, each Batch 
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of Product Produced pursuant to this Agreement before delivery to Celator.  A certificate of analysis for each Batch of Product delivered to Celator shall set forth the items tested by Baxter, specifications and test results.  Celator shall assume full responsibility for final release of each Batch of the Product.

9.4    Stability Testing.  At Celator’s expense, Baxter shall perform all stability testing in compliance with the International Conference on Harmonization for Registration of Pharmaceuticals for Human Use (ICH) requirements performed on clinical, development, conformance and/or commercial Production Batches of Product.  Such testing shall be performed in accordance with the procedures set out in the Product specific Baxter SOPs for the stability protocol and Product Master Plan.  Prior to any stability testing, Celator shall have the right to review and approve the stability testing protocol and Celator shall receive a summary report of the data generated from the stability tests.  All stability data shall be forwarded to Celator within thirty (30) days of the scheduled test date.

9.5    Permits and Licenses.  Celator shall have sole responsibility at its expense for obtaining all permits and licenses necessary and required for use, sale and / or distribution of Product Produced by Baxter hereunder.  Baxter shall be responsible at its expense to obtain and maintain all generally required licenses required for it to carry out its development, regulatory and production obligations hereunder.

9.6    Regulatory Requirements.  Each Party promptly shall notify the other of new regulatory requirements of which it becomes aware which are relevant to the Production of a Product under this Agreement and which are required by an applicable Regulatory Authority or other applicable laws or governmental regulations, and the Parties shall confer with each other with respect to the best means to comply with such requirements.  Baxter shall have no obligation to Produce Product in compliance with the explicit requirements of a Regulatory Authority not specified in the Product Master Plan; provided that, if Celator shall request Baxter to do so, the Parties shall confer with each other with respect to such request. 

9.7    Equipment Expenses.  If Baxter is required by Celator to obtain specialized equipment for use solely to Produce Product for Celator, the costs of such equipment shall be paid by Celator, i.e., [*], including shipping and insurance costs, plus VAT and reasonable installation costs.  Baxter shall advise Celator of the specialized equipment required for use solely to Produce Product for Celator and the estimated costs associated with the purchase and installation of such equipment.  Such costs shall be agreed upon by the Parties prior to Baxter ordering such equipment.  Celator shall be invoiced for all approved costs regarding the specialized equipment purchased by Baxter in accordance with this Section 9.7, and Celator shall make payment therefor promptly thereafter.  

9.8    Ownership of Equipment.  All specialized equipment supplied by or paid for by Celator shall be Celator’s property and shall be used by Baxter only for the Production of Product.  This equipment is listed in the Product Master Plan.  Upon any 
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termination or expiration of this Agreement, Celator shall have the option of either (i) taking custody of the specialized equipment supplied by or paid for by it, or (ii) allowing Baxter to purchase such equipment by paying Celator the then current fair market value of such equipment.

9.9    Records.  Baxter shall, in accordance with applicable laws and as reasonably requested by Celator, maintain complete cGMP production records and reports relating to its activities performed in providing the services under this Agreement (including, without limitation, keeping accurate records of the manufacture, testing and packaging of the Products).  Baxter shall provide Celator with access to all such records at mutually agreeable times; provided, however, that such access shall be required only during normal business hours and with reasonable advance written notice.  The Parties agree that Baxter shall have no obligation to provide or disclose its financial records to Celator.

9.10    Celator Property.     In accord with Baxter SOPs, Baxter shall properly use, store, handle and maintain all Celator property, including but not limited to Celator-supplied Components, equipment and Product, in Baxter’s custody or control.

Article 10, REGULATORY

10.1    Regulatory Approvals.  Celator will use commercially reasonable efforts to pursue Regulatory Approval of marketing licenses for Clinical Product Produced by Baxter hereunder.  Celator will advise Baxter of document requirements in support of filings and similar applications required of foreign governments and agencies including amendments, license applications, supplements and maintenance of such.  Baxter will provide documents and assist Celator in preparation of submissions to Regulatory Authorities designated by Celator in support of Celator’s applications required of governments and licenses.  All regulatory submission preparation and maintenance performed by Baxter for Celator shall be specified in the Product Master Plan.  Prior to submission to the Regulatory Authority, Celator will provide Baxter with a copy of the CMC section for review and comment.  A final copy of the CMC section will be provided by Celator to Baxter upon submission to the Regulatory Authority.  Upon Regulatory Approval, Celator will notify Baxter within two (2) business days of such approval and the anticipated date of Product launch to the market.

10.2    Regulatory Authority Inspections.  At Celator’s request, Baxter will authorize Regulatory Authorities to review related applications on Celator’s behalf as set forth in the Quality Agreement.  Celator shall bear the costs of non-routine Regulatory Authority Inspection or inspections directly relating to the Product as set forth in the Product Master Plan.

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Article 11, TRADEMARKS

11.1    Celator grants to Baxter a non-exclusive, royalty free license to use Celator Trademarks for the sole purpose of allowing Baxter to fulfill its responsibilities under this Agreement.  Such license shall not be transferable in whole or in part.

11.2    Celator shall be solely responsible for selecting, registering and enforcing Celator Trademarks used to identify the Product and, except as set forth in Section 11.1, shall have sole and exclusive rights in such Celator Trademarks.

Article 12, REPRESENTATIONS AND WARRANTIES

12.1    Mutual Representations.  Each Party hereby represents and warrants to the other Party that (a) the person executing this Agreement on behalf of such Party is legally authorized to execute this Agreement; (b) this Agreement is legal and valid and the obligations binding upon such Party enforceable by its terms; and (c) the execution, delivery and performance of this Agreement does not conflict with any agreement, instrument or understanding, oral or written, to which such Party may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

12.2    Baxter Warranty.  Baxter represents and warrants that it shall Produce all Product in accordance with cGMP and, that all Commercial Product shall meet Product Specifications.  Baxter represents and warrants that it has obtained (or will obtain prior to Producing Product), and will remain in compliance with during the Term of this Agreement, all permits, licenses and other authorizations (the “Permits”) which are required under laws and regulations applicable to the Production only of Product as specified in the Product Master Plan; provided, however, Baxter shall have no obligation to obtain Permits relating to the sale, marketing, distribution or use of Product or with respect to the labeling of Product.  Baxter makes no representation or warranty with respect to the sale, marketing, distribution or use of API, Product or to printed materials specified by Celator or its consignee. 

12.3    Disclaimer of Warranties.  Except for those warranties set forth in Sections 12.1 and 12.2 of this Agreement, Baxter makes no warranties, written, oral, express or implied, with respect to Product or the Production of Product.  ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT HEREBY ARE DISCLAIMED BY BAXTER.  NO WARRANTIES OF BAXTER MAY BE CHANGED EXCEPT IN WRITING AND SIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF BAXTER.  Celator accepts Product subject to the terms hereof.  

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12.4    Celator Warranties.  Celator warrants that (a) it has the right to give Baxter any information provided by Celator hereunder, and that Baxter has the right to use such information for the Production of Product, and (b) Celator has no knowledge of any (i) patents or other intellectual property rights that would be infringed by Baxter’s Production of Product under this Agreement, or (ii) proprietary rights of third parties which would be violated by Baxter’s performance hereunder, and (c) Celator has obtained (or will obtain prior to producing the Product), and will maintain, update and remain in compliance with all permits, licenses and other authorizations during the Term of this Agreement, which are required under federal, state and local law, rules and regulations applicable to the Production, use and sale of the Product.  Celator warrants that the API provided to Baxter hereunder will (1) conform to the API specifications and (2) not be adulterated or misbranded within the meaning of the FD&C Act.  Celator will use and promote the Product in a manner not inconsistent with its regulatory filings and approvals.  

12.5    FD&C Act Matters.  Baxter represents and covenants as of the date of this Agreement and continuously during the term of this Agreement that it is not debarred pursuant to Section 335(a) or 335(b) of the FD&C Act.  Baxter represents that it has not been debarred under the Act in the past five (5) years.  Baxter will not employ or use the services of any person or entity to perform the Production of Product who is debarred under the Act or to Baxter’s knowledge has engaged in activities that could lead to being debarred under the Act. 

Article 13, LIABILITY AND WAIVER OF SUBROGATION

13.1    Limitation of Liability.  Celator’s sole and exclusive remedies for breach of this Agreement are limited to those remedies set forth in Article 7, 8, 13.2.1, 14, and 16.  Except as expressly provided in this Agreement, under no circumstances shall either Party be liable for loss of use or profits or other collateral, special, consequential or other damages, losses, or expenses, including but not limited to the cost of cover, in connection with or by reason of the Production and delivery of Product under this Agreement whether such claims are founded in tort or contract.  The foregoing constitutes the sole and exclusive remedy of Celator and the sole and exclusive liability of Baxter.  As permitted by the applicable laws, under no circumstances shall Baxter’s aggregate liability to Celator, including but not limited to third party claims, exceed the following: [*].  All claims for breach or default under this Agreement shall be brought within two (2) years after the cause of action incurred or shall be deemed waived.  

13.2    Waiver of Subrogation.  Except to the extent expressly set forth herein, all Baxter-supplied Components and equipment owned and used by Baxter in the Production of Product (collectively, the “Baxter Property”) shall at all times remain the property of Baxter until delivery of Product as specified under Section 6.1 and Baxter assumes risk of loss for such Baxter Property.  Baxter hereby waives any and all rights of recovery against Celator and its Affiliates, and against any of their respective directors, 
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officers, employees, agents or representatives, for any loss or damage to Baxter Property to the extent the loss or damage is covered or could be covered by insurance on the Baxter Property (whether or not such insurance is described in this Agreement).  Celator assumes all risk of loss for all Celator equipment used in Production, Celator-supplied Components and all Product (collectively, the “Celator Property”) except as provided in Section 13.2.1.  Celator hereby waives any and all rights of recovery against Baxter and its Affiliates, and against any of their respective directors, officers, employees, agents or representatives, for any loss or damage to the Celator Property to the extent the loss or damage is covered or could be covered by insurance on the Celator Property (whether or not such insurance is described in this Agreement).  

13.2.1    Reimbursement for Lost or Damaged Celator Property  In the event of loss or damage of a Celator-supplied Component or Product that does not occur during Production, if such loss or damage is solely due to Baxter’s negligence or willful misconduct, Baxter shall reimburse Celator for its actual out-of-pocket costs for the lost or damaged Celator-supplied Components or Product, at the amount(s) set forth in the Product Master Plan, provided, however, that such reimbursement for any Celator-supplied Components will not exceed [*].   In the event of loss or damage of Celator equipment used by Baxter, which damage or loss is solely due to Baxter’s negligence or willful misconduct, Baxter shall promptly replace or repair such equipment [*].    

Article 14, INDEMNIFICATION

14.1    Celator Indemnification.  Celator shall indemnify, defend and hold harmless Baxter and its Affiliates and any of their respective directors, officers, employees, subcontractors and agents (collectively “Indemnified Baxter Parties”) from and against any and all liabilities, obligations, penalties, claims, judgments, demands, actions, disbursements of any kind and nature, suits, losses damages, costs and expenses (including, without limitation, reasonable attorney’s fees) arising out of or in connection with property damage or personal injury (including without limitation death) of third parties (collectively “Claims”) in connection with (a) Celator’s transport, storage, promotion, labeling, marketing, distribution, use or sale of Product, (b) Celator’s negligence or willful misconduct, (c) Celator’s breach of this Agreement, or (d) any claim that the use, sale, Production, marketing or distribution of Product by Baxter or Celator violates the patent, trademark, copyright or other proprietary rights of any third party, except if any of the foregoing (a) or (d) is caused solely by the negligence or willful misconduct of any of the Indemnified Baxter Parties or [*].  

14.2    Baxter Indemnification.  Baxter shall indemnify, defend and hold harmless Celator and its Affiliates and any of their respective directors, officers, employees, subcontractors and agents (collectively the “Indemnified Celator Parties”)
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from and against any and all liabilities, obligations, penalties, claims, judgments, demands, actions, disbursements of any kind and nature, suits, losses, damages, costs and expenses (including, without limitation, reasonable attorney’s fees) arising out of or in connection with property damage or personal injury (including without limitation death) of third parties (collectively, the “Claims”) resulting solely from Baxter’s negligence or willful misconduct [*].

14.3    Indemnitee Obligations.  A Party which intends to claim indemnification under this Article 14 (the “Indemnitee”) shall promptly notify the other Party (the “Indemnitor”) in writing of any action, claim or other matter in respect of which the Indemnitee or any of its Affiliates, or any of their respective directors, officers, employees, subcontractors, or agents, intend to claim such indemnification; provided, however, that failure to provide such notice within a reasonable period of time shall not relieve the Indemnitor of any of its obligations hereunder except to the extent the Indemnitor is prejudiced by such failure.  The Indemnitee shall permit, and shall cause its Affiliates, and their respective directors, officers, employees, subcontractors and agents to permit, the Indemnitor, at its discretion, to settle any such action, claim or other matter, and the Indemnitee agrees to the complete control of such defense or settlement by the Indemnitor.  Notwithstanding the foregoing, the Indemnitor shall not enter into any settlement that would adversely affect the Indemnitee’s rights hereunder, or impose any obligations on the Indemnitee in addition to those set forth herein, in order for it to exercise such rights, without Indemnitee’s prior written consent, which shall not be unreasonably withheld or delayed.  No such action, claim or other matter shall be settled by the Indemnitor without the prior written consent of the Indemnitee, which shall not be unreasonably withheld or delayed.  The Indemnitee, its Affiliates, and their respective directors, officers, employees, subcontractors and agents shall fully cooperate with the Indemnitor and its legal representatives in the investigation and defense of any action, claim or other matter covered by the indemnification obligations of this Article 14.  The Indemnitee shall have the right, but not the obligation, to be represented in such defense by counsel of its own selection and at its own expense.

Article 15, INSURANCE 

15.1    Celator Insurance.  Celator shall procure and maintain, during the Term of this Agreement and for a period one (1) year beyond the expiration date of Product, Commercial General Liability Insurance, including without limitation, Product Liability and Contractual Liability coverage (the “Celator Insurance”).  Celator Insurance shall cover amounts not less than 10,000,000 € (ten million EURO) combined single limit and shall be with an insurance carrier reasonably acceptable to Baxter.  Baxter shall be named as an additional insured on Celator Insurance and Celator promptly shall deliver a certificate of Celator Insurance and endorsement of additional insured to Baxter evidencing such coverage.  If Celator fails to furnish such certificates or endorsements, or if at any time during the Term of this Agreement Baxter is notified of the cancellation or lapse of Celator Insurance, and Celator fails to rectify the same within fifteen (15) calendar days after notice from Baxter, in addition to all other remedies available to 
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Baxter hereunder, Baxter, at its option, may terminate this Agreement.  Any deductible and/or self insurance retention shall be the sole responsibility of Celator.

15.2    Baxter Insurance.  Baxter acknowledges and agrees that during the Term of this Agreement it shall maintain adequate insurance and/or a self-insurance program for liability insurance, including products liability and contractual liability insurance, to cover Baxter’s obligations under this Agreement, including but not limited to those set forth in Section 14.2 of this Agreement.  Baxter shall provide Celator with evidence of such insurance and/or self-insurance program, upon Celator’s request.

15.3    No Limitation.  In no event will the liability of either Party be limited to that which is recoverable by insurance.

Article 16, COMPLAINTS, RECALL OF PRODUCT

16.1    Complaints.  In case Celator or Baxter receives complaints regarding Products which require Baxter to perform any investigations or conduct tests, Celator agrees to reimburse Baxter for any costs incurred in connection with such complaints.  Notwithstanding the foregoing, in the event of a complaint regarding Commercial Product, if the Product is non-conforming solely due to the negligence or willful misconduct of Baxter, such investigations or tests to be performed by Baxter shall be at Baxter’s expense.

16.2    Recalls.  In the event Celator shall be required to recall any Product because such Product may violate local, state or federal laws or regulations, the laws or regulations of any applicable foreign government or agency or the Product Specifications, or in the event that Celator elects to institute a voluntary recall, Product withdrawal or field correction, Celator shall be responsible for coordinating such recall.  Celator promptly shall notify Baxter if any Product is the subject of a recall and provide Baxter with a copy of all documents relating to such recall.  Baxter shall cooperate with Celator in connection with any recall, at Celator’s expense.  Celator shall be responsible for all of the costs and expenses of such recall, withdrawal or field correction.  With respect to Commercial Product, if the recall, withdrawal or field correction arises solely from the negligence or willful misconduct of Baxter [*].  Furthermore, in the event of any Product recall where the recall is necessitated solely due to the negligence or willful misconduct of Baxter [*].  

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Article 17, INTELLECTUAL PROPERTY

17.1    Existing Intellectual Property.  Except as the Parties may otherwise expressly agree in writing, each Party shall continue to own its existing patents, trademarks, copyrights, trade secrets and other intellectual property, without conferring any interests therein on the other Party.  Without limiting the generality of the preceding sentence, Celator shall retain all right, title and interest arising under the applicable laws, rules and regulations in and to all Drug Products, labeling and trademarks associated therewith (collectively, “Celator’s Intellectual Property”).  Neither Baxter nor any third party shall acquire any right, title or interest in Celator Intellectual Property by virtue of this Agreement or otherwise, except to the extent expressly provided herein.

17.2    Individually Owned Inventions.  Except as the Parties may otherwise agree in writing, all Inventions (as defined herein) which are conceived, reduced to practice, or created by a Party in the course of performing its obligations under this Agreement shall be solely owned and subject to use and exploitation by the inventing Party without a duty to account to the other Party.

17.3    Product-Related Inventions.  Celator and Baxter each acknowledge and agree that all rights, title and interest in and to any Inventions, as between the Parties, shall be owned by Celator, except for Process Inventions, which shall be owned by Baxter and subject to the restrictions, licenses and conditions set forth in Section 17.4 below.

17.4    Process Inventions.  The Parties agree that such Process Inventions shall be owned by Baxter and subject to the restrictions and conditions set forth in this Section 17.4.  Specifically, Baxter grants to Celator a non-exclusive, paid-up, royalty-free, irrevocable worldwide license to Process Inventions, with the right of Celator or any of its sub-licensees to sublicense such Process Inventions, for the manufacturing of the Product.

17.5    Disclaimer.  Except as otherwise expressly provided herein, nothing contained in this Agreement shall be construed or interpreted, either expressly or by implication, or otherwise, as: (i) a grant, transfer or other conveyance by either Party to the other of any right, title, license or other interest of any kind in any of its Inventions or other intellectual property, (ii) creating an obligation on the part of either Party to make any such grant, transfer or other conveyance or (iii) requiring either Party to participate with the other Party in any cooperative development program or project of any kind or to continue with any such program or project.

17.6    Rights in Intellectual Property.  The Party owning any Intellectual Property shall have the worldwide right to control the drafting, filing, prosecution and maintenance of patents covering the Inventions relating to such Intellectual Property, including decisions about the countries in which to file patent applications.  Patent costs associated with the patent activities described in this Section shall be borne by the sole 
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owner.  Each Party will cooperate with the other Party in the filing and prosecution of patent applications.  Such cooperation will include, but not be limited to, furnishing supporting data and affidavits for the prosecution of patent applications and completing and signing forms needed for the prosecution, assignment and maintenance of patent applications.

17.7    Confidentiality of Intellectual Property.  Intellectual Property shall be deemed to be the Confidential Information of the Party owning such Intellectual Property.  The protection of each Party’s Confidential Information is described in Article 18.  Any disclosure of information by one Party to the other under the provisions of this Article 18 shall be treated as the disclosing Party’s Confidential Information under this Agreement.  It shall be the responsibility of the Party preparing a patent application to obtain the written permission of the other Party to use or disclose the other Party’s Confidential Information in the patent application before the application is filed and for other disclosures made during the prosecution of the patent application.

Article 18, CONFIDENTIAL INFORMATION, NONDISCLOSURE AND PUBLICITY

18.1    Definition.  “Confidential Information” means: (a) all information related to the Product, CPX-351, including, without limitation, documentation, drawings, designs and specifications; (b) all information related to Baxter’s contract manufacturing services, technologies  and operations; (c) any non-public information of a party, including, without limitation, any information relating to a party’s technology, techniques, know-how, research, designs, finances, accounts, procurement requirements, manufacturing, customer lists, business forecasts and marketing plans disclosed in connection with this Agreement; provided, however, that such information of a Party that is disclosed in writing or electronically is designated as “Confidential” or “Proprietary” at the time of disclosure, in the covering letter or transmission or otherwise, or that if disclosed orally, is identified as “Confidential” or “Proprietary” at the time of disclosure and confirmed as such in a writing sent by the disclosing party to the receiving party within thirty (30) days of any such disclosure; and (d) the specific terms and pricing of this Agreement (including any Product transfer prices).  Notwithstanding the foregoing, any Confidential Information disclosed by visual observation during a tour, site visit or audit of either Party’s or any of its Affiliates laboratories, manufacturing plants or other facilities shall automatically be deemed Confidential Information for purposes of this Agreement.  

18.2    Exclusions.  The obligations in Section 18.3 will not apply to the extent that it can be demonstrated that any Confidential Information: (a) is or becomes generally known to the public through no fault of or breach of this Agreement by the receiving party; (b) was rightfully in the receiving party’s possession at the time of disclosure, without an obligation of confidentiality; (c) is independently developed by the receiving party without use of the disclosing party’s Confidential Information; or (d) is rightfully obtained by the receiving party from a third party without restriction on use or disclosure.

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18.3    Obligations.  Each Party agrees not to use the other Party’s Confidential Information, except as necessary for the performance of this Agreement, and shall not disclose such Confidential Information to any third party, except to those of its directors, officers, employees, consultants, contractors, agents, lawyers, accountants or other professional advisors and subcontractors and those of its Affiliates (“Representatives”) who need to know such Confidential Information for the performance of this Agreement or as otherwise expressly permitted in this Agreement, provided that each such Representative is subject to a written agreement that includes binding use and disclosure restrictions that are at least as protective as those set forth herein.  Each Party will use all reasonable efforts to maintain the confidentiality of the other Party’s Confidential Information in its possession or control, but in no event less than the efforts that it ordinarily uses with respect to its own confidential information of similar nature and importance.  The foregoing obligations will not restrict either Party from: (i) disclosing Confidential Information pursuant to the order or requirement of a court, administrative agency, or other governmental body, provided that the Party required to make such disclosure gives reasonable notice to the other party to enable it to contest such order or requirement; (ii) disclosing the terms of this Agreement, in confidence, to its business and legal advisors or to investors or lenders that are engaged in active due diligence regarding a financing of such Party; or (iii) disclosing the terms of this Agreement, in confidence, to potential partners or acquirers that are engaged in active due diligence regarding a transaction involving, among other things, the Product, except for those parties competitive to Baxter identified in Exhibit C, which disclosure will require the approval of Baxter, which approval shall not be unreasonably withheld.  

18.4    Limitation of Disclosure.  The Parties agree that, except as otherwise may be required by applicable laws, regulations, rules or orders, including without limitation the rules and regulations, and except as may be authorized in Section 18.4 and unless otherwise agreed in the Agreement, no information concerning this Agreement and the transactions contemplated herein shall be made public by either Party without the prior written consent of the other.

18.5    Publicity and SEC Filings.  The Parties agree that the public announcement of the execution of this Agreement shall be by only one or more press releases mutually agreed to by the Parties.  The failure of a Party to return a draft of a press release with its proposed amendments or modifications to such press release to the other Party within five (5) days of such Party’s receipt of such press release shall be deemed as such Party’s approval of such press release as received by such Party.  Each Party agrees that it shall cooperate fully and in a timely manner with the other with respect to all disclosures to the Securities and Exchange Commission or any other governmental or regulatory agencies, including requests for confidential treatment of Confidential Information of either Party included in any such disclosure.

18.6    Duration of Confidentiality.  All obligations of confidentiality and non-use imposed upon the Parties under this Agreement shall expire five (5) years after the expiration or earlier termination of this Agreement.

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18.7    Other Initiatives.  It is understood that Baxter may have present or future initiatives, including initiatives with third parties, involving products or processes that compete with or are similar to the Product Produced under this Agreement.  Accordingly, Celator acknowledges that nothing in this Agreement shall be construed as a representation or inference by either Party that it will not develop for itself, or produce for others products or implement processes that compete with the Product or are similar, provided that Confidential Information is not used in breach of this Agreement. 

18.8    Prior Mutual Confidentiality Agreement.  The Parties acknowledge the existence of a Mutual Confidentiality Agreement, as further amended, entered into by and between Celator and Baxter effective May 14, 2008 (collectively, the “CDA”).  The Parties agree that any Confidential Information exchanged prior to the Effective Date of this Agreement shall be governed by the CDA, and any Confidential Information exchanged on or after the Effective Date of this Agreement, shall be governed by this Article 18.

Article 19, FORCE MAJEURE

19.1    Subject to the provisions of Section 16.2 of this Agreement, any delay in the performance of any of the duties or obligations of either Party hereto (except with respect to the payment of monies due) caused by an event outside the affected Party’s reasonable control shall not be deemed a breach of this Agreement, and unless provided to the contrary herein, the time required for performance shall be extended for a period equal to the period of such delay.  Such events shall include without limitation, acts of God; acts of public enemies; insurrections; riots; terrorist actions; injunctions; embargoes; labor disputes, including strikes, lockouts, job actions, or boycotts; fires; explosions; floods; shortages of material, Components or energy; delays in the delivery of Components; Product recalls or withdrawals; acts or orders of any government or agency thereof or of Regulatory Authority; and other unforeseeable causes beyond the reasonable control and without the fault or negligence of the Party so affected.  The Party so affected shall give prompt notice to the other Party of such cause and a good faith estimate of the continuing effect of the force majeure condition and duration of the affected Party’s nonperformance, and shall take whatever reasonable steps are necessary or appropriate to relieve the effect of such causes as rapidly as possible.  If the period of nonperformance by Baxter because of Baxter force majeure conditions exceeds one hundred eighty (180) calendar days, Celator may terminate this Agreement by written notice to Baxter.  If the period of nonperformance by Celator because of Celator force majeure conditions exceeds one hundred eighty (180) calendar days, Baxter may terminate this Agreement by written notice to Celator.  

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Article 20, NOTICES

20.1    All notices hereunder shall be delivered by facsimile (confirmed by international courier service), to the following address of the respective Parties:

												
	If to Celator:	Celator Pharmaceuticals, Inc.
		303B College Road East
		Princeton, NJ 08540
		Attn:	Donna Cabral-Lilly, Ph.D.,
			Head of Pharmaceutical Development
		Fax No.	(609) 243-0202
		Telephone No.	(609) 243-6216
				
	With a copy to:	Duane Morris LLP
		30 South 17th Street
		Philadelphia, PA  19103-4196
		Attn:	Kathleen M. Shay
		Fax No.	(215) 689-4382
		Telephone No.	(215) 979-1210
				
	If to Baxter:	Baxter Oncology GmbH
		Kantstr. 2
		33790 Halle / Westfalen
		Germany
		Attn:	Associate Director, Contract Manufacturing
			and Business Development
		Fax No.	+49 5201 711 1880
		Telephone No.	+49 5201 711 1864
				
	With a copy to:	Baxter Germany
		Edisonstr. 4
		85719 Unterschleißheim
		Germany
		Attn:	Legal Counsel
		Fax No.	+49 89 31701 547
		Telephone No.	+49 89 31701 285

Notices shall be effective on the day following the date of transmission if sent by facsimile, and on the second business day following the date of delivery to the overnight delivery service if sent by overnight delivery.  A Party may change its address listed above by notice to the other Party given in accordance with this Section.
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Article 21, APPLICABLE LAW

21.1    This Agreement is being delivered and executed in Germany.  In any action brought regarding the validity, construction and enforcement of this Agreement, it shall be governed in all respects by the substantive and procedural laws of Germany, without regard to the principles of conflict of laws.  The courts of New York, U.S.A., shall have personal jurisdiction over the Parties hereto in all matters arising hereunder.  

Article 22, ASSIGNMENT

22.1    Neither Party shall assign this Agreement or any part hereof or any interest herein to any third party (or use any subcontractor) without the prior written approval of the other Party, which shall not be unreasonably withheld.  Either Party may assign this Agreement to one of its Affiliates without approval of the other Party; provided, however, that such assignment shall not relieve the assigning Party of responsibility for the performance of its obligations hereunder.  Notwithstanding anything to the contrary set forth above: (a) no consent shall be required in the case of a transfer by Baxter in a transaction involving the merger, consolidation, or sale of all or substantially all of the assets of Baxter, and (b)  in the case of a transfer by Celator in transaction involving the merger, consolidation, or sale of all or substantially all of the assets of Celator and such transaction relates to the line of business to which the product relates; provided, however, in each case the permitted assignee(s) shall assume all obligations of its assignor under this Agreement and such assignment shall not relieve the assigning Party of responsibility for the performance of its obligations hereunder, unless the Parties agree to such relief.   

Article 23, SUCCESSORS AND ASSIGNS

23.1    This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their successors and permitted assigns.

Article 24, ENTIRE AGREEMENT

24.1    This Agreement including the Agreements listed in Sections 2.1 and 2.2 and the Mutual Confidentiality Agreement signed by Celator and Baxter Healthcare Corporation (an Affiliate of Baxter Oncology GmbH) and effective on May 14, 2008 constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto.

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Article 25, SEVERABILITY

25.1    If any term or provision of this Agreement shall for any reason be deemed to be invalid or unenforceable, such term or provision shall be construed in such a way as to make it valid and enforceable to the maximum extent possible.  Any invalidity or unenforceability of any term or provision of this Agreement shall attach only to such term or provision and shall not affect or render invalid or unenforceable any other term or provision of this Agreement.  

Article 26, WAIVER AND MODIFICATION OF AGREEMENT

26.1    No waiver or modification of any of the terms of this Agreement shall be valid unless in writing and signed by both Parties hereto.  Failure by either Party to enforce any rights under this Agreement shall not be construed as a waiver of such rights nor shall a waiver by either Party in one or more instances be construed as constituting a continuing waiver or as a waiver in other instances.

Article 27, INDEPENDENT CONTRACTOR

27.1    Both Parties shall act as an independent contractor for the other Party in providing the services required hereunder and shall not be considered an agent of, or joint venturer with, the other Party.

Article 28, COUNTERPARTS; METHOD OF TRANSMISSION

28.1    This Agreement may be executed by the Parties on separate counterparts and exchanged by facsimile or other electronic transmission, which counterparts, when so delivered shall each be deemed to be an original and both counterparts, taken together, shall constitute one and the same agreement. 
(Signature page to follow)
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IN WITNESS WHEREOF, the Parties have caused this Clinical and Commercial Manufacturing and Supply Agreement to be signed by their duly authorized representatives as of the Effective Date.

															
	BAXTER ONCOLOGY GmbH		CELATOR PHARMACEUTICALS, INC.
					
	By:	/s/ Brik V. Eyre		By:	/s/ Scott T. Jackson
	Name:	Brik Eyre		Name:	Scott T. Jackson
	Title:	General Manager BioPharma Solutions		Title:	Chief Executive Officer

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EXHIBIT A
CELATOR’S ANNUAL OBLIGATION

									
	Contract Year	One Market Approval 
(U.S. or Europe)
	Two Market Approvals 
(U.S. and Europe)

	Contract Year One	[*]	[*]
	Contract Year Two	[*]	[*]
	Contract Year Three	[*]	[*]
	Contract Year Four	[*]	[*]

Note:  For any Contract Year(s) after Contract Year Four, the parties will mutually agree upon an Annual Obligation for any such additional Contract Years as set forth in Section 4.3.1.
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EXHIBIT B
BAXTER’S MAXIMUM SUPPLY OBLIGATION

									
	Contract Year(s)	One Market Approval 
(U.S. or Europe)
	Two Market Approvals 
(U.S. and Europe)

			
	Contract Year One	[*]	[*]
	Contract Year Two	[*]	[*]
	Contract Year Three	[*]	[*]
	Contract Year Four	[*]	[*]

Note:  For any Contract Year after Contract Year Four, the parties will mutually agree upon Baxter’s Maximum Supply Obligation for any such additional Contract Years as set forth in Section 4.3.1.
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EXHIBIT C
PARTIES COMPETITIVE TO BAXTER

Hospira One 2 One
Vetter Pharma International GmbH
Ben Venue Laboratories
Patheon Inc.
Catalent Pharma Solutions Inc.
DSM Pharmaceuticals, Inc.
HollisterStier Contract Manufacturing
Oso BioPharmaceutical Manufacturing LLC
Althea Technologies Inc.
Fresenius Kabi AG
Cook Incorporated
Teva-PharmaChemie
Pierre Fabre Medicament Production
BSP Pharmaceuticals srl
NextPharma Technologies
GP Pharm.

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