Document:

Exhibit 10.59

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

SECOND AMENDMENT
 TO GENERIC WHOLESALE SERVICE AGREEMENT
 BY AND BETWEEN
 ANIP ACQUISITION COMPANY d/b/a AM PHARMACEUTICALS INC
 AND CARDINAL HEALTH*

 

This SECOND AMENDMENT (this “Amendment”) amends that certain Generic Wholesale Service Agreement dated as of May 1,2006, as amended from time to time (“Agreement”) by and between AMP Acquisition Company d/b/a ANI Pharmaceuticals Inc. (collectively the “Supplier”) and Cardinal Health* (“Cardinal”).

 

For and in consideration of the promises and representations set forth below, and for other good and valuable consideration the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties agree as follow:

 

1.                                      Contract Administration and Chargeback Procedures.  Effective as of April 1,2012, Supplier and Cardinal agree to delete section 11 of the Agreement and replace it with following:

 

Section 11.  Contract Administration and Chargeback Procedures.  Cardinal may administer contracts between Supplier and customers of Cardinal pursuant to which Supplier and such customers have established prices at which the customer may purchase certain Products.  Cardinal’s Standard Policy on Chargebacks (the “ChargebackPolicy”) outlined on Exhibit D will govern the administration of all contracts.

 

2.                                      General.  This Amendment shall remain in full force and effect for the unexpired term of the Agreement.  Except as set forth in this Amendment, the Agreement shall continue to be in full force and effect.  Each party represents and warrants that its execution hereof as been duly authorized.

 

	
Cardinal   Health*
    	
 
    	
ANI   Acquisition Company,
    
	
 
    	
 
    	
d/b/a   ANI Pharmaceuticals Inc.
    
	
 
    	
 
    	
 
    
	
By:
    	
[Illegible]
    	
 
    	
By:
    	
/s/   Charlotte Arnold
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
SVP,   [Illegible]
    	
 
    	
Title:
    	
VP &   Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
5/7/12
    	
 
    	
Date:
    	
April 24,   2012
    

 

*The term “Cardinal” and “Cardinal Health” has the same meaning as set forth in the Agreement.

 

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

EXHIBIT D

 

CARDINAL HEALTH

 

STANDARD POLICY ON CHARGEBACKS

 

The products purchased by Cardinal Health* from its suppliers for resale to its customers may from (hue to time be the subject of contract pricing arrangements (“Customer Contracts”) which have either been (i) negotiated by these suppliers and customers independent of Cardinal Health or (ii) negotiated by Cardinal Health on behalf of these suppliers.  The following represents Cardinal Health’s standard policy for administering Customer Contracts (“Standard Policy on Chargeback” or “Policy”).  Depending upon the individual facts and circumstances associated with a supplier’s administrative procedures for Chargeback-related matters (e.g., the extent of use of electronic data interchange (“EDI”); electronic funds transfer, and other factors that affect Cardinal Health’s ability to efficiently deal with Chargeback matters), Cardinal may modify from time to time any or all of the terms of its Standard Policy on Chargebacks.

 

Cardinal Health’s role in Chargeback processing is administrative in nature and is provided as a service to its suppliers.  Accordingly, the financial risk resulting from discrepancies or inconsistencies in the terms of the various agreements involving supplier, Cardinal Health and Authorized Purchaser for the sale of products subject to Customer Contracts shall be, as between Cardinal Health and supplier, supplier’s financial risk.  By accepting a copy of this Policy) supplier acknowledges and agrees to this allocation of responsibility.

 

I.                                        Definitions.  The terms below are defined as follows:

 

·                                          “Authorized Purchaser” means the customer who has entered into a Customer Contract with supplier.

 

·                                          “Chargeback” means, in respect of a product which is the subject of a Customer Contract, the reimbursement payable by supplier to Cardinal Health for the difference between the relevant Contract Price and WAC.

 

·                                          “Contract Price” means the Authorized Purchaser’s price for a given product under the relevant Customer Contract.

 

·                                          “WAC” means the published wholesale acquisition cost applicable to a given product.

 

II.                                   Chargeback Processing

 

Cardinal Health will recognize and administer Customer Contracts, subject to their continued validity in accordance with applicable law and the supplier’s compliance with this Policy.

 

Customer Contract changes (e.g., Contract Price, product item adds, product item deletes, membership list) must be submitted to Cardinal Health at least 5 business days prior to the effective date of the change by means of the American National Standards Institute (ANSI) Accredited Standards

 

* As used herein, the term “Cardinal Health” means the following affiliated operating companies: Cardinal Health 3, LLC; Cardinal Health 104 LP; Cardinal Health 107, Inc.; Cardinal Health 110, Inc.; Cardinal Health 112, LLC; Cardinal Health 113, LLC; Cardinal Health 4 U, Inc.; Borschow Hospital & Medical Supplies, Inc.; and any other subsidiary of Cardinal Health, Inc., an Ohio corporation (“CHI”), as may be designated by CHI.

 

D-1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Committee (ASC) X12 845 Bid Award / Change Notification transaction set to the appropriate identified location per the direction of Cardinal Health.  If Cardinal Health and supplier agree to alternative forms of notification regarding Customer Contract changes, notification of those changes must nevertheless be delivered to the appropriate Cardinal Health-specified location to be effective.  Supplier must provide Cardinal Health, within, the applicable time frame, such information as is necessary for Cardinal Health to timely and correctly administer Customer Contract loading and changes.  Such information may include the following:

 

·                                          Drug Enforcement Administration (DEA) number, Health Industry Number (HIN), or such other industry-recognized unique identifiers.

 

·                                          Whether Contract Price eligibility has been determined by supplier or Group Purchasing Organization (GPO).  If, however, Contract Price eligibility has been determined by supplier, Cardinal Health may require additional information to validate such eligibility.  (Note: Only the Office of Pharmacy Affairs may determine whether an Authorized Purchaser is a “covered entity” and therefore Contract Price eligible pursuant to the Public Health Service’s 340B Drug Discount Program.)

 

Cardinal Health will not be deemed to have inaccurately administered the relevant Customer Contract for any purpose, including any applicable performance measurement, should there be any resulting Chargeback pricing discrepancies.  Moreover, Cardinal Health may deduct for any such Chargeback pricing discrepancies.

 

Chargeback amounts will be calculated based upon the WAC for the relevant product at the date of sale, and shall be paid, or credited, as appropriate, to Cardinal Health within 7 days of Cardinal Health’s submission of a request for those amounts.  Cardinal Health may deduct for those Chargebacks for which it does not timely receive payment or credit, as applicable.  If supplier has a bracketed WAC pricing structure, Cardinal may submit the Chargebacks at the “highest bracket price,” regardless of actual purchase price.

 

Cardinal Health will transmit daily all Chargeback billings to supplier via EDI.  If available, supplier must accept original Chargebacks submitted by Cardinal Health via the ANSI ASC X12 844 Chargeback Notification transaction set.  If supplier does not have the capability to accept Chargeback billings via the ANSI ASC X12 844 Chargeback Notification transaction set, then it must, until it develops this capability accept these billings from Cardinal Health via e-mail in the form of an attached Microsoft Excel file in Comma Separated Value (CSV) format.

 

Supplier must utilize electronic means to credit and reconcile Chargeback claims.  Cardinal Health will, in its sole discretion, determine whether all required fields have been provided by supplier.  If a Chargeback claim is denied or adjusted, full valid rejection detail and reasons must be provided for each line.

 

Supplier must notify Cardinal Health of any discrepancy with regard to a Chargeback claim within 15 days of Cardinal Health’s original submission.  Any such notice by supplier must include all customer invoice level detail and valid dispute reasons sufficient to meet Healthcare Distribution Management Association (HDMA) standards.  If supplier does not timely provide - to the level sufficient to meet HDMA standards - the Chargeback claim information required, the Chargeback claim will be deemed resolved in Cardinal Health’s favor and Cardinal Health may deduct accordingly or, alternatively, reconcile the relevant Chargeback claim against any corresponding deduction Cardinal Health may have already taken against amounts payable to supplier.

 

D-2

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Cardinal Health may resubmit denied or adjusted Chargebacks with corrected Information following supplier’s notification of discrepancies.

 

Supplier must respond to all Cardinal Health Chargeback claim resubmissions within 15 days of Cardinal Health’s resubmission.  If available, supplier must send any Chargeback resubmission responses via the ANSI ASC X12 849 Chargeback Reconciliation transaction set.  Any such notice by supplier must include all customer invoice level detail and valid dispute reasons sufficient to meet HDMA standards.  If supplier does not timely provide - to the level sufficient to meet HDMA standards - the Chargeback claim information required, the Chargeback claim will be deemed resolved in Cardinal Health’s favor and Cardinal Health may deduct accordingly for the Chargeback claim.  (Note: Cardinal Health typically initiates such deductions 30 days from resubmission of a chargeback rejection to supplier.)

 

If Cardinal Health notifies supplier that amounts owed by supplier to Cardinal Health resulting from Chargeback claims exceed amounts owed by Cardinal Health to supplier (“Debit Balance”), supplier must promptly remit payment for the difference to Cardinal Health by check or wire transfer.

 

III.                              Chargeback Reversals on Contract Customer Returns

 

If Cardinal Health issues a credit to an Authorized Purchaser related to the prior sale of product under a Customer Contract (for which Cardinal Health previously billed and collected a Chargeback from the supplier), the Chargeback will be reversed and remitted to supplier.

 

IV.                               Supplier Chargeback Audits

 

Supplier may audit Cardinal Health’s compliance with Customer Contracts and related Chargeback matters (including compliance with the Chargeback reversal policy stated above) subject to the following conditions:

 

A.                                    The scope of each Chargeback audit must be limited to the 12-month period immediately preceding the date the audit begins.

 

B.                                    Cardinal Health must have a reciprocal 12-month period to reconcile any differences that may arise with the supplier related to Chargeback issues (including submission and other errors and regardless of whether such issues arise as part of a supplier’s Chargeback audit).

 

C.                                    Supplier must notify Cardinal Health’s Vice President - Controller of its intent to perform the audit at least 30 days prior to beginning the audit, specifying the location to be audited and the time period to be covered.  If Cardinal Health determines in its sole discretion that the timing of the audit may create undue disruption in the conduct of its business, Cardinal Health may delay the start of (he audit for up to 30 additional days.

 

D.                                    Each audit must be performed by any of:  (1) bona fide, permanent employees of the party conducting such audit or inspection; (2) auditors from independent accounting firms of national recognition; or (3) such other representatives as the parties may mutually agree.  Supplier is responsible for compliance by those persons performing the audit on its behalf for compliance with all confidentiality agreements that would apply if supplier were to perform the audit itself.

 

E.                                     Audits must be performed at the Cardinal Health site that is being audited, or such alternate sites where appropriate records are located as Cardinal Health may designate.

 

D-3

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

F.                                      Audits must be performed during the normal office hours of the Cardinal Health site that is being audited.

 

Cardinal Health will make existing accounting records of the Cardinal Health site being audited available for audit, subject to the following conditions:

 

1.                                      Electronic data will not be especially created; and

 

2.                                      Cardinal Health may, in its sole discretion, summarize the contents of all records containing sensitive or competitive information.

 

Cardinal Health may bill supplier for any direct out-of-pocket costs incurred in conjunction with a supplier-requested audit unless the results of the audit show that the amount of Chargebacks invoiced by Cardinal Health to supplier over the audit period were overstated by 5% or more of the amount invoiced.  Amounts billed for audit costs may be deducted from Cardinal Health’s payments for current purchases following completion of the audit.

 

Any supplier claims arising front an audit must be supported by specific audit findings related to specific transactions.  Extrapolation of results from one period to another will not be accepted.

 

Any supplier claims arising from an audit must be submitted to Cardinal Health’s Vice President -Controller within 30 days of completing the audit.  All claims must be accompanied by specific supporting details of the transactions that comprise the claim.  Cardinal Health will then have 45 days to review the claim and advise the supplier of acceptance of, or disagreement with, the claim.

 

V.                                    Related Matters

 

Cardinal Health will be entitled to cash discounts based on the gross invoice price of all goods purchased from the supplier (such gross price being determined prior to any reduction for Chargebacks), regardless of whether a Chargeback is ultimately claimed by Cardinal Health.

 

Supplier must provide Cardinal Health with a Chargeback advance to cover credit exposure of unsecured credit granted to supplier by Cardinal Health for Chargeback claims and to offset the carrying costs involved in the Chargeback process, subject to the following conditions:

 

A.                                    The Chargeback advance, which Cardinal Health will calculate for each calendar quarter, must be no less than an amount equal to one mouth of Chargeback billings based on an average of the most recent 6 months of billings,

 

B,                                    Cardinal Health will remit any Chargeback advance that remains at the conclusion of a given calendar quarter in the next payment due to supplier following that calendar quarter, Cardinal Health may, at the time of such payment, deduct the amount necessary for the new Chargeback advance from payments for Cardinal Health’s then-current product purchases from supplier.

 

D-4

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

 

December 22, 2008

 

Gary Cannizaro
 National Account Manager
 ANIP Acquisition Company
 1302 Concourse Dr. Ste 101 
 Linthicum, MD 21090

 

Re: Increase in Base Service Fee

 

Dear Gary:

 

This year has been a difficult year for most markets and the pharmaceutical distribution markets are no exception. Product pricing continues to deflate at ever faster rates, while Cardinal Health’s transportation and other costs to provide distribution services have steadily risen. As a result of these conditions and in order to continue to provide quality service to our customers, Cardinal Health finds it necessary to require an increase in the Base Service Fee paid to Cardinal Health for its distribution services.

 

This letter is to inform you that Cardinal Health is therefore requiring a mandatory [***] increase in the Base Service Fee in Exhibit B of the Generic Wholesale Service Agreement between Cardinal Health and your company (“GWSA”).  This new Base Service Fee will be [***] and will become effective as of January 1, 2009. Cardinal will also change the in minimum order requirement to [***] per purchase order. Please indicate your acceptance of this  change by signing below and returning a copy of this signed letter to me by fax at (614) 757-8713 or by pdf to todd.treeger@cardinalhealth.com. Please return the signed copy to me no later than December 31st, 2008 in order to avoid an interruption in Cardinal’s orders for products covered by the GWSA.

 

We appreciate ANIP’s supply of quality products and look forward to a continued supply of quality products and value to Cardinal and its Source customers.

 

Please call me at (614) 757-7173 if you have any questions.

 

 

	
 
    	
 
    	
Best   regards,
    
	
 
    	
 
    	
/s/   Todd Treeger
    
	
 
    	
 
    	
Todd   Treeger
    
	
 
    	
 
    	
Director   Strategic Sourcing
    
	
 
    	
 
    	
 
    
	
AGREED:
    	
 
    	
 
    
	
ANIP Acquisition Company
    	
 
    	
 
    
	
By:
    	
/s/   Jane Williams
    	
 
    	
 
    
	
Title:
    	
Sr.   VP Sales & Marketing
    	
 
    	
 
    
	
Date:
    	
12/22/08
    	
 
    	
 
    

 

D-5

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

 

July 1, 2008

 

Todd Treeger
 Product Director
 Cardinal Health, Inc.
 7000 Cardinal Place
 Dublin, Ohio 43017

 

Dear Todd,

 

As previously discussed, this letter is to confirm that ANI Pharmaceuticals, Inc. (“ANI”) is assigning the Generic Wholesale Service Agreement (“GWSA”) dated May 1, 2006 between ANI and Cardinal Health (as defined in the GWSA) to ANIP Acquisition Company, d/b/a ANI Pharmaceuticals Inc.  Please confirm Cardinal Health’s consent by signing below.

 

	
 
    	
 
    	
Best   regards,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Jane Williams
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name
    	
Jane   Williams
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title
    	
Sr.   Vice President, Sales & Marketing
    
	
Agreed:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Cardinal   Health (as defined in the GWSA)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Craig Couman
    	
 
    	
 
    
	
Signature
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Craig   Couman
    	
 
    	
 
    
	
Name
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SVP,   Generic Sourcing
    	
 
    	
 
    
	
Title
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
7/10/08
    	
 
    	
 
    
	
Date
    	
 
    	
 
    

 

7131 Ambassador Road, Sidle 150, Woodlawn, MD 21244

Phone (410)-281-9450 • Toll-Free (800) 434-1121 • Fax (4l 0) 281-9451

3600 25th Avenue, Gulfport, MS 39501 • Phone (228) 863-1702 • Fax (228) 865-0842

210 Main Street West, Baudette, MN 56623 • Phone (218)-634-.3500 • Fax (228)-634-3540

 

D-6

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

FIRST AMENDMENT
 TO GENERIC WHOLESALE SERVICE AGREEMENT
 BY AND BETWEEN
 ANIP ACQUISITION COMPANY
 d/b/a ANI PHARMACEUTICALS INC.
 AND CARDINAL HEALTH*

 

THIS FIRST AMENDMENT (this “Amendment”) amends that certain Generic Wholesale Service Agreement dated as of May 1, 2006 as amended from time to time (“Agreement”) by and between ANN’ Acquisition Company, d/b/a ANI Pharmaceuticals Inc. (collectively the “Supplier”) and Cardinal Health* (“Cardinal”).

 

For and in consideration of the promises and representations set forth below, and for other good and valuable consideration the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties agree as follows:

 

1.  Return Goods and Recalls.  Effective as of June 1, 2008 Supplier and Cardinal agree to delete Exhibit C and replace with the following in Section 10 of Exhibit A:

 

Cardinal will have (he right to return to Supplier and receive the then-current Invoice Price for nil Products Cardinal chooses to return to Supplier.  No special procedures or prior approval from Supplier will he required to authorize such returns; provided, however, Cardinal will provide Supplier with notice of intended returns.  Supplier will reimburse Cardinal for the full amount of all reasonable costs and expenses incurred by Cardinal in connection with Cardinal’s performance of any recall services or assistance relating to the Products which will be conducted in accordance with HDMA guidelines.

 

2.  Return Goods Allowance.  Effective as of June 1, 2008 Cardinal agrees to stop billing Supplier for the [***] Return Goods Allowance [***].  Cardinal will provide Supplier with n June 1, 2008 Cardinal On-Hand Inventory Report of all Supplier’s Products (labeler code 62559-) in all of Cardinals’ Distribution Centers, based upon that inventory, Cardinal will reimburse Supplier the [***] Return Goods .Allowance already taken on those products shown on the inventory report.  The transaction of reimbursement will be completed by Cardinal and Supplier will be reimbursed the money doe no later than August 1, 2008.

 

3.  General.  This Amendment shall remain in full force and effect for the unexpired term of the Agreement.  Except as set forth in this Amendment, the Agreement shall continue to be in full force and effect.  Each party represents and warrants that its execution hereof has been duly authorized.

 

	
Cardinal Health*
    	
 
    	
AN   IP Acquisition Company
    
	
 
    	
 
    	
 
    	
d/b/a   ANI Pharmaceuticals Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Craig Couman
    	
 
    	
By:
    	
/s/   Jane Williams
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
SVP,   Generic Sourcing
    	
 
    	
Title:
    	
Sr.   Vice President, Sales & Marketing
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
7/10/08
    	
 
    	
Date:
    	
7/10/08
    

 

* The term “Cardinal” and “Cardinal Health” has the same meaning as set forth in the Agreement.

 

A-7

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

GENERIC WHOLESALE SERVICE AGREEMENT

 

This Agreement is made as of May 1, 2006 (the “Effective Date”), between Cardinal Health (“Cardinal”)* and ANI Pharmaceuticals, Inc (“Supplier”).  Supplier and Cardinal hereby agree as follows:

 

1.                                      General Terms and Conditions.  Supplier hereby appoints Cardinal as a non-exclusive, authorized distributor of all generic pharmaceutical products manufactured and/or marketed by Supplier (collectively, the “Products”), and Cardinal hereby accepts that appointment on the terms and subject to the conditions described in this Agreement, as further described on Exhibit A.

 

2.                                      Rebates, Discounts and Service Fees.  Supplier will pay Cardinal rebates, discounts and Service Fees as described on Exhibit B and Exhibit C.  Cardinal will invoice Supplier monthly for the amount of all Service Fees earned by Cardinal, with exception of off-invoice discounts already applied by Supplier, Supplier will cause Cardinal to receive payment in full on all such invoices no later than 30 days following the date of Cardinal’s invoice.  Supplier and Cardinal will work together in good faith to resolve any discrepancies related to the nature or amount of a rebate, discount or Service Fee invoice that are raised within 60 days of the date of the applicable invoice.

 

3.                                      Term and Termination.  The initial term of this Agreement will begin on the Effective Date and will continue until the two-year anniversary of the Commencement Date (the “Initial Term”).  At the expiration of the Initial Term, this Agreement will renew automatically for successive one-year periods upon the same terms and conditions, unless or until either party provides written notice of non-renewal to the other party at least 90 days prior to the end of the then-current term.  Notwithstanding the foregoing, either party may effect an early termination of this Agreement upon the default of a material provision of this Agreement by the other party and that party’s failure to cure such default within 20 days following written notice from the nondefaulting party.  Any reference in this Agreement to the “term of this Agreement” will include the Initial Term and any renewal periods.

 

4.                                      Miscellaneous.

 

a.                                      Relationship of the Parties.  The relationship among the parties is and will be that of independent contractors.  This Agreement does not establish or create a partnership or joint venture among the parties.

 

b.                                      Notices.  Any notice or other communication required to be given to any party under this Agreement will be in writing and will be deemed given when delivered to the other party at its address set forth below, by Federal Express.  Airborne, or any other similar express delivery service.  Any party may change its address for notices under this Agreement by giving the other party written notice of such change.

 

c.                                       Governing Law.  All questions concerning the validity or meaning of this Agreement or relating to the rights and obligations of the parties with respect to performance under this Agreement will be construed and resolved under the laws of the State of Ohio.  The parties designate the United States District Court for the Southern District of Ohio as the court of proper jurisdiction and venue for any actions or proceedings relating to this Agreement; irrevocably consent to such designation, jurisdiction, and venue, and waive any objections or defenses relating to jurisdiction or venue with respect to any actions or proceedings initiated in such court.

 

7131 Ambassador Road, Suite 150, Woodlawn, MD 21244

Phone (410)-281-9450 • Toll-Free (800) 434-1121 • Fax (410) 284-9451

3600 25th Avenue, Gulfport, MS 39501 • Phone (223) 863-1702 • Fax (228) 865-0842

210 Main Street West, Baudette, MN 56623 • Phone (218)-634-3500 • Fax (228)-634-3540

 

A-1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

d.                                      Severability.  The intention of the parties is to comply fully with all laws and public policies, and this Agreement will be construed consistently with all laws and public policies to the extent possible.  If and to the extent that any court of competent jurisdiction determines that it is impossible to construe any provision of this Agreement consistently with any law or public policy and consequently holds that provision to be invalid, such holding will in no way affect the validity of the other provisions of this Agreement, which will remain in full force and effect.

 

e.                                       Complete Agreement; Amendment.  All of the schedules attached hereto are incorporated herein by reference.  This Agreement contains the entire agreement between the parties and supersedes all prior or contemporaneous discussions, negotiations, representations, warranties, or agreements relating to the subject matter of this Agreement, including without limitation any previous wholesale distribution agreement entered into between Supplier and any of the individual companies comprising Cardinal.  No changes to this Agreement will be made or be binding on either party unless made in writing and signed by each party.

 

f.                                        No Waiver.  The failure of either party to enforce any provision of this Agreement will not be considered a waiver of any future right to enforce such provision.

 

g.                                       Assignment.  Neither party will have the right to assign this Agreement to any third party without the prior written consent of the other party; provided, however, that Cardinal will be permitted to assign this Agreement to any subsidiary or affiliate of Cardinal Health, Inc.  Any generic pharmaceutical product Supplier acquires after the Effective Date that is already subject to a pre-existing agreement with Cardinal will be excluded from this Agreement and will continue to be subject to the terms of the pre-existing agreement whether the acquired product is sold under the original label and NDC number or Supplier’s label and NDC number, unless the parties agree otherwise in writing.  In addition, any of Supplier’s generic pharmaceutical products that are subject to this Agreement will continue to be subject to and sold under the terms of this Agreement exclusively, whether such Product is sold under Supplier’s original label and NDC number or a different manufacturer’s label and NDC number.

 

h.                                      Signature Authority.  Each signatory to this Agreement represents and warrants to the other that he or she has signature authority and is empowered on behalf of his or her respective party or execute this Agreement.

 

	
ANI Pharmaceuticals, Inc.
    	
 
    	
Cardinal   Health*
    
	
(Name of Supplier)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Jane Williams
    	
 
    	
By:
    	
/s/   Craig Couman
    
	
 
    	
 
    	
 
    
	
Print   Name:
    	
Jane   Williams
    	
 
    	
Print   Name:
    	
Craig   Couman
    
	
 
    	
 
    	
 
    
	
Title:
    	
Sr.   VP Sales & Marketing
    	
 
    	
Title:
    	
SVP,   Rx Product Mgt
    
	
 
    	
 
    	
 
    
	
Address   of Supplier:
    	
 
    	
Address   of Cardinal:
    
	
 
    	
 
    	
 
    
	
1302   Concourse Drive
    	
 
    	
Attention:   SVP - Rx Product Management
    
	
Suite 101
    	
 
    	
7000   Cardinal Place
    
	
Linthicum,   MD 21090
    	
 
    	
Dublin,   Ohio 43017
    
									

 

*The term “Cardinal Health” or “Cardinal” will include the following affiliated operating companies; Cardinal Health 110, Inc.; Cardinal Health 106, Inc.; Cardinal Health 103, Inc.; Cardinal Health 100, Inc.;

 

A-2

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Cardinal Health 104, LP.; Cardinal Health 107, Inc.; Cardinal Health 3, Inc. and any other subsidiary of Cardinal Health, Inc., an Ohio corporation (“CHI”), as may be designated by CHI.

 

A-3

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

EXHIBIT A
 GENERAL TERMS AND CONDITIONS

 

1.                                      Invoice Price Outlines.  If at any time during the term of this Agreement, the Invoice Price for any Product is reduced, then Supplier will issue a credit to Cardinal in an amount equal to the difference between (a) the value for Cardinal’s then-current inventory of that Product as of the later of (i) the date Cardinal acquired that Product or (ii) the date of Supplier’s last effective price change for the Product for which Cardinal received a Moor stock adjustment, and (h) the value of Cardinal’s then-current inventory of that Product, determined using the reduced Invoice Price for all such inventory (the “Floor Stock Adjustment”), for purposes of this section, “Cardinal’s then-current inventory” will include all Products held by Cardinal’s distribution centers, all Products that are consigned by Cardinal and all Product “in transit” to or from such distribution centers or customer stoics on the effective date of such Invoice Price decrease.  Cardinal will notify Supplier of the amount of any credit due pursuant to this section, along with supporting documentation, and will apply a debit memo at the time such notice is given to Supplier.  Except as otherwise provided in this Agreement, Supplier will give Cardinal written notice at least twenty-four hours prior to the effective date of an increase or decrease in the Invoice Price for any Product.  Throughout this Agreement, term “Invoice Price” means the Cardinal’s wholesale acquisition cost from Supplier without reduction for cash or off-invoice discounts or other rebates.  Supplier will accept purchase orders at the Invoice Price in effect on the day the order is submitted by Cardinal.

 

2.                                      Terms of Sale and Shipment.  As an authorized distributor, Cardinal may purchase such quantities of the Products as Cardinal deems necessary to fill its customers’ orders from time to time and Supplier agrees to sell the Products to Cardinal.  Unless otherwise agreed by both parties, all orders for the Products will be invoiced by Supplier on the date shipped.  Cardinal will have no obligation to accept automatic shipments of any Product or maintain any particular level of inventory of any Product.  Supplier will sell each Product to Cardinal at a price no higher than the Invoice Price for such Product in effect on the date of Cardinal’s order and deliver the Products to those distribution centers specified in Cardinal’s order or such other locations as may be agreed upon by the parties in the case of drop shipment orders, in either such case, freight prepaid.  Title and risk of loss to the Products will remain with Supplier until shipment is received at the destination specified by Cardinal.

 

3.                                      Service Level.  Suppliers service level to Cardinal (as a percentage) will be no less than its service level to any other customer.  Supplier will ship Products with not less than fourteen (14) months’ shelf life remaining, unless the Product is manufactured with a less shelf life, in which case such Product will he shipped per Supplier’s (or the manufacturer’s) guidelines.  Supplier will ship purchase orders within its routine average lead times, which will be 10 days or less from the date Cardinal’s purchase order is placed (“Routine Average Lead Times”).  Supplier will provide Cardinal with accurate backorder information weekly.  If Supplier cannot ship the Products within its Routine Average Lead Times, Supplier will provide Cardinal with shipping schedules describing when Supplier will ship each purchase order, which will be within [***] of the date of Cardinal’s order (each, a “Shipping Schedule”).  Supplier will ship Products ordered by Cardinal pursuant to such Shipping Schedules, at the price as of the date of Cardinal’s purchase order or the then-current price, whichever is lower.  If Supplier fails to ship Cardinal’s orders in accordance with each Shipping Schedule and within [***] of the date of Cardinal’s order.  Supplier will pay Cardinal a service level credit equal to the Adjusted Service Level Shortfall multiplied by [***] (the “Service Level Credit”).  The Adjusted Service Level Shortfall will be calculated monthly as follows:

 

(i)                                     Service Level Shortfall = (Total Orders at Invoice Price) (Total Receipts at Invoice Price)

 

A-1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

(ii)                                  Adjusted Service Level Shortfall = (Service Level Shortfall) (Service Level Adjustments)

 

(iii)                               Service Level Adjustments = free good orders at Invoice Price, Products discontinued by Supplier for all of Supplier’s customers, and Products that are not shipped due to an Event of Force Majeure.

 

[***]

 

An “Event of Force Majeure” means a natural disaster, riots, tires, war, embargoes, or failure of power or gas necessary in production that directly impacts Supplier’s ability to manufacture and/or ship a particular Product.

 

Notwithstanding the foregoing, Supplier remains obligated to ship Cardinal’s orders pursuant to a revised Shipping Schedule to he mutually determined by the parties.  Cardinal may replace a Product in the primary position on its Preferred Programs if a Product is listed on a backorder report and/or Supplier has not satisfied Cardinal’s orders for such Product.

 

Whether or not Supplier has satisfied the Service Level, for any Product that Supplier is unable to supply to Cardinal, Cardinal will be entitled to an amount equal to the difference between the price at which Cardinal’s customers purchase Products from a secondary generic supplier through Cardinal as a result of Supplier’s failure to supply the Products and the contract price Supplier would have charged Cardinal’s customers for such Product if Supplier had been able to supply such Product (the “Reprocurement Amount”), Cardinal may take any action it deems appropriate to provide its customers with an alternative product.  Cardinal will use reasonable efforts to minimize the price at which its customers purchase Products from a secondary generic supplier.  The Reprocurement Amount will not apply if the Product is on the Preferred Source B or Generic Alliance B programs.

 

4.                                      Price Protection (Contract Price Increases).  If Supplier increases the contract price of any Preferred Product then Supplier will issue to Cardinal a [***].  The credit will be paid within [***] of the date of Cardinal’s invoice.  In order for Cardinal to [***], Supplier will give Cardinal [***] of the effective date of the increase.

 

5.                                      Price Protection (Contract Price Decreases).  With respect to generic Products that have not been previously manufactured or marketed (i.e., new launches).  Supplier will price protect Cardinal’s customers for thirty days following the addition of each Product to the Preferred Programs.  Supplier will pay Cardinal the difference between the contract price of such Preferred Product and the then-current market price, multiplied by the number of units of such Preferred Product sold by Cardinal to its customers.  With respect to customers that hold Cardinal’s inventory on consignment, if the contract price for a Product decreases at any time, Supplier will issue to Cardinal a credit memo equal lo the difference between the higher contract price and the decreased contract price, multiplied by the number of units of Preferred Product sold by Cardinal to its customers and is not yet dispensed by the customer to the patient as of the date of the decrease.

 

6.                                      Non-Compete.  Supplier agrees that it will not, either directly or indirectly (including through an affiliate) solicit, attempt to induce, cause or facilitate any of Cardinal’s customers to terminate or change its relationship with Cardinal with respect to purchasing generic products, or otherwise interfere with any relationship between Cardinal and any of Cardinal’s customers.  This provision applies during the period in which the respective customer purchases generics through any of Cardinal’s GenericSOURCE programs and for 6 months thereafter.  Supplier agrees that the duration and scope of this provision are reasonable.

 

7.                                      Pricing Agencies; Medicaid formularies.  Supplier recognizes the importance of timely updates to First Data Bank and similar pricing agencies  (“Pricing Agencies”)  and agrees that it will provide all information necessary to ensure that all Products are: reimbursable by Third parties and Senior Pharmaceutical Assistance Programs (“SPAPs”).  Products manufactured and/or distributed by Supplier, will be kept up-to-date with Pricing Agencies on a regular basis.  Supplier will register all Products with the Centers for Medicare and Medicaid Services (“CMS”) and

 

A-2

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

file supplementary applications as required by certain states so that all Products may be reimbursed under all Medicaid programs and SPAPs.  Supplier will lake all steps necessary to maintain consistent pharmacy reimbursement coverage of all Products on all state Medicaid formularies and SPAPs.  If at any time a Product is the sole Product eligible for reimbursement under a Medicaid formulary and such Product is not in the primary position on the Preferred Programs.  Supplier will provide Cardinal with competitive contract pricing for Cardinal’s customers in the applicable state

 

8.                                      New Product Introductions.  Supplier will provide Cardinal with all documentation requested by Cardinal to set up a new Product in its system, including but not limited to, HDMA forms, material data safely sheets, and package, inserts.

 

9.                                      Debit Balance; Setoff Right.  Supplier will provide Cardinal with financial statements upon execution of this Agreement and at least annually upon Cardinal’s request.  In the event that Supplier is in a debit position with Cardinal, Cardinal reserves the right to request payment by alternative means (including, but not limited to, inventory and/or cash payments).  Supplier will then cause Cardinal to receive payment in full no later than 30 days following such a written request.  Cardinal returns the right to withhold payments, set off amounts owed to Supplier against amounts owed to Cardinal, request a chargeback advance, and/or cease its purchase relationship with Supplier if Cardinal does not receive payment for amounts owed to it under this Agreement or based upon credit or other considerations deemed relevant by Cardinal, With respect to Cardinal’s right of set off.  Cardinal and its affiliates, parent or related entities, collectively or individually, may exercise a right of set off against any and all amounts clue Supplier, without in any way limiting its rights under law or in equity.  For purposes of this section.  Cardinal, its affiliates, parent or related entities will be deemed to be a single creditor.

 

10.                               Returned Goods and Recalls.  [***]

 

11.                               Contract Administration and Chargeback Procedures.  Cardinal may administer contracts between Supplier and customers of Cardinal pursuant to which Supplier and such customers have established prices at which the customer may purchase certain Products, Cardinal’s Standard Chargeback Policy (The “Chargeback Policy”) will govern the administration of all contracts.

 

12.                               Confidential Information.  In connection with the ongoing relationship between Supplier and Cardinal, each party may gain access to proprietary information of the other which may be considered confidential by the party providing such information, and each party will use the same care to prevent disclosure, publication, or dissemination to any Third party of the other party’s confidential information as is used to protect its own confidential information, but not less reasonable care However, information generated, compiled or stored by Cardinal reflecting the purchase and resale of Products to its customers does not constitute the confidential information of Supplier, and Cardinal will be entitled to utilize all such information in any manner deemed appropriate by it  Supplier understands and agrees that Cardinal may, in its sole discretion, elect to sell warehouse withdrawals, sales, and other data to IMS/DDD and/or other Third parties without contribution to Supplier.

 

13.                               Warranty and Indemnification.  Supplier hereby warrants that the Products are and will be manufactured and delivered to Cardinal in conformity with the Federal Food, Drug and Cosmetic Act, as amended, and all other applicable laws, rules, and regulations.  Supplier will defend, indemnify, and hold harmless Cardinal and its affiliates, customers, directors, officers, employees and representatives from and against any and all claims, losses, damages, costs, and expenses (including without limitation reasonable attorneys’ fees) arising directly or indirectly out of: (a) the fraud, misrepresentation, intentional misconduct, omission or negligence of Supplier; (b) the manufacture, marketing, testing, shipping, sale, possession or use of the Products (excluding any claim, liability, loss, damage, cost or expense shown to be solely attributable to Cardinal’s negligence in handling such Products): (c) “class of trade” pricing, if any, maintained by Supplier from and after the effective date of this

 

A-3

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Agreement, including without limitation those arising out of Cardinal’s administration of Supplier Contracts:  and  (d)  any intellectual properly infringement actions (including patent, trademark, service mark, copyright trade dress, trade secret and other proprietary rights) brought by a third party in connection with Cardinal’s distribution of Products hereunder.  The warranty and indemnification provisions of this section will survive any termination or expiration of this Agreement.

 

14.                               Insurance.  During the term of this Agreement and thereafter as may be necessary to cover claims associated with Products purchased by Cardinal (whether before, during or after such term), Supplier will obtain, pay for, and keep in full force and effect Product—Completed Operations Liability insurance with a per occurrence limit of not less than [***], with one or more insurance carriers with an AM Best Rating of at least A-, VII or its equivalent.  In the event that these insurance policies are written on a claims-made basis, then the policy(ies) will be maintained during the entire period of this Agreement and for a period of not less than five (5) years following the termination or expiration of this Agreement.  Supplier will deliver to Cardinal certificates evidencing the existence and continuation of such insurance at the execution of this Agreement and upon Supplier’s periodic renewal of such policy with the following language:  “Cardinal Health, Inc. and its subsidiaries and affiliates are named as additional insureds and the insurance evidenced by this certificate will be considered primary and non-contributing to any Cardinal Health insurance.”  Such insurance will include a provision for at least thirty (30) days prior written notice to Cardinal in the event of cancellation or material reduction of coverage.

 

15.                               Compliance with Laws.  Each party will comply with all federal, state and local laws and regulations applicable to its operations, including but not limited to, those dealing with employment opportunity and affirmative action including Executive Order 11246 (Equal Opportunity), 38 U.S.C. § 4212(a) (Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era), 29 U.S.C. § 793 (Affirmative Action for Workers with Disabilities), and 42 U.S.C. §1320a-7b (Anti- Kickback Statute) and any amendment and applicable regulations pertaining thereto.  In addition, Supplier will comply with all terms of 48 C.F.R. § 52.244-6 (Subcontracts for Commercial Items and Commercial Components) (including the requirement of including this provision in subcontracts awarded under this contract), 15 U.S.C. § 637 (d) (2) and (3) (Utilization of Small Business Concerns), and such provision is hereby incorporated into this Agreement as if fully set forth herein.  In accordance with the provisions of 48 C.F.R. § 52.209-6.  Supplier represents, warrants and certifies that neither it nor its principals was or is debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care-programs (as that term is defined in 42 U.S.C. 1320(a)-7b(f)) or convicted of a criminal offense related to the provision of health care items or services, but has not yet been debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care programs.  In the event that Supplier, or any of its principals, is debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care programs or convicted of a criminal offense related to the provision of health care items or services.  Supplier will notify Cardinal immediately.  In addition, Supplier represents and warrants that it complies with all federal, state, local and other applicable laws, regulations, conventions or treaties prohibiting any form of child labor or other exploitation of children in the manufacturing and delivery of Supplier’s products or services,

 

16.                               Audit and Inspection.  During the term of this Agreement, upon reasonable prior notice and during normal business hours either party will be entitled to audit and inspect those relevant records which are maintained by the other party in direct connection with its performance under this Agreement subject to the terms and conditions contained in the Chargeback Policy.

 

A-4

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

EXHIBIT B
 SERVICE PEES, CASH DISCOUNT AND INITIAL STOCKING BILLBACKS

 

1. Services.  In consideration for the Service Fees, Cardinal will provide the following services (collectively, the “Services”):

 

a.                                      Storage, handling and distribution of generic produces manufactured and/or marketed by Supplier (collectively, the “Products”)

b.                                      Sophisticated ordering technology

c.                                       Daily consolidated deliveries 10 providers

d.                                      Emergency shipments 10 customers 24/7/365

e.                                       Consolidated accounts receivable management

f.                                        Contract and Chargeback administration

g.                                       Returns processing

h.                                      Customer Service support to customers

i.                                          Licensed, environmentally controlled, PDMA compliant, secure facilities

j.                                         Pedigree handling where required by law

k.                                      Other miscellaneous wholesaling and distribution services

 

Cardinal will not be required to provide any particular level of promotional or marketing activities with respect to or on behalf of any Product and will not be prohibited from providing the Services or any other customized promotional or marketing services with respect to any other products or on behalf of other suppliers,

 

2.                                      Service Fees.  In consideration for the Services, Supplier will pay Cardinal service fees as follows (the “Service fees’”):

 

a.                                      Base Service Fee.

 

Cardinal will be entitled to a Service fee of [***] % on its Net Purchases of Products under this Agreement, [***]

 

b.                                      Preferred Product Service Fee

 

Supplier agrees to provide Cardinal an additional .Service Fee equal to [***] for a total of [***] of the Net Purchases of Exclusive Preferred Products on Preferred Programs purchased by Cardinal under this Agreement.

 

Supplier agrees to provide Cardinal an additional Service Fee equal to [***] for a total of [***] of the Net Purchases of Multi-source Preferred Products on Preferred Programs purchased by Cardinal under this Agreement.

 

c.                                       Stand-Alone or Pass-Through Rebates

 

Each Cardinal customer that participates in any of Cardinal’s Alliance programs (each, an “Alliance Customer”) will continue to receive all incentives as negotiated on a stand-alone basis with Supplier prior to such customer’s participation in the applicable Alliance program, and upon Cardinal awarding Supplier a position on a Preferred Program.  Cardinal will specify to Supplier whether the rebate for Alliance Customers will be paid to Cardinal and passed through to the Alliance Customer, or paid directly to the Alliance Customer.  Cardinal will invoice Supplier monthly for the Pass-Through Rebates to be paid to Cardinal, and Supplier will pay such invoice

 

B-1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

within 30 days following the date of Cardinal’s invoice.  All Alliance Customers added to the Alliance programs after the effective date of this Agreement will be entitled to receive stand alone performance incentives.  These incentives apply only to purchases of Preferred Products by Cardinal customers through an Alliance program.  These incentives are in addition to any and all incentives and rebates paid to Cardinal.

 

d.                                      Existing Inventory.  The Service Fees will be applied to on-hand inventory that Cardinal purchased from Supplier prior to the Effective Date, for example, if Cardinal has 60 days of inventory on-hand on the Effective Date, Supplier will pay a Base Service Fee and a Volume Service Fee with respect to such inventory, to compensate Cardinal for the Services it provided.

 

(i)                                     The term “Net Purchases” means the Invoice Price for a Product without reduction for Cash Discounts, Service Fees or other discounts or rebates multiplied by the total purchases of Product by Cardinal from Supplier less Floor Stock Adjustments, chargebacks and returns.  Only Product received by Cardinal will be included in the calculation of Net Purchases.

 

(ii)                                  The term “Preferred Programs” means any and all generic sourcing programs developed by Cardinal to promote generic products, and other similar programs developed by Cardinal from time to time.

 

(iv)                              The term “Preferred Product” means any Product included in a Preferred Program.

 

3.                                      Cash Discount.  Cardinal will be entitled to a cash discount equal to [***] for all invoices paid within [***] of Cardinal’s receipt of same (the “Cash Discount”).  The Cash Discount will be calculated based on Invoice Price.  Cardinal will still be entitled to the Cash Discount if Supplier is in a debit balance.  If, during the Initial Term.  Cardinal’s inventory exceeds 40 days of demand and payment is clue to Supplier within 30 days or less, Cardinal may extend its payment terms.

 

4.                                      Initial Stocking Billback.  Cardinal will be entitled to a minimum [***] on the initial purchase of (a) any Preferred Product added to any Preferred Product program, (b) any Product into a Cardinal distribution center that did not previously stock such Product, (c) any Product into a new Cardinal distribution center, and (d) additional Product to service a new Alliance Customer (each, an “Initial -Stocking Billback”).  Each Initial Stocking Billback will be calculated based on the applicable promotional allowance percentage (i.e., [***]) multiplied by the [***] for the applicable Product.  The Initial Stocking Billback will be based on Product ordered by Cardinal in its initial purchase order (one order per DC).

 

B-2

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

EXHIBIT C

 

This Exhibit C is to be considered part of the GWSA between Cardinal and ANI Pharmaceuticals.

 

Cardinal will receive from ANI Pharmaceuticals [***].

 

Cardinal will not return any product(s) except for [***].  Cardinal must notify ANI Pharmaceuticals and ANI Pharmaceuticals will issue Return authorization instructions.

 

The Parties agree that if an overstock situation develops because, [***] the parties will cooperate to move the Product to other customers or return to ANI Pharmaceuticals for credit.  In such case, ANI Pharmaceuticals will issue a credit equal to the then-current Wholesale Acquisition Cost (WAC) less the Return Goods Allowance.

 

Cardinal will [***].

 

Supplier will [***] Cardinal for [***].

 

Both Parties agree to review the Return Goods and Recalls policy on the 1st anniversary, or as close to thereof, of the signed Agreement.

 

	
ANI Pharmaceuticals Inc.
    	
 
    	
Cardinal   Health
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Jane Williams
    	
 
    	
By:
    	
/s/   Craig Couman
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Print   Name:
    	
Jane   Williams
    	
 
    	
Print   Name:
    	
Craig   Couman
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Sr.   VP Sales & Marketing
    	
 
    	
Title:
    	
SVP,   Rx Product Mgt
    
	
 
    	
 
    	
 
    
	
5-10-06
    	
 
    	
 
    
											

 

C-1Exhibit 10.60

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

ADDENDUM to
 DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
 Dated February 5, 2009

 

THIS ADDENDUM (this “Addendum”) is dated as of June 12, 2012 and is between ANIP ACQUISITION COMPANY, d/b/a ANI PHARMACEUTICALS, INC., a Delaware corporation (“ANI”) and COUNTY LINE PHARMACEUTICALS, LLC, a Wisconsin limited liability company (“CLP”).

 

The parties wish to set forth additional terms and conditions under which ANI will store, on behalf of CLP, the active ingredient [***] (“API”).

 

TERMS AND CONDITIONS FOR STORAGE

 

I.                Upon receipt of the API, ANI will store the API under cGMP conditions.  Risk of damage or loss of the API shall remain with CLP, unless ANI was negligent in the storage or handling of the API;

 

II.           CLP will provide evidence reasonably satisfactory to ANI that all of the API stored by ANI is covered for damage or loss under CLP’S insurance policies.

 

CLP acknowledges that failure to timely provide evidence of insurance reasonably satisfactory to ANI will result in all API being returned to CLP at CLP’s sole risk and expense.

 

IN WITNESS WHEREOF, the parties have caused this Addendum to be duly executed on the date first written above.

 

	
ANIP   ACQUISITION COMPANY D/B/A LLC ANI PHARMACEUTICALS, INC.
    	
 
    	
COUNTY   LINE PHARMACEUTICALS, 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Charlotte C. Arnold
    	
 
    	
By:
    	
/s/   Richard D. Losiniecki
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Charlotte   C. Arnold
    	
 
    	
Name:
    	
Richard   D. Losiniecki
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
VP &   CFO
    	
 
    	
Title:
    	
President &   CEO
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
6/12/2012
    	
 
    	
Date:
    	
6/12/2012
    

 

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT

 

By and between

 

ANI PHARMACEUTICALS, INC.

 

And

 

COUNTY LINE PHARMACEUTICALS, LLC.

 

Dated as of February 5, 2009

 

 

TABLE OF CONTENTS

 

	
Section 1
    	
 
    	
Definitions
    
	
 
    	
 
    	
 
    
	
Section 2
    	
 
    	
Product   Development
    
	
 
    	
 
    	
 
    
	
Section 3
    	
 
    	
Product   Supply
    
	
 
    	
 
    	
 
    
	
Section 4
    	
 
    	
Profit   Share
    
	
 
    	
 
    	
 
    
	
Section 5
    	
 
    	
Representations   and Warranties of ANI
    
	
 
    	
 
    	
 
    
	
Section 6
    	
 
    	
Representations   and Warranties of CLP
    
	
 
    	
 
    	
 
    
	
Section 7
    	
 
    	
Additional   Covenants and Agreements of the Parties
    
	
 
    	
 
    	
 
    
	
Section 8
    	
 
    	
Indemnification
    
	
 
    	
 
    	
 
    
	
Section 9
    	
 
    	
Terminations
    
	
 
    	
 
    	
 
    
	
Section 10
    	
 
    	
Miscellaneous
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
 
    	
Product   Listing
    
	
 
    	
 
    	
 
    
	
Exhibits   B-E
    	
 
    	
Technology   Transfer and Manufacturing Project Detail
    
	
 
    	
 
    	
 
    
	
Exhibit 2.4
    	
 
    	
Development   Batch Costs
    
	
 
    	
 
    	
 
    
	
Exhibit 3.1
    	
 
    	
CLP   Standard Purchase Order Form
    
	
 
    	
 
    	
 
    
	
Exhibit 3.6
    	
 
    	
Supply   Price and Batch Size
    
	
 
    	
 
    	
 
    
	
Exhibit 3.7
    	
 
    	
Initial   Forecast
    

 

iii

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT

 

This DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT (“this Agreement”), dated as of February 5, 2009 (the “Effective Date”), is by and between ANI PHARMACEUTICALS, INC., a Delaware Corporation (“ANI”), and COUNTY LINE PHARMACEUTICALS, LLC., a Wisconsin Limited Liability Corporation (“CLP”).

 

W I T N E S S E T H
 - - - - - - - - - - -

 

WHEREAS, ANI is engaged, among other things, in the business of manufacturing, packaging and supply of pharmaceutical products;

 

WHEREAS, CLP is engaged, among other things, in the business of development, marketing and selling of pharmaceutical products;

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, CLP wishes to engage ANI for the manufacturing, packaging and supply of certain prescription products.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.                                      1. DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Activities” shall mean the development, manufacturing, testing, packaging, marketing, selling and distributing of the Product(s) in the Territory as contemplated by this Agreement.

 

“Affiliates” shall mean, with respect to any Person, any Persons directly or indirectly controlling, controlled by, or under common control with, such other Person.  For purposes hereof, the term “controlled” (including the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the direct or indirect ability or power to direct or cause the direction of management policies of such Person or otherwise direct the affairs of such Person, whether through ownership of voting securities or otherwise.

 

“API” shall mean the active ingredient [***].

 

“ANI” shall have the meaning given in the preamble and shall include its Affiliates.

 

“cGMP” shall mean current Good Manufacturing Practices, as determined by the FDA from time to time.

 

“CLP” shall have the meaning given in the preamble and shall include its Affiliates.

 

“COGs” means cost of goods sold and shall be calculated based on the cost of API, plus Supply Price of the Product(s), plus the cost of distribution (which distribution cost will be equal to [***]), plus the royalty paid for formulation development (which royalty amount will not exceed [***]) as determined in accordance with GAAP, consistently applied.

 

“Damages” shall mean any and all actions, costs, losses, lost profits, claims, liabilities, fines, penalties, demands, damages and expenses, court costs, and reasonable fees and disbursements of counsel, consultants and expert witnesses incurred by a party hereto (including interest which may be imposed in connection therewith).

 

1

 

“Defective” shall mean, as to the Product(s), the failure of such to strictly conform to the Specifications, this Agreement and all applicable law.

 

“FDA” shall mean the United States Food and Drug Administration.

 

“Force Majeure” shall mean acts of God, explosion, fire, flood, tornadoes, thunderstorms, earthquake or tremor, war whether declared or not, civil strife, riots, embargo, losses or shortages of power, labor stoppage, substance shortages, damage to or loss of product in transit, currency restrictions, or events caused by reason of laws, regulations or orders by any government, governmental agency or instrumentality or by any other supervening or unforeseeable circumstances reasonably beyond the control of each party.

 

“GAAP” shall mean generally accepted accounting practices in the United States as in effect from time to time.

 

“Gross Margin” means, for any period, the Net Sales for such period minus the COG’s for such period, as determined in accordance with GAAP, consistently applied.

 

“Indemnified Party” shall have the meaning given in Section 8.3 hereof.

 

“Indemnifying Party” shall have the meaning given in Section 8.3 hereof.

 

“Launch” shall mean the date when the Product(s) is first made commercially available by CLP.

 

“Net Sales” shall mean, with respect to the Product(s), the gross amount invoiced to unrelated third parties for the Product(s) in the Territory, less:

 

(a)         trade and reasonable and customary cash discounts allowed;

 

(b)         refunds, rebates, chargebacks, retroactive price adjustments and any other allowances which effectively reduce the net selling price; and

 

(c)          returns, credits and allowances.

 

Such amounts shall be determined from books and records maintained in accordance with GAAP, consistently applied.

 

“Person” shall mean a natural person, a corporation, a partnership, a trust, a joint venture, a limited liability company, any governmental authority or any other entity or organization.

 

“Product” shall mean a pharmaceutical product listed on Exhibit A fully manufactured, packaged, and labeled, meeting all Specifications.

 

“Quarter” shall mean, as the case may be, the three months ending on March 31, June 30, September 30 or December 31 in any year.

 

“Specifications” shall mean, at any time, the specifications for the Product(s) as determined by the Parties upon completion of the development activities as outlined per this Agreement.

 

“Territory” shall mean the fifty (50) states, the District of Columbia and the territories and possessions comprising the United States of America, including Puerto Rico.

 

2.                                      PRODUCT DEVELOPMENT

 

2.1.                            Product Formulations.  CLP will provide to ANI commercially scalable formulations and related analytical methods for each Product shown on Exhibit A within six (6) months from the Effective Date.  In the event CLP fails to provide to ANI a commercially scalable formulation and related analytical method for any Product shown on Exhibit A within six (6) months from the Effective Date, ANI shall have the right to terminate their obligation to

 

2

 

supply such Product per Section 3.1 below.  In addition CLP will provide all necessary technical assistance related to the transfer of these formulations to ANI as well as the final review and approval of manufacturing and control documents.

 

2.2.                            Raw Materials.  CLP will purchase and ensure that ANI has appropriate quantities of API in order for ANI to meet its technical transfer service obligations pursuant to Section 2.3.  Upon receipt of the API, ANI will perform all necessary API testing at ANI’s expense.  In addition, ANI will ensure proper handling and storage under cGMP conditions of all API received from CLP.  ANI will be responsible, at ANI’s expense, for purchasing and testing of all other raw materials including, but not limited to, Product excipients, packaging, and labeling components.

 

2.3.                            Technical Transfer Services.  ANI will perform all technical transfer services, manufacturing scale-up of the Product formulations provided by CLP and all necessary stability studies as further detailed in Exhibits B, C, D and E.

 

2.4.                            Development Batches.  As sole consideration for the manufacture of any development batches that are not suitable for commercial sale prior to the initial Launch of any Product, CLP will reimburse ANI the applicable amount listed on Schedule 2.4, or the actual material and labor cost of the batches, whichever is greater; however, in no event will the reimbursement exceed [***] of the amount listed on Schedule 2.4.

 

2.5.                            Initial Stability.  In the event any commercial batch fails three (3) month accelerated stability prior to the initial Launch of any Product, CLP will reimburse ANI [***] for each stability pull performed on such failed batch or the actual material and labor cost of the stability pull, whichever is greater; however, in no event will the reimbursement exceed [***] for each such stability pull performed.

 

3.                                      PRODUCT SUPPLY

 

3.1.                            Product Supply.  For the term of this Agreement, ANI will manufacture and package the Product(s) exclusively for CLP as requested by CLP per purchase orders delivered to ANI at least sixty (60) days prior to delivery date.  All purchase orders hereunder shall be on CLP’s standard purchase order form (a copy of which is attached as Schedule 3.1).

 

3.2.                            Batch Sizes.  Purchase orders will be in full batch size quantities, which batch size quantities shall be mutually agreed upon by both Parties and noted in Schedule 3.6.

 

3.3.                            Stability; Shelf Life.  ANI will perform all on-going stability studies and reporting for the Product(s).  All Product delivered by ANI shall have a shelf life that is no more than 2 months less than the maximum shelf life of such Product (other than batches that were under investigation and batches for validation which shall have at least 18 months of shelf life remaining upon delivery to CLP).

 

3.4.                            Raw Materials.  CLP will purchase and ensure that ANI has appropriate quantities of API in order for ANI to meet its manufacturing and packaging obligations pursuant to Section 3.1.  Upon receipt of the API, ANI will perform all necessary API testing at ANI’s expense.  In addition, ANI will ensure proper handling and storage under cGMP conditions of all API received from CLP and will maintain a reasonable Product yield with the API.  Upon the reasonable request of CLP, ANI shall provide to CLP a report of API inventory on-hand.  ANI will be responsible, at ANI’s expense, for purchasing and testing of all other raw materials including, but not limited to, Product excipients, packaging, and labeling components.

 

3.5.                            Regulatory Matters.  All Product(s) supplied to CLP shall be produced under cGMP and in accordance with the Specifications.  ANI shall furnish CLP with a Certificate of Analysis with a cGMP statement to demonstrate that each shipment of Product has been

 

3

 

manufactured under cGMP and other FDA guidelines and in accordance with the Specifications.  At CLP’s reasonable request, ANI shall provide such other data and documentation with respect to the Activities for use by CLP related to any regulatory, manufacturing or other matters surrounding the Product(s).  In addition, CLP reserves the right, at its own expense, to audit the facility of ANI, up to once per Quarter, including its processes, records and other facets of the operation as may be necessary to assure that all applicable regulations have been complied with, and the Specifications have been met.  ANI shall permit duly authorized representatives of CLP to audit all manufacturing and processing operations at reasonable times with a prior appointment.  The right to audit shall commence with the Effective Date of this Agreement.  These audits will be conducted to assure compliance with all pertinent acts, regulations, and guidelines promulgated by the FDA and other regulatory authorities, as well as standards then in effect in the regulatory environment.  Such audits will be permitted during normal business hours and will be performed with a minimum of disruption.

 

3.6.                            Supply Price.  CLP will pay to ANI the supply price associated with each Product as shown in Schedule 3.6 (‘Supply Price”) within [***] of receipt of Product.  With the exception of Profit Share payments as outlined below in Section 4, Supply Price will be the sole consideration for the manufacturing, testing, and packaging of the Product(s), including all on-going stability studies and reporting.

 

3.7.                            Forecasts.  CLP shall provide ANI with 12-month non-binding forecasts within thirty (30) days after the end of each Quarter, with the initial non-binding forecast attached as Schedule 3.7.  Such forecasts shall be revised and extended in each succeeding Quarter.

 

3.8.                            Delivery.  Delivery of Product shall be by means of a common carrier in accordance with the destination and dates set forth in CLP’s purchase order.  Delivery shall be F.O.B. origin, freight prepaid.

 

3.9.                            Rejection and Replacement.  In the event CLP determines that any Product as manufactured and packaged by ANI is Defective, then, within thirty (30) days after delivery of such Product to CLP (or, in the event that such Product is Defective as a result of a latent defect, within thirty (30) days of the discovery of such latent defect), CLP shall provide to ANI a written notice of rejection, specifying in reasonable detail the manner in which Product is Defective (the “Notice of Rejection”).  If no written Notice of Rejection is given to ANI by CLP within such thirty (30) day period, such Product shall be deemed to have been accepted by CLP.  Upon receipt of a Notice of Rejection from CLP and in order to minimize any hardship to CLP’s customers, ANI shall use its best efforts to promptly supply to CLP a quantity of replacement Product meeting the Specifications equal to the size of the lot which CLP claims was Defective so that such replacement Product shall be received by CLP within thirty (30) days following ANI’s receipt of CLP’s Notice of Rejection.  ANI reserves the right to test rejected Product, and if found not to be Defective, will notify CLP accordingly and provide CLP the results of its tests.  If there is disagreement between CLP and ANI on the results, a mutually agreeable third party testing lab will be retained to retest the Product in question.  Cost of the third party testing will be the responsibility of the Party whose test results were inconsistent with the third party testing lab.  All actual and documented costs and expenses directly relating to any rejection and replacement pursuant to this Section 3.9 shall be paid by ANI, or in the case of disagreement between CLP and ANI as to the rejected Product being Defective, by the party whose test results are inconsistent with the third party testing lab.

 

4.                                      PROFIT SHARE

 

4.1.                            Profit Share Rate.  CLP will pay to ANI a profit share equal to [***] the Effective Date of this Agreement.  If the commercial launch is [***] the Effective Date, due to the fault of ANI, [***] is reduced to [***].  A delay on the part of ANI in the launch of the Product(s)

 

4

 

[***] from the Effective Date of this Agreement (“Profit Share”) will result in no profit share [***] and a [***] of the Agreement by [***].

 

4.2.                            Negative Gross Margin.  In the event that during any Quarter in which Gross Margin is negative, such negative amount will be carried forward to future Quarters for the purpose of calculating Gross Margin.  Any negative amounts will be carried forward until such negative amounts are completely offset by Gross Margin from future Quarters.

 

4.3.                            Payments.  Profit Share payments to ANI will be made (i) within [***] after the end of any initial partial Quarter and after the end of the first full Quarter following the Launch of any Product, (ii) within [***] after the end of the subsequent three Quarters and (iii) within [***]  after each month thereafter.  Concurrently with each such Profit Share payment, CLP will deliver to ANI a written report detailing the [***] pursuant to which such payment has been calculated.

 

5.                                      REPRESENTATIONS AND WARRANTIES OF ANI

 

ANI hereby represents and warrants to CLP that:

 

5.1.                            Organization, Power and Authority.  ANI is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware.  ANI has all necessary corporate power and authority to enter into, and be bound by the terms and conditions of this Agreement.

 

5.2.                            Due Authority; No Breach.  The execution, delivery and performance by ANI of this Agreement and each agreement or instrument contemplated by this Agreement, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action by ANI.  This Agreement is, and each agreement or instrument contemplated by this Agreement, when executed and delivered by ANI in accordance with the provisions hereof, will be (assuming the due execution and delivery hereof and thereof by CLP) the legal, valid and binding obligation of ANI, in each case enforceable against ANI in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization, or similar laws from time to time in effect which affect the enforcement of creditors’ rights generally and by legal and equitable limitations on the availability of specific performance and other equitable remedies against ANI.  All persons who have executed this Agreement on behalf of ANI, or who will execute on behalf of ANI any agreement or instrument contemplated by this Agreement, have been duly authorized to do so by all necessary corporate action.  Neither the execution and delivery of this Agreement or any such other agreement or instrument by ANI, nor the performance of the obligations contemplated hereby and thereby, will (i) conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of the articles of incorporation or by-laws of ANI or any material contract or any other material obligation to which ANI is a party or to which it is subject or bound, or (ii) violate any judgment, order, injunction, decree or award of any court, administrative agency, arbitrator or governmental body against, or affecting or binding upon, ANI or upon the securities, property or business of ANI, or (iii) constitute a violation by ANI of any applicable law or regulation of any jurisdiction as such law or regulation relates to ANI, or to the property or business of ANI except for such conflict, acceleration, default, breach or violation that is not reasonably likely to have a material adverse effect on ANI’s ability to perform its obligations under this Agreement or under any agreement or instrument contemplated hereby.

 

5.3.                            Litigation.  There are no pending or, to the best of ANI’s knowledge, threatened judicial, administrative or arbitral actions, claims, suits or proceedings pending as of the date hereof against ANI relating to the Activities which, either individually or together with any

 

5

 

other, would have a material adverse effect on the Activities or the ability of ANI to perform its obligations under this Agreement or any agreement or instrument contemplated hereby.  There are no pending, and ANI does not presently contemplate bringing, any actions or suits relating to the Activities against others.

 

5.4.                            Governmental Approval.  No consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any governmental authority is required in connection with the execution, delivery and performance of this Agreement, or any agreement or instrument contemplated by this Agreement, by ANI or the performance by ANI of its obligations contemplated hereby and thereby.

 

5.5.                            Brokerage.  No broker, finder or similar agent has been employed by or on behalf of ANI, and no Person with which ANI has had any dealings or communications of any kind is entitled to any brokerage commission, finder’s fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby.

 

6.                                      REPRESENTATIONS AND WARRANTIES OF CLP

 

CLP hereby represents and warrants to ANI that:

 

6.1.                            Organization, Power and Authority.  CLP is a limited liability corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin.  CLP has all necessary corporate power and authority to enter into, and be bound by the terms and conditions of this Agreement.

 

6.2.                            Due Authority; No Breach.  The execution, delivery and performance by CLP of this Agreement, and each agreement or instrument contemplated by this Agreement, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action by CLP.  This Agreement is, and each agreement or instrument contemplated by this Agreement, when executed and delivered by CLP in accordance with the provisions hereof, will be (assuming due execution and delivery hereof and thereof by AM) the legal, valid and binding obligation of CLP, in each case enforceable against CLP in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization, or similar laws from time to time in effect which affect the enforcement of creditors’ rights generally and by legal and equitable limitations on the availability of specific performance and other equitable remedies against CLP.  All persons who have executed this Agreement on behalf of CLP, or who will execute on behalf of CLP any agreement or instrument contemplated by this Agreement, have been duly authorized to do so by all necessary corporate action.  Neither the execution and delivery of this Agreement by CLP, or any such other agreement or instrument by CLP, nor the performance of the obligations contemplated hereby and thereby, will (i) conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of its articles of organization or by-laws or any material contract or any other material obligation to which CLP is a party or to which it is subject or bound, or (ii) violate any judgment, order, injunction, decree or award of any court, administrative agency, arbitrator or government body against, or affecting or binding upon, CLP or upon the securities, property or business of CLP, or (iii) constitute a violation by CLP of any applicable law or regulation of any jurisdiction as such law or regulation relates to CLP or to the property or business of CLP, except for such conflict, acceleration, default, breach or violation that is not reasonably likely to have a material adverse effect on CLP’s ability to perform its obligations under this Agreement or any agreement or instrument contemplated hereby.

 

6.3.                            Litigation.  There are no pending or, to the best of CLP’s knowledge, threatened judicial, administrative or arbitral actions, claims, suits or proceedings pending as of the date hereof against CLP relating to the Activities which, either individually or together with any

 

6

 

other, would have a material adverse effect on the Activities or the ability of CLP to perform its obligations under this Agreement or any agreement or instrument contemplated hereby.  There are no pending, and CLP does not presently contemplate bringing, any actions or suits relating to the Activities against others

 

6.4.                            Governmental Approval.  No consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any governmental authority is required in connection with the execution, delivery and performance of this Agreement, or any agreement or instrument contemplated by this Agreement, by CLP or the performance by CLP of its obligations contemplated hereby and thereby.

 

6.5.                            Brokerage.  No broker, finder or similar agent has been employed by or on behalf of CLP and no Person with which CLP has had any dealings or communications of any kind is entitled to any brokerage commission, finders fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby.

 

7.                                      ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

 

7.1.                            Governmental Filings.  ANI and CLP each agree to prepare and file whatever filings, listings, requests or applications are required to be filed with any governmental authority in connection with this Agreement or the Product(s) and to cooperate with one another as reasonably necessary to accomplish the foregoing.

 

7.2.                            Compliance with Law.  CLP and ANI shall each comply with all federal, state and local laws and regulations applicable to the Activities related to the Product(s) in the Territory or the performance of their respective obligations hereunder.  ANI and CLP each shall keep all records and reports required to be kept by applicable laws and regulations, and each shall make its facilities available at reasonable times during business hours for inspection by representatives of governmental agencies.  ANI and CLP each shall notify the other within forty-eight (48) hours of receipt of any notice or any other indication whatsoever of any FDA or other governmental agency inspection, investigation or other inquiry, or other material notice or communication of any type, involving the Product(s).  CLP and ANI shall cooperate with each other during any such inspection, investigation or other inquiry including, but not limited to, allowing upon request a representative of the other to be present during the applicable portions of any such inspection, investigation or other inquiry and providing copies of all relevant documents.  CLP and ANI shall discuss any written response to observations or notifications received in connection with any such inspection, investigation or other inquiry and each shall give the other an opportunity to comment upon any proposed response before it is made.  In the event of disagreement concerning the form or content of such response, however, ANI shall be responsible for deciding the appropriate form and content of any response with respect to any of its cited activities and CLP shall be responsible for deciding the appropriate form and content of any response with respect to any of its cited activities.

 

7.3.                            Recall.  CLP and ANI shall consult with one another as to all decisions concerning recall or withdrawal of Product from the market, including, but not limited to, determining whether or not to make any such recall or withdrawal, the timing and scope thereof, and the means of conducting any recall or withdrawal.  The party requesting any recall or withdrawal must receive the prior written consent of the other party, such consent not to be unreasonably withheld prior to initiating such recall or withdrawal.  No consent shall be necessary if the recall or withdrawal is requested by the FDA or other governmental authority.  ANI shall bear the costs (including but not limited to, shipping and product credits) for any recall or withdrawal due to the failure of the product integrity as a result of ANI related deficiencies in manufacturing or packaging of the Product(s), including but not limited to, ANI’s failure to comply with this Agreement or the Specifications.  The costs for any other recall or withdrawal shall be the responsibility of CLP.

 

7

 

7.4.                            Publicity.  The parties agree that no publicity release or announcement concerning the transactions contemplated hereby shall be issued without the advance written consent of the other party, except as such release or announcement may be required by law, in which case the party making the release or announcement shall, before making any such release or announcement, afford the other party a reasonable opportunity to review and comment upon such release or announcement.

 

7.5.                            Cooperation.  If either party shall become engaged in or participate in any investigation, claim, litigation or other proceeding with any third party, including the FDA, relating in any way to the Product(s), the other party shall cooperate in all reasonable respects with such party in connection therewith, including, without limitation, using its reasonable efforts to make available to the other such employees who may be helpful with respect to such investigation, claim, litigation or other proceeding.

 

7.6.                            Non-Compete.  Except as provided in this Agreement, ANI will not directly or in-directly formulate, develop, manufacture, or sell any pharmaceutical product containing [***] or directly or in-directly assist any other party with the formulation, development, manufacture, or sale of any pharmaceutical product containing [***].

 

7.7.                            Liability Insurance.  At and after Launch, ANI shall use its best efforts to obtain and carry in full force and effect product liability insurance in respect of the Product(s) in the amount of [***] per occurrence, [***] in the aggregate.  At and after Launch, CLP shall use its best efforts to obtain and carry in full force and effect product liability insurance in respect of the Product(s) in the amount of [***] per occurrence, [***] in the aggregate.

 

7.8.                            Breach of Covenant.  Neither ANI nor CLP shall be deemed to be in breach of any covenant contained in this Section 7 if such party’s deemed breach is the result of any action or inaction on the part of the other party.

 

8.                                      INDEMNIFICATION

 

8.1.                            ANI shall indemnify, defend and hold CLP (and its directors, officers, employees, and Affiliates) harmless from and against any and all Damages incurred or suffered by CLP (and its directors, officers, employees, and Affiliates) as a consequence of.  (i) any breach of any representation or warranty made by ANI in this Agreement or any agreement, instrument or document delivered by ANI pursuant to the terms of this Agreement; (ii) any failure to perform duly and punctually any covenant, agreement or undertaking on the part of ANI contained in this Agreement; or (iii) any act or omission of ANI with respect to the operation of ANI’s business, or the handling, manufacturing, sale, consumption or use of the Product(s) by ANI.

 

8.2.                            CLP shall indemnify, defend and hold ANI (and its directors, officers, employees, and Affiliates) harmless from and against any and all Damages incurred or suffered by ANI (and its directors, officers, employees, and Affiliates) as a consequence of: (i) any breach of any representation or warranty made by CLP in this Agreement or any agreement, instrument or document delivered by CLP pursuant to the terms of this Agreement; (ii) any failure to perform duly and punctually any covenant, agreement or undertaking on the part of CLP contained in this Agreement; or (iii) any act or omission of CLP with respect to the operation of CLP’s business or the handling, manufacturing, sale, consumption or use of the Product(s) by CLP.

 

8.3.                            Notice and Opportunity to Defend.  Promptly after receipt by a party hereto of notice of any claim which could give rise to a right to indemnification pursuant to Sections 8.1 or 8.2, such party (the “Indemnified Party”) shall give the other party (the “Indemnifying Party”) written notice describing the claim in reasonable detail.  The failure of an Indemnified Party to give notice in the manner provided herein shall not relieve the Indemnifying Party of its obligations under this Section, except to the extent that such

 

8

 

failure to give notice materially prejudices the Indemnifying Party’s ability to defend such claim.  The Indemnifying Party shall have the right, at its option, to compromise or defend, at its own expense and by its own counsel, any such matter involving the asserted liability of the party seeking such indemnification.  If the Indemnifying Party shall undertake to compromise or defend any such asserted liability, it shall promptly (and in any event not less than 10 days after receipt of the Indemnified Party’s original notice) notify the Indemnified Party in writing of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise or defense against any such asserted liability.  All reasonable costs and expenses incurred in connection with such cooperation shall be borne by the Indemnifying Party.  If the Indemnifying Party elects not to compromise or defend the asserted liability, fails to notify the Indemnified Party of its election to compromise or defend as herein provided, fails to admit its obligation to indemnify under this Agreement with respect to the claim, or, if in the reasonable opinion of the Indemnified Party, the claim could result in the Indemnified Party becoming subject to injunctive relief or relief other than the payment of money damages that could materially adversely affect the ongoing business of the Indemnified Party in any manner, the Indemnified Party shall have the right, at its option, to pay, compromise or defend such asserted liability by its own counsel and its reasonable costs and expenses shall be included as part of the indemnification obligation of the Indemnifying Party hereunder.  Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnified Party may settle or compromise any claim over the objection of the other; provided, however, that consent to settlement or compromise shall not be unreasonably withheld.  In any event, the Indemnified Party and the Indemnifying Party may participate, at their own expense, in the defense of such asserted liability.  If the Indemnifying Party chooses to defend any claim, the Indemnified Party shall make available to the Indemnifying Party any books, records or other documents within its control that are necessary or appropriate for such defense.  Notwithstanding anything to the contrary in this Section 8.3, (i) the party conducting the defense of a claim shall (A) keep the other party informed on a reasonable and timely basis as to the status of the defense of such claim (but only to the extent such other party is not participating jointly in the defense of such claim), and (B) conduct the defense of such claim in a prudent manner, and (ii) the Indemnifying Party shall not cease to defend, settle or otherwise dispose of any claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld).

 

8.4.                            Indemnification Payments and Obligations.  No Indemnifying Party will have any obligations under Sections 8.1 or 8.2 until the cumulative aggregate amount of Damages incurred or suffered by the Indemnified Party which the Indemnifying Party is otherwise subject to under this Agreement exceeds [***] at which time the entire cumulative aggregate amount of such Damages shall be covered.  The provisions of this Section 8.4 shall not limit or otherwise affect the obligations of any Indemnifying Party under any other Section of this Agreement.

 

8.5.                            The amount of any Damages for which indemnification is provided under Section 8 shall be reduced to take account of any net tax benefit and shall be increased to take account of any net tax detriment arising from the incurrence or payment of any such Damages or from the receipt of any such indemnification payment and shall be reduced by the insurance proceeds received and any other amount recovered, if any, by the Indemnified Party with respect to any Damages; provided, however, that an Indemnified Party shall not be subject to an obligation to pursue an insurance claim relating to any Damages for which indemnification is sought hereunder.  If any Indemnified Party shall have received any payment pursuant to this Section 8 with respect to any Damages and shall subsequently have received insurance proceeds or other amounts with respect to such Damages, then such Indemnified Party shall pay to the Indemnifying Party an amount equal to the difference (if any) between (i) the sum of the amount of those insurance proceeds or other amounts received and the amount of the payment by such Indemnifying Party pursuant to this Section 8 with respect to such Damages and (ii) the

 

9

 

amount necessary to fully and completely indemnify and hold harmless such Indemnified Party from and against such Damages; provided, however, in no event will such Indemnified Party have any obligation pursuant to this sentence to pay to such Indemnifying Party an amount greater than the amount of the payment by such Indemnifying Party pursuant to this Section 8 with respect to such Damages.

 

8.6.                            Upon the final determination of liability and the amount of the indemnification payment under this Section 8, the appropriate party shall pay to the other, as the case may be, within 10 business days after such determination, the amount of any claim for indemnification made hereunder.

 

8.7.                            Survival.  The provisions of Section 8 shall survive any termination of this Agreement.  Each Indemnified Party’s rights under Section 8 shall not be deemed to have been waived or otherwise affected by such Indemnified Party’s waiver of the breach of any representation, warranty, agreement or covenant contained in or made pursuant this Agreement, unless such waiver expressly and in writing also waives any or all of the Indemnified Party’s right under Section 8.

 

9.                                      TERMINATIONS

 

The term of this Agreement shall begin upon the Effective Date of this Agreement and, unless sooner terminated as hereinafter provided, shall end upon the ten (10) year anniversary of the Effective Date.  Notwithstanding the foregoing, this Agreement may be terminated as follows:

 

9.1.                            Termination for Insolvency.  If either CLP or ANI (i) makes a general assignment for the benefit of creditors or becomes insolvent; (ii) files an insolvency petition in bankruptcy; (iii) petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets; (iv) commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors; or (v) becomes a party to any proceeding or action of the type described above in (iii) or (iv) and such proceeding or action remains undismissed or unstayed for a period of more than 60 days, then the other party may by written notice terminate this Agreement in its entirety with immediate effect.

 

9.2.                            Termination for Default.  CLP and ANI each shall have the right to terminate this Agreement for default upon the other party’s failure to comply in any material respect with the terms and conditions of this Agreement.  At least 60 days prior to any such termination for default, the party seeking to so terminate shall give the other party written notice of its intention to terminate this Agreement in accordance with the provisions of this Section 9.2, which notice shall set forth the default(s) which form the basis for such termination.  If the defaulting party fails to correct such default(s) within 60 days after receipt of notification, then such party immediately may terminate this Agreement.  This Section 9.2 shall not be exclusive and shall not be in lieu of any other remedies available to a party hereto for any default hereunder on the part of the other party.

 

9.3.                            Continuing Obligations.  Termination of this Agreement for any reason shall not relieve the parties of any obligation accruing prior thereto with respect to the Product(s) and any ongoing obligations hereunder with respect to the remaining Product(s) and shall be without prejudice to the rights and remedies of either party with respect to any antecedent breach of the provisions of this Agreement.  Without limiting the generality of the foregoing, no termination of this Agreement, whether by lapse of time or otherwise, shall serve to terminate the obligations of the parties hereto under Sections 7.3, 7.4, 7.5, 7,7, 8, 9.3, 10 hereof, and such obligations shall survive any such termination.

 

10

 

10.                               MISCELLANEOUS

 

10.1.                     Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that neither ANI nor CLP may assign any of its rights, duties or obligations hereunder without the prior written consent of the other, which consent shall not be unreasonably withheld, except that no prior written consent shall be required in the event that a third party acquires substantially all of the assets or outstanding shares of, or merges with, CLP or ANI, as the case may be.

 

10.2.                     Notices.  All notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or facsimile and confirmed in writing, or mailed first class, postage prepaid, by registered or certified mail, return receipt requested (mailed notices and notices sent by facsimile shall be deemed to have been given on the date received) as follows:

 

If to CLP as follows:  
 County Line Pharmaceuticals, LLC
 13890 Bishop’s Drive, Suite 410
 Brookfield, WI 53005
 ATTN:  President
 Facsimile:  866-229-7220

 

If to ANI as follows:  
 ANI Pharmaceuticals
 7131 Ambassador Road Suite 150
 Woodlawn, Maryland 21244 
 ATTN:  President
 Facsimile:  410-281-9451

 

10.3.                     Waiver; Remedies.  Any term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by a written instrument executed by such party.  No delay on the part of ANI or CLP in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either ANI or CLP of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.  The indemnification provided in Section 8 shall be the sole remedy available for any Damages arising out of or in connection with this Agreement except for any rights or remedies which the parties hereto may otherwise have in equity.

 

10.4.                     Survival of Representations.  Each of the representations and warranties made in this Agreement shall continue for the term of this Agreement and shall thereafter be extinguished.

 

10.5.                     Independent Contractors.  The parties hereto are independent contractors and nothing contained in this Agreement shall be deemed to create the relationship of partners, joint venturers, or of principal and agent, franchisor and franchisee, or of any association or relationship between the parties other than as expressly provided in this Agreement.  CLP acknowledges that it does not have, and CLP shall not make representations to any third party, either directly or indirectly, indicating that CLP has any authority to act for or on behalf of ANI or to obligate ANI in any way whatsoever.  ANI acknowledges that it does not have, and it shall not make any representations to any third party, either directly or indirectly, indicating that it has any authority to act for or on behalf of CLP or to obligate CLP in any way whatsoever.

 

11

 

10.6.                     Entire Agreement.  Except for the Mutual Confidentiality and Non-Disclosure Agreement dated September 17, 2008 (and as may be further amended from time to time) entered into by the parties, which remains in full force and effect, this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements or understandings of the parties relating thereto.

 

10.7.                     Amendment.  This Agreement may be modified or amended only by written agreement of the parties hereto.

 

10.8.                     Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument.

 

10.9.                     Governing Law.  This Agreement shall be governed and construed in accordance with the laws of the State of Wisconsin excluding any choice of law rules which may direct the application of the law of another state.

 

10.10.              Arbitration.  Any dispute, controversy or claim arising out of or in connection with this Agreement shall be determined and settled by arbitration in Wisconsin pursuant to the Rules of Arbitration then in effect of the American Arbitration Association.  Any award rendered shall be final and conclusive upon the parties and a judgment thereon may be entered in a court having competent jurisdiction.  Any arbitration hereunder shall be (i) submitted to an arbitration tribunal comprised of three (3) independent members knowledgeable in the pharmaceutical industry, one of whom shall be selected by CLP, one of whom shall be selected by ANI, and one of whom shall be selected by the other two arbitrators; (ii) allow for the parties to request discovery pursuant to the rules then in effect under the Federal Rules of Civil Procedure for a period not to exceed 90 days; and (iii) require the award to be accompanied by findings of fact and a statement of reasons for the decision.  Each party shall bear its own costs and expenses, including attorney’s fees incurred in any dispute which is determined and/or settled by arbitration pursuant to this Section.  Except where clearly prevented by the area in dispute, both parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved.  Arbitration shall not prevent any party from seeking injunctive relief where such remedy is an appropriate form of remedy under the circumstances.

 

10.11.              Captions.  All section titles or captions contained in this Agreement, in any Schedule referred to herein or in any Exhibit annexed hereto, and the table of contents, if any, to this Agreement are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement.

 

10.12.              No Third-Party Rights.  No provision of this Agreement shall be deemed or construed in any way to result in the creation of any rights or obligation in any Person not a party or not affiliated with a party to this Agreement.

 

10.13.              Severability.  If any provision of this Agreement is found or declared to be invalid or unenforceable by any court or other competent authority having jurisdiction, such finding or declaration shall not invalidate any other provision hereof, and this Agreement shall thereafter continue in full force and effect.

 

10.14.              Attachments.  All Schedules, Exhibits and other attachments to this Agreement are by this reference incorporated herein and made a part of this Agreement.

 

10.15.              Force Majeure.  In the event that a party is prevented from carrying out its obligations under this Agreement by an event of Force Majeure, then such party’s performance of its obligations under this Agreement shall be excused during the period of such event and for a subsequent reasonable period of recovery.

 

12

 

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

 

 

	
 
    	
 
    	
County   Line Pharmaceuticals, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard Losiniecki
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Richard   Losiniecki
    
	
 
    	
Title:
    	
President   and CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
AM   Pharmaceuticals, Inc
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas L. Anderson
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Thomas   L. Anderson
    
	
 
    	
Title:
    	
President   and CEO
    
				

 

13

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Exhibit A

 

Products

 

[***]

 

A-1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Exhibit B

 

Technology Transfer and Manufacturing of [***] for County Line Pharmaceuticals (CLP) [***]

 

Project Definition and Scope

 

ANI Pharmaceuticals (ANI) to transfer formulation and analytical methods provided by CLP in preparation for commercial marketing of product.  All transfer, development, analytical and manufacturing decisions will be made in conjunction with CLP.  The intent is to market the product upon acceptable 3 month accelerated and room temperature stability results and complete process and packaging validation under cGMP conditions.  The tablets will have the following attributes:

 

[***]

 

Raw Materials

 

·                  Test and release [***] per USP specifications with validated methods

·                  Order all excipients and test and release per specifications with validated methods

 

Technology Transfer

 

·                  Transfer CLP formulation to AM

·                  Scale-up manufacturing process

·                  Manufacture one (1) batch for initial stability testing (small-scale or full-scale, TBD)

·                  Determine any necessary in-process tests and specifications

·                  Perform all necessary analytical testing

 

Manufacturing

 

·                  Manufacture with batch size determined by ANI equipment

 

Specifications and Analytical Methods

 

·                  Develop and validate cleaning validation analytical method

·                  Implement specifications for API and excipients

·                  Implement finish product specifications, per USP

 

Packaging

 

·                  HDPE bottles of 100

·                  Screw cap with induction foil seal

·                  Label

·                  Outsert

·                  No desiccant

 

Stability

 

·                  Initial stability:   One batch accelerated conditions with testing at 0, 1, 2 and 3 months and controlled room temperature conditions with testing at 0, 3, 6, 9, 12, 18, 24 and 36 months

·                  Ongoing stability:   One batch per year controlled room temperature

 

Validation

 

·                  Process and packaging validation according to ANI standard validation process

·                  Cleaning

·                  Analytical

 

B-1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Exhibit C

 

Technology Transfer and Manufacturing of [***] for County Line Pharmaceuticals (CLP) [***]

 

Project Definition and Scope

 

ANI Pharmaceuticals (ANI) to transfer formulation and analytical methods provided by CLP in preparation for commercial marketing of product.  All transfer, development, analytical and manufacturing decisions will be made in conjunction with CLP.  The intent is to market the product upon acceptable 3 month accelerated and room temperature stability results and complete process and packaging validation under cGMP conditions.  The tablets will have the following attributes:

 

[***]

 

Raw Materials

 

·                  Test and release [***] per USP specifications with validated methods

·                  Order all excipients and test and release per specifications with validated methods

 

Technology Transfer

 

·                  Transfer CLP formulation to ANI

·                  Scale-up manufacturing process

·                  Manufacture one (1) batch for initial stability testing (small-scale or full-scale, TBD)

·                  Determine any necessary in-process tests and specifications

·                  Perform all necessary analytical testing

 

Manufacturing

 

·                  Manufacture with batch size based on ANI equipment

 

Specifications and Analytical Methods

 

·                  Develop and validate cleaning validation analytical method

·                  Implement specifications for API and excipients

·                  Implement finish product specifications, per USP

 

Packaging

 

·                  HDPE bottles of 100

·                  Screw cap with induction foil seal

·                  Label

·                  Outsert

·                  Cotton/rayon

·                  No desiccant

 

Stability

 

·                  Initial stability:   One batch accelerated conditions with testing at 0, 1, 2 and 3 months and controlled room temperature conditions with testing at 0, 3, 6, 9, 12, 18, 24 and 36 months

·                  Ongoing stability:   One batch per year controlled room temperature

 

Validation

 

·                  Process and packaging validation according to ANI standard validation process

·                  Cleaning

·                  Analytical

 

C-1

 

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

 

Exhibit D

 

Technology Transfer and Manufacturing of [***] for County Line Pharmaceuticals (CLP) [***]

 

Project Definition and Scope

 

ANI Pharmaceuticals (ANI) to transfer formulation and analytical methods provided by CLP in preparation for commercial marketing of product.  All transfer, development, analytical and manufacturing decisions will be made in conjunction with CLP.  The intent is to market the product upon acceptable 3 month accelerated and room temperature stability results and complete process and packaging validation under cGMP conditions.  The tablets will have the following attributes:

 

[***]

 

Raw Materials

 

·                  Test and release [***] per USP specifications with validated methods

·                  Order all excipients and test and release per specifications with validated methods

 

Technology Transfer

 

·                  Transfer CLP formulation to ANI

·                  Scale-up manufacturing process

·                  Manufacture one (1) batch for initial stability testing (small-scale or full-scale, TBD)

·                  Determine any necessary in-process tests and specifications

·                  Perform all necessary analytical testing

 

Manufacturing

 

·                  Manufacture with batch size based on ANI equipment

 

Specifications and Analytical Methods

 

·                  Develop and validate cleaning validation analytical method

·                  Implement specifications for API and excipients

·                  Implement finish product specifications, per USP

 

Packaging

 

·                  HDPE bottles of 100

·                  Screw cap with induction foil seal

·                  Label

·                  Outsert

·                  Cotton/rayon

·                  No desiccant

 

Stability

 

·                  Initial stability:  One batch accelerated conditions with testing at 0, 1, 2 and 3 months and controlled room temperature conditions with testing at 0, 3, 6, 9, 12, 18, 24 and 36 months

·                  Ongoing stability:  One batch per year controlled room temperature

 

Validation

 

·                  Process and packaging validation according to ANI standard validation process

·                  Cleaning

·                  Analytical

 

D-1

 

Exhibit E

 

Technology Transfer and Manufacturing of [***] for County Line Pharmaceuticals (CLP) [***]

 

Project Definition and Scope

 

ANI Pharmaceuticals (ANI) to transfer formulation and analytical methods provided by CLP in preparation for commercial marketing of product.  All transfer, development, analytical and manufacturing decisions will be made in conjunction with CLP.  The intent is to market the product upon acceptable 3 month accelerated and room temperature stability results and complete process and packaging validation under cGMP conditions.  The tablets will have the following attributes:

 

[***]

 

Raw Materials

 

·                  Test and release [***] per USP specifications with validated methods

·                  Order all excipients and test and release per specifications with validated methods

 

Technology Transfer

 

·                  Transfer CLP formulation to ANI

·                  Scale-up manufacturing process

·                  Manufacture one (1) batch for initial stability testing (small-scale or full-scale, TBD)

·                  Determine any necessary in-process tests and specifications

·                  Perform all necessary analytical testing

 

Manufacturing

 

·                  Manufacture with batch size based on ANI equipment

 

Specifications and Analytical Methods

 

·                  Develop and validate cleaning validation analytical method

·                  Implement specifications for API and excipients

·                  Implement finish product specifications, per USP, adding a dissolution specification (specification to be provided by CLP)

 

Packaging

 

·                  HDPE bottles of 100

·                  Screw cap with induction foil seal

·                  Label

·                  Outsert

·                  Cotton/rayon

·                  1 g canister desiccant

 

Stability

 

·                  Initial stability:   One batch accelerated conditions with testing at 0, 1, 2 and 3 months and controlled room temperature conditions with testing at 0, 3, 6, 9, 12, 18, 24 and 36 months

·                  Ongoing stability:   One batch per year controlled room temperature

 

Validation

 

·                  Process and packaging validation according to ANI standard validation process

·                  Cleaning

·                  Analytical

 

E-1

 

Schedule 2.4

 

Development Batch Costs

 

[***]

 

The amounts above represent full development batch size (batch size of [***]).  The above amounts will be adjusted pro-rata for any development batches produced in a scale less than full batch size.

 

2.2-1

 

 

3.1-1

 

TERMS AND CONDITIONS

 

1.                                      Definitions:  (a) Buyer means County Line Pharmaceuticals, LLC (b) Seller means any person, firm, or corporation to whom this Purchase Order is directed.

2.                                      Terms:  This Purchase Order constitutes an order to buy goods, equipment, material, supplies, or services according to the description and other terms set forth on its face.  No additional or different terms offered by the Seller shall be or become part of this order, nor shall this order be modified without the express written approval of Buyer.

3.                                      Shipping Instructions:  All shipments must contain packing lists giving descriptions of material, quantity and purchase order number.  If shipment is not made F.O.B. origin, the original bill of lading must be furnished with invoices.  Buyer’s count will be accepted as final on all shipments not accompanied by packing lists.

4.                                      Risk of Loss:  The risk of loss from any casualty to the goods regardless of the cause, shall be on Seller until the goods have been received, inspected and accepted by the Company.

5.                                      Delays in Delivery:  Time is of the essence.  If Seller for any reason does not comply with the Buyer’s delivery schedule, Buyer in addition to remedies provided by law, at its option may either approve and revise delivery schedule or, may terminate the order without liability on account thereof.

6.                                      Warranty:  Seller expressly warrants that all goods, equipment, material, supplies or services covered by this order will conform to the specification, drawings, samples or other description furnished or specified by the Buyer, shall be of good material and workmanship and free from defects.

7.                                      Rejections:  If any of the goods, equipment, material or supplies are found within thirty (30) days after delivery to the Buyer to be defective in material or workmanship or otherwise not in conformity with the requirements of the order, Buyer, in addition to any other rights which it may have under warranties or otherwise, shall have the right to reject and return such goods at Seller’s expense, such goods not to be replaced without suitable written authorization from Buyer.

8.                                      Compliance with Laws:  Seller shall comply with all applicable, State, Federal and local laws, rules and regulations.

9.                                      Termination:  (a) The Buyer may terminate work on this order for its own convenience in whole or in part by written or telegraphic notice at 30 days prior to requested ship date.  In that event, any claim arising out of such termination shall be on the basis of the Seller’s substantiated costs and commitments properly incurred or made, with due allowance for salvage value.  (b) If the Seller ceases to conduct its operations in the normal course of business including liability to meet its obligation as they mature or if any proceeding under the bankruptcy or insolvency laws is brought by or against the Seller, a receiver for the Seller is appointed or applied for an assignment for the benefit of Creditors is made by the Seller, Buyer may terminate the order without liability except for the deliveries previously made or for goods covered by the order then completed and subsequently delivered in accordance with the terms of the order.

10.                               Non-Waiver:  Any waiver of strict compliance with the provisions of this order shall not be deemed a waiver of the Buyer’s rights to insist upon strict compliance thereafter.

11.                               Subcontracting:   In the event the Seller subcontracts all or any part of this order, Seller remains completely responsible for price, delivery and quality.

 

3.1-2

 

Schedule 3.6

 

Supply Price and Batch Size

 

[***]

 

3.6-1

 

Schedule 3.7

 

Initial Non-Binding Forecast - [***]

 

[***]

 

3.7-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}]]