Document:

EXHIBIT
10.38

 

MANUFACTURING AGREEMENT

between

 

 

ABBOTT GMBH & CO. KG

and

 

RELIANT PHARMACEUTICALS, LLC

 

 

Dated as of December 3, 2003

 

 

 

MANUFACTURING AGREEMENT

This Manufacturing Agreement (this “Agreement”)
is made and entered into as of December 3, 2003, by and between Reliant
Pharmaceuticals, LLC, a Delaware limited liability company (“Buyer”),
and Abbott GmbH & Co. KG (“Seller”). Buyer and Seller are sometimes
referred to hereinafter individually, as a “Party” and collectively as
the “Parties.”

 

W I T N E S S E T H:

 

WHEREAS, Buyer and Abbott Laboratories, an Illinois
corporation (“Parent”), have entered into an Asset Purchase Agreement of
even date herewith (the “Asset Purchase Agreement”); and

 

WHEREAS, in connection with the transactions contemplated
by the Asset Purchase Agreement, Buyer desires that Seller Manufacture (as
defined herein) and supply certain Products to Buyer, and Seller desires to
Manufacture and supply such Products to Buyer in accordance with this
Agreement.

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants, agreements and provisions herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties, intending to be legally bound, hereby agree
as follows:

 

ARTICLE
1 - 

DEFINITIONS

Any capitalized terms used but not otherwise defined
in this Agreement shall have the meanings set forth in the Asset Purchase
Agreement. In addition to the terms defined above and other terms defined
elsewhere in this Agreement, the following capitalized terms shall have the
following meanings when used herein:

 

1.1                               “Act”
shall mean collectively the Federal Food, Drug, and Cosmetic Act of 1938,
including any amendments thereto, and all regulations rules, guidelines and
procedures promulgated thereunder, and the Federal Controlled Substances Act,
including all amendments thereto, and all regulations rules, guidelines and
procedures promulgated thereunder.

 

1.2                               “Affiliate” means, with respect to any Person,
any other Person directly or indirectly controlling or controlled by, or under
direct or indirect common control with, such Person. For purposes of this
definition, a Person shall be deemed to control another Person if it owns or
controls more than fifty percent (50%) of the voting equity of the other Person
(or other comparable ownership if the Person is not a corporation), provided
that with respect to Seller, the term “Affiliate” shall specifically exclude
TAP Pharmaceutical Products Inc., TAP Finance Inc. and TAP Pharmaceuticals Inc.

 

1.3                               “Agreement”
shall have the meaning set forth in the introductory paragraph.

 

1.4                               “Approved
Transaction” shall have the meaning set forth in Section 7.3.

 

2

 

1.5                               “Asset
Purchase Agreement” shall have the meaning set forth in the Recitals.

 

1.6                               “Business
Day” shall mean any day, other than a Saturday or Sunday, on which
commercial banks are not authorized by law to close in Chicago, Illinois or New
York, New York.

 

1.7                               “Buyer”
shall have the meaning set forth in the introductory paragraph.

 

1.8                               “Buyer
Indemnified Party(ies)” shall have the meaning set forth in Section
3.3(a).

 

1.9                               “cGMP”  shall mean the quality systems and current
good manufacturing practices set forth in 21 C.F.R. (Parts 210 and 211) and all
applicable directives, Regulatory Requirements (as defined below) and FDA (as
defined below) rules, regulations, guides, guidance, each as amended from time
to time and in effect during the Term of this Agreement.

 

1.10                        “Contract
Year” shall mean the twelve (12) month period coinciding with the calendar
year. Notwithstanding the foregoing, for purposes of this Agreement, the first
Contract Year of this Agreement shall mean the period from the Effective Date
to December 31, 2003. Thereafter, each Contract Year shall be from January 1
through December 31 of each calendar year during the Term of this Agreement.

 

1.11                        “Discretionary
Changes” has the meaning set forth in Section 4.7(c).

 

1.12                        “Effective
Date” shall mean the Closing (as defined in the Asset Purchase Agreement)
of the transactions contemplated in the Asset Purchase Agreement.

 

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

 

1.14                        “Firm
Order” shall mean a firm Buyer obligation to purchase and take delivery of
Products, and a firm Seller obligation to Manufacture, sell and deliver
Products.

 

1.15                        “First
Extension Term” shall have the meaning set forth in Section 6.1(b).

 

1.16                        “Forecast”
shall have the meaning set forth in Section 2.2(b)(i).

 

1.17                        “Governmental Authority” means any nation or
government, any state, regional, local or other political subdivision thereof,
any supranational organization of sovereign states, and any entity, department,
commission, bureau, agency, authority, board, court, official or officer,
domestic or foreign, exercising executive, judicial, regulatory or
administrative functions of or pertaining to government.

 

1.18                        “Initial
Firm Order” shall have the meaning set forth in Section 2.2(a).

 

1.19                        “Initial
Forecast” shall have the meaning set forth in Section 2.2(a).

 

1.20                        “Initial
Term” shall have the meaning set forth in Section 6.1(a).

 

3

 

1.21                        “Law” means each provision of any
currently existing federal, state, local or foreign law, statute, ordinance,
order, code, rule or regulation, promulgated or issued by any Governmental
Authority, as well as any binding judgments, decrees, injunctions or agreements
issued or entered into by any Governmental Authority.

 

1.22                        “Losses” shall have the
meaning set forth in Section 3.3(a).

 

1.23                        “Manufacturing”
or “Manufacture” shall mean the activities associated with producing a
finished dosage form Product including, but not limited to, Materials
acquisition, manufacturing, packaging, testing, handling and labeling/trade
dress of finished dosage form Product.

 

1.24                        “Materials”
means all ingredients, packaging supplies, printed materials and all other
components used to Manufacture the Products.

 

1.25                        “New
Products” shall have the meaning set forth in Section 2.5.

 

1.26                        “Non-Standard
Costs” means the dollar value of the costs incurred by the Seller at
Buyer’s request and/or approval that cannot, in advance, be directly and/or
indirectly assigned to a specific Product based on established and planned
criteria.

 

1.27                        “Ordered
Materials” shall have the meaning set forth in Section 2.2(f).

 

1.28                        “Ordered
Products” shall have the meaning set forth in Section 2.2(f).

 

1.29                        “Parent”
shall have the meaning set forth in the Recitals.

 

1.30                        “Party”
or “Parties” shall have the meaning set forth in the introductory
paragraph.

 

1.31                        “Person”
means any individual, corporation, partnership, joint venture, limited
liability company, trust or unincorporated organization or Governmental
Authority or any agency or political subdivision thereof.

 

1.32                        “PPI”
shall have the meaning specified in Section 2.3(b).

 

1.33                        “Products”
shall mean the products listed in Exhibit 1.16 attached hereto, which
may be amended from time to time to add or subtract products thereto or
therefrom by mutual written agreement of the Parties (in accordance with the
terms of this Agreement).

 

1.34                        “Product
Complaints” shall have the meaning set forth in Section 5.7(a).

 

1.35                        “Product
Specifications” shall mean those product, process, Manufacturing and
labeling specifications used by Seller in the Manufacture of Products in
compliance with all applicable Regulatory Requirements, including Product
formula and materials required for the Manufacture of the Products that are to
be manufactured, purchased and supplied under this Agreement, as such are in
effect as of the Effective Date, as such specifications may be amended

 

4

 

from time to time as required by any Regulatory Requirements
or by the mutual written agreement of the Parties.

 

1.36                        “Propafenone”
means propafenone (or any salt, ether or metabolite thereof, including,
propafenone hydrochloride), including, without limitation, any and all dosage
forms, formulas, strengths and types thereof.

 

1.37                        “Purchase
Order(s)” shall have the meaning set forth in Section 2.2(a).

 

1.38                        “Purchase
Price” shall have the meaning set forth in Section 2.3(a).

 

1.39                        “Put-Ups”
shall mean the final packaging configuration for a Product, also known as the
SKUs.

 

1.40                        “Quality
Agreement” shall have the meaning set forth in Section 4.6.

 

1.41                        “Registration(s)”
shall mean all permits, licenses, approvals and authorizations granted by any
Regulatory Authority with regard to any Product, including, without limitation,
the NDAs and INDs identified on Schedule 2.1(b) to the Asset Purchase
Agreement.

 

1.42                        “Regulatory
Authority” shall mean any foreign, federal, state or local regulatory
agency, department, bureau or other Governmental Authority, including, without
limitation, the FDA and the U.S. Drug Enforcement Administration, which is
responsible for issuing approvals, licenses, registrations (including but not
limited to, the Registrations), permits or authorizations necessary for, or
otherwise governs, the Manufacture, handling, use, storage, import, export,
transport, distribution or sale of Products in the Territory.

 

1.43                        “Regulatory
Requirements” shall mean all applicable approvals, licenses, registrations
(including but not limited to, the Registrations), cGMPs, and authorizations
and all other requirements of each applicable Regulatory Authority in relation
to the Products, including, but not limited to, each of the foregoing which is
necessary for, or otherwise governs, the Manufacture, handling, use, storage,
import, transport, distribution or sale of Products.

 

1.44                        “Remaining
Inventory” has the meaning set forth in Section 2.2(f).

 

1.45                        “Replacement
Goods” has the meaning set forth in Section 2.2(g).

 

1.46                        “Required
Changes” has the meaning set forth in Section 4.7(b).

 

1.47                        “Second
Extension Term” shall have the meaning set forth in Section 6.1(c).

 

1.48                        “Seller”
shall have the meaning set forth in the introductory paragraph.

 

1.49                        “Seller
Indemnified Party(ies)” shall have the meaning set forth in Section
3.3(b).

 

1.50                        “Shipment
Date” shall have the meaning set forth in Section 2.3(d).

 

5

 

1.51                        “Standard
Manufacturing Batch” shall mean, with respect to each Product, the standard
planning batch size at the compounding stage, each of which as is set forth on Exhibit 1.16
attached hereto.

 

1.52                        “Term”
shall have the meaning set forth in Section 6.1(e).

 

1.53                        “Territory”
shall mean the United States of America, its territories and possessions, including
Puerto Rico.

 

1.54                        “Third
Party” shall mean any Person other than Seller or Seller’s Affiliates or
Buyer or Buyer’s Affiliates.

 

1.55                        “Transfer
Plan” shall have the meaning set forth in Section 6.7(a).

 

ARTICLE
2 - 

ORDERS, PRICING, PAYMENT AND CONFORMANCE

 

2.1                               Manufacture and Sale of Product; Initial
Purchase of Inventory.

 

(a)                                  Manufacture
and Sale. Upon and subject to the terms and conditions contained herein and
during the Term of this Agreement, Seller shall, and/or shall cause Seller’s
Affiliates to, Manufacture, sell and deliver Products to Buyer, and Buyer shall
purchase and take delivery of Products from Seller or Seller’s Affiliates.
Seller shall, and/or shall cause Seller’s Affiliates to, Manufacture, sell and
deliver Products hereunder in accordance with (i) the Product Specifications;
(ii) cGMP; and (iii) the Act and all other applicable Regulatory Requirements.

 

(b)                                 Initial
Inventory Purchase. As contemplated by Section 2.1(b) of the Asset Purchase
Agreement, on or prior to the Effective Date, Buyer shall deliver to Seller a
purchase order for the purchase of the Inventory set forth on Schedule
2.1(b) to the Asset Purchase Agreement. Except as otherwise provided in the
Asset Purchase Agreement, all other terms and conditions related to the purchase
and sale of such Inventory shall be governed by the terms of this Agreement.

 

2.2                               Forecasts, Orders.

 

(a)                                  Initial
Forecast; Initial Firm Order. Buyer’s forecast of the monthly requirements
of Product to be manufactured and supplied hereunder for the first eighteen
(18) calendar months of this Agreement (the “Initial Forecast”) shall be
delivered by Buyer to Seller prior to the Effective Date and shall be attached
to this Agreement as Exhibit 2.2(a) hereto. The portion of the
Initial Forecast commencing on the Effective Date and ending on the last day of
the fourth (4th) month after the Effective Date shall be deemed a Firm Order
(the “Initial Firm Order”) for which Buyer is obligated to order and
take delivery of the forecasted Product requirements. The Initial Firm Order
shall be confirmed by delivery by Buyer to Seller of a purchase order (each a “Purchase
Order”, collectively, “Purchase Orders”). Buyer shall submit to
Seller on the Effective Date a purchase order for the first month of the
Initial Firm Order, and Buyer shall submit a second Purchase Order for the
remainder of the period covered by Initial Firm Order on or before the
fifteenth (15th) Business Day after the Effective Date. The

 

6

 

remainder of the Initial Forecast shall set forth
Buyer’s best estimate of its Product production and supply requirements.

 

(b)                                 Rolling
Forecast.

 

(i)                                     On
or before the fifteenth (15th) calendar day of each month during the Term (as
defined in Section 6.1 herein), Buyer shall provide Seller with an
updated eighteen (18) month forecast of the Products to be manufactured and
supplied (each a “Forecast”) for the eighteen (18) month period
beginning on the first day of the following calendar month. The first two months
of each Forecast will restate the balance of the Firm Order period of the prior
Forecast, and the first three (3) months of the Forecast shall constitute the
new Firm Order period for which Buyer is obligated to purchase and take
delivery of the forecasted Product, and the supply required for the last month
of such new Firm Order period shall not be more than one (1) full Standard
Manufacturing Batch from the quantity specified for such month in the previous
Forecast (or Initial Forecast, as the case may be). Except as provided in Section
2.2(a), Purchase Orders setting forth Buyer’s monthly Product requirements
will be issued for the last month of each Firm Order period no later than the
fifteenth calendar day of the first month of each Firm Order period, and such
Purchase Order will be in agreement with the Firm Order period of the Forecast.
If a Purchase Order for any month is not submitted by such deadline, Buyer
shall be deemed to have submitted a Purchase Order for such month for the
amount of Product set forth in Buyer’s Forecast for such month.

 

(ii)                                  The
remainder of the Forecast shall set forth Buyer’s best estimate of its Product
production and supply requirements for the remainder of the Forecast period.
Each portion of such Forecast that is not deemed to be a Firm Order shall not
be deemed to create a binding obligation on Buyer to purchase and take delivery
of Products nor a binding obligation of Seller to deliver Products, except as
otherwise provided in Section 2.2(f).

 

(iii)                               Forecast and Purchase
Orders shall be in full Standard Manufacturing Batches. If a Product has
multiple SKUs, then the composite of the forecasted SKU must equate to the
Standard Manufacturing Batch. One Purchase Order shall be issued for each full
Standard Manufacturing Batch of Product and contain the required information
set forth in Section 2.2(e) hereof.

 

(c)                                  Variance
in Purchase Order. In the event that a Purchase Order requires delivery by
Seller or Seller’s Affiliates of Product in amount different than the amount set
forth in the Forecast for such month, Seller shall confirm to Buyer its
acceptance of the delivery schedule provided in such Purchase Order within
fifteen (15) calendar days after receipt of such Purchase Order. In the event
that Seller does not agree with the delivery schedule provided in such Purchase
Order, Seller shall so notify Buyer within such fifteen (15) day period, and
the Parties shall negotiate in good faith a mutually acceptable delivery
schedule for such Products. The Parties agree to negotiate in good faith any
changes proposed by Buyer to any order for Product pursuant to a Firm Order and
confirmed by a Purchase Order. Buyer shall use its reasonable efforts to give
Seller reasonable notice of any such proposed change.

 

7

 

(d)                                 Purchase
Obligations; Delivery. The Parties agree and acknowledge that Buyer shall
be obligated to purchase, and Seller shall be obligated to Manufacture, and
sell and deliver to Buyer, EXW Seller’s Manufacturing Plant (Whippany, New
Jersey, USA), those Standard Manufacturing Batch quantities for which Buyer has
submitted (or is deemed to have submitted) a Purchase Order pursuant to Sections
2.2(a) and (b) (subject to Section 2.2(c)) and shall also
purchase the Remaining Inventory, if any, in accordance with Section 2.2(f)
of this Agreement.

 

(e)                                  Purchase
Order Terms. Each Purchase Order or any acknowledgment thereof, whether
printed, stamped, typed or written, shall be governed by the terms of this
Agreement, and none of the provisions of such Purchase Order or acknowledgment
shall be applicable except those specifying Product and quantity ordered,
delivery dates, special shipping instructions and invoice information. To the
extent any conflict may exist between the terms of any Purchase Order and this
Agreement, the terms of this Agreement shall control.

 

(f)                                    Remaining
Inventory. Upon the expiration or termination of this Agreement, Buyer
agrees to purchase from Seller or Seller’s Affiliates, and Seller agrees to
sell, or cause its applicable Affiliate to sell, to Buyer in accordance with
all Regulatory Requirements, (i) all Product covered by Purchase Orders in
accordance with Section 2.2(d) (the “Ordered Products”), which
shall be purchased and sold at the prices specified in the applicable Purchase
Order, and (ii) all Materials purchased by Seller in the normal course of
business and consistent with past practice in connection with the performance
of this Agreement and the Manufacture of Products hereunder (which, for the
avoidance of doubt shall include any raw materials obtained by Seller or its
Affiliates in contemplation any Firm Orders and any other raw materials
purchased by Seller pursuant to Buyer’s written approval or authorization) (the
“Ordered Materials” and, together with the Ordered Products,
collectively, the “Remaining Inventory”), which shall be purchased and
sold for an amount equal to, as applicable, either Seller’s or Seller’s
Affiliate’s (A) then applicable standard inventory cost, or (B) the acquisition
cost (i.e., price paid by Seller or Seller’s
Affiliate to the applicable vendor, plus freight and set up costs) plus [***]
percent ([***]%), plus any applicable tax, excise charge, or similar charge
provided for in Section 2.3(d), provided that such Remaining Inventory
complies with the representations, warranties and covenants contained in Section
3.1 hereof. At the request of Buyer and in no event later than thirty-five
(35) Business Days prior to the expiration of this Agreement, or immediately
upon termination of this Agreement, Seller shall provide Buyer with a detailed
list and description of the type and amount of Remaining Inventory to be
purchased pursuant to this Section 2.2(f), and shall, at Buyer’s
reasonable request, cooperate with Buyer in verifying the amount and cost of
such Remaining Inventory. Within three (3) Business Days following Seller’s and
Buyer’s agreement regarding amount and cost of such Remaining Inventory, Buyer
shall issue a purchase order to Seller for such Remaining Inventory. Payment
for such Remaining Inventory shall be made by Buyer within sixty (60) days
after receipt by Buyer of such Remaining Inventory.

 

[***]: 
Certain information on this page has been omitted and filed separately
with the Commission.  Confidential treatment
has been requested with respect to the omitted portions.

 

8

 

(g)                                 Product
Returns. In the event that any amounts due to Buyer in respect of sales of
Product by or on behalf of Buyer after the Effective Date are reduced, offset,
credited or otherwise decreased as a result of or in respect of any Product
(with an expiration date of not less than twelve (12) months) or Buyer receives
a request for replacement or refund of Product (with an expiration date of not
less than twelve (12) months) (collectively, “Replacement Goods”), Buyer
shall within five (5) Business Days notify Parent of such Replacement Goods.
The Parties shall determine Parent’s obligations under Section 7.5 of the Asset
Purchase Agreement with reference to lot numbers, it being agreed that Parent
shall be responsible for those lots which Parent fully sold through the Closing
Date and with respect to any lots that are split between Buyer and Parent,
Parent shall be responsible in proportion to that percentage of the lot sold by
Parent through the Closing Date. Based on the foregoing, for Replacement Goods
that are Parent’s obligations pursuant to such Section 7.5 of the Asset
Purchase Agreement, Seller or its designee shall, at Buyer’s request, replace
such Replacement Goods with Product equivalent to the dosage and formulation of
such Replacement Goods pursuant to the terms and conditions of this Agreement
until the earlier to occur of (i) thirty-six (36) months from the Effective
Date or (ii) the issuance by Seller of two million (2,000,000) tablets as
replacement Product. Thereafter, Parent has no liability or obligation to Buyer
for any Replacement Goods. For any and all Replacement Goods replaced pursuant
to this Section 2.2(g), Buyer shall submit to Seller a deduction ticket
documenting the date, type and quantity of Replacement Goods and certifying
that such replaced Product (with an expiration date of not less than twelve
(12) months) have been destroyed in a manner consistent with applicable Law,
rule and regulation. Seller shall credit such Replacement Goods replaced
pursuant to this Section 2.2(g) against Buyer’s future Purchase Orders.

 

2.3                               Purchase Price; Adjustment; Shipment.

 

(a)                                  Purchase
Price. The initial price for each Product manufactured and supplied by
Seller hereunder shall be as set forth in Exhibit 1.16 attached hereto
(expressed in U.S. Dollars) (as such prices may be adjusted from time to time
pursuant to this Section 2.3, the “Purchase Price”). The Purchase
Price as of the Effective Date corresponds to the Product Specifications in
effect as of the Effective Date. Any changes to the Product Specifications
during the Term of this Agreement may result in changes to the Purchase Price.
Such Products shall be EXW (Whippany, New Jersey, USA). The Purchase Price
shall be subject to adjustment as provided in Section 2.3(b).

 

(b)                                 Purchase
Price Adjustments. For each Contract Year commencing January 1, 2005, the
Seller shall be allowed to adjust the Purchase Price for each Product to be
effective for such Contract Year based on the most recent available final
Producers’ Price Index for Pharmaceutical Products as published by the Bureau
of Labor Statistics, or any government successor thereof (“PPI”), using
the procedure set forth in Exhibit 1.16 attached hereto. For each
Contract Year in which Seller is entitled to adjust the Purchase Price pursuant
to this Section 2.3(b), Seller shall provide Buyer with written
notice of any change in the Purchase Price within ten (10) Business Days after
October 1st of the prior Contract Year. For the avoidance of doubt,
the Parties agree that the Purchase Price shall be subject to adjustment
hereunder not more than once per Contract Year.

 

9

 

(c)                                  Payment.
Seller shall invoice Buyer upon delivery of Products in accordance with the
terms hereof, and Buyer agrees to pay Seller for such Products as set forth
herein. Buyer shall make payment within sixty (60) calendar days from the date
of the invoice of such Products pursuant to this Agreement, provided that this
obligation shall not apply to any Products that are rejected pursuant to the
provisions of Section 2.4 hereof until Buyer’s receipt of conforming
replacement Products in accordance with the terms of such section. All payments
hereunder shall be made in U.S. Dollars. Seller will issue invoices at the time
Product(s) are delivered to the carrier.

 

(d)                                 Shipment.
Buyer shall arrange transit of the Products from Seller’s facility located in
Whippany, New Jersey, USA. Seller will contact Buyer upon notification from
Seller’s quality control division that the Products are ready for shipment (“Shipment
Date”). Upon receipt of written instructions and upon agreement of the
Parties, alternate shipping routes may be utilized.

 

(e)                                  Public
Distribution of Product. Buyer shall be solely responsible for
determination and approval of the release and distribution of the Products for
public consumption.

 

2.4                               Replacement of Nonconforming Shipment.

 

(a)                                  Inspection;
Product Replacement. Buyer shall have a period of ten (10) Business Days
after the date of its receipt of a shipment of Product to inspect and accept or
reject such shipment for non-conformance with the Product Specifications based
on the outward appearance of such shipment. Buyer shall have a period of thirty
(30) days (forty-five (45) days if an outside testing laboratory is used) after
the date of its receipt of a shipment of Product to inspect and accept or
reject such shipment for any other non-conformance with the Product
Specifications or based upon a finding by Buyer of non-conformance, assuming
that such non-conformance has not been approved in writing by the Buyer and the
Seller, or due to deviation from cGMPs, Regulatory Requirements or any applicable
Law, rule, regulation, guideline or procedure, including the Act, in the
production of the shipment. If Buyer rejects such shipment, it shall promptly
so notify Seller, and the Parties shall thereafter attempt in good faith to
determine whether such Products did or did not conform to the applicable
Product Specifications and shall reasonably cooperate with each other for such
purpose (including, but not limited to, providing the other Party with
reasonable access to all documents, filings and other relevant materials then
in such Party’s possession or reasonably accessible to such Party and the
Buyer’s provision to Seller of samples of such shipment for testing). If either
Seller or Buyer determines that such shipment did not conform to the Product
Specifications, either Party may, if such Party determines it to be relevant,
submit samples of such shipment to an independent laboratory of nationally
recognized standing for testing. If such independent laboratory determines that
the shipment conformed in all respects to the Product Specifications, Buyer
shall bear all expenses of shipping and testing such shipment samples and shall
be obligated to accept and pay for such shipment. If Seller or such independent
laboratory confirms that such shipment did not meet the Product Specifications
in all respects, Seller shall replace, at no cost to Buyer, that portion of the
Product shipment that does not conform to the Product Specifications, and shall
bear all expenses of shipping and testing the shipment samples, including any
costs incurred by Buyer in returning such Product to Seller or its nominee. If
based on a facility inspection or audit by Buyer as

 

10

 

provided herein, or based on a specific observation
made by any Regulatory Authority following an audit or inspection, Buyer
determines that a shipment or portion of a shipment was manufactured under
conditions that materially deviated from cGMPs, Regulatory Requirements or any
applicable Law, rule, regulation, guideline or procedure, including the Act,
Buyer and Seller shall agree upon the appropriate action to be taken in
conformance with the FDA483 or the action letter received by Seller relating to
the Products. If rejection of Product is warranted, Seller shall replace, at no
cost to Buyer, that portion of the Product shipment that was manufactured under
conditions deviating from cGMP, such Regulatory Requirements or applicable Law,
rule, regulation, guideline or procedure, including the Act. Any non-conforming
portion of any shipment shall be disposed of as directed by Seller, at Seller’s
expense. Any Product that Buyer does not reject pursuant to this Section 2.4
shall be deemed accepted and Buyer’s right to reject Product on the grounds
that it does not conform with the Product Specifications shall be deemed fully
waived and released by Buyer. Nothing in this Section 2.4 shall limit
the Buyer’s right to revoke acceptance of the Product in whole or in part under
the circumstances specified in Section 2-608 of the Illinois Uniform Commercial
Code for the purposes of determining Seller’s liability under Article 3
of this Agreement. Without limiting the foregoing, it is agreed that for
purposes of Section 2-607(3)(a) of the Illinois Uniform Commercial Code, Buyer
will not have been deemed to have discovered or should have discovered any
breach that is not, or reasonably would not be, discovered or detected by a
visual inspection by Buyer consisting of an identification of the Products
received by Buyer, a review of the Certificate of Analysis and a visual
inspection for physical damage to the Products shipped.

 

(b)                                 Sample
Retention. Seller, on behalf of both Buyer and Seller, shall retain
representative samples and associated documentation from each lot of finished
Product and manufacturer’s corresponding lot of key ingredients used in the
Manufacture of Products for the period required by the applicable FDA
regulations and the Act.

 

2.5                               New Products. Buyer shall notify Seller if Buyer
desires Seller to Manufacture any additional product strengths and/or Put-Ups
of the Products that Seller does not Manufacture (collectively, “New
Products”). The Parties shall negotiate in good faith to determine whether
Seller shall develop such New Products for Buyer. If the Parties agree upon a
development plan, Seller shall be reimbursed for all direct and actual
out-of-pocket development costs as shall be agreed to by the parties. This
Agreement and Exhibit 1.16 attached hereto shall then be amended to
include such New Products. Initial pricing for any New Products shall set forth
on Exhibit 1.16, and shall be adjusted annually in accordance with Section
2.3(b); provided however, pricing for such New Products shall not be
adjusted if such New Products are added to Exhibit 1.16 within the
last calendar quarter of the initial Term of this Agreement.

 

2.6                               Stability. During the Term, Seller shall conduct the commercial stability
program pursuant to Regulatory Requirements applicable as of the Effective Date
at its own expense. Should additional stability studies be required, the
Parties shall agree, in good faith, upon the protocol, and associated charges,
based on the then current charge rates for the staff services, with invoicing
for such additional services to occur when the lot is placed on stability.

 

2.7                               Non-Standard Costs. The Parties
acknowledge that during the Term of this Agreement, Seller and/or its
Affiliates may incur Non-Standard Costs. Seller will invoice Buyer

 

11

 

monthly for Non-Standard Costs, if any, on a time and
Material basis, at the rates set forth on Exhibit 1.16. Buyer shall
pay such invoice within thirty (30) days after the date of invoice.

 

ARTICLE
3 - 

WARRANTIES, COVENANTS AND INDEMNIFICATION

 

3.1                                 Representations, Warranties and Covenants.

 

(a)                                  Seller,
in its own name and on behalf of any of its Affiliates engaged in the
performance of the actions contemplated hereby, including, without limitation,
the Manufacture, sale and delivery of Products hereunder, hereby represents,
warrants and covenants to Buyer that all Products that are Manufactured,
supplied and delivered by Seller or any of Seller’s Affiliates under and
pursuant to this Agreement will:

 

(i)                                     conform
in all respects to the Product Specifications;

 

(ii)                                  be
free and clear from all liens, Encumbrances and defects of title, other than
those that arise directly as a result of actions taken by the Buyer; and

 

(iii)                               comply with all of the
requirements under the Act, any Regulatory Requirements and any other applicable
Law, rule, regulation, guideline or procedure, and will not, at the time of
such delivery, (i) be adulterated or misbranded within the meaning of the Act,
or (ii) be an article which may not, under the provisions of the Act, be
introduced into interstate commerce.

 

(b)                                 Seller
and its Affiliates hereby represent, warrant and covenant to Buyer that Seller
or any of its Affiliates shall not willfully or intentionally disrupt or cause
the disruption of the supply of Product to Buyer as provided herein. Notwithstanding
the foregoing, an event of force majeure under Section 8.4 herein shall
not constitute a willful or intentional disruption of the supply of Product
under this Section 3.1(b).

 

3.2                               Recalls. In the event that any Product is quarantined or recalled, or is
subject to stop-sale action, whether voluntarily or by action of any
Governmental Authority, it is agreed and understood that any expenses,
including reasonable fees of any experts or attorneys that may be used by
either Party, government fines or penalties, related to such recall, quarantine
or stop-sale, shall be borne by Buyer, unless it is determined that Seller has
breached its representations, warranties, covenants, agreements or obligations
under this Agreement and such breach is a material basis upon which said recall, quarantine or stop-sale was
initiated, in which case such expenses shall be borne by Seller to the extent
caused by Seller’s breach. Said determination of any recall, quarantine or
stop-sale action may be made by the Governmental Authority involved, or by
mutual agreement of the Parties following examination and review of all records
pertinent to the Manufacture of the Product subject to such recall, quarantine
or stop-sale action.

 

3.3                               Indemnification.

 

(a)                                  Seller
Indemnification. Seller agrees to defend, indemnify and hold Buyer, its
Affiliates and all of their respective parents, Affiliates, subsidiaries,
officers, directors, managers, members, employees, agents, assignees and
successors (collectively, the “Buyer

 

12

 

Indemnified Parties”) harmless at
all times from and against and in respect of any and all judgments, losses,
liabilities, costs or expenses (including reasonable attorney’s fees)
(collectively, “Losses”) which any Buyer Indemnified Party may suffer or
incur either directly or in connection with any claims, demands, actions,
causes of action, liabilities, suits, proceedings, investigations, inquiries,
injunctions or regulatory actions by a Third Party to the extent such Losses
arise from or are based upon a breach by Seller of any of its representations,
warranties, agreements, covenants or obligations contained in or made pursuant
to this Agreement; provided, however, Seller shall not be
required to indemnify any Buyer Indemnified Party to the extent such Losses
arise from (i) a reckless act of such Buyer Indemnified Party, (ii) the
negligence or willful misconduct of Buyer or its Affiliates or any of their
respective employees, agents, contractors or consultants, or (iii) a breach of
this Agreement by Buyer or its Affiliates.

 

(b)                                 Buyer
Indemnification. Buyer agrees to defend, indemnify and hold Seller, its
Affiliates and all of their respective parents, Affiliates, subsidiaries,
officers, directors, employees, agents, assignees and successors (collectively,
the “Seller Indemnified Parties”) harmless at all times from and against
and in respect of any and all Losses which any Seller Indemnified Party may
suffer or incur either directly or in connection with any claims, demands,
actions, causes of action, liabilities, suits, proceedings, investigations,
inquiries, injunctions or regulatory actions by a Third Party to the extent
such Losses arise from or are based upon a breach by Buyer of any of its
representations, agreements, covenants or obligations contained in or made
pursuant to this Agreement; provided however, Buyer shall not be required to
indemnify any Seller Indemnified Party to the extent such Losses arise from (i)
a reckless act of such Seller Indemnified Party, (ii) the negligence or willful
misconduct of Seller or its Affiliates or any of their respective employees,
agents, contractors or consultants, or (iii) a breach of this Agreement by
Seller or its Affiliates.

 

(c)                                  Notice
of Claims. The indemnified party shall promptly notify the indemnifying
party in writing of all matters which may give rise to the right to
indemnification hereunder; provided, however, that failure to
timely give the notice provided in this Section 3.3(b) shall not be
a defense to the liability of the indemnifying party for such claim, but the
indemnifying party may recover any actual damages arising from the indemnified
party’s failure to give such timely notice. The indemnified party shall not
admit any liability with respect to, or settle, compromise or discharge any
such matter covered by this Section 3.3 without the indemnifying party’s
prior written consent (which shall not be unreasonably withheld). The
indemnifying party shall have the right, with the consent of the indemnified
party (which shall not be unreasonably withheld), to settle all indemnifiable
matters related to claims by third parties which are susceptible to being
settled. In connection with any claim giving rise to indemnity hereunder
resulting from or arising out of any claim or legal proceeding by a person
other than the indemnified party, the indemnifying party at its sole cost and
expense may, upon written notice to the indemnified party received by the
indemnified party within ten (10) calendar days after the indemnifying party’s
receipt of notice of such claim, assume the defense of any such claim or legal
proceeding. If the indemnifying party assumes the defense of any such claim or
legal proceeding, the indemnifying party shall select counsel reasonably acceptable
to the indemnified party to conduct the defense of such claims or legal
proceedings and, at the indemnifying party’s sole cost and expense (which costs
and expenses shall not be applied against any indemnity limitation herein),
shall take all steps necessary in the defense or settlement thereof. The
indemnified party shall be entitled to participate in (but not control) the

 

13

 

defense of any such action, with its own counsel and
at its own expense, and shall be entitled to any and all information and
documentation relating thereto. If the indemnifying party does not assume (or
continue to diligently and competently prosecute) the defense of any such claim
or litigation resulting therefrom in accordance with the terms hereof, the
indemnified party may, at the indemnifying party’s expense, defend against such
claim or litigation in such manner as it may deem appropriate, including, but
not limited to, settling such claim or litigation, after giving notice of the
same to the indemnifying party, on such terms as the indemnified party may deem
appropriate. The indemnified party will cooperate reasonably with the
indemnifying party in its efforts to conduct or resolve such matters, including
by making available to the indemnifying party relevant documents and witnesses.
The indemnified party and the indemnifying party shall keep each other informed
of all settlement negotiations with third parties and of the progress of any
litigation with third parties. The indemnified party and the indemnifying party
shall permit each other reasonable access to books and records and shall
otherwise cooperate with all reasonable requests of each other in connection
with any indemnifiable matter resulting from a claim by a third Person.

 

(d)                                 Other
Limitations.

 

(i)                                     No
liability shall arise in respect of any breach of any representation, warranty,
covenant or agreement herein to the extent that liability for such breach
occurs (or is increased) directly or indirectly as a result of any
retrospective application of a change in applicable Law, or in accounting
policies, procedures or practices, announced or, if not announced in advance of
taking effect, taking effect, after the Effective Date.

 

(ii)                                  No
party hereto shall be entitled to recover any Losses or other amounts due from
the other Party pursuant to this Agreement by retaining or setting off amounts
(whether or not such amounts are liquidated or reduced to judgment) against any
amounts due or to become due from such first party to such second party
hereunder or under any document or instrument delivered pursuant hereto or
thereto or in connection herewith or therewith.

 

(e)                                  Survival.
This Section 3.3 shall survive the termination of this Agreement for a
period of three (3) years.

 

3.4                               Limitations
on Liability. This Section 3.4 shall survive the termination of this
Agreement for a period of three (3) years. NEITHER PARTY OR ANY OF SUCH PARTY’S AFFILIATES SHALL HAVE ANY
LIABILITY TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL,
INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES UNDER THIS AGREEMENT AND LOSSES
INDEMNIFIABLE HEREUNDER SHALL NOT INCLUDE SUCH DAMAGES, EXCEPT, IN EACH CASE,
(i) TO THE EXTENT SUCH OTHER PARTY OR SUCH OTHER PARTY’S AFFILIATE IS REQUIRED
TO PAY SUCH AMOUNT TO A THIRD PARTY IN RESPECT TO A FINAL JUDGMENT OR ORDER
OBTAINED BY THE THIRD PARTY, OR (ii) AS A RESULT OF SELLER’S  BREACH OF SECTION 3.1(b) HEREIN. Buyer hereby agrees and acknowledges that it
has a duty to mitigate (consistent with applicable law) any and all damages
suffered and losses

 

14

 

recoverable by Buyer under
this Agreement, including without limitation the damages and losses set forth
in this Section 3.4.

 

3.5                               Insurance. Each of Buyer and Seller shall obtain and maintain in full force
during the Term of this Agreement insurance policies from a reputable insurance
company or pursuant to a self-insurance program providing such Party with
insurance coverage for the Products that is reasonably consistent with the
levels of insurance coverage customarily maintained in the pharmaceutical
industry.

 

ARTICLE
4 - 

MANUFACTURING OF THE PRODUCTS

 

4.1                               cGMP. Seller and its Affiliates shall Manufacture and supply the
Products to Buyer at all times in full compliance with the Act, cGMP and any
other applicable Regulatory Requirements. Seller and its Affiliates shall
maintain during the Term of this Agreement and for a period thereafter
consistent with Seller’s policies and standard cGMP requirements, all records
as are necessary or appropriate to demonstrate compliance with the Act, cGMP
and any other applicable quality control standards of any Regulatory Authority
in the Territory. If Seller fails to comply with cGMPs in a manner, as
demonstrated by an observation of a Regulatory Authority, Seller shall
diligently proceed to remedy such deviation in accordance with Seller’s
response to the observation.

 

4.2                               Audit.
Buyer shall have the right, either by itself or through independent outside
auditors or consultants, not more than once per year during the Term of this
Agreement, unless reasonable cause is shown, to inspect and audit any areas of
Seller’s or its Affiliates’ facilities in which any portion of the
Manufacturing of the Products is performed for the examination of production or
quality records or to perform cGMP audits, at its sole expense, on reasonable
advance notice, during Seller’s normal business hours in a manner that does not
interfere unreasonably with Seller’s operations. Any such auditor or consultant
shall enter into an agreement with the Parties on terms in which such
independent auditor shall agree to maintain the confidentiality of the
information obtained during the course of such audit.

 

4.3                               Acquisition of Raw Materials. Seller or its Affiliates shall
provide all Materials necessary for the Manufacture, shipping and delivery of
Products to Buyer, as part of the Purchase Price. Seller shall be responsible
for vendor quality approval for vendors of Materials, all of which shall comply
with Product Specifications.

 

4.4                               Use of Trademarks, Trade Names, Service Marks.
Except as set forth in the Asset Purchase Agreement and as to currently
existing Product inventory packaged and labeled by Seller with its own
trademarks, trade names, service marks and existing Product Registrations,
Buyer shall, in a manner consistent with Buyer’s forecasts for requirements of
Products, promptly supply Seller with approved artwork to comply with required
copy changes. Buyer shall be solely responsible for any costs incurred by Buyer
and related to providing these items to Seller, as well as any reasonable
incremental direct out-of-pocket costs of Seller related to incorporating these
items into the Manufacturing process that are above Seller’s cost of packaging
and labeling Product inventory with its own trademarks, trade names, service
marks and existing Product Registrations. Seller shall invoice Buyer separately
for any such costs and

 

15

 

expenses. Buyer and Seller shall meet promptly after
the Effective Date to outline a plan to convert trade dress for Products to
Buyer trade dress. Buyer shall have the sole responsibility to ensure that the
labeling and artwork for the Product complies with all FDA, customs and other
Governmental Authority marking and labeling requirements. All production of
Products initiated six (6) months or longer after the Effective Date shall be
in Buyer’s trade dress.

 

4.5                               Exception
Documentation, Certificates of Analysis and Batch Records.

 

(a)                                  Exceptions.
Buyer shall be required to review and approve or reject all exception
documentation associated with the Manufacture of Product in accordance with
procedures stated in the Quality Agreement. Seller shall make available to
Buyer any and all data supporting the investigation of such exception,
including but not limited to, the batch records.

 

(b)                                 Certificate
of Analysis. Seller shall provide a certificate of analysis and other
documents as defined in the Quality Agreement for any Product to be released
hereunder, in a form in accordance with the cGMPs and all other applicable
Regulatory Requirements and Product Specifications and as shall be agreed upon
by the parties. For any batch that initially failed to meet any Product
Specification, the certificate of analysis shall document the exception. Products that do not meet dissolution
specifications at USP Stage I and II testing shall not be accepted by Buyer
(and such requirement shall be included in the Product Specifications/Quality
Manual).

 

(c)                                  Access
to Batch Documentation; Annual Audit. Full batch documentation including
batch production records, and Manufacturing and analytical procedures shall be
available for review by Buyer in conjunction with the annual audit or at
semi-annual status meetings.

 

(d)                                 Certificate
of Compliance. Prior to the first delivery of Product hereunder and
thereafter at least once per Contract Year, Seller shall provide a certificate
of compliance, in form and substance reasonably satisfactory to Buyer, certifying
compliance with the Product Specifications, cGMP, the Act, Regulatory
Requirements and all related processes and procedures contemplated hereby.

 

4.6                               Quality
Agreement. Within at least thirty (30) days following the Effective Date of
this Agreement, the Parties shall mutually agree upon an intercompany quality
agreement which will appropriately address regulatory, operational and quality
responsibilities and shall be in substantially the form attached hereto as Exhibit
4.6 (the “Quality Agreement”). The Quality Agreement will include a
key contact list for each Party.

 

4.7                               Manufacturing and Packaging Changes.

 

(a)                                  Product
Changes. Seller shall not make any changes to the Product Specifications
and/or Manufacturing that would require approval from, or notification to, any
Regulatory Authority applicable to the performance of this Agreement, without
the prior written consent of Buyer, which such consent shall not be
unreasonably withheld. The timing of Seller’s notice to Buyer of any such
change shall permit adequate time for Buyer to make any necessary

 

16

 

regulatory filings and obtain any necessary approval
thereof from a Regulatory Authority prior to the change being implemented.

 

(b)                                 Required
Changes. For changes to the Product Specifications or Manufacturing
relating solely to the Products that are required by Laws and other Regulatory
Requirements (including, without limitation, cGMP), or by medical or scientific
concerns as to the toxicity, safety and/or efficacy of the Products
(collectively, “Required Changes”), the Parties shall cooperate in
making such changes promptly.

 

(c)                                  Discretionary
Changes. Seller shall consider in good faith any request by Buyer to make
changes to the Product Specifications or Manufacturing that are not Required
Changes, including, but not limited to, changes to the existing Product,
Product line extensions, or changes to the existing or additional packaging
(collectively, “Discretionary Changes”). Any analytical improvements shall
be considered Discretionary Changes unless requested or required by Regulatory
Authorities in which case such improvements shall be considered a Required
Change. Any change requested by Seller which is not a Required Change shall be
made only with the written consent of the Buyer, which consent shall not be
unreasonably withheld.

 

(d)                                 Costs
of Changes. Any and all costs associated with (i) Required Changes
initiated by either Party, or (ii) Discretionary Changes initiated by the Buyer
shall be borne by the Buyer. Any Discretionary Changes initiated by Seller
shall be agreed to by the Parties including which Party or Parties shall be
responsible for the funding of such Discretionary Change.

 

4.8                               Management of Products.

 

(a)                                  Appointment
of Representatives. Each Party shall appoint one or more representatives to
serve as contacts for the other Party; such contacts shall have primary
responsibility for the overall coordination of the Products and the
Manufacturing and delivery of the Products to Buyer hereunder, as well as the
performance of each Party’s obligations under this Agreement. The names and
contact information of such contact(s) shall be delivered by each Party to the
other Party not less than ten (10) Business Days after the Effective Date and will
be the names included in the key contact list in the Quality Agreement.

 

(b)                                 Semiannual
Meetings. From time to time during the Term of this Agreement, but in any
event not less than once every six (6) months, the two business unit managers
shall meet (either in person or by teleconference) to discuss each Party’s
performance of the terms of this Agreement and to make recommendations to
improve its future performance.

 

4.9                               Restrictions
on Sale of Products. From and after
the Effective Date, Seller shall not, and shall cause each of its Affiliates
not to, (a) market, distribute or sell any of the Products or any
pharmaceutical product containing Propafenone as an active ingredient within
the Territory, (b) knowingly cause or facilitate the Products to be marketed,
distributed, or sold within the Territory, except by or on behalf of Buyer
pursuant to this Agreement, (c) market, distribute or sell the Products outside
the Territory to a Third Party who Seller or any of Seller’s Affiliates knows
intends to distribute the Products within the Territory, (d) knowingly supply
any bulk API Propafenone to any Third Party for ultimate sale and/or
distribution in the Territory, or

 

17

 

(e) market, sell,
distribute, or manufacture for any other Person, generic finished Propafenone
in the Territory during the ten (10) year period commencing on the Effective
Date and ending on the tenth year anniversary of the Effective Date. Except for
a termination of this Agreement pursuant to Section 6.2 prior to the
Effective Date, the restrictions pursuant to Section 4.9(e) shall
survive the termination or expiration of this Agreement as provided therein.

 

ARTICLE
5 - 

REGULATORY MATTERS.

 

5.1                               Maintenance of Registrations.
Except as otherwise provided in this Agreement or the Asset Purchase Agreement,
Buyer shall maintain all Registrations. Seller shall fully cooperate and
assist, at Buyer’s expense, with all reasonable requests of Buyer related to
the maintenance of such Registrations. Neither Seller nor any of its Affiliates
shall take any action intended to adversely affect or that could reasonably be
expected to adversely affect any of the Registrations.

 

5.2                               Reporting. Except as to
responsibilities which Seller may not, as a matter of law, transfer, Buyer
shall prepare any reports related to matters regarding the Manufacture and
production of Products to any applicable Regulatory Authorities in accordance
with pertinent Laws and regulations, provided that Seller provides to Buyer all
information in its possession or control required to prepare any such reports.
Seller shall promptly furnish copies of any such reports related to the Manufacture and production of the
Products to Buyer. Seller shall also advise Buyer of any occurrences or information
arising out of Seller’s Manufacturing and production activities that have or
could reasonably be expected to have adverse regulatory compliance and/or
reporting consequences with respect to or concerning Products.

 

5.3                               FDA Inspections. Except as
otherwise provided herein, Seller shall be responsible, at Seller’s sole
expense, for handling and responding to any FDA or other Regulatory Authority
inspections with respect to Seller’s Manufacture
of the Products during the Term of this Agreement. Seller shall provide to
Buyer any information reasonably requested by Buyer and all information
requested by any Regulatory Authority concerning any inspection by any
Governmental Authority related to the Products. To the extent Seller requires
the assistance of Buyer in order to fulfill its obligations pursuant to this Section
5.3, Buyer agrees to fully cooperate and assist Seller, at Buyer’s sole
expense. In the event Seller is provided notice by any Regulatory Authority
that it will be inspected by such Regulatory Authority in connection with the
Products, Seller shall promptly notify Buyer of any observations made during
such inspection. Notwithstanding any provision herein to the contrary, Seller
shall provide Buyer with the opportunity to comment on any filings, notices or
other correspondence with any Regulatory Authority that relates to or could
affect the Manufacture or supply of Products hereunder.

 

5.4                               Notice to Buyer. In the event
Seller, the Products or any facility at which the Products or any component
thereof are Manufactured, packaged, tested or stored are inspected by any
Regulatory Authority, Seller shall promptly notify Buyer, to the extent that
such inspection affects the Product(s) or the Manufacture thereof under this
Agreement, of (i) any such inspection with reasonable advance notice, and (ii)
any alleged written violations or deficiencies relating to the Manufacturing
facility at which Products are Manufactured,

 

18

 

packaged, tested or stored, and (iii) the corrective
action to be taken, and shall promptly contest such alleged violations or
deficiencies in good faith or take the required corrective action, each at
Seller’s sole expense.

 

5.5                               Seller’s Intellectual Property.

 

(a)                                  No
License. Except as provided in the Asset Purchase Agreement, the Other
Agreements, or otherwise provided herein, Seller has granted no license,
express or implied, to Buyer to use Seller’s proprietary technology or rights
relating to Seller’s Manufacturing process, other than for purposes of this
Agreement.

 

(b)                                 Improvements.
Subject to Section 5.5(c), if Seller, in its sole discretion, deems
patentable any improvement or invention relating to Seller’s proprietary
technology, know-how or rights relating to Seller’s Manufacturing processes
made or reduced to practice in the course of this Agreement, and if such
improvement or invention relates exclusively to the Seller’s Manufacturing
operations in general, Seller shall solely own and shall be entitled to apply
for patent protection on such improvements or inventions at Seller’s expense
and risk.

 

(c)                                  Buyer’s
Rights. Subject to Section 5.5(b), Buyer shall be entitled to all
such rights relating to any improvement or invention relating to Seller’s or
any of Seller’s Affiliate’s proprietary technology, know-how or rights relating
exclusively to the Products or the Manufacture
thereof, and Seller shall assign, and cause its Affiliates to assign, in each
case free of charge, such rights to Buyer and assist Buyer in securing any
patent or other intellectual property right relating thereto at Buyer’s sole
expense.

 

(d)                                 License
Right to Buyer. To the extent not otherwise transferred to Buyer pursuant
to the Asset Purchase Agreement or this Agreement, with respect to any (i) improvements
or inventions covered by Section 5.5(b) above that are necessary to
Manufacture the Products in accordance with Product Specifications, or (ii) any
Product Specifications, Seller hereby grants, on behalf of itself and its
Affiliates (and shall be deemed to have granted) to Buyer, without any further
action by Seller or any of Seller’s Affiliates, a fully-paid, non-exclusive,
perpetual, sub-licensable, irrevocable, royalty-free license to use such
improvements, inventions or Product Specifications solely for the purposes of
the Manufacture of the Products.

 

(e)                                  Identification
of Seller on Labels. Seller hereby grants Buyer a non-exclusive,
royalty-free limited right and license to use the Seller’s name solely for the
purpose of identifying Seller as the manufacturer on all packaging materials,
labels, inserts and any other printed matter included in the Products to the
extent required by Law and regulations.

 

5.6                               Buyer’s Intellectual Property.
Buyer has granted no license, express or implied, to Seller to use Buyer’s
proprietary technology, know-how or rights relating to Products, other than for
purposes of this Agreement. If Buyer, in its sole discretion, deems patentable
any improvement or invention related to the Products or to Buyer’s proprietary
technology, know-how or rights relating to the Products, then Buyer shall
solely own and shall be entitled to apply for patent protection on such
improvements or inventions at Buyer’s sole expense and risk.

 

19

 

5.7                               Complaints, Recalls.

 

(a)                                  Complaints
concerning the Manufacture or supply by Seller of Products hereunder (“Product
Complaints”) received by either Party will be promptly faxed and in no
event later than five (5) Business Days after receipt by the recipient to the
other Party to:

 

Abbott
Laboratories

1401 Sheridan Road

D-44K, Bldg. R1

North Chicago, IL 60064-6255

Attention: Quality Assurance Department

Fax: 847-937-4261

 

and

 

Reliant
Pharmaceuticals, LLC 

110 Allen Road

Liberty Corner, NJ 07938

Attention: Quality Assurance Department

Fax: 908-542-9405

 

(b)                                 The
Parties shall cooperate with each other to investigate all complaints
associated with the Manufacture or supply of Products hereunder and to complete
a written report in a form reasonably satisfactory to both Parties. In the
event either Party should be required to initiate a recall, field alert,
Product withdrawal or field correction with respect to any Product supplied and
delivered under this Agreement, that Party shall promptly notify the other
Party in writing. Except where one Party is required by Law to do so, Buyer
shall have the sole and exclusive right to initiate any recall, field alert,
Product withdrawal or field correction and shall provide Seller with written
notice thereof. Nothing contained in this Section 5.8 shall relieve the
other Party of its obligations under Article 3 hereof.

 

ARTICLE
6 - 

TERM; TERMINATION; TECHNICAL TRANSFER

 

6.1                               Initial Term; Extension Terms.

 

(a)                                  Initial
Term. The initial term of this Agreement will commence upon the Effective
Date and will continue through December 31, 2008, unless terminated earlier in
accordance with the provisions of this Article 6 (the “Initial Term”).

 

(b)                                 First
Extension Term. During the Initial Term of this Agreement, Buyer shall use
commercially reasonable efforts to transfer the Manufacturing of the Rythmol®SR
Product(s) to a Third Party effective upon the expiration of the Initial Term
of this Agreement and shall provide Seller with reasonable written evidence of
such efforts. If, as of the end of the fourth Contract Year during the Initial
Term, after exercise of its commercially reasonable efforts and/or prohibition
of such transfer by applicable Law, rule or regulation, Buyer notifies Seller
that it reasonably believes it may be unable to transfer the Manufacturing of
the Rythmol®SR Product(s) hereunder prior to the end of the Initial Term (which
notice shall describe the basis for such reasonable belief), Buyer shall have
the option to extend the Term hereunder for the

 

20

 

Manufacture of the Rythmol®SR Product(s) for an
additional two (2) year period, upon not less than twelve (12) months written
notice to the Seller prior to the end of the Initial Term (such additional two
(2) year period, the “First Extension Term”).

 

(c)                                  Second
Extension Term. During the First Extension Term of this Agreement, Buyer
shall use commercially reasonable efforts to transfer the Manufacturing of the
Rythmol®SR Product(s) to a Third Party effective upon the expiration of the
First Extension Term of this Agreement and shall provide Seller with reasonable
written evidence of such efforts. If, as of the end of the first year of the
First Extension Term, after exercise of its commercially reasonable efforts
and/or prohibition of such transfer by applicable Law, rule or regulation,
Buyer notifies Seller that it reasonably believes it may be unable to transfer
the Manufacturing of the Rythmol®SR Product(s) hereunder prior to the
expiration of the First Extension Term (which notice shall describe the basis
for such reasonable belief), Buyer shall have the option to extend the Term
hereunder for the Manufacture of the Rythmol®SR Product(s) for an additional
two (2) year period, upon not less than twelve (12) months written notice to
the Seller prior to the end of the First Extension Term (such additional two
(2) year period, the “Second Extension Term”).

 

(d)                                 Price
Adjustment During Extension Terms. If Buyer elects to exercise the option
with respect to the First Extension Term and Second Extension Term, then the
Purchase Price shall be adjusted as of the expiration of the Initial Term and
the First Extension Term, as applicable, of this Agreement and annually
thereafter, if applicable, to reflect Seller’s then applicable costs to
Manufacture the Rythmol®SR Product(s) plus fifteen percent (15%).

 

(e)                                  Definition
of “Term”. As used herein, the “Term” shall be deemed to include the
Initial Term and each of the First Extension Term and the Second Extension
Term, as applicable.

 

6.2                               Termination Prior to Effective Date.
In the event that the Asset Purchase Agreement is terminated prior to the
Closing of the transactions contemplated thereby, this Agreement shall
automatically terminate without any affirmative action of either Party, and
shall be deemed null and void ab initio.
In the event of such an automatic termination neither Party shall have any
liabilities or obligations to the other Party hereunder as a result of such
termination of this Agreement.

 

6.3                               Voluntary Termination. During the Term, Buyer may, in its
sole discretion, terminate this Agreement for any reason or no reason
whatsoever upon one (1) year prior written notice to Seller.

 

6.4                               Material Breach. Either Party may
terminate this Agreement upon forty-five (45) calendar day’s prior written
notice in accordance with Section 8.11 to the other Party if the other
Party is in material breach of this Agreement and fails to cure that breach
within such forty-five (45) day period.

 

6.5                               Insolvency. Either Party may
terminate this Agreement on immediate notice if at any time the other Party (a)
shall voluntarily file in any court pursuant to any statute of any Governmental
Authority in any country a petition in bankruptcy or insolvency or for

 

21

 

reorganization or for the appointment of a receiver or
trustee of such Party or of its assets; (b) shall be served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition
shall not be dismissed within sixty (60) days after the filing thereof; (c)
shall be a Party to any dissolution or liquidation; or (d) shall make a general
assignment for the benefit of its creditors.

 

6.6                               Effect of Termination. Termination
of this Agreement shall not affect any obligations of either Party incurred
prior to its termination, including, without limitation, each Party’s
obligations with respect to any Firm Orders that have been submitted or are
deemed to have been submitted pursuant to Article 2 hereof; provided,
however, if Buyer is in material breach of this Agreement for failure to
pay or otherwise, Seller shall have no obligation with respect to any Firm
Order until such time as such breach is cured. Buyer shall purchase all
Remaining Inventory as set forth in Section 2.2(f) above.

 

6.7                               Technical Transfer.

 

(a)                                  Transfer
Plan. The Parties hereby agree that effective at the time of any expiration
or termination of this Agreement in accordance with Section 6.1 and Section
6.2 hereof or at Buyer’s request in the event that Buyer desires to qualify
a source other than Seller to Manufacture a Product, the Parties shall meet and
mutually agree upon a reasonable plan (the “Transfer Plan”) to transfer
the Manufacture of the Product, including the Product Specifications, from
Seller or Seller’s Affiliates to Buyer or Buyer’s designees to enable Buyer or
Buyer’s designees to Manufacture the Products. The Transfer Plan may include,
at Buyer’s reasonable request, the right to observe Seller’s or Seller’s
Affiliate’s Manufacture of the Product(s), subject to reasonable
confidentiality undertakings on behalf of such observers, and reasonable
cooperation by Seller and Seller’s Affiliates prior to and following the
effectiveness of the transfer, including as may be necessary to assist Buyer in
the discharge of its obligations under Sections 6.1(b) and 6.1(c)
hereof as set forth in such Transfer Plan.

 

(b)                                 Intellectual
Property Associated with Transfer Plan. Buyers shall receive, pursuant to
this Section 6.7, the necessary Product Specifications and know-how and
certain intellectual property developed in the course of this Agreement as
described in Section 5.5 to permit the Buyer or Buyer’s designee to
Manufacture the products in accordance with the Product Specifications in place
at the time of the transfer. At any time after the Effective Date, Seller shall
reasonably cooperate with Buyer’s efforts to qualify a source other than Seller
to Manufacture the Products and obtain necessary approvals for such
qualifications. The effective date of such transfer shall be specified by Buyer
upon written notice to Seller (provided that such transfer shall not relieve
Seller of any obligations accrued prior to such transfer date, including the
responsibility for Firm Orders already placed and any Remaining Inventory).

 

(c)                                  One
Transfer Plan per Product. Seller shall only be obligated to cooperate with
Buyer in the qualification of one source other than Seller for the Manufacture
of any Product (meaning all formulations and or packaging configurations for
such Product). For the avoidance of doubt, the Parties agree that there shall
be one Transfer Plan in respect of Rythmol®IR and one Transfer Plan in respect
of Rythmol®SR.

 

22

 

(d)                                 Costs
of Transfer Plan. In the event that this Agreement terminates for any
reason except Seller’s material breach, all direct actual out-of-pocket costs
incurred by Seller in connection with each such Transfer Plan, and the Seller’s
and Seller’s Affiliates’ time (at the current staff rates) incurred in
connection with each such Transfer Plan, shall be the sole responsibility of
the Buyer. In the event that this Agreement terminates as result of Section
6.3 as a result of Seller’s material breach, all direct actual out-of-pocket
costs incurred in connection with such Transfer Plan, and the Seller’s and
Seller’s Affiliates’ time at the current staff rates incurred in connection
with such Transfer Plan, shall be the sole responsibility of Seller.

 

ARTICLE
7 - 

CONFIDENTIALITY

 

7.1                               Buyer’s Information. Except as
provided in Section 7.3, all information provided by Buyer to Seller
concerning this Agreement shall be maintained in strict confidence by Seller.
Such information shall remain the property of Buyer, and Seller shall not use
the same for or on behalf of any Person or entity other than Buyer or make use
of any such information except for the purposes for which it was provided.

 

7.2                               Seller’s Information. Except as
provided in Section 7.3, all information provided by Seller to Buyer
concerning this Agreement shall be maintained in strict confidence by Buyer.
Such information shall remain the property of Seller, and Buyer shall not make
use of any such information except for the purposes for which it was provided.

 

7.3                               Exceptions. The covenants of the
receiving Party contained in Section 7.1 and Section 7.2 shall
not apply to information that:  (a) is
already in the public domain at the time of disclosure; (b) becomes part of the
public domain through no action or omission of the receiving Party after
disclosure to the receiving Party; or (c) is required to be disclosed by Law or
a court or other Governmental Authority or Regulatory Authority.
Notwithstanding any provision herein to the contrary, nothing herein shall
prevent or prohibit any disclosure of any information concerning this Agreement
(i) required under applicable securities Laws and the rules and regulations of
any stock exchange or market system on which any Party’s securities are or may
be traded, (ii) by Buyer in connection with
an Approved Transaction (as defined below), and/or (iii) to investment bankers
and/or financing sources in connection with bona fide financing transactions
involving Buyer or an Affiliate. In addition, the Parties (and any of
their respective Affiliates and representatives) may disclose to any and all
Persons, without limitation of any kind, the “tax treatment” and “tax
structure,” within the meaning of Treasury Regulation Section 1.6011-4, of the
transactions contemplated hereby, and by the Asset Purchase Agreement and the
Other Agreements, and all materials of any kind (including opinions or other
tax analyses) that are provided to it relating to such tax treatment and tax
structure (but no other details regarding matters covered by this agreement,
including, without limitation, the identities of the parties); provided,
however, that each party recognizes that the privilege each has to
maintain, in its sole discretion, the confidentiality of a communication
relating to the transactions contemplated hereby, and by the Asset Purchase
Agreement and the Other Agreements, including a confidential communication with
its attorney or a confidential communication with a federally authorized tax
practitioner under Section 7525 of the Internal Revenue Code of 1986, as
amended, is not intended to be affected by the foregoing. For the purposes of
this Agreement, each of the following shall constitute an “Approved Transaction”: (i) the
conversion of Buyer

 

23

 

from a limited liability company to a corporation
following which the equityholders of Buyer immediately prior to such conversion
hold shares in the resulting corporation in approximately the same relative
proportions as they did in the pre-conversion entity, (ii) the issuance by
Buyer of securities in connection with any financing transaction or public
offering, (iii) the merger, consolidation or other similar transaction (i.e., wherein all or substantially all of
Buyer’s equity interests or assets are acquired by another entity).

 

7.4                               Survival. This Article 7
shall survive termination of this Agreement for a period of five (5) years.

 

ARTICLE
8 - 

MISCELLANEOUS

 

8.1                               Corporate Organization and Authority. Each Party represents and warrants
to the other Party that it is a corporation duly organized, validly existing,
and in good standing under the Laws of the jurisdiction wherein it is
organized, and that it has all necessary power and authorization to perform its
obligations under this Agreement and to discharge them pursuant to the terms
hereof.

 

8.2                               No Conflicts; Enforceability. The
execution, delivery and performance of this Agreement by each Party is not and
shall not be prohibited or limited by, and will not result in the breach of or
a default under: (i) the Articles of Incorporation or Bylaws or the constituent
documents of any Party and/or its Affiliates; (ii) the Intellectual Property;
(iii) any binding agreement or instrument; or (iv) any applicable order, Law,
writ, injunction or decree of any court or Governmental Authority. This
Agreement has been duly executed and delivered by each Party, and constitutes,
the legal, valid and binding obligations of each Party and its Affiliates,
enforceable against each Party and its Affiliates in accordance with its terms,
except as enforceability may be limited or affected by applicable bankruptcy,
insolvency, moratorium, reorganization or other Laws of general application
relating to or affecting creditors’ rights generally.

 

8.3                               Public Announcements. Except as
provided for in Section 10.2 of the Asset Purchase Agreement, neither
Party shall make any publicity releases, interviews or other dissemination of
information concerning this Agreement or its terms, or either Party’s
performance hereunder, to communication media, financial analysts or others
without the prior written approval of the other Party, which approval shall not
be unreasonably withheld. Either Party may, upon written notice to the other,
make any disclosure in filings with Governmental Authorities or Regulatory
Authorities as required by Law or applicable court or other order; provided,
however, that the other Party shall have the opportunity to review and
comment on such disclosures and filings.

 

8.4                               Force Majeure. Neither Party shall
be liable to the other if, and to the extent that, the performance or delay in
performance of any of its obligations under this Agreement is prevented,
restricted, delayed or interfered with due to circumstances beyond the
reasonable control of such Party, including, without limitation, fires, floods,
explosions, epidemics, accidents, acts of God and/or wars, riots, strikes,
lockouts or other concerted acts of workers. The Party claiming an event of
force majeure shall promptly notify the other Party in writing and

 

24

 

provide full particulars of the cause or event and the
date of first occurrence thereof as soon as possible after the event and also
keep the other Party informed of any further developments. The Party so
affected shall use its commercially reasonable efforts to remove the cause of
non-performance, and both Parties shall resume performance hereunder with the
utmost dispatch when such cause is removed, unless this Agreement has
previously been terminated under Article 6 hereof.

 

8.5                               Entire Agreement. This Agreement,
the Asset Purchase Agreement and the Other Agreements contain the entire
agreement and understanding between the Parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings,
whether written or oral, relating to such subject matter; provided, however,
that except as otherwise expressly agreed by the Parties, nothing herein shall
modify or supersede the Asset Purchase Agreement.

 

8.6                               Amendment and Waiver. This
Agreement may be amended only by a writing that specifically states that such
is an amendment, specifically states its purpose and that is signed by both
Parties. No course of dealing between the Parties or failure by either Party to
exercise any right or remedy hereunder shall constitute an amendment to this
Agreement or a waiver of any other right or remedy or the later exercise of any
right or remedy.

 

8.7                               Governing Law. This Agreement
shall be governed by and construed in accordance with the substantive law of
the State of Illinois, without regard to the conflicts of law provisions
thereof.

 

8.8                               Alternative Dispute Resolution.
Any dispute, controversy or claim between the Parties arising out or relating
to this Agreement, or the breach, termination or invalidity thereof, which is
not settled by written agreement between the Parties shall be finally settled
pursuant to the alternative dispute resolution procedures set forth in Exhibit
8.8 attached hereto; provided, however, that nothing herein
shall prevent or prohibit any Party from seeking injunctive/equitable relief in
any court with appropriate jurisdiction.

 

8.9                               Successors and Assigns. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective successors and assigns; provided,
however, that except as otherwise provided herein, no Party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without first receiving the prior written consent of the other Party,
which consent shall not be unreasonably withheld, except that either Party may
assign and delegate its rights and duties hereunder without obtaining such
consent (a) to any Affiliate of such Party or (b) to any Person or entity that
acquires substantially all of the business or assets of such Party, if such
Party guarantees the performance of the acquiring Party and the acquiring Party
expressly assumes the assigning Party’s obligations hereunder. For the purposes
of this Section 8.9, none of the following shall constitute an
assignment by Buyer: (a) the conversion of Buyer from a limited liability
company to a corporation (whether such conversion is effected by statutory
conversion provisions, merger or otherwise), or (b) the issuance of debt or
equity securities by Buyer in connection with any financing transaction.

 

25

 

8.10                        Nature of Agreement. In performing
this Agreement, each Party shall act independently and this Agreement shall not
be construed as creating any partnership, joint venture or incorporated
business entity. Neither Party shall have any authority to incur any liability
or obligation whatsoever on behalf of the other Party.

 

8.11                        Notices. All communications,
notices and consents provided for herein shall be in writing and be given in
person or by means of telex, facsimile or other means of wire transmission
(with request for assurance of receipt in a manner typical with respect to
communications of that type), by overnight courier or by mail, and shall become
effective: (a) on delivery if given in person; (b) on the date of transmission
if sent by telex, facsimile or other means of wire transmission; (c) one (1)
Business Day after delivery to the overnight service; or (d) four (4) Business
Days after being deposited in the United States mail, with proper postage and
documentation, for first-class registered or certified mail, prepaid. Notices
shall be addressed as follows:

 

If
to Buyer, to:

 

Reliant
Pharmaceuticals, LLC

110 Allen Road

Liberty Corner, NJ 07938

Attn: Chief Executive Officer

Facsimile: (908) 542-9405

 

with
copies sent simultaneously to:

 

Reliant
Pharmaceuticals, LLC

110 Allen Road 

Liberty Corner, NJ 07938 

Attn: General Counsel

Facsimile: (908) 542-9405

 

Latham & Watkins LLP

Sears Tower, Suite 5800

Chicago, IL  60606

Attn: Michael A. Pucker

Facsimile: (312) 993-9767

 

26

 

If
to Seller, to:

 

Abbott
GmbH & Co. KG

Postfach 21085

D-67008 Ludwigshafen

Attn: General Manager

 

Abbott
Laboratories

100
Abbott Park Road

Building
AP6D, Department 364

Abbott
Park, Illinois  60064-6020

Attn:  Senior Vice President, Secretary and General
Counsel

Facsimile
Number: (847) 938-6277

 

Abbott
Laboratories

Dept.
50C, Bldg. J23

200
Abbott Park Road

Abbott
Park, Illinois  60064-6162

Attn:  Manager, Contract Manufacturing

Facsimile
Number:  (847) 938-9319

 

provided,
however, that if either Party shall have designated a different address
by notice to the other Party pursuant to this Section 8.11 then to the
last address so designated.

 

8.12                        Construction. The language in all parts of this
Agreement shall be construed, in all cases, according to its fair meaning.
Seller and Buyer acknowledge that each Party and its counsel have reviewed and
revised this Agreement and that any rule of construction to the effect that any
ambiguities are to be resolved against the drafting Party shall not be employed
in the interpretation of this Agreement. The words “hereof,” “herein,” “hereto”
and “hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa. The terms “dollars” and “$” shall mean
United States dollars. Whenever used herein, the words “include,” “includes”
and “including” shall mean “include, without limitation,” “includes, without
limitation” and “including, without limitation,” respectively. The masculine,
feminine or neuter gender and the singular or plural number shall each be
deemed to include the others whenever the context so indicates. With respect to
any particular action or agreement, the use of the words “Seller shall” or
“Seller will” herein shall also mean “Seller shall cause” the particular action
to be performed.

 

8.13                        Agent for Service of Process. By
its execution hereof, Seller hereby appoints Parent, and Parent hereby accepts
such appointment, as Seller’s agent for service of process in respect of all
matters arising hereunder.

 

27

 

IN WITNESS WHEREOF, the Parties have affixed hereunto
their authorized signature as follows:

 

	
  RELIANT PHARMACEUTICALS, LLC

  	
   

  	
  ABBOTT GMBH & CO. KG

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

Abbott
Laboratories, an Illinois corporation and the parent of Seller, hereby
(i) guarantees payment and performance of all of Seller’s and its
Affiliates obligations under this Agreement, and (ii) agrees to its appointment
as Seller’s agent for service of process pursuant to Section 8.13:

 

ABBOTT LABORATORIES

 

 

	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

 

28

 

EXHIBIT 1.16

 

Products and Product Prices

 

See
attached.

 

 

Reliant Supply Agreement

Exhibit 1.16 - For 2005

 

Commerical Product Pricing

 

	
  Product

  	
   

  	
  List-Label-

  Size

  	
   

  	
  List-

  Tuc-

  Sales

  Size

  	
   

  	
  SAP

  Product

  #

  	
   

  	
  Package

  	
   

  	
  Standard

  Mfg Lot

  Size (units)

  	
   

  	
  Standard

  Finished

  Lot Size

  (units)

  	
   

  	
  2005

  Selling

  Price

  	
   

  
	
  Rythmol
  SR225Mg 100 Tab Btl (A)

  	
   

  	
  6134-04-13

  	
   

  	
   

  	
   

  	
  259524

  	
   

  	
  100 Tab Btl

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR225Mg Sample

  	
   

  	
  6134-48-06

  	
   

  	
   

  	
   

  	
  259530

  	
   

  	
  1x6

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR225Mg 100 Tab HUD (A)

  	
   

  	
  6134-04-11

  	
   

  	
   

  	
   

  	
  259527

  	
   

  	
  100 Tab HUD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR325Mg 100 Tab Btl (A)

  	
   

  	
  6135-04-13

  	
   

  	
   

  	
   

  	
  259525

  	
   

  	
  100 Tab Btl

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR325Mg Sample

  	
   

  	
  6135-48-06

  	
   

  	
   

  	
   

  	
  259531

  	
   

  	
  1x6

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR325Mg 100 Tab HUD (A)

  	
   

  	
  6135-04-11

  	
   

  	
   

  	
   

  	
  259528

  	
   

  	
  100 Tab HUD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR425Mg 100 Tab Btl (A)

  	
   

  	
  6136-04-13

  	
   

  	
   

  	
   

  	
  259526

  	
   

  	
  100 Tab Btl

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR425Mg Sample

  	
   

  	
  6136-48-06

  	
   

  	
   

  	
   

  	
  259532

  	
   

  	
  1x6

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  SR425Mg 100 Tab HUD (A)

  	
   

  	
  6136-04-11

  	
   

  	
   

  	
   

  	
  259529

  	
   

  	
  100 Tab HUD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  150Mg 100 Tab Bill (A)

  	
   

  	
  1628-04-13

  	
   

  	
   

  	
   

  	
  259284

  	
   

  	
  100 Tab Bottle

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  150Mg 100 Tab HUD (A)

  	
   

  	
  1628-04-11

  	
   

  	
   

  	
   

  	
  259287

  	
   

  	
  100 Tab HUD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  225Mg 100 Tab Btl (A)

  	
   

  	
  1732-04-13

  	
   

  	
   

  	
   

  	
  259285

  	
   

  	
  100 Tab Bottle

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  225Mg 100 Tab HUD (A)

  	
   

  	
  1732-04-11

  	
   

  	
   

  	
   

  	
  259288

  	
   

  	
  100 Tab HUD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  300Mg 100 Tab Btl (A)

  	
   

  	
  1831-04-13

  	
   

  	
   

  	
   

  	
  259286

  	
   

  	
  100 Tab Bottle

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rythmol
  300Mg 100 Tab HUD (A)

  	
   

  	
  1831-04-11

  	
   

  	
   

  	
   

  	
  259289

  	
   

  	
  100 Tab HUD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

 

Hourly Rates for Resources Not in Standard

 

	
  Area

  	
   

  	
  Charge Rate

  	
   

  	
  Billing

  Rate

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

	
  Accepted
  By:

  	
   

  	
   

  
	
    /    /     

  	
   

  	
  Accepted
  by:

  
	
  Abbott Laboratories

  	
  Dated

  	
   

  	
   

  
	
  Michael
  L. McGibbon

  	
   

  	
    /    /

  	
   

  
	
  General
  Manager, Pharma

  	
   

  	
  Reliant
  Pharmaceuticals

  
					

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

 

EXHIBIT 2.2(a)

 

Initial Forecast

 

[To be attached prior to Effective Date]

 

32

 

	
  Rythmol IR

  SKU

  	
   

  	
  Initial

  Inventory

  	
   

  	
  Dec-03

  	
   

  	
  Jan-04

  	
   

  	
  Feb-04

  	
   

  	
  Mar-04

  	
   

  	
  Apr-04

  	
   

  	
  May-04

  	
   

  	
  Jun-04

  	
   

  	
  Jul-04

  	
   

  	
  Aug-04

  	
   

  	
  Sep-04

  	
   

  	
  Oct-04

  	
   

  	
  Nov-04

  	
   

  	
  Dec-04

  	
   

  	
  Jan-05

  	
   

  	
  Feb-05

  	
   

  	
  Mar-05

  	
   

  	
  Apr-05

  	
   

  	
  May-05

  	
   

  	
  June-05

  	
   

  
	
  100ct 150mg Bottle

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100ct 150mg HUD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Rythmol IR 

  SKU

  	
   

  	
  Initial

  Inventory

  	
   

  	
  Dec-

  03

  	
   

  	
  Jan-

  04

  	
   

  	
  Feb-

  04

  	
   

  	
  Mar-

  04

  	
   

  	
  Apr-

  04

  	
   

  	
  May-

  04

  	
   

  	
  Jun-

  04

  	
   

  	
  Jul-

  04

  	
   

  	
  Aug-

  04

  	
   

  	
  Sep-

  04

  	
   

  	
  Oct-

  04

  	
   

  	
  Nov-

  04

  	
   

  	
  Dec-

  04

  	
   

  	
  Jan-

  05

  	
   

  	
  Feb-

  05

  	
   

  	
  Mar-

  05

  	
   

  	
  Apr-

  05

  	
   

  	
  May-

  05

  	
   

  	
  June-

  05

  	
   

  
	
  100ct 225mg Bottle

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100ct 225mg HUD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

33

 

	
  Rythmol IR

  SKU

  	
   

  	
  Initial

  Inventory

  	
   

  	
  Dec-03

  	
   

  	
  Jan-04

  	
   

  	
  Feb-04

  	
   

  	
  Mar-04

  	
   

  	
  Apr-04

  	
   

  	
  May-04

  	
   

  	
  Jun-04

  	
   

  	
  Jul-04

  	
   

  	
  Aug-04

  	
   

  	
  Sep-04

  	
   

  	
  Oct-04

  	
   

  	
  Nov-04

  	
   

  	
  Dec-04

  	
   

  	
  Jan-05

  	
   

  	
  Feb-05

  	
   

  	
  Mar-05

  	
   

  	
  Apr-05

  	
   

  	
  May-05

  	
   

  	
  June-05

  	
   

  
	
  100ct 300mg Bottle

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100ct 300mg HUD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

 

	
  Rythmol SR

  SKU

  	
   

  	
  Dec-03

  	
   

  	
  Jan-04

  	
   

  	
  Feb-04

  	
   

  	
  Mar-04

  	
   

  	
  Apr-04

  	
   

  	
  May-04

  	
   

  	
  Jun-04

  	
   

  	
  Jul-04

  	
   

  	
  Aug-04

  	
   

  	
  Sep-04

  	
   

  	
  Oct-04

  	
   

  	
  Nov-04

  	
   

  	
  Dec-04

  	
   

  	
  Jan-05

  	
   

  	
  Feb-05

  	
   

  	
  Mar-05

  	
   

  	
  Apr-05

  	
   

  	
  May-05

  	
   

  	
  June-05

  	
   

  
	
  100ct 225mg Bottle

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100ct 225mg HUD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6ct 225mg Sample

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Rythmol SR

  SKU

  	
   

  	
  Dec-03

  	
   

  	
  Jan-04

  	
   

  	
  Feb-04

  	
   

  	
  Mar-04

  	
   

  	
  Apr-04

  	
   

  	
  May-04

  	
   

  	
  Jun-04

  	
   

  	
  Jul-04

  	
   

  	
  Aug-04

  	
   

  	
  Sep-04

  	
   

  	
  Oct-04

  	
   

  	
  Nov-04

  	
   

  	
  Dec-04

  	
   

  	
  Jan-05

  	
   

  	
  Feb-05

  	
   

  	
  Mar-05

  	
   

  	
  Apr-

  05

  	
   

  	
  May-05

  	
   

  	
  June

  -05

  	
   

  
	
  100ct 325mg Bottle

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100ct 325mg HUD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6ct 325mg Sample

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

 

	
  Rythmol

  SR SKU

  	
   

  	
  Dec-03

  	
   

  	
  Jan-04

  	
   

  	
  Feb-04

  	
   

  	
  Mar-04

  	
   

  	
  Apr-04

  	
   

  	
  May-04

  	
   

  	
  Jun-04

  	
   

  	
  Jul-04

  	
   

  	
  Aug-04

  	
   

  	
  Sep-04

  	
   

  	
  Oct-04

  	
   

  	
  Nov-04

  	
   

  	
  Dec-04

  	
   

  	
  Jan-05

  	
   

  	
  Feb-05

  	
   

  	
  Mar-05

  	
   

  	
  Apr-05

  	
   

  	
  May-05

  	
   

  	
  June-05

  	
   

  
	
  100ct 425mg Bottle

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100ct 425mg HUD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PO #

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6ct 425mg Sample

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deliveries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[***]:  Certain information on this page has been omitted
and filed separately with the Commission. 
Confidential treatment has been requested with respect to the omitted
portions.

 

 

 

Exhibiti 4.6

 

 

 

 

QUALITY
AGREEMENT

 

 

Between

 

 

 

 

 

 

 

And

 

 

Abbott Laboratories

 

 

 

 

 

 

 

For the manufacture of:

 

 

Rythmol® (Propafenone) Tablets
150 mg, 225 mg, and 300 mg

Rythmol SR (Propafenone) Capsules
225 mg, 325 mg and 425 mg

 

 

 

 

 

TABLE OF CONTENTS

 

                                                                                                                                                                                                                        

	
   

  	
   

  	
   

  	
  Page

  
	
  I

  	
  QUALITY AGREEMENT AND TERM

  	
  1

  
	
  II

  	
  PRODUCTS

  	
  1

  
	
  III

  	
  CONTACT INFORMATION

  	
  2

  
	
  IV

  	
  MANUFACTURING COMPLIANCE

  	
  2

  
	
   

  	
  1.

  	
  Premises

  	
  2

  
	
   

  	
  2.

  	
  Equipment

  	
  2

  
	
   

  	
  3.

  	
  Personnel

  	
  3

  
	
   

  	
  4.

  	
  Materials

  	
  3

  
	
   

  	
  5.

  	
  Documentation

  	
  3

  
	
   

  	
  6.

  	
  Lot
  Numbers and Expiration

  	
  3

  
	
   

  	
  7.

  	
  Product
  Storage and Shipment

  	
  4

  
	
  V

  	
  QUALITY CONTROL

  	
  5

  
	
   

  	
  1.

  	
  Premises

  	
  6

  
	
   

  	
  2.

  	
  Equipment

  	
  6

  
	
   

  	
  3.

  	
  Personnel

  	
  6

  
	
   

  	
  4.

  	
  Out-of-Specification
  (OOS) Investigations

  	
  6

  
	
   

  	
  5.

  	
  Reference
  Standards

  	
  7

  
	
   

  	
  6.

  	
  Product
  Release

  	
  7

  
	
   

  	
  7.

  	
  Stability

  	
  7

  
	
  VI

  	
  QUALITY ASSURANCE

  	
  8

  
	
   

  	
  1.

  	
  Documentation

  	
  8

  
	
   

  	
  2.

  	
  Samples

  	
  8

  
	
   

  	
  3.

  	
  Investigations

  	
  9

  
	
   

  	
  4.

  	
  Product
  Complaints or Adverse Events

  	
  9

  
	
   

  	
  5.

  	
  Annual
  Product Review

  	
  10

  
	
   

  	
  6.

  	
  Product
  Recalls

  	
  10

  
	
   

  	
  7.

  	
  Audits
  by Reliant Pharmaceuticals

  	
  11

  
	
  VII

  	
  REGULATORY

  	
  12

  
	
   

  	
  1.

  	
  Inspections
  by Regulatory Agencies

  	
  12

  
	
   

  	
  2.

  	
  Annual
  Reports

  	
  12

  
	
   

  	
  3.

  	
  Drug
  Listing

  	
  12

  
	
  VIII

  	
  VALIDATION

  	
  13

  
	
   

  	
  1.

  	
  Process

  	
  13

  
	
   

  	
  2.

  	
  Equipment
  Cleaning Validation

  	
  13

  
	
   

  	
  3.

  	
  Computer

  	
  13

  
	
   

  	
  4.

  	
  Analytical
  Test Methods

  	
  13

  

 

i

 

I  QUALITY AGREEMENT
AND TERM

 

1.               It is deemed
necessary by Reliant Pharmaceuticals (“Reliant”) and Abbott Laboratories
(“Abbott” or “Manufacturer”) to allocate the responsibilities of current good
manufacturing practice (cGMP), as defined in 21 CFR part 210-211, by which
Rythmolâ (Propafenone)Tablets 150 mg, 225 mg and 325 mg
and Rythmol  SRâ
(Propafenone) Capsules 225 mg, 325 mg and 425 mg (the Products) shall be
manufactured and provided to Reliant.

 

2.               This agreement, in
conjunction with the Manufacturing Agreement between Reliant and Abbott, dated
November ____, 2003 (the “Manufacturing Agreement”), shall define the
responsibilities of the parties involved, and the levels of interaction
necessary for the delivery of a compliant drug product.

 

3.               This Quality
Agreement shall expire with the termination of the Manufacturing
Agreement.  The agreement can be modified
with the written approval of Reliant and Abbott.  A revision history shall be maintained as
part of the Quality Agreement.

 

II  PRODUCTS

 

Abbott
has agreed to manufacture the Products in accordance with all cGMP’s, Product
Specifications and all applicable federal, state, and local laws and
regulations.

 

Rythmol
SR is manufactured at Ludwigshafen, Germany, shipped in bulk to Abbott
Whippany, where it is tested and final-packaged for commercial release.  Rythmol â
is manufactured, tested, and final packaged for commercial release at Abbott
Whippany.  Both sites are part of
Abbott’s Global Pharmaceutical Operations (GPO).  Communications on either product will be
directed through the Abbott Whippany quality assurance group, who will direct
inquiries on Rythmol SR manufacture, as required, to the appropriate
Ludwigshafen counterpart.

 

 

 

 

 

 

 

 

*
Unless otherwise indicated, all terms used herein shall have the meaning
ascribed to them in the Manufacturing Agreement to which this agreement is
annexed as Exhibit  __.

 

1

 

III  CONTACT
INFORMATION

 

See  separate attachment, QMCL.

 

 

IV  MANUFACTURING
COMPLIANCE

 

The Product will
be manufactured by Abbott pursuant to the Manufacturing Agreement at the Abbott
facility(s) located at 30 N. Jefferson Road, Whippany, NJ  07981 (FDA facility registration #2211084)
and at Abbott GmbH & Co. KG, Knoll Strasse 50, Ludwigshafen, Germany 67061
(FDA facility registration #3002807401).

 

1.             Premises

 

1.1                                 The
manufacturing facility(s) shall comply with all aspects of 21 CFR Part 210 and
211 Subpart C, as well as all additional requirements detailed in the
Manufacturing Agreement.

2.                                      Equipment

 

2.1                                 Equipment
used to manufacture the Product shall comply with 21 CFR part 211 Subpart D, as
well as all additional requirements detailed in the NDAs or approved
Supplements.

 

2.2                                 Abbott
shall maintain written records for usage, cleaning, maintenance, and
calibration of all equipment used in the processing of the Products to ensure
that cleaning and maintenance records are readily identifiable with equipment
usage in the event of a drug product problem that may be investigated.  Abbott shall maintain approved written
procedures including, but not limited to, specifications for cleaning,
assignment of responsibility for cleaning and maintaining equipment.

 

2.3                                 Installation
qualification (IQ)/ operational qualification (OQ)/ performance qualification
(PQ) shall be performed on all equipment used in analysis of the Products, and
the same equipment shall be placed on a calibration and/or preventive
maintenance schedule, as appropriate.

 

2.4                                 Abbott
shall only use the major equipment detailed in the NDAs or approved NDA Supplements thereto for the processing and
manufacture of the Products.  Use of
equipment other than that stipulated in the mutually agreed to Master Batch
production records shall not be permitted without prior written consent from
Reliant Quality, irrespective of FDA guidance’s detailing equipment class and
subclass equivalencies.

 

2

 

3.                                      Personnel

 

3.1                                 Abbott
shall maintain a quality control unit to be responsible for the duties relating
to quality control.  The responsibilities
of the quality control unit shall be defined in written procedures.

 

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

 

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

 

4.             Materials

 

4.1                                 Abbott
shall use only those excipients, Active Pharmaceutical Ingredient (API), and
packaging materials as detailed in the NDAs or approved NDA Supplement.

 

4.2                                 Abbott
shall sample all raw materials and API according to approved procedures, and
shall test and release those materials according to approved analytical
methodology and specifications as filled in the NDAs or approved Supplements.

 

4.3                                 Abbott
shall store all packaging materials, excipients, API and finished product in a
suitable environment so as not to impact the materials’ quality.  A suitable retest program shall be used to
demonstrate the quality of the stored material versus approved
specifications.  Certificates of Analysis
shall be generated, as required for Reliant, for materials used to process and
manufacture the Product.

 

4.4                                 All
excipients used in the manufacture of the Products shall be tested in
accordance with Abbott standard operating procedures, using approved methods
and specifications.

 

4.5                                 All
printed commodities shall come from qualified vendors.  When commodities are sourced and provided by
Abbott, such vendors will be suitably qualified by Abbott procedures, and when
commodities are sourced and provide by Reliant, such vendors will be suitably
qualified by Reliant procedures.  Any
qualified vendor (Abbott or Reliant) may be used to source printed commodities.

 

5.                                      Documentation

 

5.1           Abbott shall provide written
documentation in the form of a Master Batch Record for all processes used in
the manufacture of the Products.

 

3

5.2           Abbott shall maintain and follow all
Standard Operating Procedures (SOPs) required to manufacture, package, analyze,
release, and store the Products as detailed in the NDA or approved Supplements,
and required by cGMP.

 

5.3                                 Abbott
shall follow a suitable, internal, change control procedure for all
documentation.  All changes to the batch
record, manufacturing specifications, or test methods must be submitted to
Reliant QA for review and approval prior to implementation.

 

5.4                                 Original
texts of labeling will be supplied by Reliant. All artwork shall be approved by
Reliant. Abbott shall have written label control procedures for the receipt,
dispensing, and reconciliation of all labels.

 

 

6.                                      Lot
Numbers and Expiration

 

6.1                                 Reliant
will provide unique lot numbers for the finished packaged product.

 

6.1.1                        The
bulk product lot number will be assigned according to Abbott lot numbering
system.  The Abbott Whippany bulk lot
number is assigned in accordance with the Abbott Whippany lot numbering system.

 

6.1.2                        Once
all QC testing has completed, Abbott will forward Bulk Product C of A to
Reliant.  The C of A will detail Product
Name/Number, Lot Number, Date of Manufacturing, tests, specifications, and
results from all release testing performed.

 

6.1.3                        Reliant
will provide Abbott with the product packaging lot number and expiration date
via an approved “Packaging Lot Number Request Form” (QA # 6, see Exhibit
__).  If a single lot of bulk Product is
to be packaged into multiple packaging configurations, Reliant must supply the
expiration date and unique lot number for each packaged product.

 

6.1.4                        The
Reliant lot number is a seven digit alpha/numeric sequence.  The first character is numeric, the second
and third characters are alpha, and the remaining 4 characters are
numeric.  Printed text will appear as
follows:  LOT  #AA####.

 

6.1.5                        The
Reliant expiration date will consist of 3 alpha characters corresponding to the
month of expiry (i.e. JUN for June) and the 4 digit year (i.e. 2005).

6.1.6                        Product
labeling shall contain the word “Lot” (followed by a space) above the word
“Exp.” (followed by a space) to accommodate Whippany equipment needs.

 

4

 

6.2                                 Product
lot expiration dating will start on the first day API is blended with
excipients, and will be based on the approved expiration dating in the approved
NDA or Supplement.

 

7.             Product Storage and Shipment

 

7.1                                 Abbott
shall store all finished product in suitable containers, labeled with lot
specific information, as detailed in the Manufacturing Agreement, and in a
controlled environment under cGMP conditions.

 

7.2                                 Product
shall be labeled with all D.O.T. and O.S.H.A. information, as required, and
suitably packaged to minimize damage during transit.

 

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

 

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

 

5

 

V  QUALITY CONTROL

 

All testing shall be
done in accordance with the approved NDA and approved Supplements.    Any changes to laboratory test sites will
be reviewed and approved by Reliant QA. 
Labs currently used to test raw material and finished product, for
example microbial testing, will be considered acceptable.

 

1.             Premises

 

1.1                                 The
quality control laboratory shall comply with all aspects of 21 CFR Part 210 and
211, as well as all additional requirements detailed in the NDAs or approved
Supplements.

 

2.                                      Equipment

 

2.1                                 Installation
qualification (IQ)/ operational qualification (OQ)/ performance qualification
(PQ) shall be performed on all equipment used in analysis of the Product, and
the same equipment shall be placed on a calibration and/or preventive
maintenance schedule, as appropriate.

 

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

 

3.             Vendor
Approval

 

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

 

4.                                      Personnel

 

4.1                                 Personnel
used to test and release the Product shall be appropriately trained in cGMP’s,
as well as the methods and techniques they utilize.  Training shall be documented and available
for review. Training shall be conducted on a continuing basis by qualified
individuals.

 

5.                                      Out-of-Specification
(OOS) Investigations

 

5.1                                 Abbott
is responsible for following its SOP to investigate any test results that fail
to meet specifications.  A confirmed OOS
failure should be conveyed to Reliant Quality within 2 business days.  These OOS investigations are open to review
by Reliant during an audit.

 

6

 

6.             Reference Standards

 

6.1                                 All
testing shall use primary reference standards, or appropriately qualified
secondary reference standards. 
Qualification of secondary reference standards must comply with current
ICH guidelines.

 

7.                                      Product
Release

 

7.1           Reliant shall only accept finished
product that complies with the NDA or approved Supplement, and with the
Manufacturing Agreement.

 

7.2                                 Significant
occurrences of Dissolution Stage II product releases will result in
investigations when such investigations are agreed-to by Reliant QA and Abbott
QA.

 

8.             Stability

 

8.1                                 The
stability program will be conducted in accordance with Abbott Standard
Operating Procedures.  The currently
approved Regulatory stability protocols will be followed as written.  Changes to the protocols will be approved by
Reliant QA.

 

 

7

 

VI  QUALITY ASSURANCE

 

Abbott shall assure that
the Product was manufactured, tested, released, and stored in accordance with
cGMP’s, and all requirements as detailed in the NDA, approved Supplement and
Manufacturing Agreement.

 

1.                                      Documentation

 

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

 

1.2                                 Abbott
shall retain all executed master batch production records and all other
applicable records defined in 21 CFR 211.80(a) and (b) for the Product for a
period of not less than one year past the product expiration date.

2.                                      Samples

 

 

2.1                                 Abbott’s
Quality Control Unit shall assure that all test samples are taken in accordance
with approved SOP’s and as detailed in the approved NDA Supplement.

 

2.2                                 Abbott
shall maintain finished Product Reserve samples for a period of not less than
one year past the expiration date of finished Products.  Abbott shall retain Active Compound reserve
samples for one year after the expiration date on the last finished Product
drug lot containing it.  At least twice
as much material shall be retained as is needed to conduct all specification
release testing.

 

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

 

2.4                                 Abbott
shall perform annual inspection of the Retain Samples as per 21 CFR 211.170,
and on investigation of deterioration, if necessary, as per 21 CFR 211.170.

 

 

8

 

 

 

3.                                      Investigations/Deviations

 

3.1                                 Abbott
shall notify Reliant Quality in writing within one business day after
confirmation of any situation that impacts product that has already been
released.  Abbott shall also provide
Reliant with verbal communication of any such investigation prior to the
confirmation so that appropriate action can be implemented to restrict
continued distribution of product until the investigation can be finalized.

 

3.2                               All
results of major manufacturing or analytical deviations shall be investigated,
and copies of said investigations shall be conveyed to Reliant Quality with the
issuance of the bulk product certificate of analysis.  Copies of minor deviations shall be provided
only upon request.

 

                                                A
Major Deviation is defined as: A departure from normal operating
conditions that is determined to have a significant
or unknown impact on the
identity, strength, quality, and purity of the drug product.  Examples include, but are not limited to:
failure of a batch or lot to meet any analytical specification that is not
determined to be a laboratory error; or, compounding errors such as dispensing
incorrect quantities of material; or processing errors such as using equipment
that is outside of approved calibration dating or processing a batch outside
the tolerances set forth in the batch record; or observation of foreign
materials in a batch; or packaging or labeling errors.

 

                                                A
Minor Deviation is defined as: A departure from normal operating
conditions that is determined to have no impact on the identity, strength,
quality, and purity of the drug product. 
Examples include, but are not limited to: low gross yields; or
calculation or rounding errors that have no impact on the batch.

 

3.3                                 All
minor deviations to the manufacturing process or analytical test methods must
be documented and reviewed versus the respective validation, and approved by
Abbott’s Quality department prior to release of the Product.

 

4.                                      Product
Complaints or Adverse Events

 

4.1                                 All
individuals reporting a product related complaint should be immediately
directed to contact Reliant’s Customer Complaints Group as directed on QMCL
Reliant.

 

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

 

4.1.2                        Reliant
shall report any product complaints to Abbott in writing within seven days of
receipt of the complaint.

 

9

 

4.1.3                        Upon
receiving a product complaint for which the subject bottle is still available,
Reliant shall issue a return mailer to have the complaint sample returned to
Abbott at (ADDRESS).

 

4.1.4                        Abbott
shall perform a thorough investigation of each product complaint for operations
performed at Abbott, and shall make every reasonable effort to provide Reliant
with a written report within 45 days, unless a more urgent need is identified
and mutually agreed upon (i.e. NDA Field Alert).

 

4.1.5                        Reliant
shall be responsible for communication and final correspondence with the complainant,
and/or regulatory authorities.

 

4.2                                 All
individuals reporting an Adverse Event (AE) should be immediately directed to
contact Reliant’s Medical Affairs Department as directed on QMCL Reliant.

 

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

 

4.2.2                        Reliant
shall maintain all AE files and is responsible for forwarding all appropriate
information to Regulatory Agencies.

 

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

 

4.4                                 Should
Reliant discover a product related problem, Reliant Quality Department shall
provide a written complaint notification to Abbott within 2 business days of
the occurrence.

 

5.                                      Annual
Product Review

 

5.1                                 Abbott
Whippany shall perform an annual product review for the Product detailing all
drug product lots manufactured, product investigations, stability updates, lots
released or rejected, and process or method revisions (including validation
reports) for all drug product lots manufactured in the previous Manufacturing
Agreement year.  All critical release data shall be trended to evaluate the process.

 

5.2                                 The
written Annual Product Review report for each year shall be sent to Reliant
Quality Department as specified in the table below.

 

(SUGGEST
TABLE OUTLINING DUE DATE FOR EACH PRODUCT APR — INFORMATION TO BE PROVIDED BY
R. LENGEL)

 

6.                                      Product
Recalls

 

6.1                                 It
shall be the sole responsibility of Reliant to issue a FDA Field Alert
Notification pertaining to a product quality issue discovered by Abbott or

 

10

 

                                                Reliant.  An alert shall only be issued with
substantive evidence of a quality issue, for which Abbott shall have 5 business
days from obtaining knowledge of the substantial evidence of a quality issue to
initiate an investigation report, with updates as needed.

 

6.2                                 It
shall be the sole responsibility of Reliant to issue a product recall, and
discuss with FDA the extent or type of action that should occur.  Decisions to initiate a product recall shall
be based on product medical reviews and the investigation report used to
support the FDA Field Alert.

 

7.                                      Audits
by Reliant Pharmaceuticals

 

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

 

7.2                                 Reliant
Quality shall provide 20 business days notification for a routine audit, and 3
business days’ notification for a ‘for cause’ audit pertaining to product
quality or safety.

 

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

 

7.4                                 Abbott
shall provide a written response to the audit observations within 20 business
days.  The response shall include details
of the corrective actions to the observations, and the expected completion date
of the action.  Reliant Quality shall
follow-up on the progress of the corrective actions based on the expected
completion dates provided.

 

 

11

 

 

VII  REGULATORY

 

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

 

1.                                      Inspections
by Regulatory Agencies

 

1.1                                 Abbott
shall inform Reliant Pharmaceuticals of any Regulatory Agency performing an
inspection relating to the Product(s), or a facilities inspection affecting the
Product(s) within the same business day of notification.  Reliant Quality Department may be present at
any inspections and exit meetings specific to the Product(s).

 

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

 

1.3                                 Abbott
shall provide copies of all regulatory agency inspection documentation (i.e.
483’s, EIR’s, etc.) or any other regulatory correspondence pertaining to the
Product(s) to Reliant Quality Department within two business days of
receipt.  A redacted copy may be provided
to protect other customer’s products.

 

2.                                      Annual
Reports

 

2.1                                 It
shall be the sole responsibility of Reliant Pharmaceuticals to maintain all
regulatory communication and updates (Supplements, CBE, Annual Reports, etc.)
pertaining to the Products as outlined in ICH and FDA regulatory guidance
documents.  All necessary CMC
documentation updates will be conveyed to Abbott, who shall provide the necessary
documentation to Reliant Regulatory not less than 45 days prior to filing date.

 

	
  Product

  	
  Filing
  date

  
	
  Rythmol

  	
  10/31

  
	
  Rythmol
  SR

  	
  9/4

  

 

3.                                      Drug
Listing

 

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

 

12

 

VIII  VALIDATION

 

Abbott shall
assure that all systems used to manufacture, test, release, and distribute the
Product shall have been appropriately transferred, qualified, and/or validated
prior to using that system to process the Product.

 

1.                                      Process

 

1.1                                 Abbott
shall be responsible for performing and documenting process validation to
comply with cGMP’s and to ensure consistency of quality Product.  A draft process validation protocol shall be
forwarded to Reliant for review and approval prior to carrying out the
validation.

 

 

2.                                      Equipment
Cleaning Validation

 

2.1                               Abbott
is responsible for reviewing toxicity and safety information for all products
they manufacture to set appropriate cleaning limits to ensure there are no
cross contamination issues between products. 
Abbott shall demonstrate, through approved protocol and final report,
that cleaning validation has been performed for the Product(s).

 

3.                                      Analytical
Test Methods

 

3 .1                              Abbott
shall be responsible for demonstrating the validity of all methodology used for
in-process control, and release of all materials, Active Compound, components
and the Product.  This validation, or
verification in the case of a compendial raw material item, will be
demonstrated.  This validation shall be
established, through approved protocol and final report, based on the current
ICH and FDA validation guidance documents. 
Method validation shall be performed consistent with Abbott-approved
procedures.  .  Suitability of all compendia methodology will
be demonstrated, and written in a report, prior to use for release of
materials, Active Compound, components, or the Product(s).

 

4.                                      Computer

 

4.1                                 Abbott
is responsible for compliance as it pertains to systems validation, electronic
records, electronic records retention, and electronic signatures for those
systems used in the control of the manufacturing processes, analytical testing,
receipt, release and distribution of materials, API’s, components, and
Product(s) as prescribed by 21 CFR part 11, and any other current, approved FDA
Guidance requirements.

 

13

 

REVISION HISTORY

	
  Revision

  Date

  	
  Revision
  Approval

  (Reliant)

  	
  Revision
  Approval

  ([Manufacturer])

  	
  Revision
  Description

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 

 

 

 

 

[Remainder of page
intentionally left blank]

 

14

 

IN WITNESS WHEREOF, the Parties have affixed hereto
their authorized signatures as follows:

 

 

 

	
  RELIANT
  PHARMACEUTICALS, LLC

  	
   

  	
  ABBOTT
  LABORATORIES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
  Name: Teri Hoen

  
	
  Title:

  	
   

  	
  Title: Div.
  V.P., Quality, Finished Goods

  
	
   

  	
   

  	
  Operations, US
  and Puerto Rico

  
					

 

 

15

 

EXHIBIT 8.8

 

ALTERNATIVE DISPUTE RESOLUTION

 

The Parties recognize
that a bona fide dispute as to certain matters may arise from time to time
during the term of this Agreement which relates to either Party’s rights and/or
obligations. To have such a dispute resolved by this Alternative Dispute
Resolution (“ADR”) provision, a Party first must send written notice of
the dispute to the other Party for attempted resolution by good faith
negotiations between the President of Company Pharmaceuticals, Inc. and the
Senior Vice President, Pharmaceutical Products Division, of Abbott (or their
equivalents) of the affected subsidiaries, divisions, or business units within
thirty (30) days after such notice is received (all references to “days” in
this ADR provision is to calendar days).

 

Any negotiations
regarding a dispute shall be treated as settlement negotiations for the
purposes of the Federal Rules of Evidence and any similar state rules of
evidence. Such negotiations shall not be admissible in any subsequent ADR
hearing.

 

If the matter has not been resolved within
thirty (30) days of the notice of dispute, or if the Parties fail to meet
within such thirty (30) days, either Party may initiate an ADR proceeding as
provided herein. The Parties shall have the right to be represented by counsel
in such a proceeding.

 

1.                                       To begin an ADR proceeding, a Party shall provide written notice
to the other Party of the issues to be resolved by ADR. Within fourteen (14)
days after its receipt of such notice, the other Party may, by written notice
to the Party initiating the ADR, add additional issues to be resolved within
the same ADR.

 

2.                                       Within twenty-one (21) days following receipt of the original ADR
notice, the Parties shall select a mutually acceptable neutral to preside in
the resolution of any disputes in this ADR proceeding. If the Parties are
unable to agree on a mutually acceptable neutral within such period, either
Party may request the President of the CPR Institute for Dispute Resolution
(“CPR”), 366 Madison Avenue, 14th Floor, New York, New York 10017,
to select a neutral pursuant to the following procedures:

 

(a)                                  The CPR shall submit to the Parties a list of not less than five
(5) candidates within fourteen (14) days after receipt of the request, along
with a Curriculum Vitae for each candidate. No candidate shall be an employee,
director, or shareholder of either Party or any of their subsidiaries or
affiliates.

 

(b)                                 Such list shall include a statement of disclosure by each
candidate of any circumstances likely to affect his or her impartiality.

 

(c)                                  Each Party shall number the candidates in order of preference
(with the number one (1) signifying the greatest preference) and shall deliver
the list to the CPR within seven (7) days following receipt of the list of
candidates. If a Party believes a conflict of interest exists regarding any of
the candidates, that Party shall provide a written explanation of the conflict
to the CPR along with its list showing its order of

 

38

 

preference for the candidates. Any Party failing to return a list
of preferences on time shall be deemed to have no order of preference.

 

(d)                                 If the Parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR immediately shall designate as the
neutral the candidate for whom the Parties collectively have indicated the
greatest preference. If a tie should result between two candidates, the CPR may
designate either candidate. If the Parties collectively have identified three
(3) or more candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its sole discretion, may either (i)
immediately designate as the neutral the candidate for whom the Parties
collectively have indicated the greatest preference, or (ii) issue a new list
of not less than five (5) candidates, in which case the procedures set forth in
subparagraphs 2(a) – 2(d) shall be repeated.

 

3.                                       No earlier than twenty-eight (28) days or later than fifty-six
(56) days after selection, the neutral shall hold a hearing to resolve each of
the issues identified by the Parties. The ADR proceeding shall take place at a
location agreed upon by the Parties. If the Parties cannot agree, the neutral
shall designate a location other than the principal place of business of either
Party or any of their subsidiaries or affiliates.

 

4.                                       At least seven (7) days prior to the hearing, each Party shall
submit the following to the other Party and the neutral:

 

(a)                                  a copy of all exhibits on which such Party intends to rely in any
oral or written presentation to the neutral;

 

(b)                                 a list of any witnesses such Party intends to call at the hearing,
and a short summary of the anticipated testimony of each witness;

 

(c)                                  a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each issue. The
proposed rulings and remedies shall not contain any recitation of the facts or
any legal arguments and shall not exceed one (1) page per issue.

 

(d)                                 a brief in support of such Party’s proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.

 

Except as expressly set forth in
subparagraphs 4(a) – 4(d), no discovery shall be required or permitted by any
means, including depositions, interrogatories, requests for admissions, or
production of documents.

 

5.                                       The hearing shall be conducted on two (2) consecutive days and
shall be governed by the following rules:

 

(a)                                  Each Party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each Party has had the
five (5) hours to which it is entitled.

 

 

(b)                                 Each Party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross-examination time shall be charged against the Party
conducting the cross-examination.

 

(c)                                  The Party initiating the ADR shall begin the hearing and, if it
chooses to make an opening statement, shall address not only issues it raised
but also any issues raised by the responding Party. The responding Party, if it
chooses to make an opening statement, also shall address all issues raised in
the ADR. Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in the same
sequence.

 

(d)                                 Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.

 

(e)                                  Settlement negotiations, including any statements made therein,
shall not be admissible under any circumstances. Affidavits prepared for
purposes of the ADR hearing also shall not be admissible. As to all other
matters, the neutral shall have sole discretion regarding the admissibility of
any evidence.

 

6.                                       Within seven (7) days following completion of the hearing, each
Party may submit to the other Party and the neutral a post-hearing brief in
support of its proposed rulings and remedies, provided that such brief shall
not contain or discuss any new evidence and shall not exceed ten (10) pages.
This page limitation shall apply regardless of the number of issues raised in
the ADR proceeding.

 

7.                                       The neutral shall rule on each disputed issue within fourteen (14)
days following completion of the hearing. Such ruling shall adopt in its
entirety the proposed ruling and remedy of one of the Parties on each disputed
issue but may adopt one Party’s proposed rulings and remedies on some issues
and the other Party’s proposed rulings and remedies on other issues. The
neutral shall not issue any written opinion or otherwise explain the basis of
the ruling.

 

8.                                       The neutral shall be paid a reasonable fee plus expenses. These
fees and expenses, along with the reasonable legal fees and expenses of the
prevailing Party (including all expert witness fees and expenses), the fees and
expenses of a court reporter, and any expenses for a hearing room, shall be
paid as follows:

 

(a)                                  If the neutral rules in favor of one Party on all disputed issues
in the ADR, the losing Party shall pay 100% of such fees and expenses.

 

(b)                                 If the neutral rules in favor of one Party on some issues and the
other Party on other issues, the neutral shall issue with the rulings a written
determination as to how such fees and expenses shall be allocated between the
Parties. The neutral shall allocate fees and expenses in a way that bears a
reasonable relationship to the outcome of the ADR, with the Party prevailing on
more issues, or on issues of greater value or gravity, recovering a relatively
larger share of its legal fees and expenses.

 

 

9.                                       The rulings of the neutral and the allocation of fees and expenses
shall be binding, non-reviewable, and non-appealable, and may be entered as a
final judgment in any court having jurisdiction.

 

10.                                 Except as provided in paragraph 9
or as required by Law, the existence of the dispute, any settlement
negotiations, the ADR hearing, any submissions (including exhibits, testimony,
proposed rulings, and briefs), and the rulings shall be deemed Confidential
Information. The neutral shall have the authority to impose sanctions for
unauthorized disclosure of Confidential Information.EXHIBIT 10.40

 

AMENDED AND RESTATED

MANUFACTURING AND PACKAGING AGREEMENT

 

This Manufacturing and Packaging Agreement (“Agreement”)
is made this    day of March, 2007 by and between Cardinal Health
PTS, LLC, having a place of business at 2725 Scherer Drive, St Petersburg,
Florida 33716 (“Cardinal Health”) and Reliant Pharmaceuticals, Inc. (“Reliant”),
having its principal place of business at 110 Allen Road, Liberty Corner, New
Jersey 07938. (Cardinal Health and Reliant are each a “Party” and shall
collectively be referred to herein as the “Parties.”)

 

BACKGROUND

 

A.            Cardinal
Health provides contract pharmaceutical development, manufacturing, packaging,
analytical, and sales and marketing services to the pharmaceutical industry.

 

B.            Reliant
has rights to market certain pharmaceutical products and wants Cardinal Health
to assist in the formulation, filling, packaging and testing of such products
as provided in this Agreement and the attachments hereto.

 

C.            In
April 2005, Cardinal Health and Reliant entered into that certain
Manufacturing and Packaging Agreement under which Reliant engaged Cardinal
Health to provide certain services to Reliant in connection with the processing
of the Product (defined below) (the “Initial
Agreement”) on a non-exclusive basis.

 

D.            The
Parties wish to amend and restate the Initial Agreement as set forth below.

 

E.             THEREFORE,
in consideration of the mutual conditions and covenants set forth herein, the
Parties hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

The
following terms have the following meanings in this Agreement:

 

1.1                                 “Affiliate(s)” means any corporation,
firm, partnership or other entity that controls, is controlled by or is under
common control with a Party. For purposes of this definition, “control” shall
mean the ownership of at least fifty percent (50%) of the voting share capital
of such entity or any other comparable equity or ownership interest.

 

1.2                                 “API” means the active pharmaceutical
ingredient described in the Manufacturing Specifications, which have been
released by Reliant and provided to Cardinal Health as raw material, along with
a certificate of analysis, as provided in this Agreement.

 

1.3                                 “API
Cap” shall have the meaning set forth in Section 15.1.

 

 

1.4                                 “Applicable Laws” means all laws,
ordinances, rules and regulations within the Territory applicable to the
Manufacturing and Packaging of the Product or any aspect thereof and the
obligations of Cardinal Health or Reliant, as the context requires under this
Agreement, including, without limitation, (A) all applicable federal,
state and local laws and regulations of each Territory; (B) the U.S.
Federal Food, Drug and Cosmetic Act, and (C) the current Good
Manufacturing Practices promulgated by the Regulatory Authorities, as amended
from time to time (“cGMPs”).

 

1.5                                 “Batch” means defined quantity of
finished drug product that has been or is being Manufactured and Packaged in
accordance with the Specifications.

 

1.6                                 “Calendar Quarter” means a period of
three (3) consecutive months commencing on January 1, April 1, July 1
or October 1 of any calendar year.

 

1.7                                 “Cardinal Health Technology” shall have
the meaning set forth in Article 12.

 

1.8                                 “Change Order” shall have the meaning
set forth in Section 4.5(A).

 

1.9                                 “Confidential Information” shall have
the meaning set forth in Section 11.2.

 

1.10                           “Contract Year” means each consecutive
twelve (12) month period beginning on January 1, 2007.

 

1.11                           “Defective Product” shall have the
meaning set forth in Section 5.2.

 

1.12                           “Delivery
Date” shall mean the date on which Cardinal Health tenders the relevant
Batch(es) to the carrier in accordance with Section 6.1. Each Delivery
Date shall be specified by Reliant on the relevant Purchase Order and confirmed
by Cardinal Health as set forth in Section 4.4.

 

1.13                           “Dispute” shall have the meaning set
forth in Section 19.9.

 

1.14                           “Effective Date” means January 1,
2007.

 

1.15                           “Facility
or Facilities” means Cardinal
Health’s facilities located in St. Petersburg, Florida or such other facility
as agreed by the Parties.

 

1.16                           “FDA” means the United States Food and
Drug Administration and any successor agency thereto.

 

1.17                           “Firm Commitment” shall have the
meaning set forth in Section 4.3.

 

1.18                           “Manufacture”
or “Manufacturing” means the compounding, filling, encapsulation, producing
and/or inspection of the API and Raw Materials into Product in accordance with
the Specifications and the terms and conditions set forth in this Agreement.

 

 

1.19                           “Manufacturing Date” means the day on which the
Product is to be compounded by Cardinal Health, which shall not be more than
forty-five (45) days prior to the Delivery Date.

 

1.20                           “Manufacturing
Related Reference Documents” means (a) all completed production/Batch
records; (b) all quality control test/request forms (result worksheets)
and associated data; (c) dynamic monitoring performed during processing; (d) any
alert/action notifications generated during processing; (e) any planned or
unplanned deviations associated with the Product; (f) any out of
Specification result investigations associated with the Product; (g) the
Certificate of Analysis for the Batch comparing testing to Specifications; (h) the
appropriate disposition notification for the Batch, and (i) a Yield
statement.

 

1.21                           “Manufacturing
Sample” shall have the meaning set forth in Section 5.1.

 

1.22                           “Minimum
Requirement” shall have the meaning set forth in Section 4.1.

 

1.23                           “Package”
or “Packaging” means the labeling and the packaging of the Product onto the
bulk product packaging in accordance with the Specifications and the terms and
conditions of this Agreement.

 

1.24                           “Product” means Omacor® as fully
compounded API Manufactured and Packaged in accordance with the Specifications,
including both Sample Product and Trade Product.

 

1.25                           “Product
Maintenance Fee” shall have the meaning set forth in Section 7.2.

 

1.26                           “Product
Maintenance Services” shall have the meaning set forth in Section 2.3.

 

1.27                           “Purchase Order” shall have the meaning
set forth in Section 4.4.

 

1.28                           “Raw Materials” means all raw
materials, supplies, components and packaging, not including API, necessary to
Manufacture, Package and ship the Product in accordance with the
Specifications.

 

1.29                           “Regulatory Authority” means any
governmental regulatory authority within a Territory involved in regulating any
aspect of the development, manufacture, market approval, sale, distribution,
packaging or use of the Product.

 

1.30                           “Reliant Technology” shall have the
meaning set forth in Article 12.

 

1.31                           “Review Period” shall have the meaning
set forth in Section 5.1.

 

1.32                           “Rolling Forecast” shall have the
meaning set forth in Section 4.3.

 

1.33                           “Sample Product” shall mean Product
supplied to physicians and other permitted recipients without charge in
accordance with all Applicable Laws.

 

1.34                           “Softgel
Technology” means Cardinal Health’s proprietary technology for the manufacture
of softgels for the oral administration of pharmaceutical active ingredients
having 

 

 

certain solubility
characteristics and includes proprietary know-how including without limitation
know-how relating to (i) the development of fill and shell formulations; (ii) the
design and use of the encapsulation process to enhance stability, solubility,
bioavailability, and manufacturability of active ingredient chemical entities
in softgels; (iii) the selection and preparation of solvents, vehicles,
excipients, surfactants, stabilizers, gelatin, plasticizers and other
components of the liquid fill and the gelatin shell; (iv) certain
encapsulation, drying and related manufacturing techniques and machinery for
making commercial quantities of softgels, and (v) Cardinal Health’s
proprietary [***] technique.

 

1.35                           “Specifications” means the procedures,
requirements, standards, quality control testing and other data and the scope
of services as set forth in Exhibit A, which are hereby
incorporated by reference into this Agreement, along with any valid amendments
or modifications thereto, subject to the terms and conditions of Article 9.

 

1.36                           “Term” shall have the meaning set forth
in Section 15.1.

 

1.37                           “Territory” means the United States of
America, its territories and possessions.

 

1.38                           “Trade
Product” means any Product which has been designated and packaged for
commercial sale in the Territory.

 

1.39                           “Unit”
means each individual unit of Product, as described more fully in the Specifications.

 

1.40                           “Unit Pricing” shall have the meaning
set forth in Section 7.1.

 

1.41                           “Yield”
shall have the meaning set forth in Section 3.4.

 

ARTICLE 2

VALIDATION, MANUFACTURING, PACKAGING &
RELATED SERVICES

 

2.1                                 Validation
Services. During the Term, Cardinal Health shall perform the
qualification and validation services described in Exhibit D of
this Agreement for the prices specified therein.

 

2.2                                 Supply
and Purchase of Product. During the Term, Cardinal Health shall Manufacture
and Package the Products in accordance with the Specifications, Applicable Laws
and the terms and conditions of this Agreement. Reliant shall purchase Product
from Cardinal Health in accordance with the terms and conditions of this
Agreement, including but not limited to the obligations set forth in Section 4.1
and Section 4.2 hereof.

 

2.3                                 Product
Maintenance Services. During the Term and subject to Reliant’s payment of
the Product Maintenance Fee as set forth in Section 7.2, if applicable,
Reliant shall be entitled to the Product maintenance services set forth below
(collectively, the “Product Maintenance Services”). For the avoidance of doubt,
in the event that, in accordance with the terms of Section 7.2, Reliant 

 

[***]:  Certain information on this page has
been omitted and filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

 

 

is not required to pay
the Product Maintenance Fee, Reliant shall nonetheless be entitled to the
Product Maintenance Services:

 

•                  Administration
of Foreign Trade Zone;

•                  One
annual audit;

•                  Annual
Product review;

•                  Access to document library over and
above the Quality Agreement, including additional copies of batch paperwork or
other batch documentation;

•                  Annual
Drug Master File update;

•                  Preparation of Product licenses or
permits under United States local, state or Federal regulations (in each case
as more fully set forth in Article 10);

•                  Product
Document and Manufacturing Sample Storage relating to cGMP requirements;

•                  Vendor
re-qualification;

•                  Maintenance
and storage of Audit Reports; and

•                  Bulk
stability (6 months, warehouse conditions).

 

ARTICLE 3

MATERIALS

 

3.1           API.

 

A.                                   Reliant
shall supply to Cardinal Health for Manufacturing and Packaging, at Reliant’s
sole cost, the API and applicable reference standards in quantities sufficient
to meet Reliant’s requirements for each Product as further set forth in Article 4.
Prior to delivery of any of the API or reference standard to Cardinal Health
for Manufacturing and Packaging, Reliant shall provide to Cardinal Health a
copy of the API Material Safety Data Sheet (“MSDS”), as amended, and any
subsequent revisions thereto. Reliant shall supply the API, reference
standards, and Certificate of Analysis FOB the Facility no later than thirty
(30) days before the scheduled Manufacture Date upon which such API will be
used by Cardinal Health. Upon receipt of the API, Cardinal Health shall conduct
identification testing of the API. Cardinal Health shall use the API solely and
exclusively for Manufacturing and Packaging under this Agreement. The maximum
volume of API that Reliant supplies to Cardinal Health shall not exceed the
amount reflected in the Firm Commitment and the next six (6) months of the
Rolling Forecast.

 

B.                                     All
API provided by Reliant shall meet applicable Specifications that apply
thereto, and shall be produced in accordance with all applicable federal, state
and local laws and regulations, including, without limitation, cGMPs.

 

C.                                     Cardinal
Health shall inspect API as received to verify its identity and shall give
Reliant oral and written notice of any nonconformity with Specifications within
thirty (30) calendar days of receipt of API by Cardinal Health. Reliant shall
provide a Certificate of Analysis with each delivery of API and such
certificate shall be the basis for drug potency.

 

D.                                    Reliant
shall retain title to API at all times and shall bear the risk of loss thereof;
provided, however, subject to Section 15.1, from the time
API is received at Cardinal Health’s Facility to the time API is returned (or
Product is delivered) to Reliant’s designated carrier at 

 

 

Cardinal Health’s loading
dock, Cardinal Health shall bear the risk of loss of API arising from Cardinal
Health’s negligence or failure to comply with cGMPs or failure to comply with
all Specifications.

 

3.2                                 Raw
Materials. Cardinal Health shall be responsible for procuring, inspecting
and releasing adequate Raw Materials as necessary to meet the Firm Commitment,
unless otherwise agreed to by the Parties in writing. All Raw Material supplier
changes must be agreed by the Parties by amending the Specifications in
writing.

 

3.3                                 Reimbursement
for Materials. In the event of (A) a Specification change requested by
Reliant or Cardinal Health for Reliant’s benefit and agreed by the Parties, or
to comply with any new requirement of a Regulatory Authority, (B) termination
of this Agreement by Reliant without cause or expiration of this Agreement; or (C) unforeseeable
obsolescence of any Raw Material, Reliant shall bear the cost of any unused Raw
Materials that cannot be used by Cardinal Health or returned for credit,
provided that Cardinal Health purchased such Raw Materials in quantities
consistent with Reliant’s most recent Firm Commitment and the supplier’s
minimum purchase obligations.

 

3.4                                 Yield
and Inventory Reconciliation. Cardinal Health will achieve a minimum Yield
in Manufacturing the Product. “Yield” means the relation between the API
content of the Product Manufactured over a certain time period and the actual
quantity of API used to Manufacture such quantity of Product. The minimum Yield
was determined after the Manufacture of the greater of twenty (20) batches or
the number of batches Manufactured during the first three (3) months of
production and is set forth in Exhibit C. In the event the minimum
yield falls below [***]% at any time during the Term, the Parties agree to
discuss remedies to elevate the minimum yield in good faith and amend the
Agreement as the Parties deem appropriate, provided, however, the
foregoing discussions shall not relieve Cardinal Health of its obligations to
pay for quantities of API consumed in excess of the minimum Yield under this Section 3.4.
In the event the Parties have not agreed on remedies to elevate the Yield to [***]%
within three (3) months of determining the minimum Yield as set forth
above, the Parties expressly agree that for purposes of this Section 3.4
and the obligations set forth herein, the minimum Yield shall be no less than [***]%,
unless the Parties discuss and agree that it is commercially impracticable
under the circumstances. After the Parties have established the minimum Yield,
Cardinal Health shall, after Manufacture of each Batch, compare actual Yield
for such batch with the minimum Yield. Cardinal Health shall prepare a
quarterly report that sets forth all Yields by lot numbers that exceed the
minimum Yield. Cardinal Health will reimburse or credit Reliant an amount that
is equal to the current price that Reliant actually paid for API per kilo in
the Contract Year (currently [***] dollars ($[***])[***]) consumed in excess of
the minimum Yield, as evidenced by written documentation submitted to Cardinal
by Reliant. The Parties agree that for specific written orders Reliant may provide
Cardinal Health with instructions for Manufacturing that result in Yields lower
than the minimum Yield. Reliant will not be entitled to reimbursement or credit
for API to the extent that API loss is attributable solely to Reliant’s
specific instructions. Within three (3) business days of the end of each
quarter Cardinal Health shall notify Reliant of the quantities of API (both raw
material and in-process) in inventory. Upon reasonable advance notice to
Cardinal Health and at mutually agreeable times but not more than twice in any
twelve 

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

(12) month period,
Reliant shall be permitted to inspect API inventory at Cardinal Health’s
Facility.

 

ARTICLE 4

COMMITMENT OF THE PARTIES, PURCHASE ORDERS &
FORECASTS

 

4.1                                 Minimum
Requirement. During each Contract Year, Reliant shall purchase the minimum
dollar volume of Product (the “Minimum Requirement”) set forth on Exhibit B.
If Reliant does not purchase such Minimum Requirement during any Contract Year,
within thirty (30) days after the end of such Contract Year and upon receipt of
an invoice from Cardinal Health, Reliant shall pay Cardinal Health the
difference between (A) the Minimum Requirement and (B) the sum of all
purchases from Cardinal Health for the Product during the just concluded
Contract Year.

 

4.2                                 Commitment
of the Parties.

 

(a) INTENTIONALLY
OMITTED

 

(b)                                 Reliant
commits to purchase a minimum of [***]% of its Manufacturing requirements for [***]
in the Territory per Contract Year from Cardinal Health during the Term of this
Agreement, subject to Section 4.2 (c) and (d) below. For the
avoidance of doubt, Reliant may, in its sole discretion, purchase any or all of
its [***] from any third party. Further, for the avoidance of doubt, the
pricing for all Product will be at the level assuming that Reliant purchases [***]%
of its requirements for [***] from Cardinal Health, and, in the event Reliant
purchases less than [***]% of its requirements from Cardinal Health the Parties
will conduct a reconciliation of pricing at the conclusion of that Contract
Year.

 

Within
sixty (60)
days following the end of each Contract Year during the Term of this Agreement,
and within sixty
(60) days following the termination or expiration of this Agreement for
any reason, Reliant shall submit to Cardinal Health a written report (each, an “Annual
Report”), certified by an officer of Reliant, setting forth, with respect to
the immediately preceding Contract Year: (i) Reliant’s Manufacturing
requirements for Trade Product in the Territory, (ii) the aggregate Units
of Trade Product purchased from Cardinal Health; (iii) the calculation of
the percentage of its Manufacturing requirements for Trade Product purchased
from Cardinal Health, and (iv) the amount, if any, to be paid to Cardinal
Health in accordance with the terms and conditions set forth in Exhibit B
based on the actual percentage of Reliant’s Manufacturing requirements
purchased from Cardinal Health. In the event that such Annual Report indicates
that Cardinal Health is owed an additional amount for Trade Product purchased
in the immediately preceding Contract Year, Cardinal Health shall invoice
Reliant for such amount, and Reliant shall pay such invoice within thirty (30)
days of the date of receipt of such invoice.

 

(c)                                  In
the event Cardinal Health (i) determines it cannot meet any of Reliant’s
Rolling Forecasts delivered in accordance with Section 4.3 below, or (ii) fails
to deliver any Product within ten (10) days of a respective Delivery Date
for three (3) consecutive months during the Term, such that at the end of
any three month period Cardinal Health has failed to deliver the total number
of lots for which Reliant has issued Purchase Orders, Reliant’s obligations
under 

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

4.2(b) shall be
reduced in direct proportion to the percentage such unfulfilled Purchase Orders
represent as measured against Reliant’s obligations in Section 4.2(b), provided,
however, Reliant shall use commercially reasonable efforts to return to
the purchase requirement level set forth in Section 4.2(b) following
resolution of any technical issues.

 

(d)                                 Any
quantity of Product which is not delivered to Reliant by Cardinal Health within
ten (10) days of any Delivery Date, for any reason whatsoever, during the
Term shall give Reliant the option to purchase such quantity of Trade Product,
but only such quantity, from a qualified third-party supplier.

 

(e)                                  In
the event Cardinal Health’s Facility undergoes expansion and subsequent FDA
approval of such expansion, Reliant shall have the option, but not the
obligation, to have its Product Manufactured and Packaged in such new wing,
provided, however, that Reliant shall bear the cost of relocating to such new
wing, up to a cap of $[***].

 

4.3                                 Forecast.
On the Effective Date and on or before the first (1st) day of each
calendar month following the Effective Date, 
Reliant shall furnish to Cardinal Health in writing, an eighteen (18)
month rolling forecast of the quantities of Product that Reliant intends to
order from Cardinal Health during such period (“Rolling Forecast”). The first
three (3) months of such Rolling Forecast shall constitute a binding order
for the quantities of Product specified therein (“Firm Commitment”) and the
following fifteen (15) months of the Rolling Forecast shall be non-binding,
good faith estimates.

 

4.4                                 Purchase
Orders. On or before the first (1st) day of each calendar month,
Reliant shall submit a purchase order for the Firm Commitment, which specifies
the actual number of Batches to be Manufactured and Packaged, the approximate
number of Units in each Batch, and the requested Delivery Dates for each Batch
(“Purchase Order”). Reliant shall submit each Purchase Order to Cardinal Health
at least ninety (90) days in advance of the earliest Delivery Date requested in
the Purchase Order. Cardinal Health shall confirm Delivery Dates to Reliant. In
the event of a conflict between the terms of any Purchase Order and this
Agreement, this Agreement shall control. Notwithstanding the foregoing,
Cardinal Health shall supply Reliant with quantities of Product that exceed by
not more than [***] percent ([***]%)  the
quantities specified in the Firm Commitment (“Excess Quantities”), and shall
use best commercial efforts to supply additional quantities of Product
requested by Reliant (“Additional Quantities”). Cardinal Health’s supply of
Excess Quantities and Additional Quantities are both subject to (i) receipt
of a Purchase Order for such Additional Quantities and Excess Quantities at
least ninety (90) days in advance of the requested Delivery Date for such
Additional Quantities and Excess Quantities, and (ii) Cardinal Health’s
possession of sufficient quantities of API to Manufacture Excess Quantities and
Additional Quantities. Cardinal Health’s failure to supply Reliant with Additional
Quantities shall not constitute a failure to supply under Section 2.2 and
4.2. Should Cardinal Health fail to supply Reliant with its requirements for
the Product, specifically excluding Additional Quantities, for any particular
month hereunder, Cardinal Health shall be required to make up the difference in
the immediately subsequent month.

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

4.5                                 Cardinal
Health’s Cancellation of Purchase Orders. Notwithstanding the terms and
conditions set forth in Section 4.6 below, Cardinal Health reserves the
right to cancel all, or any part of, a Purchase Order upon written notice
to Reliant (and Cardinal Health shall have no further obligations or liability
with respect to such Purchase Order) if Reliant refuses or fails to make
scheduled deliveries of the API.

 

4.6                                 Reliant’s
Modification or Cancellation.

 

A.                                   Reliant
may modify the delivery date, Specifications or quantity of Product in
such Purchase Order only by submitting a written change order (“Change Order”)
to Cardinal Health at least thirty (30) business days in advance of the
earliest scheduled Manufacturing Date for the Manufacturing and Packaging
covered by the change order. Such change order shall be effective and binding
upon Cardinal Health only upon the written acceptance by Cardinal Health and,
notwithstanding the foregoing, Reliant shall remain responsible for the Firm
Commitment portion of the Rolling Forecast.

 

B.                                     Notwithstanding
any amounts due to Cardinal Health under Section 4.1 or Section 4.4,
if Reliant fails to place Purchase Orders sufficient to satisfy the Firm
Commitment, Reliant shall, within thirty (30) days of receipt of invoice, pay
to Cardinal Health the difference between the (i) Unit Price for all Units
that would have been Manufactured and Packaged if Reliant had placed Purchase
Orders sufficient to satisfy the Firm Commitment, and (ii) Cardinal Health’s
cost of any Raw Materials that would have been used in such Units, provided,
however, that Cardinal Health is not in default of any of its supply
obligations hereunder. In the event Cardinal Health has an opportunity to
mitigate its damages hereunder, the Parties shall meet in good faith to discuss
an appropriate reduction.

 

4.7                                 Unplanned
Delay or Elimination of Manufacturing and Packaging. Cardinal Health shall
timely fill each Purchase Order, subject to the terms and conditions of this
Agreement applicable to both Parties. Cardinal Health shall notify Reliant as
soon as possible after the receipt of a Firm Commitment or Purchase Order if
Cardinal Health determines that any Manufacturing or Packaging related to the
Firm Commitment or Purchase Order will be delayed or eliminated for any reason.

 

4.8                                 Inspection
of Manufacturing and Packaging. Reliant may base up to two (2) representatives
at the Facilities to observe the Manufacturing and Packaging provided that
Reliant provide Cardinal Health at least ten (10) days’ advance written
notice of the attendance of such Reliant representatives. Reliant shall
indemnify and hold harmless Cardinal Health for any action or activity of such
representatives while on Cardinal Health’s premises.

 

ARTICLE 5

TESTING; MANUFACTURING SAMPLES; RELEASE

 

5.1                                 Manufacturing
Samples; Testing. Within seven (7) days after Cardinal Health’s
completion of Manufacturing and Packaging of each Batch, Cardinal Health shall
deliver to Reliant, or its designee, a sample of the Product (“Manufacturing
Sample”) and the Manufacturing Related Reference Documents for such Batch. No
later than thirty (30) days after receipt of the Manufacturing Sample and a
complete set of the Manufacturing Related Reference 

 

 

Documents (“Review Period”),
Reliant or its designee shall review the Manufacturing Related Reference
Documents and notify Cardinal Health whether the Manufacturing Sample conforms
to the warranty set forth in Section 13.1 of this Agreement. Upon receipt
of notice from Reliant that a Batch meets the warranty in Section 13.1, or
upon failure of Reliant to respond by the end of the Review Period, Cardinal
Health will invoice Reliant for such Batch in accordance with Section 7.5
below.

 

5.2                                 Non-Conforming
Product. If Reliant notifies Cardinal Health during the Review Period that
the Manufacturing Sample does not conform to the warranty set forth in Section 13.1
and Cardinal Health agrees with Client’s determination, Client shall not be
responsible to pay for such batch (the “Defective Product”), and Cardinal
Health shall, at Reliant’s option, either (A) replace any Batch of
non-conforming Product, or (B) credit any payments made by Reliant for
such Batch. If Cardinal Health does not agree with Reliant’s determination that
such Product fails to meet the warranty set forth in Section 13.1, then
after reasonable efforts to resolve the disagreement, the Parties shall cause a
mutually acceptable independent third party to review records, test data and to
perform comparative tests and/or analyses on the Manufacturing Sample. The
results of the independent review shall be final and binding. Unless otherwise
agreed to by the Parties in writing, the costs associated with such testing and
review shall be borne by the non-prevailing Party.

 

THE OBLIGATION OF
CARDINAL HEALTH TO (A) REPLACE DEFECTIVE PRODUCT IN ACCORDANCE WITH THE
SPECIFICATIONS OR CREDIT PAYMENTS MADE BY RELIANT FOR DEFECTIVE PRODUCT AND (B) REIMBURSE
RELIANT FOR API LOST IN THE DEFECTIVE BATCH, SUBJECT TO THE LIMITATIONS IN ARTICLE 15.1,
SHALL BE RELIANT’S SOLE AND EXCLUSIVE REMEDY (WITHOUT PREJUDICE TO ANY
INDEMNIFICATION OBLIGATIONS UNDER SECTION 14.1 OR THE OBLIGATIONS OF SECTION 10.6
(RECALL)) UNDER THIS ARTICLE FOR DEFECTIVE PRODUCT AND IS IN LIEU OF ANY
OTHER WARRANTY, EXPRESS OR IMPLIED.

 

5.3                                 Supply
of Material for Defective Product. In the event Cardinal Health is required
to replace Product pursuant to Section 5.2, above, in no instance shall
Cardinal Health be liable for damage in excess of fees paid for Defective
Product and API, subject to the limitation of liability in Section 15.1
and the indemnification obligations under Section 14.1.

 

ARTICLE 6

DELIVERY

 

6.1                                 Delivery.
Cardinal Health shall segregate and store all Product until such Product has
been Manufactured and Packaged to the Product Specifications. Upon such
acceptance, Cardinal Health shall tender the Product for delivery, F.O.B. the
Facility. Reliant shall be responsible for all costs and risk of loss
associated with shipment of the Product. Reliant shall qualify at least one (1) carrier
to ship the Product, and if Reliant qualifies more than one carrier Reliant
shall designate the priority of such qualified carriers to Cardinal Health.

 

6.2                                 Failure
to Take Delivery. If Reliant fails to take delivery within seven (7) days
of any scheduled delivery date solely with respect to Product that has been
deemed acceptable by 

 

 

Reliant, Reliant shall be
invoiced for such Product pursuant to Section 7.5   On the first day of each subsequent month
Reliant shall be invoiced for the stored Product at a rate of [***] of Batch
price per month for administration and storage costs. For each such batch of
accepted but undelivered Product, Reliant agrees that: (A) Reliant has
made a fixed commitment to purchase such Product, (B) title and risk of
loss for such Product passes to Reliant, (C) such Product shall be on a
bill and hold basis for legitimate business purposes, (D) if no delivery
date is determined at the time of billing, Cardinal Health shall have the right
to ship the Product to Reliant or Reliant’s designee within four months after
billing, and (E) Reliant will be responsible for any decrease in market
value of such Product that relates to factors and circumstances outside of
Cardinal Health’s control. Within five (5) days following a written
request from Cardinal Health, Reliant shall provide Cardinal Health with a
letter confirming items (A) through (E) of this Section for each
Batch of undelivered Product.

 

ARTICLE 7

PRICING AND PAYMENT

 

7.1                                 Unit
Pricing. Reliant shall pay to Cardinal Health the unit pricing set forth on
Exhibit B (“Unit Pricing”) for all Product. When a Purchase Order
is placed, Reliant shall specify in such Purchase Order whether each lot is
designated for Sample Product or Trade Product. For lots designated for Sample
Product, Reliant shall pay the Unit Pricing for Sample Products as set forth on
Exhibit B. For lots designated for Trade Product, Reliant shall pay
the tiered Unit Price based on the number of Units set forth in its Rolling
Forecast for the then-current Contract Year. By way of example, as of the date
a Purchase Order is submitted, if Reliant’s Rolling Forecast for then current
Contract Year estimates a unit volume in excess of One Hundred Million Units,
Reliant shall pay the Unit Pricing for such volume indicated on Exhibit B.
The Parties shall reconcile all accounts annually, no later than thirty (30)
days after the beginning of each Contract Year hereunder, including
verification by Reliant of its sampling program. In the event Reliant shall desire
to make a Sample Product lot out of a lot otherwise forecast and purchased as
Trade Product, the Parties shall reconcile such transfer and Cardinal Health
shall credit the difference to Reliant within thirty (30) days of such
notification. Unit Pricing for Sample Product to be used by Reliant for
physician sampling shall be extended for two (2) years from the Effective
Date. In the event Reliant shall receive FDA approval for a new indication for
the Product, the Parties agree to discuss in good faith an extension of the
Sample Product pricing program at the original sample price. In the event
Reliant requests services other than Manufacturing and Packaging Product,
Cardinal Health shall provide a written quote of the fee for such additional
services and Reliant shall advise Cardinal Health whether it wishes to have
such additional services performed by Cardinal Health.

 

7.2                                 Product
Maintenance Fee. In partial consideration of the Product Maintenance
Services set forth in Section 2.3, Reliant shall pay Cardinal Health an
annual Product Maintenance Fee of [***] dollars ($[***]) for any Contract Year
wherein Reliant purchases less than [***] Units of Product from Cardinal Health.
For any year in which the Product Maintenance Fee is applicable, it shall be payable
by December 31 of such Contract Year. For the avoidance of doubt, no
Maintenance Fees are due and owing as of the Effective Date.

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

7.3                                 Price
Increase. The Unit Pricing may be adjusted on an annual basis,
effective on the first day of each Contract Year beginning January 1,
2008, upon ninety (90) days’ written notice from Cardinal Health to Reliant. Such
adjustment shall be based on actual increases or decreases in Raw Material or
Manufacturing and Packaging costs, subject to the following limitations: The
Unit Pricing for Product shall include only: (a) the cost of Raw Materials
and (b) Cardinal Health’s Manufacturing and Packaging costs, including
without limitation Cardinal Health’s labor, utilities and overhead. Any price
adjustment shall limit the increase in component (b) to [***] ([***]%); provided,
however, Cardinal Health shall use its best commercial efforts to limit
any increases hereunder as much as possible and Cardinal Health agrees to
provide backup documentation for all annual increases, if any, and such costs
and related documentation shall be auditable upon reasonable notice by an
independent third party reasonably acceptable to Cardinal Health and Reliant. Reliant
shall bear all costs associated for such audit, unless such audit reveals that
Cardinal Health exceeded the permitted increase, in which case Cardinal Health
shall bear the costs of the audit and shall credit such overpayment to Reliant.

 

7.4                                 Taxes;
Duty. All taxes, duties and other amounts assessed on the Raw Materials,
API or the Product prior to or upon sale to Reliant are the responsibility of
Reliant, and Reliant shall reimburse Cardinal Health for any such taxes, duties
or other expenses paid by Cardinal Health, upon receipt of reasonable
documentation.

 

7.5                                 Payment
Terms. Cardinal Health shall invoice Reliant for all Product as provided in
Section 7.1, and for any amounts due pursuant to Section 4.1 or Section 4.2
and payment for such undisputed invoices shall be due within thirty (30) days
after the date of such invoice. In the event payment is not received by
Cardinal Health, for any amounts due under this Agreement, on or before the
thirtieth (30th) day after the date of the invoice, or in the case
of the Product Maintenance Fee, upon the date set forth in Sections 7.2, then
such unpaid amounts shall accrue interest at the rate of percent (1.0%) per
month until paid in full.

 

ARTICLE 8

INTENTIONALLY OMITTED

 

ARTICLE 9

CHANGES TO SPECIFICATIONS

 

All
Specifications and any changes thereto agreed to by the Parties from time to
time shall be in writing, dated and signed by the Parties. No change in the
Specifications shall be implemented by Cardinal Health, whether requested by
Reliant or requested or required by any Regulatory Authority, until the Parties
have agreed in writing to such change, the implementation date of such change,
and any increase or decrease in costs, expenses or fees associated with such
change. Cardinal Health shall respond promptly to any request made by Reliant
for a change in the Specifications, and both Parties shall use commercially
reasonable, good faith efforts to agree to the terms of such change in a timely
manner. If after initial Product qualification, Reliant requests a change in
the Specifications for its own benefit or to comply with the requirements of a
Regulatory Authority, the Specifications shall be amended as soon as 

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

possible after a request
is made for any change in Specifications, and Cardinal Health shall notify
Reliant of the costs associated with such change and shall provide such
supporting documentation as Reliant may reasonably require. Reliant shall
pay all costs associated with such Reliant-requested changes or changes
required by a Regulatory Authority as may be agreed upon by the Parties.
Changes, agreed to between the Parties, for the benefit of Cardinal Health,
shall be at the expense of Cardinal Health. If there is a conflict between the
terms of this Agreement and the terms of the Specifications, this Agreement
shall control.

 

ARTICLE 10

RECORDS; REGULATORY MATTERS

 

10.1                           Batch
Records and Data. Within thirty (30) days following the completion of
Manufacturing and Packaging of each batch, Cardinal Health shall provide
Reliant with properly completed copies of Manufacturing Related Reference
Documents prepared in accordance with the Specifications; provided, however,
that if testing reveals an out-of-Specification result, Cardinal Health shall
provide such Batch records within ten (10) days following resolution of
the out-of Specification result.

 

10.2                           Recordkeeping.
Cardinal Health shall maintain true and accurate books, records, test and
laboratory data, reports and all other information relating to Manufacturing
and Packaging under this Agreement, including all information required to be
maintained by all Applicable Laws. Such information shall be maintained in
forms, notebooks and records for a period of at least two (2) years from
the relevant finished Product expiration date or longer if required under
Applicable Laws.

 

10.3                           Regulatory
Compliance. Cardinal Health, with the assistance of Reliant, shall obtain
all permits and licenses required by any United States federal, state or local
regulatory agency with respect to the Product and the Manufacturing and
Packaging under this Agreement, including any product licenses, applications
and amendments in connection therewith. Cardinal Health will be responsible to
maintain all permits and licenses required by any Regulatory Authority with
respect to the Facility. During the Term, Cardinal Health will assist Reliant
with all regulatory matters relating to Manufacturing and Packaging under this
Agreement, at Reliant’s request and at Reliant’s expense. Each Party intends
and commits to cooperate to satisfy all Applicable Laws relating to
Manufacturing and Packaging under this Agreement. Cardinal Health shall provide
a Certificate of Compliance to Reliant annually during the Term.

 

10.4                           Governmental
Inspections and Requests. Cardinal Health shall immediately advise Reliant
if an authorized agent of any Regulatory Authority visits the Facility
concerning the Manufacturing or Packaging of the Product. Cardinal Health shall
furnish to Reliant a copy of the report by such Regulatory Authority, if any,
within ten (10) days of Cardinal Health’s receipt of such report. Further,
upon receipt of a Regulatory Authority request to inspect the Facilities or
audit Cardinal Health’s books and records with respect to Manufacturing or Packaging
under this Agreement, Cardinal Health shall immediately notify Reliant, and
shall provide Reliant with a copy of any written document received from such
Regulatory Authority. Cardinal Health shall permit Reliant to have a
representative present for any such Product-specific Facility inspection unless
such presence would be unreasonable under the circumstances. To the extent
specifically related to the Manufacturing or Packaging hereunder, Cardinal
Health shall provide Reliant with 

 

 

a copy of any proposed
written response prior to submission and a reasonable opportunity for Reliant
to review and approve, provided such approval is not unreasonably withheld,
conditioned or delayed.

 

10.5                           Reliant
Inspections and Audits.

 

A.                                   Except
for circumstances as set forth in Section 10.4, during the term of this
Agreement, duly-authorized employees, agents and representatives of Reliant
shall be granted access upon at least twenty-four (24) hours prior notice,
unless more time is reasonably requested by Cardinal Health, and at reasonable
times during regular business hours to only the portion of the Facilities where
Cardinal Health Manufactures or Packages API for the purpose of inspecting and
verifying that Cardinal Health is Manufacturing and Packaging API in accordance
with cGMPs, the Specifications and the Product Master Batch Record. For
purposes of this Section 10.5, duly-authorized agents and representatives
shall be required to sign Cardinal Health’s standard Confidential Disclosure
Agreement prior to being allowed access to Cardinal Health’s Facilities.

 

B.                                     With
due regard to information and operations which constitute Proprietary
Information of Cardinal Health, duly-authorized employees, agents and
representatives of Reliant shall have the right to inspect Cardinal Health
Batch Records relating to Product and those portions of Cardinal Health’s
Facilities used for Manufacturing and Packaging Product. Reliant’s Quality
Assurance Manager will arrange audit visits with Cardinal Health Quality
Management.

 

10.6                           Recall.
In the event Cardinal Health believes a recall, field alert, Product withdrawal
or field correction may be necessary with respect to any Product provided
under this Agreement, Cardinal Health shall immediately notify Reliant in
writing. Cardinal Health will not act to initiate a recall, field alert,
Product withdrawal or field correction without the express prior written
approval of Reliant, unless otherwise required by Applicable Laws. In the event
Reliant believes a recall, field alert, Product withdrawal or field correction may be
necessary with respect to any Product provided under this Agreement, Reliant
shall immediately notify Cardinal Health in writing and Cardinal Health shall
provide all necessary cooperation and assistance to Reliant. Reliant shall
solely control the implementation of such recall, filed alert, Product
withdrawal or field correction. The cost of any recall, field alert, Product
withdrawal or field correction shall be borne by Reliant unless such recall,
field alert, Product withdrawal or field correction is caused solely by
Cardinal Health’s breach of its representations, warranties and obligations
under this Agreement or Applicable Laws or its negligence or willful
misconduct, then such cost shall be borne by Cardinal Health. For purposes
hereof, such cost shall be limited to reasonable, actual and documented
administrative costs incurred by Reliant for such recall, withdrawal or
correction, and replacement of the Defective Product to be recalled, in
accordance with Article 5.

 

10.7                           Quality
Agreement. Within thirty (30) days following the execution of this
Agreement, the Parties shall execute a Quality Agreement in substantially the form attached
to this Agreement as Exhibit E. The Quality Agreement shall in no
way determine liability or financial responsibility of the Parties for the
responsibilities set forth therein. In the event of a conflict between the
terms of this Agreement and the Quality Agreement, this Agreement shall
control.

 

 

10.8                           Qualification
of Additional Facilities. In the event Reliant requests that Cardinal
qualify additional Facilities to Manufacture and Package the Product, Reliant
shall be solely responsible for any costs associated therewith which shall be
limited to technology transfer and technology transfer service costs. In the event that Cardinal Health desires to qualify
additional Facilities to Manufacture and Package the Product, Cardinal Health
shall be solely responsible for any costs associated therewith.

 

ARTICLE 11

CONFIDENTIAL INFORMATION

 

11.1                           Confidentiality
Agreement. The use and disclosure of confidential information exchanged
between the Parties shall be governed by the Confidentiality Agreement by and
between Cardinal Health, Reliant and Pronova Biocare, a.s., dated July 29,
2004 (the “Confidentiality Agreement”).

 

11.2                           No
Implied License. Except as otherwise set forth herein, the Party receiving
Confidential Information (as such is defined in the Confidentiality Agreement)
will obtain no right of any kind or license under any patent application or
patent by reason of this Agreement. All Confidential Information will remain
the sole property of the Party disclosing such information or data.

 

11.3                           Return
of Confidential Information. Upon termination or expiration of this
Agreement, the Party to which Confidential Information has been disclosed will,
upon request, promptly return within thirty (30) days, all such Confidential
Information, including any copies thereof, and cease its use or, at the option
of the receiving Party,  promptly destroy
the same and certify such destruction to the disclosing Party, except for a
single copy thereof which may be retained for the sole purpose of
determining the scope of the obligations incurred under this Agreement.

 

11.4                           Disclosure
of Confidential Information. Notwithstanding the terms set forth this Article 11
or the Confidentiality Agreement, each of the Parties shall have the right to
disclose the existence and terms of this Supply Agreement to those of its
directors, managers, officers, employees, accountants, attorneys, advisers,
agents, investment bankers, lenders and potential lenders, financing sources,
acquirers or business combination candidates who need to know such terms for
the purpose of evaluating or entering into a potential business arrangement (“Third
Parties”); provided, that such Third Parties are required to maintain the
confidentiality of this Supply Agreement to the same extent as if they were
Parties hereto Notwithstanding the foregoing, each of the Parties shall have
the right to disclose the existence and terms of this Supply Agreement as may be
required by applicable laws or rules of any stock exchange to which a
Party or any Affiliate of a Party is subject, in which case the disclosing
Party shall provide the non-disclosing Party with prompt advance notice of such
disclosure so that the non-disclosing Party shall have the opportunity if it so
desires to seek a protective order or other appropriate remedy and, in
connection with any disclosure required by the Securities and Exchange
Commission or the rules of any stock exchange to which a Party or any
Affiliate of a Party is subject, the disclosing Party shall use reasonable
efforts to obtain confidential treatment for such disclosure.

 

 

11.5                           Survival.
The obligations of this Article 11 shall terminate five (5) years
from the expiration or termination of this Agreement.

 

ARTICLE 12

INTELLECTUAL PROPERTY

 

All
Cardinal Health Technology, including, without limitation, all improvements,
developments, derivatives or modifications to the Cardinal Health Technology,
shall be owned exclusively by Cardinal Health and, except as set forth herein
no right or license in Cardinal Health Technology is transferred or granted to
Reliant. All Reliant Technology, including, without limitation, all
improvements, developments, derivatives or modifications to the Reliant
Technology shall be owned exclusively by Reliant. Reliant hereby grants to
Cardinal Health a non-exclusive, royalty-free license for the term of this
Agreement to use Reliant Technology, but solely for the purpose of carrying out
Cardinal Health’s obligations under this Agreement. For purposes hereof, “Cardinal
Health Technology” means all Softgel Technology, Cardinal Health Confidential
Information, intellectual property, and developments (including, all patents,
patent applications, know-how, inventions, designs, concepts, improvements,
technical information, manuals, instructions or specifications), owned,
licensed or used by Cardinal Health in developing, formulating, manufacturing,
filling, processing or packaging of pharmaceuticals and the packaging
equipment, processes or methods of packaging, or any improvements to any of the
foregoing, including any container, pouch, vial, ampoule, blister pack or other
form of container developed by Cardinal Health. For purposes hereof, “Reliant
Technology” means all proprietary information, intellectual property and
developments owned, developed, licensed or used by Reliant relating to the API,
including, without limitation, patents, patent applications, know-how,
inventions, designs, concepts, improvements, technical information, trademarks
or trade names.

 

ARTICLE 13

REPRESENTATIONS AND WARRANTIES

 

13.1                           Cardinal
Health. Cardinal Health represents and warrants to Reliant that:

 

A.                                   At
the time of delivery of the Product as provided in Section 6.1, such
Product will conform to and will have been Manufactured and Packaged in
conformance with the Product Specifications and Applicable Laws;

 

B.                                     Cardinal
Health will be solely responsible for and will obtain all governmental
approvals, permits and licenses necessary or desirable in connection with the
Manufacturing and Packaging of the API in the Territory.

 

C.                                     It
has, and shall have, good, complete and valid rights to utilize the Cardinal
Health Technology utilized in connection with the Product and as contemplated
by this Agreement. There are no patents owned by others related to the Cardinal
Health Technology used with the Product which would be infringed or misused by
Cardinal Health’s performance of the Agreement and, to its knowledge, no trade
secrets or other proprietary rights of others related to the Cardinal Health
Technology used with the Product which would be infringed or misused by
Cardinal Health’s performance of this Agreement.

 

 

F.                                      THE
LIMITED WARRANTY SET FORTH IN THIS SECTION 13.1 IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY AND
ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE WARRANTY
EXPRESSED IN THIS SECTION 13.1, CARDINAL HEALTH MAKES NO OTHER WARRANTY,
EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE MANUFACTURING AND PACKAGING OR
THE PRODUCT.

 

13.2                           Reliant.
Reliant represents, warrants and covenants to Cardinal Health that:

 

A.                                   The
API and any other materials supplied by Reliant to Cardinal Health (“Reliant-supplied
Materials”) will comply with all applicable Specifications, will have been
produced in compliance with the Applicable Laws, and will be provided in
accordance with the terms and conditions of this Agreement;

 

B.                                     It
has all necessary authority and all right, title and interest in and to any
Reliant Technology related to the API or any other Reliant supplied materials;

 

C.                                     No
specific safe handling instructions are applicable to the Product, the API or
any other Reliant supplied materials, except as disclosed to Cardinal Health in
writing by the Reliant in sufficient time for review and training by Cardinal
Health prior to delivery;

 

D.                                    All
Product delivered to Reliant by Cardinal Health will be held, used and/or
disposed of by the Reliant in accordance with all applicable laws, rules and
regulations;

 

E.                                      Reliant
will comply with all laws, rules, regulations and guidelines applicable to
Reliant’s performance under this Agreement and its use of Product provided by
Cardinal Health under this Agreement;

 

F.                                      If
release testing is conducted by Reliant, Reliant will not release any Batch of
Product if the required Certificates of Analysis indicate that the Product does
not comply with the Specifications;

 

G.                                     The
content of all artwork provided to Cardinal Health complies with all Applicable
Laws;

 

H.                                    Reliant
has all necessary authority and right, title and interest in and to any
copyrights, trademarks, trade secrets, patents, inventions and developments
related to the API, the manufacture thereof, and any Product artwork;

 

I.                                         To
the knowledge of Reliant, the work to be performed by Cardinal Health under
this Agreement will not violate or infringe upon any trademark, tradename,
copyright, patent or other rights held by any person or entity; and

 

 

J.                                        Reliant
will be solely responsible for and will obtain all governmental approvals,
permits and licenses necessary or desirable in connection with the testing,
marketing, sale, advertising or distribution of the Product in the Territory.

 

13.2                           Mutual.
Each Party hereby represents and warrants to the other Party that:

 

A.                                   Such
Party (1) is duly organized, validly existing and in good standing under
the laws of the state in which it is organized, (2) has the power and
authority and the legal right to own and operate its property and assets, and
to carry on its business as it is now being conducted, and (3) is in
compliance with all requirements of applicable law, except to the extent that
any noncompliance would not materially adversely affect such Party’s ability to
perform its obligations under the Agreement;

 

B.                                     Such
Party (1) has the power and authority and the legal right to enter into
this Agreement and to perform its obligations hereunder and thereunder and
(2) has taken all necessary action on its part to authorize the
execution and delivery of the Agreement and the performance of its obligations
hereunder;

 

C.                                     This
Agreement is validly executed and delivered on behalf of such Party, and
constitutes a legal, valid, binding obligation, enforceable against such Party
in accordance with its terms;

 

D.                                    All
necessary consents, approvals and authorizations of all agencies and other
persons required to be obtained by such Party in connection with the Agreement
have been obtained; and

 

E.                                      The
execution and delivery of this Agreement and the performance of such Party’s
obligations hereunder (1) do not conflict with or violate any requirement
of applicable laws or regulations or any material contractual obligation of
such Party and (2) do not materially conflict with, or constitute a
material default or require any consent under, any material contractual
obligation of such Party.

 

ARTICLE 14

INDEMNIFICATION

 

14.1                           Indemnification
by Cardinal Health. Cardinal Health shall indemnify and hold harmless
Reliant, its Affiliates, directors, officers, employees and agents from and
against any and all suits, claims, losses, demands, liabilities, damages, costs
and expenses (including reasonable attorney’s fees) in connection with any
suit, demand or action by any third party (“Losses”) arising out of or
resulting from (A) any breach of its representations, warranties or
obligations under this Agreement; (B) any negligence or willful misconduct
by Cardinal Health, except to the extent that any of the foregoing arises out
of or results from the negligence, willful misconduct or breach of this
Agreement by of Reliant; or (C) any actual or alleged infringement or
violation of any patent, trade secret, copyright, trademark or other
proprietary rights used by Cardinal Health in Manufacturing and Packaging the
Product, except to the extent such was provided by Reliant.

 

 

14.2                           Indemnification
by Reliant. Reliant shall indemnify and hold harmless Cardinal Health, its
Affiliates, directors, officers, employees and agents from and against all
Losses arising out of or resulting from (A) any breach of its
representations, warranties or obligations under this Agreement; (B) any
manufacture, sale, promotion, distribution, use (other than by Cardinal Health)
of or exposure to the Product, the API or any Reliant-supplied materials,
including, without limitation, product liability or strict liability; (C) Reliant’s
exercise of control over the Manufacturing and Packaging under this Agreement,
to the extent that Reliant’s written instructions or directions violate
applicable law or regulation; (D) any actual or alleged infringement or
violation of any patent, trade secret, copyright, trademark or other
proprietary rights provided by Reliant and used by Cardinal Health in
Manufacturing and Packaging the Product; or (E) any negligence or willful
misconduct by Reliant, except to the extent that any of the foregoing arises
out of or results from the negligence, willful misconduct or breach of this
Agreement by Cardinal Health.

 

14.3                           Indemnification
Procedures. All indemnification obligations in this Agreement are
conditioned upon the Party seeking indemnification (the “Indemnified Party”): (A) promptly
notifying the indemnifying Party (the “Indemnifying Party”) of any claim or
liability of which the Party seeking indemnification becomes aware (including a
copy of any related complaint, summons, notice or other instrument), provided,
however, that failure to provide such notice within a reasonable period of time
shall not relieve the Indemnifying Party of any of its obligations hereunder
except to the extent the Indemnifying Party is materially prejudiced by such
failure; (B) cooperating with the Indemnifying Party in the defense of any
such claim or liability (at the Indemnifying Party’s expense), and (C) not
compromising or settling any claim or liability without prior written consent
of the Indemnifying Party. The liability of an Indemnifying Party under this Article XIV
with respect to Losses arising from claims of any Third Party which are subject
to the indemnification provided for in this Article XIV (“Third Party Claims”) shall be governed by and contingent
upon the following additional terms and conditions. If an Indemnified Party
shall receive notice of any Third Party Claim, the Indemnified Party shall give
the Indemnifying Party notice of such Third Party Claim within thirty (30) days
of the receipt by the Indemnified Party of such notice; provided,
however, that the failure to provide such notice shall not release the
Indemnifying Party from any of its obligations under this Article XIV
except to the extent the Indemnifying Party is materially prejudiced by such
failure. The Indemnifying Party shall be entitled to assume and control the
defense of such Third Party Claim at its expense and through counsel of its
choice if it gives notice of its intention to do so to the Indemnified Party
within thirty (30) days of the receipt of such notice from the Indemnified
Party; provided, however, that if there exists a material conflict of interest that
would make it inappropriate for the same counsel to represent both the
Indemnified Party and the Indemnifying Party, then the Indemnified Party shall
be entitled to retain its own counsel, at the expense of the Indemnifying Party,
provided that the Indemnifying Party shall not be obligated to pay the
reasonable fees and expenses of more than one separate counsel for all
Indemnified Parties, taken together. In the event the Indemnifying Party
exercises the right to undertake any such defense against any such Third Party
Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying
Party, all witnesses, pertinent records, materials and information in the
Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the 

 

 

Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to the
Indemnified Party, all such witnesses, records, materials and information in
the Indemnifying Party’s possession or under the Indemnifying Party’s control
relating thereto as is reasonably required by the Indemnified Party. The
Indemnifying Party shall not, without the written consent of the Indemnified
Party (which shall not be unreasonably withheld or delayed), (a) settle or
compromise any Third Party Claim or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by the claimant
or plaintiff to the Indemnified Party of a written release from all liability
in respect of such Third Party Claim or (b) settle or compromise any Third
Party Claim if the settlement imposes equitable remedies or material
obligations on the Indemnified Party other than financial obligations for which
such Indemnified Party will be indemnified hereunder and which contains no
admission of fault or wrongdoing. No Third Party Claim shall be settled or
compromised by the Indemnified Party without the written consent of the
Indemnifying Party (which shall not be unreasonably withheld or delayed) if
such settlement or compromise would result in an obligation of the Indemnifying
Party to indemnify such Indemnified Party, or would otherwise result in
liability of, or have an adverse impact upon, such Indemnifying Party.

 

ARTICLE 15

LIMITATION OF LIABILITY

 

15.1                           CARDINAL
HEALTH’S LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS FOR LOST,
DAMAGED OR DESTROYED API OR OTHER RELIANT-SUPPLIED MATERIALS WHETHER OR NOT
SUCH API OR RELIANT-SUPPLIED MATERIALS ARE INCORPORATED INTO PRODUCT IS SET
FORTH IN EXHIBIT B. THE LIMITATION OF LIABILITY, WITH RESPECT TO ANY GIVEN
CONTRACT YEAR, SHALL NOT EXCEED THE APPLICABLE AMOUNTS SET FORTH IN EXHIBIT B
(THE “API CAP”). IN THE EVENT THAT CARDINAL HEALTH LIABILITY FOR LOST API SHALL
EXCEED THE API CAP FOR ANY CONTRACT YEAR DURING THE TERM, THE PARTIES SHALL
MEET WITHIN THIRTY (30) DAYS FROM THE DATE CARDINAL HEALTH’S LIABILITY FOR LOST
API EXCEEDS THE API CAP AND NEGOTIATE IN GOOD FAITH WHETHER (A) CARDINAL
HEALTH INCREASES THE API CAP FOR SUCH CONTRACT YEAR, OR (B) WHETHER RELIANT’S
OBLIGATIONS UNDER SECTION 4.2(B) SHALL BECOME NULL AND VOID. IN THE
EVENT THAT THE PARTIES CANNOT REACH AN AGREEMENT WITH REGARD TO THE FOREGOING
SENTENCE WITHIN SUCH THIRTY (30) DAY PERIOD, RELIANT SHALL HAVE THE SOLE OPTION
TO (X) CONTINUE WITH THE AGREEMENT WITH CARDINAL HEALTH HAVING NO LIABILITY IN
EXCESS OF THE API CAP FOR LOST, DAMAGED OR DESTROYED API FOR THE THEN CURRENT
CONTRACT YEAR, OR (Y) HAVE PRODUCT MANUFACTURED AND PACKAGED BY A QUALIFIED
THIRD-PARTY SUPPLIER WITHOUT REGARD TO ITS OBLIGATIONS UNDER SECTION 4.2(B).
ANY AMOUNTS OWING BY CARDINAL HEALTH HEREUNDER SHALL NOT COUNT AGAINST THE
LIABILITY CAP SET FORTH IN SECTION 15.2 BELOW.

 

15.2                           NOTWITHSTANDING,
AND SPECIFICALLY EXCLUDING, ANY AMOUNTS OWED BY CARDINAL HEALTH TO RELIANT UNDER
SECTION 15.1 ABOVE, AND SPECIFICALLY EXCLUDING LOSSES RESULTING FROM
CARDINAL HEALTH’S GROSS NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT, CARDINAL
HEALTH’S 

 

 

 

TOTAL LIABILITY UNDER
THIS AGREEMENT OTHER THAN FOR LOST, DAMAGED OR DESTROYED API, SHALL IN NO EVENT
EXCEED FIVE MILLION DOLLARS ($5,000,000).

 

15.3                           NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES (EXCEPT FOR THOSE INDEMNITY OBLIGATIONS UNDER ARTICLE 14
THAT ARE DEEMED CONSEQUENTIAL DAMAGES) ARISING OUT OF PERFORMANCE UNDER THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUES, PROFITS OR DATA,
WHETHER IN CONTRACT OR TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

15.4                           Limitation
of Liability for Operation of Foreign Trade Subzone. Cardinal Health has
been granted a special purpose subzone (the “FTZ”) that includes the main plant of Cardinal Health’s US
Facility. Reliant may recognize a number of economic benefits resulting
from Cardinal Health’s operation of the FTZ. However, notwithstanding anything
to the contrary contained herein, including but not limited to the provisions
of Section 14.1, Cardinal Health’s liability to the Reliant, if any, as a
result of any and all liabilities, losses, claims, demands, damages, costs,
expenses, settlements made or reasonably approved by Cardinal Health, and money
judgments (including attorneys’ fees and other costs of litigation), related to
Cardinal Health’s operation of the FTZ, including, but not limited to: (A) Cardinal
Health acting as Reliant’s agent for duty drawback purposes pursuant to 19 CFR
§191.9 with respect to the Product; and (B) the suspension or closing of
the FTZ (whether voluntary or not)), incurred by or rendered against the
Reliant for personal injury, sickness, disease or death and other damages shall
in no event exceed Fifty Thousand United States Dollars ($50,000).

 

ARTICLE 16

INSURANCE

 

16.1                           Cardinal
Health. Cardinal Health shall, at its own cost and expense, obtain and
maintain in full force and effect the following insurance during the term of
this Agreement: (A) Commercial General Liability insurance with
per-occurrence and general aggregate limits of not less than $1,000,000; (B) Products
and Completed Operations Liability Insurance with per-occurrence and general
aggregate limits of not less than $5,000,000; (C) Workers’ Compensation
and Employer’s Liability Insurance with statutory limits for Workers’
Compensation and Employer’s Liability insurance limits of not less than
$1,000,000; and (D) Professional Services Errors & Omissions
Liability Insurance with per claim and aggregate limits of not less than
$1,000,000 covering sums that Cardinal Health becomes legally obligated to pay
as damages resulting from claims made by Reliant for errors or omissions
committed in the conduct of the services outlined in the Agreements. In lieu of
insurance, Cardinal Health may self-insure any or a portion of the above
required insurance. In the event that any of the required policies of insurance
are written on a claims made basis, then such policies shall be maintained
during the entire Term and for a period of not less than three (3) years
following the termination or expiration of this Agreement. Cardinal Health
shall obtain a waiver from any insurance carrier with whom Cardinal Health
carries Workers’ Compensation insurance releasing its subrogation rights
against Reliant. Reliant shall be named as an additional insured under the
Commercial 

 

 

General Liability and
Products and Completed Operations Liability insurance policies as respects the
manufacturing services outlined in this Agreement. Cardinal Health shall
furnish certificates of insurance for all of the above noted policies and
required additional insured status to Reliant as soon as practicable after the
Effective Date of the Agreement and upon renewal of any such policies. Each
insurance policy that is required under this Section shall be obtained
from an insurance carrier with an A.M. Best rating of at least A- VII.

 

16.2                           Reliant
Insurance. Reliant shall, at its own cost and expense, obtain and maintain
in full force and effect the following insurance during the term of this
Agreement: (A) Products and Completed Operations Liability Insurance with
per-occurrence and general aggregate limits of not less than $10,000,000; (B) Workers’
Compensation and Employer’s Liability Insurance with statutory limits for
Workers’ Compensation and Employer’s Liability insurance limits of not less
than $1,000,000; (C) All Risk Property Insurance in an amount equal to
full replacement value covering Reliant’s property while it is at Cardinal
Health’s facility; and (D) transit coverage in an amount not less than
$1,000,000 while Reliant’s property is in transit to or from Cardinal Health’s
facility. In the event that any of the required policies of insurance are
written on a claims made basis, then such policies shall be maintained during
the entire Term and for a period of not less than three (3) years
following the termination or expiration of this Agreement. Reliant shall obtain
a waiver from any insurance carrier with whom Reliant carries Workers’
Compensation insurance releasing its subrogation rights against Cardinal
Health. Reliant shall obtain a waiver from any insurance carrier with whom
Reliant carries Property Insurance releasing its subrogation rights against
Cardinal Health. Reliant shall not seek reimbursement for any property claim,
or portion thereof, which is not fully recovered from Reliant’s Property
Insurance policy. Cardinal Health and its Subsidiaries and Parent Corporation
shall be named as additional insureds under the Products and Completed
Operations Liability insurance policies as respects the products and completed
operations outlined in this Agreement. Reliant shall furnish certificates of insurance
for all of the above noted policies and required additional insured status to
Cardinal Health as soon as practicable after the Effective Date of the
Agreement and upon renewal of any such policies. Each insurance policy that is
required under this Section shall be obtained from an insurance carrier
with an A.M. Best rating of at least A- VII.

 

ARTICLE 17

TERM AND TERMINATION

 

17.1                           Term.
This Agreement shall commence on the Effective Date and shall continue for a
period of five (5) Contract Years (January 1, 2007 through December 31,
2011), unless earlier terminated under Section 17.2 (the “Initial Term”). After
the Initial Term, this Agreement may be automatically extended for further
periods of one (1) year each (the “Renewal Term”), unless terminated by
either Party upon written notice given to the other Party at least twelve (12)
months prior to the end of the Initial Term. The Initial Term and any Renewal
Term shall constitute the Term.

 

17.2                           Termination
by Either Party.

 

A.                                   Material
Breach. Either Party may terminate this Agreement effective upon sixty
(60) days prior written notice to the other Party, if the other Party commits a
material breach of this Agreement and fails to cure such breach by the end of
such sixty (60) day period; provided, 

 

 

however, that failure to
pay amounts due under this Agreement within thirty (30) days after such
payments are due (as set forth in Section 7.5) more than two (2) times
in any Contract Year shall constitute cause for immediate termination of this
Agreement, provided, however, that Reliant’s Chief Operating
Officer, or his designee, and Cardinal’s Facility General Manager from each
Party shall discuss such nonpayment in advance of termination.

 

B.                                     Bankruptcy.
Either Party may terminate this Agreement effective upon written notice to
the other Party, if the other Party becomes insolvent or admits in writing its
inability to pay its debts as they become due, files a petition for bankruptcy,
makes an assignment for the benefit of its creditors or has a receiver, trustee
or other court officer appointed for its properties or assets.

 

17.3                           Without
Cause. Either Party may terminate this Agreement without cause upon
thirty-six (36) months’ written notice to the other Party, following the date
which is twenty-four (24) months from the Effective Date.

 

17.4                           Effect
of Termination.

 

A.                                   Expiration
or termination of this Agreement shall be without prejudice to any rights or
obligations that accrued to the benefit of either Party prior to such
expiration or termination.

 

B.                                     In
the event of any termination, Cardinal Health shall promptly return (1) any
remaining inventory of materials received from Reliant, (2) all remaining
inventories of API and Product, and (3) any other Product, or API being
stored for Reliant, to Reliant at Reliant’s expense. Cardinal Health shall have
no obligation to return the foregoing until all outstanding undisputed invoices
sent by Cardinal Health to Reliant have been paid in full. For termination
initiated by Reliant, Reliant shall also be required to pay for (Y) completed
but not yet shipped Product and (Z) Product in process and Product shipped but
not yet invoiced in the event that this Agreement is terminated for reasons
other than Cardinal Health’s default. In the event Reliant breaches or terminates
this Agreement (other than as a result of a breach of this Agreement by
Cardinal Health) or if Cardinal Health terminates this Agreement under Section 17.2
hereof, Reliant will also be required to pay Cardinal Health for its direct
cost of all materials purchased by Cardinal Health for Processing. Reliant
shall specify the location in the continental United States to which delivery,
at Reliant’s expense, of the foregoing is to be made.

 

ARTICLE 18

NOTICE

 

All
notices and other communications hereunder shall be in writing and shall be
deemed given:    (A) when delivered
personally; (B) when delivered by facsimile transmission (receipt
verified);   (C) when received or
refused, if mailed by registered or certified mail (return receipt requested),
postage prepaid; or (D) when delivered if sent by express courier service,
to the Parties at the following addresses (or at such other address for a Party
as shall be specified by like notice; provided, that notices of a change of
address shall be effective only upon receipt thereof):

 

 

	
  To Reliant:

  	
  Reliant
  Pharmaceuticals, Inc.

  
	
   

  	
  110 Allen Road

  
	
   

  	
  Liberty Corner,
  NJ 07938

  
	
   

  	
  Attention:
  Robert Polster, Ph.D., Vice President,

  
	
   

  	
  Commercial
  Operations

  
	
   

  	
  Facsimile:
  908.542.9405

  
	
   

  	
   

  
	
  With a copy to:

  	
  Reliant Pharmaceuticals, Inc.

  
	
   

  	
  110 Allen Road

  
	
   

  	
  Liberty Corner,
  NJ 07938

  
	
   

  	
  Attention: Legal
  Department

  
	
   

  	
  Facsimile:
  908.542.9405

  
	
   

  	
   

  
	
  To Cardinal
  Health:

  	
  Cardinal Health
  PTS, LLC

  
	
   

  	
  2725 Scherer
  Drive

  
	
   

  	
  St. Petersburg,
  Florida 33716

  
	
   

  	
  Attention:
  General Manager, Encapsulation,

  
	
   

  	
  North America

  
	
   

  	
  Facsimile: (727)
  803-1632

  
	
   

  	
   

  
	
  With a copy to:

  	
  Cardinal Health, Inc.

  
	
   

  	
  14 Schoolhouse
  Road

  
	
   

  	
  Somerset, New
  Jersey 08873

  
	
   

  	
  Attn: General
  Counsel

  
	
   

  	
  Facsimile: (732)
  537-6491

  

 

ARTICLE 19

MISCELLANEOUS

 

19.1                           Entire
Agreement; Amendments. This Agreement including the attachments, as well as
the Confidentiality Agreement dated July 29, 2004, constitute the entire
understanding between the Parties and supersedes any contracts, agreements or
understanding (oral or written) of the Parties with respect to the subject
matter hereof; provided, however, that this Agreement does not supersede the
Initial Agreement with respect to events that happened prior to January 1,
2007. For the avoidance of doubt, as of January 1, 2007, other than
payments due and owing of which both parties are aware, there are no payments
of any kind due and owing to either party. No term of this Agreement may be
amended except upon written agreement of both Parties, unless otherwise
provided in this Agreement.

 

19.2                           Captions.
The captions in this Agreement are for convenience only and are not to be
interpreted or construed as a substantive part of this Agreement.

 

19.3                           Further
Assurances. The Parties agree to execute, acknowledge and deliver such
further instruments and to take all such other incidental acts as may be
reasonably necessary or appropriate to carry out the purpose and intent of this
Agreement.

 

 

19.4                           No
Waiver. Failure by either Party to insist upon strict compliance with any
term of this Agreement in any one or more instances will not be deemed to be a
waiver of its rights to insist upon such strict compliance with respect to any
subsequent failure.

 

19.5                           Severability.
If any term of this Agreement is declared invalid or unenforceable by a court
or other body of competent jurisdiction, the remaining terms of this Agreement
will continue in full force and effect.

 

19.6                           Independent
Contractors. The relationship of the Parties is that of independent
contractors, and neither Party will incur any debts or make any commitments for
the other Party except to the extent expressly provided in this Agreement. Nothing
in this Agreement is intended to create or will be construed as creating
between the Parties the relationship of joint ventures, co-partners,
employer/employee or principal and agent.

 

19.7                           Successors
and Assigns. This Agreement will be binding upon and inure to the benefit
of the Parties, their successors and permitted assigns. Neither Party may assign
this Agreement, in whole or in part, without the prior written consent of the
other Party (which consent shall not be unreasonably withheld, conditioned or
delayed), except that either Party may, without the other Party’s consent,
assign this Agreement to an Affiliate or to a successor to substantially all of
the business or assets of the assigning company (or the assigning company’s
business unit responsible for the performance of this Agreement), or, in the
case of Reliant, to a successor to all of the assets relating to the Product.

 

19.8                           Governing
Law. This Agreement shall be governed by and construed under the laws of
the State of New York, excluding its conflicts of law provisions.

 

19.9                           Alternative Dispute Resolution. If a dispute, controversy or disagreement (“Dispute”)
arises between the Parties in connection with this Agreement, then the Dispute
shall be presented to the respective presidents or senior executives of
Cardinal Health and Reliant for their consideration and resolution. If such
Parties cannot reach a resolution of the Dispute, then such Dispute shall be
resolved by binding alternative dispute resolution in accordance with the then
existing commercial arbitration rules of The CPR Institute for Dispute
Resolution (“CPR”), 366 Madison Avenue, New York, NY 10017. Arbitration shall
be conducted in New York, New York.

 

19.10                     Counterparts.
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original but all of which together will constitute one and
the same instrument.

 

19.11                     Publicity.
Neither Party will make any press release or other public disclosure regarding
this Agreement or the transactions contemplated hereby without the other Party’s
express prior written consent (which shall not be unreasonably withheld,
conditioned or delayed), except as required under applicable law or by any
governmental agency, in which case the Party required to make the press release
or public disclosure shall use commercially reasonable efforts to obtain the
approval of the other Party (which shall not be unreasonably withheld, conditioned
or delayed) as to the form, nature and extent of the press release or public
disclosure prior to issuing the press release or making the public disclosure.

 

 

19.12                     Survival.
The rights and obligations of the Parties shall continue under Articles 5
(Testing; Manufacturing Samples; Release), 7 (Payment Terms), , 10 (Records;
Regulatory Matters), 11 (Confidential Information), 12 (Intellectual Property),
14 (Indemnification), 15 (Limitations of Liability), 16 (Insurance) to the
extent expressly stated therein, 18 (Notice), 19 (Miscellaneous), and Sections 4.2,
6.2 and 17.4 (Effect of Termination), notwithstanding expiration or termination
of this Agreement.

 

19.13                     Force
Majeure. Except as to payments required under this Agreement, neither Party
shall be liable in damages for, nor shall this Agreement be terminable or
cancelable by reason of, any delay or default in such Party’s performance
hereunder if such default or delay is caused by events beyond such Party’s
reasonable control including, but not limited to, acts of God, regulation or
law or other action or failure to act of any government or agency thereof, war
or insurrection, civil commotion, destruction of production facilities or
materials by earthquake, fire, flood or storm, labor disturbances, epidemic, or
failure of suppliers, public utilities or common carriers;  provided however, that the Party seeking
relief hereunder shall immediately notify the other Party of such cause(s)
beyond such Party’s reasonable control. The Party that may invoke this section shall
use all reasonable endeavors to reinstate its ongoing obligations to the other.
If the cause(s) shall continue unabated for sixty (60) days, then both Parties
shall meet to discuss and negotiate in good faith what modifications to this
Agreement should result from this force majeure.

 

The
Parties are executing this Agreement on the date stated in the introductory
clause.

 

	
  CARDINAL
  HEALTH PTS, LLC

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name: David J.
  Heyens

  	
  Name: Joseph S.
  Zakrzewski

  
	
  Its: President,
  Encapsulation North America

  	
  Its: Chief
  Operating Officer

  
						

 

 

EXHIBIT A

SPECIFICATIONS

 

	
  Finished Product Release Specification

  

  

  Omacor Capsules

  	
  OMA-RSP

  

  

  Version: 03

  	
  

  

 

	
  Test

  	
   

  	
  Acceptance Criteria

  	
   

  	
  Method

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  *

  	
   

  

*Microbial limit tests are
performed by qualified laboratories, typically bulk capsule manufacturers.

History:

•      Version
01:  Approved on 6/14/05.

•      Version
02:  Removed unit for anisidine value
(typographical error), modified microbial limit test method numbers and other
minor typographical errors.  Approved on
8/31/05.

•      Version
03:  Changed capsule logo to “REL900” and
other editorial changes.

 

 

	
  Prepared by:

  	
   

  	
     Date:

  	
  8/11/06

  	
     Prepared by:

  	
   

  	
     Date:

  	
  8/11/06

  
	
   

  	
  Cindy Wu

  Manager

  QA/QC

  	
   

  	
   

  	
   

  	
  Goff Baker

  Director

  QA/QC

  	
   

  	
   

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

 

 

EXHIBIT B

UNIT PRICING, LIMITS OF LIABILITY, AND MINIMUM
REQUIREMENT

 

UNIT PRICING FOR TRADE PRODUCT– [***]% Requirements Level

 

	
  Units
  (millions)

  	
   

  	
  Price per thousand Units

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

 

UNIT PRICING FOR TRADE PRODUCT– [***]% Requirements Level

 

	
  Units
  (millions)

  	
   

  	
  Price per thousand Units

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

 

In the event Reliant
purchases less than [***] percent ([***]%) but more than [***] ([***]%) of its [***]
from Cardinal in any given Contract Year, an additional [***] dollars ($[***])
shall be added to the amounts set forth in the “Price per thousand Units”
column, in accordance with the first chart above i.e., if Reliant purchases up
to [***] units in a Contract Year, and such [***] Units amount represents less
than [***]% of Reliant’s commercial requirement for that given Contract Year,
the price shall be $[***] per [***] Units ([***]).

 

This is a “tiered”
pricing system. Therefore, for example, if Reliant purchases [***] Units from
Cardinal Health in a given Contract Year, and this represents [***] percent ([***]%)
of Reliant’s Manufacturing requirement levels for [***] for that Contract Year,
the price for the first [***] Units shall be $[***] per [***] Units, the price
for [***] Units through [***] Units shall be $[***] per [***] Units, the price
for [***]Units through [***] Units shall be $[***] per [***] Units, and the
price for [***] Units through [***] Units shall be $[***]. In the event the [***]
Units purchased from Cardinal Health does not represent [***] percent ([***]%)
of Reliant’s Manufacturing requirement levels for [***] for that Contract Year,
the Unit Pricing shall be modified in accordance with the paragraph and
applicable chart above.

 

The price for [***] shall
be $[***] per [***] Units for any Contract Year wherein Reliant purchases less
than [***] percent ([***]%) of its Manufacturing requirement levels for [***] from
Cardinal Health. For any Contract Year wherein Reliant purchases [***] percent
([***]%) of its Manufacturing requirement levels for [***] from Cardinal
Health, the price of the [***] shall be the same as the price for the [***] for
that Contract Year as reflected in the applicable above chart.

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

For the avoidance of
doubt, the price for all Product purchased by Reliant from Cardinal Health from
July 1, 2006 through and including December 31, 2006 shall be [***]dollars
($[***]) per [***] Units.

 

LIMITATIONS OF LIABILITY

 

	
  Units

  	
   

  	
  Liability Limit per Each Contract Year

  
	
  Up to and
  including 200 million

  	
   

  	
  $ 1 million

  
	
  201 million up
  to and including 500 million

  	
   

  	
  $ 2 million

  
	
  501 million up
  to and including 750 million

  	
   

  	
  $ 3 million

  
	
  751 million up
  to and including 1 billion

  	
   

  	
  $ 4 million

  
	
  1 billion up to
  and including 1.25 billion

  	
   

  	
  $ 5 million

  
	
  1.251 billion up
  to and including 1.50 billion

  	
   

  	
  $6 million

  
	
  1.51 billion up
  to and including 1.750 billion

  	
   

  	
  $7 million

  
	
  1.751 billion
  and above

  	
   

  	
  $8 million

  

 

MINIMUM REQUIREMENT

 

	
  Contract
  Year

  	
   

  	
  Product / Dosage Form

  	
   

  	
  Minimum Requirement

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

 [***]: 
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

EXHIBIT C

 

MINIMUM YIELD SCHEDULE

 

[Reliant Pharmaceuticals
Letterhead]

 

May 23, 2006                                                

VIA
FACSIMILE (727) 803-2224

Cardinal Health PTS, LLC

2725 Scherer Drive

St. Petersburg, Florida  33716

Attention:  President, Encapsulation,

North America Oral Technologies

Re:          Minimum Yield

Dear Mr. Heyens:

                Reference is made hereby to the Manufacturing and
Packaging Agreement dated as of April 14, 2005 (the “Agreement”) between
Reliant Pharmaceuticals, Inc. (“Reliant”) and Cardinal Health PTS, LLC
(“Cardinal Health”).  All capitalized
terms in this letter that are not otherwise defined herein shall have the
meaning set forth in the Agreement.

By this letter Reliant and
Cardinal Health hereby acknowledge and agree that for purposes of Section 3.4,
the parties have established the Minimum Yield to be [***] Percent ([***]%).  This letter shall serve as Exhibit C
to the Agreement.  In all other respects
the Agreement shall remain in full force and effect.

To confirm your agreement
with the foregoing, please execute a copy of this letter in the place indicated
below.

	
   

  	
  Reliant
  Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Robert
  Polster

  
	
   

  	
   

  	
  Vice
  President, Manufacturing

  

 

 

 

Agreed
and acknowledged this 23 day

of
May, 2006

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  David Heyens

  
	
   

  	
  President,
  Encapsulation — North America

  
	
   

  	
   

  
	
  cc:

  	
  Cardinal Health, Inc.
  Associate General Counsel, Pharmaceutical Technologies and Services (via
  facsimile — (614) 757-5051)

  

 

[***]:  Certain information on this page has been omitted
and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

 

 

EXHIBIT D

 

QUALIFICATION, VALIDATION AND STABILITY SERVICES

 

Quotation

Process Validation of 1000 mg
Omacor

Softgels at the St. Petersburg, FL

Facility

 

QTE-RLD-0025.00

 

 

 

Confidential for Reliant Pharmaceuticals

 

Prepared for Abdel Fawzy, Ph.D

100 Allen Road

Liberty Corner, NJ 07938

908-542-4488

Cardinal Health Contact: Jack Wright

Phone: 609-654-4524

February
15, 2005

 

	
  

   CardinalHealth

  	
  BioPharmaceutical
  Product Development

  Pharmaceutical Product Development

  Clinical Packaging Services

  Analytical Chemistry Services

  Scientific and Regulatory Consulting

  Pulmonary and Nasal Product Development

  Clinical and Small Scale Commercial Manufacturing

  

 

 

	
  QTE-RLD-0025.00

  	
   

  	
  CONFIDENTIAL

  

 

 

Executive Summary

 

Reliant Pharmaceuticals (Reliant) has requested Cardinal Health,
Pharmaceutical Development (Cardinal Health) to perform process validation for
the Omacor 1000 mg softgels at Cardinal Health’s facility in St. Petersburg,
FL. The estimated cost for this project is $[***] plus cost of softgels, over a
period of approximately [***].

 

Section 1.  Scope of Work

 

Cardinal Health, Somerset has developed and scaled up Omacor 1000 mg
softgels to commercial scale in Cardinal Health, St. Petersburg. Cardinal
Health will manufacture three (3) process validation batches and generate
validation report prior final commercial launch. All clinical batch manufacture
activities will be conducted according to cGMP guidelines.

 

Section 2.  Activities/Specifications

 

2.1          Project Activities

 

2.1.1                     Cardinal
Health’s Responsibilities

 

2.1.1.1           Preliminary Activities

 

Cardinal Health
will conduct preliminary activities to include the following:

 

•                  Provide project
management and timelines.

•                  Identify
project team members and outline expectations.

•                  Finalize
initial protocols.

•                  Identify and
receive necessary Reference Standards, API lots, and excipients for
development.

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated Cost ($)

  
	
  1

  	
   

  	
  No Charge

  

 

2.1.1.2           Omacor Development Report

 

Cardinal Health will
carry out project-related activities to include the following:

 

•                  Compile listing
of all batches made in St. Petersburg, FL.

•                  Gather all
information related to any research and development conduct in the St.
Petersburg, FL facility.

•                  Issue a
development report summarizing all work completed in the St. Petersburg,
FL facility.

14 Schoolhouse
Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

2

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated
  Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  

 

2.1.1.3           Omacor 1000 mg Softgel Process Validation

 

Cardinal Health
will perform the following activities in order to validate Omacor 1000 mg
softgel manufacturing process at commercial scale:

 

•                  Generate a
process validation protocol and obtain approval from Reliant.

•                  Obtain drug
substance from Reliant and complete ID test for release (included in analytical
support section).

•                  Order raw
materials and sample for release.

•                  Generate
product masters.

•                  Perform as
customer liaison and supervise batches.

•                  Complete
peroxide test on drug prior to encapsulation (included in analytical support
section).

•                  Manufacture and
validate manufacturing process of three full-scale in-line printed
batches at production site.

•                  Monitor batches
and collect fill and softgel samples for in-process testing as required in the
validation protocol.

•                  Monitor
hardness of softgels during drying.

•                  Wash and bulk
package softgels for shipping to Reliant.

•                  Perform
in-process seal thickness, fill and shell weight measurement.

•                  Clean equipment
as per validated method.

•                  Release
finished product.

•                  Perform QA
review of all documentation.

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated
  Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  

 

2.1.1.4           DMF Update

 

Cardinal Health will
update the DMF to reflect all changes made from the original DMF filing.

Estimated Cost

	
  Estimated Duration (Weeks)

  	
   

  	
  Estimated
  Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

3

 

2.1.1.5           In-Process and Release Testing of
Softgels for Process Validation

 

Cardinal Health will
carry out project-related activities for three process validation batches as
follows:

 

•                  Perform
appropriate in-process fill weight and content uniformity testing and release
testing for three batches of active: appearance, identification (HPLC),
assay/related substances, fill weight, disintegration, content uniformity,
moisture, and microbial limits testing (MLT).

•                  Perform
peroxide test and AQL on three batches.

•                  Issue CoA.

Estimated Cost

	
  Activity and Estimated Duration
  (Weeks)

  	
   

  	
  Estimated Cost ($)

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

*
Additional cost may be incurred for more then three samples ($[***] per sample requiring assay). Content uniformity will be charged at $[***] per set of samples.

2.1.2                     Reliant
Responsibilities

 

Reliant will sign the
protocol and provide a technical contact who will be available for technical
discussions and make decisions that are needed in reference to this project.
Reliant will not use any samples/materials shipped from Cardinal Health for
this project in a manner that is inconsistent with the scope of this project.

 

2.2          Specifications

 

2.2.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will
propose and document the specifications, as applicable, in the Protocol(s).

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

4

 

2.2.2                     Reliant’s
Responsibilities

 

Reliant will provide all
specifications necessary to perform this project.

 

Section 3.  Cost Proposal

 

3.1          Project Costs

Total Estimated Project Cost

	
  Section

  Reference

  	
   

  	
  Activity

  	
   

  	
  Estimated Duration

  (Weeks)

  	
   

  	
  Estimated Cost

  ($)

  	
   

  
	
  2.1.1.1.

  	
   

  	
  Preliminary Activities

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.2.

  	
   

  	
  Omacor Development
  Report

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.3.

  	
   

  	
  Omacor 1000 mg Softgel
  Process Validation

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.4.

  	
   

  	
  DMF Update

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  2.1.1.5.

  	
   

  	
  In-Process and Release
  Testing of Softgels for Process Validation

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Total
  Estimated Project Cost

  	
   

  	
  [***]

  	
   

  

 

3.2          Additional
Fees

 

If copies of raw data are requested in the course of an active project,
Reliant will be invoiced at $[***] for time required to generate and compile
the data packet. If copies of raw data are requested after a final report has
been issued, Reliant will be invoiced at the current laboratory rate for the
hours required to generate and compile the data packet.

 

3.3          Revisions
to Pricing

 

Cardinal Health reserves the right to revise quoted costs for any
project as a result of initial scope change, revisions in Protocols,
modifications of test methods, final review of test methods, undocumented
requirements, retesting or resynthesis, or any unforeseen difficulty in
executing the project. The additional work will be performed based on written
agreement from Reliant and will be documented on a Cardinal Health Quotation
Amendment Record (QAR).

 

All required investigational work (such as OOS investigations, trouble
shooting chromatographic methods, etc.) may be conducted without prior approval
from Reliant, for up to 16 scientist hours per occurrence. If the additional
work requires going beyond [***] hours, Reliant will be contacted prior to
continuation. All investigational retesting performed that is not directly due
to a Cardinal Health error will be invoiced to Reliant.

 

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

 

5

Section 4.  Invoicing and Payment Terms

 

4.1          Invoicing

 

Upon request from Reliant, Cardinal Health will
purchase all samples/materials necessary to perform the project and will
invoice Reliant monthly at cost plus reasonable and customary acquisition and
handling costs.

 

Non-standard or special instrumentation or equipment
required solely for this project will be invoiced to Reliant following Reliant
approval.

 

4.2          Additional Invoicing Terms

 

Cardinal Health will issue invoices based on
milestones identified in Section 2.1.1. If a draft report is issued, Reliant
will have 10 business days to return comments to Cardinal Health. If no
comments are received, Cardinal Health will finalize the report and issue the
invoice. If comments are received after issuance of the final report, Reliant
will be billed at the current standard hourly rate for the time required to
complete changes and reissue the report.

 

4.3          Payment Terms

 

Payments toward all invoices are due within 30 days of
receipt of invoice and are non-refundable. Any applicable wire transfer fees
must be included in the payment issued to Cardinal Health. All shipments are
FOB Somerset, New Jersey. Remit all payments to:

 

Cardinal Health, Pharmaceutical Development, Somerset 

P.O. Box 827389

Philadelphia, PA 19182-7389

 

Section 5.  Scheduling/Deliverables

 

5.1          Scheduling

 

Cardinal Health must receive a signed Quotation with a
Purchase Order number (if applicable), a signed Protocol, and all raw
materials/intermediates/final product samples in order for this project to be
scheduled. Once scheduled, Reliant will be notified by Cardinal Health of the
anticipated start and completion date of the project activities.

 

5.2          Deliverables

 

5.2.1                     Reports
and Certificates of Analysis

 

A report and/or
Certificate of Analysis will be issued upon completion of each project phase.

 

6

5.2.2                     Communication

 

In order to establish a
collaborative relationship between Reliant and Cardinal Health, both parties
will appoint a Project Manager to serve as a point of contact to oversee
progress on this project. Upon initiation of the project, Cardinal Health and
Reliant will establish a communication plan, if requested, that may include
conference calls, visits, and timelines.

 

Section 6.  Additional Project Terms

 

6.1          Safety

 

6.1.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will
assess all vendor and Reliant MSDS and all handling data for the
samples/materials associated with this project. If categorized as a CDS and/or
Category 3 or above, the samples/materials will require special handling
precautions and will be subject to a Hazardous Material Fee for all handling
and testing directly associated with the samples/materials. If applicable, this
Hazardous Materials Handling Surcharge will be included in the project costs.

 

6.1.2                     Reliant’s
Responsibilities

 

Reliant will provide MSDS
and all sample/material handling data for the samples/materials associated with
this project. If any sample/material has any special handling considerations,
Reliant will notify Cardinal Health prior to the initiation of the project.

 

6.2          Methods/Documentation

 

6.2.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will
review all project-related documentation and methods received from Reliant
associated with this project.

 

6.2.2                     Reliant’s
Responsibilities

 

Reliant will provide all
available project-related documentation and methods to be used for this
project.

 

7

6.3          Samples/Materials

 

6.3.1                     Cardinal
Health’s Responsibilities

 

Cardinal Health will, as
necessary, log in all samples/materials according to current Standard Operating
Procedures. The sample/material lot numbers will be recorded in the laboratory
notebooks at the time of use.

Upon issuance of the
final report or Certificate of Analysis, samples/materials will be stored in
quarantine at Cardinal Health for a period of 30 days. After the 30-day quarantine
period, samples/materials will be disposed of at Cardinal Health unless
requested otherwise by Reliant. If additional storage is requested, Cardinal
Health will issue a QAR for the additional cost.

 

6.3.2                     
Reliant’s Responsibilities

 

If available, Reliant
will provide all samples/materials necessary to perform this project. The
samples/materials should arrive at Cardinal Health with all proper
documentation. If samples/materials are not available, Reliant will request
that Cardinal Health purchase all necessary samples/materials needed to perform
this project.  If return shipment is
requested, Reliant will notify Cardinal Health prior to the disposition of
samples/materials.

 

6.4          Cancellation

 

If this project is cancelled by Reliant for purposes
within their control, Cardinal Health will invoice Reliant the cost of any
sample/materials, work performed before cancellation, reference materials,
equipment, and supplies purchased by Cardinal Health specifically for this
project.  In addition, Cardinal Health
reserves the right to invoice project cancellation fees according to the
following schedule: acceptance of quotation but no approved protocol, $[***];
acceptance of protocol but no laboratory work, $[***]; and after laboratory
work has begun, [***]%.

 

For pilot plant manufacture, Cardinal Health reserves
the right to invoice project cancellation fees according to the following
calendar day schedule: [***].

 

6.5          Project Notes

 

Reliant communication is encouraged.  To foster project planning, reviews/updates,
and coordination meetings, Cardinal Health will provide four person-hours a
month of communication free of charge. 
Additional communication hours beyond this amount will be invoiced at
the standard hourly rate.

 

[***]:  Certain information on this page has been
omitted and filed separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.

 

8

Reliant shall pay for all product batches, including
batches that do not conform to applicable specifications, unless all methods
and processes associated with the manufacture, testing, and storage of that
product have been fully validated in accordance with generally accepted
standards of the pharmaceutical industry.

 

The costs associated with optional testing have not
been included in the total estimated project cost.

 

The summary of costs detailed above does not include
any extra reformulation activities, any post submission activities, and/or any
activities required for commercial batch manufacture.  Additionally, it does not include any post
approval tasks such as annual stability testing or storage.  If requested by Reliant, these costs will be
quoted separately.

 

Section 7.   Version History

 

 

Revisions

 

	
  Version

  	
   

  	
  Revisions

  
	
  00

  	
   

  	
  New Issue

  

 

Section 8. 
Terms and Conditions

All work performed under this quotation is subject to
the Supply Agreement to be executed between Cardinal Health and Reliant
Pharmaceuticals.  Upon receipt of an
executed Term Sheet and Purchase Order from Reliant, Cardinal Health shall
commence the validation process activities and manufacture the validation lots,
while the parties negotiate the supply agreement.  In the event that the supply agreement has
not been executed as of the date of the completion of the manufacture of the
validation lots, Cardinal Health shall release the validation lots to Reliant
upon payment of the amounts due Cardinal Health as set forth in the Purchase
Order and agreement by the parties as to responsibility for any liabilities
(i.e. recall, product liability etc) associated with the manufacture or sale of
the validation lots.

 

9

Section 9.  Project Approval and Authorization

 

By signing below, Reliant agrees to the project
details as set forth in this Quotation.

 

	
  Reliant Pharmaceuticals.

  	
   

  	
  Cardinal Health PTS, LLC

  
	
   

  	
   

  	
  /s/

  
	
  Signature

  	
   

  	
  Signature

   

  
	
   

  	
   

  	
  Kent Payne, Ph.D.

  
	
  Printed Name

  	
   

  	
  Printed Name

  
	
   

  	
   

  	
  Vice President, Research and Development

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
  16 Feb 2005

  
	
  Date

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  PO Number

  	
   

  	
   

  

 

Please sign and return a copy of the Quotation Approval Page via fax to

Denise McGraw at (732) 537-6480 or email to denise.mcgraw@cardinal.com.

 

EXHIBIT E

 

FORM OF QUALITY AGREEMENT

 

 

COMMERCIAL

QUALITY AGREEMENT

Between

And

For the manufacture of:

OmaCor Capsules

 

	
  Commercial Quality Agreement

  	
   

  	
  OmaCor Capsules

  
	
  Between Reliant
  Pharmaceuticals, Inc. and Cardinal Health

  	
   

  	
   

  

TABLE OF CONTENTS

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  I

  	
   

  	
  QUALITY AGREEMENT AND TERM 

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  PRODUCTS 

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  CONTACT INFORMATION 

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  MANUFACTURING COMPLIANCE

  	
   

  	
   

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Premises

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Equipment

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Personnel

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Materials

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Documentation

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Lot Numbers and Expiration

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Bulk Product Storage and Shipment

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
  8.

  	
   

  	
  Processing of Intermediates (Bulk
  Hold)

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V

  	
   

  	
  QUALITY CONTROL 

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Premises

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Equipment

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Vendor Approval

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Personnel

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Out-of-Specification (OOS
  Investigations)

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Reference Standards

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Product Release

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI

  	
   

  	
  QUALITY ASSURANCE 

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Documentation

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Samples

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Investigations/Deviations

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Product Complaints or Adverse
  Events

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Annual Product Review

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Product Recalls

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Audits by Reliant Pharmaceuticals

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII

  	
   

  	
  REGULATORY 

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Inspections by Regulatory Agencies

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Annual Reports

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Drug Listing

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII

  	
   

  	
  VALIDATION 

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Process

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Equipment Cleaning Validation

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Computer

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Analytical Test Methods

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REVISION HISTORY AND APPROVAL 

  	
   

  	
  14

  	
   

  
										

 

i

 

This Quality Agreement does
not supercede or amend any provisions in the Supply Agreement between Reliant
Pharmaceutical (Reliant) and Cardinal Health (Cardinal) dated April 14, 2005
(as may be amended from time to time, the “Agreement”).  In the event of a conflict between the terms
of the Agreement and this Quality Agreement, the Agreement shall be
controlling.

I               QUALITY AGREEMENT AND TERM

 

1.             It is deemed
necessary by Reliant and Cardinal to allocate the responsibilities of current
good manufacturing practice (cGMP), as defined in 21 CFR part 210-211, by which
OmaCor Capsules shall be manufactured and provided to Reliant.

2.             This Quality
Agreement, in conjunction with the Agreement, shall define the responsibilities
of the parties involved, and the levels of interaction necessary for the
delivery of a compliant drug product.

3.             This Quality
Agreement shall expire with the termination of the Agreement.  This Quality Agreement can be modified with
the written approval of Reliant and Cardinal Quality Departments.  A revision history shall be maintained as
part of the Quality Agreement.

II             PRODUCTS

 

Cardinal has agreed to
manufacture OmaCor Capsules in accordance with all cGMP’s, Product
Specifications and all applicable federal, state, and local laws and
regulations.

 

1

 

III            CONTACT INFORMATION

 

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

 

	
  DEPARTMENT

  	
   

  	
  RELIANT CONTACT

  	
   

  	
  CARDINAL CONTACT

  
	
  QUALITY
  ASSURANCE

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Keith Bowen

  (908) 542-4432

  (908) 542-4460

  kbowen@reliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail:

  	
  Leandra Mollanazar

  (727) 803-2263

  (727) 803-2315

  leandra.mollanazar@cardinal.com

  
	
  MANUFACTURING OPERATION

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Christopher Campbell

  (908) 542-4425

  (908) 542-9405

  ccampbell@reliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Michael Stanco

  (727) 803-2373

  (727) 803-1632

  michael.stanco@cardinal.com

  
	
  REGULATORY

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Mary Chin

  (908) 542-4461

  (908) 542-4460

  mchin@greliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Gloria Kulcheski

  (727) 803-2454

  (727) 803-2315

  gloria.kulcheski@cardinal.com

  
	
  PRODUCTION PLANNING

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Tanya Quinn

  (908) 860-4654

  (908) 542-9405

  tquinn@reliantrx.com

  	
   

  	
  Name: 

  Phone: 

  Fax: 

  e-mail: 

  	
  Lee Kelly

  727-803-2209

  727-572-9577

  lee.kelly@cardinal.com

  

 

2

 

IV            MANUFACTURING COMPLIANCE

OmaCor will be manufactured by Cardinal according to the Agreement at
their facility located at 2725 Scherer Drive, St. Petersburg, FL  33716 as detailed in the NDA and
Agreement.  The FDA facility number for
this location is 1811396.

1.             Premises

1.1           The manufacturing facility shall comply
with all aspects of 21 CFR Part 210 and 211 Subpart C, as well as all
additional requirements detailed in the Agreement,

2.             Equipment

2.1           Equipment used to manufacture the
Product shall comply with 21 CFR part 211 Subpart D, as well as all additional
requirements detailed in the original DMF and subsequent updates.

2.2           Cardinal shall maintain written
records for equipment usage, cleaning, maintenance and calibration of all
equipment used in the processing of the Drug Product to ensure that cleaning and
maintenance records are readily identifiable with equipment usage in the event
of a drug product problem that may be investigated.  Cardinal shall maintain approved written
procedures including, but not limited to, specifications for cleaning,
assignment of responsibility for cleaning and maintaining equipment.

2.3           Installation qualification (IQ)/
operational qualification (OQ)/ performance qualification (PQ) shall be
performed on all equipment used in the manufacture and analysis of the product,
and the same equipment shall be placed on a calibration and/or preventive
maintenance schedule, as appropriate.

2.4           Cardinal shall only use the major
equipment detailed in the Master Batch Records thereto for the processing and
manufacture of the product.  Use of
equipment other than that stipulated in the mutually agreed to Master Batch
production records shall not be permitted without prior written consent from
Reliant Quality and Regulatory, irrespective of FDA guidance’s detailing
equipment class and subclass equivalencies.

3.             Personnel

3.1           Cardinal shall maintain quality
control and quality assurance units to be responsible for the duties relating
to quality control and quality assurance. 
The responsibilities of these units shall be defined in written procedures.

3.2           Personnel used to process the drug
product shall be appropriately trained in cGMP’s, as well as the processes they
perform.  Training shall be

 

3

 

                documented and available for review.  Training shall be conducted on a continuing
basis by qualified individuals.

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

4.             Materials

4.1           Cardinal shall use only those
excipients, Active Pharmaceutical Ingredients (“API”), components, and bulk
capsule packaging materials as detailed in the DMF.

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

4.3           Cardinal shall store all packaging
materials, excipients, API, and finished product in a suitable environment so
as not to impact the materials’ quality. 
A suitable retest program shall be used to demonstrate the quality of
the stored material versus approved specifications.  Certificates of Analysis or analytical test
sheets, as defined by Cardinal, shall be generated and reviewed by quality control
to release all materials used to process and manufacture the Product.

5.             Documentation

5.1           Cardinal shall provide written
documentation in the form of a master batch record for all processes used in
the manufacture of the Product.

5.2           Cardinal shall maintain and follow
Standard Operating Procedures (SOP) required to manufacture, package, analyze,
release, and store in-process materials as well as the Product as detailed in
the DMF, and required by cGMP.

5.3           Cardinal shall follow a suitable
change control procedure for all documentation. 
All changes to controlled documents such as, batch records,
manufacturing specifications, test methods, and raw materials supplied by
Reliant and product specifications must be submitted to Reliant QA for review
and approval prior to final approval and implementation.  Any documentation necessary to support the
change request shall be provided as necessary.

5.4           Labeling of bulk finished product
will be executed per Cardinal’s in-house labeling program.  Bulk shipper labels shall contain a minimum
of the following information:  product
name, strength, container number, storage statement, package by date, Cardinal
shall follow written procedures for 

 

4

 

label control for the
receipt, release, dispensing, and reconciliation of all labels, as appropriate.

6.             Lot Numbers and Expiration

6.1           Cardinal shall assign unique lot
numbers to bulk finished product to ensure complete product traceability.

7.             Bulk Product Storage and
Shipment

7.1           Cardinal shall store all finished product
in suitable containers, labeled with lot specific information, and in a
controlled environment to remove possibility of tampering, theft, adulteration,
or contamination.

7.2           Product shall be labeled with all
D.O.T. and O.S.H.A. information, as required, and suitably packaged to minimize
damage during transit.

7.3           Bulk product container shall be
sealed with tamper evident closures or seals to remove the possibility of
tampering, theft, adulteration, or contamination.

7.4           Bulk finished product may be shipped
by Cardinal to a Reliant specified address once all site specific testing
requirements are approved all deviations and investigations are closed, and the
batch record is approved..  Materials may
be shipped under Quarantine only with the prior written consent from the
Quality Department from Reliant and Cardinal.

7.5           Product should be segregated by lot
number prior to shipment.

8.             Processing of Intermediates
(Bulk Hold)

8.1           Each process intermediate for each
step of the manufacturing process may be held for a period of up to 30
days.  Holding a process intermediate for
a period of longer than 30 days must be supported by stability data, generated
per an approved protocol that supports a longer storage interval.

 

5

 

V             QUALITY
CONTROL

Cardinal shall maintain a cGMP quality control laboratory suitable to
test and release all materials; API, components, in-process test samples, and
finished product according to the analytical methods and specifications detailed
in the DMF and subsequent updates or NDA or approved Supplement.  This laboratory is the only qualified
laboratory to perform analytical testing in support of the materials, API,
components, and drug products, unless otherwise specified in the DMF.  Use of any other laboratory for release
testing is not permitted.

1.             Premises

1.1           The quality control laboratory shall
comply with all aspects of 21 CFR Part 210 and 211.

2.             Equipment

2.1           Installation qualification/
operational qualification/ performance qualification shall be performed on all
equipment used in analysis of excipients, components, and the product and the
same equipment shall be placed on a calibration schedule, as appropriate.

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

3.             Vendor Approval

3.1           Cardinal shall suitably qualify all
vendors from which materials are sourced for use in the finished drag
product.  This includes, but is not
limited to excipients, container closure systems, printed commodities, etc.

4.             Personnel

4.1           Personnel used to test and release
the Product shall be appropriately trained in cGMP’s, as well as the methods
and techniques they utilize.  Training
shall be documented and available for review. 
Training shall be conducted on a continuing basis by qualified
individuals.

5.             Out-of-Specification (OOS)
Investigations

5.1           Cardinal is responsible for following
its SOP to investigate any test results that fail to meet specifications.  A confirmed OOS failure should be conveyed to
Reliant Quality within 2 business days. 
These OOS investigations are open to review by Reliant during an audit.

 

6

 

6.             Reference Standards

6.1           All testing shall use primary
reference standards, or appropriately qualified secondary reference
standards.  Qualification of secondary
reference standards must comply with current ICH guidelines.

7.             Product Release

7.1           Reliant is responsible for assessing
final product disposition and release. 
Cardinal shall provide a COA/COC and product yield page for each lot
manufactured.

 

7

 

VI            QUALITY
ASSURANCE

Cardinal’s Quality Department shall assure that the drug product was
manufactured, tested, released, and stored in accordance with cGMP’s, and all
requirements as detailed in the in the approved master batch
record/specifications.

1.             Documentation

1.1           Cardinal will provide both a
Certificate of Analysis indicating all Cardinal test results and their
specifications, and a Certificate of Compliance indicating the Drug Product has
been manufactured, packaged, tested, released and stored according to cGMP’s
and all requirements as detailed in the master batch record/specifications.

1.2           Cardinal shall provide written
certification for cGMP Compliance and Debarment annually upon request.

1.3           Cardinal shall retain all Batch
Production Records for the Drug Product for a period of not less than one year
past the finished product expiration date.

1.4           Deviations to the manufacturing
process or analytical test methods must be documented, reviewed versus the
respective validation, and approved by both Reliant and Cardinal Quality
Assurance department s prior to release of the Drug Product.

1.5           Cardinal is responsible for
maintaining all documentation supporting all manufacturing processes,
analytical testing, and storage of the Drug Product for a period of not less
than one year past the expiration date of any finished product lot containing
it.

1.6           Cardinal shall follow a suitable
Change Control Procedure for all documentation. 
All changes to batch records, manufacturing specifications, or test
methods must be submitted to Reliant Quality Assurance for review and approval
prior to implementation.

1.7           Validation records shall be
maintained by Cardinal until the NDA is retired.

2.             Samples

2.1           Cardinal’s Quality Control Unit shall
assure that all test samples are taken in accordance with approved SOP’s.

2.2           Cardinal shall maintain bulk product
reserved samples for a period of not less than one year past the expiration
date of finished products.  At least
twice as much material shall be retained as is needed to conduct testing if
necessary.

 

8

 

2.3           Cardinal shall retain API reserve
samples for one year after the expiration date on the last finished product lot
containing it.  At least twice as much
material shall be retained as is needed to conduct all specification release
testing.

2.4           Manufacturer shall perform annual
inspection of the bulk product retained samples as per 21 CFR 211.170, and will
perform an investigation of deterioration, if necessary, as per 21 CFR 211.170.

3.             Investigations/Deviations

3.1           Cardinal shall notify Reliant Quality
in writing within two business day after confirmation of any situation that
impacts product that has already been released. 
Cardinal shall also provide Reliant with verbal communication of any
such investigation prior to the confirmation so that appropriate action can be
implemented to restrict continued distribution of product until the
investigation can be finalized.

3.2           All major and minor manufacturing
deviations shall be investigated and approved by both Cardinal and Reliant QA
departments.  Copies of the final
approves investigations shall be conveyed to Reliant Quality with the issuance
of the bulk product certificate of analysis. 
In addition, Cardinal shall inform Reliant QA of any confirmed Out of
Specification result.

A Major Deviation is defined as:  A departure from normal operating conditions
that is determined to have a significant or unknown
impact on the identity, strength, quality, and purity of the drug product.  Examples include, but are not limited
to:  failure of a batch or lot to meet
any analytical specification that is not determined to be a laboratory error;
or, compounding errors such as dispensing incorrect quantities of material; or
processing errors such as using equipment that is outside of approved
calibration dating or processing a batch outside the tolerances set forth in
the batch record; or observation of foreign materials in a batch; or packaging
or labeling errors.

A Minor Deviation is defined as:  A departure from normal operating conditions
that is determined to have no impact on the identity, strength, quality, and
purity of the drug product.  Examples
include, but are not limited to:  low
gross yields; or calculation or rounding errors that have no impact on the
batch.

3.3           Rework/Reinspections:  Cardinal shall obtain approval from Reliant
QA before performing any rework or reinspection of intermediates or finished
product.

 

9

 

4.             Product Complaints or Adverse
Events

4.1           All individuals reporting a product
related complaint shall be immediately directed to contact Reliant Pharmaceuticals’
Customer Complaints Group at telephone number: 
908.580.1200.

4.2           All individuals reporting an Adverse
Event shall be immediately directed to contact Reliant Pharmaceuticals’ Medical
Affairs Department at telephone number: 
908.580.1200.

4.3           Reliant Pharmaceutical’s Quality
Department shall evaluate all complaints and determine if product retain
analysis is required.  A written request
shall be forwarded to Cardinal detailing any product retain investigation that
is required.  Cardinal shall provide a
written report of the investigation within 20 business days.

4.4           Cardinal shall maintain a system for
logging, tracking, and responding to complaints.

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

4.6           Should Reliant discover a product
related problem, Reliant Quality Department shall provide a written complaint
notification to Manufacturer within 2 business days of the occurrence.

4.7           Should Cardinal, through routine
product review, discover a product related issues that causes an investigation,
Cardinal shall provide written notification to Reliant’s Quality Department
within 3 business days.

5.             Annual Product Review

5.1           Cardinal shall perform an annual
product review for the Product detailing all product lots manufactured, product
investigations, lots released or rejected, specification changes (to excipient,
in-process controls, or finished product), and process or method revisions
(including validation reports) for all Product lots manufactured in the
previous calendar year.  All critical
release data shall be trended to evaluate the process.

5.2           The written annual product review
report for a given year shall be sent to Reliant Quality Department.  The reporting period shall commence with the
first day of the month in which the validation campaign started, and shall
close 365 days later (i.e. April 1, 2005 through March 31, 2006).  This period will be the established reporting
period for the product.

 

10

 

5.3           The written annual product review
report for a given year shall be sent to Reliant Quality Department within 90
days of the close of the reporting period.

6.             Product Recalls

6.1           It shall be the sole responsibility
of Reliant to issue a FDA Field Alert Notification pertaining to a product
quality issue discovered by Cardinal or Reliant.  An alert shall only be issued with
substantive evidence of a quality issue, for which Cardinal shall have 5
business days from obtaining knowledge of the substantial evidence of a quality
issue to provide a full investigation report to Reliant Pharmaceuticals.

6.2           It shall be the sole responsibility
of Reliant to issue a product recall, and discuss with FDA the extent or type
of action that should occur.  Decisions
to initiate a product recall shall be based on product medical reviews and the
investigation report used to support the FDA Field Alert.

7.             Audits by Reliant
Pharmaceuticals

7.1           Routine Audits may be performed by
Reliant or its agent upon prior notification, and not more than once a
year.  CGMP compliance audits of
Cardinal’s facilities may be conducted during regular business hours, and may
cover any system or area, plus associated documentation, used to support
receiving, sampling, testing, releasing and holding of raw materials, or
manufacturing, sampling, testing, releasing, labeling, holding, and
distribution of the drug product.

7.2           Reliant Quality shall provide 180
days notification for a routine audit, and 7 days notification for a ‘for
cause’ audit pertaining to a specific product quality and safety issue.  A ‘for cause’ audit does not constitute a
routine audit.

7.3           An exit meeting shall be held to
provide significant audit observations. 
A written report of observations shall be issued.

7.4           Cardinal shall provide a written
response to the audit observations within 30 business days of receipt of
written observations from Reliant.  The
response shall include details of the corrective actions to the observations,
and the expected completion date of the action. 
Reliant Quality shall follow-up on the progress of the corrective
actions based on the expected completion dates provided.

7.5           Reliant shall have the right to be
present during the manufacture of any product validation lots, or during the
manufacture of a lot in which a CAPA issue is being implemented.  These visits shall not go against Reliant’s
right to an annual audit.

 

11

 

VII          REGULATORY

All final, Regulatory assessments pertaining to the manufacture,
release, and distribution of the Product shall be the responsibility of
Reliant’s Regulatory Affairs group. 
Cardinal shall provide a cGMP compliant facility in order to supply the
Product to Reliant Pharmaceuticals.

1.             Inspections by Regulatory
Agencies

1.1           Cardinal shall inform Reliant
Pharmaceuticals of any Regulatory Agency performing an inspection relating to
the Product, or a facilities inspection affecting the Product within the same
business day of notification.  Reliant
Quality Department may be present at any Product specific inspections and exit
meetings with prior approval from Cardinal’s Quality Department.

1.2           All Product specific regulatory
correspondence, or facilities correspondence affecting the manufacturing of the
Product shall be conveyed to Reliant Quality Department within 2 business days
of receipt.  Cardinal shall provide
written responses to all Product related observations for Reliant review prior
to commitment to any regulatory authority.

1.3           Cardinal shall provide copies of all
regulatory agency inspection documentation (i.e. 483’s, EIR’s, etc.) or any
other regulatory correspondence pertaining to the Product to Reliant Quality
Department within seven business days of receipt.  A redacted copy will be provided to protect
other customer’s products.

2.             Annual Reports

2.1           It shall be the sole responsibility
of Reliant Pharmaceuticals to maintain all regulatory communication and updates
(Supplements, CBE, Annual Reports, etc.) pertaining to the Product as outlined
in ICH and FDA regulatory guidance documents. 
All necessary CMC documentation updates will be conveyed to Cardinal,
who shall provide the necessary documentation to Reliant Regulatory not less
than 45 days prior to filing date.

3.             Drug Listing

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

 

12

 

VIII         VALIDATION

Cardinal shall assure that all systems used to manufacture, test,
release, and distribute the Product shall have been appropriately transferred,
qualified, and/or validated prior to using that system to process the Product
for commercial product.

1.             Process

1.1           Cardinal shall be responsible for
performing and documenting process validation to comply with cGMP’s and to
ensure consistency of quality Product.  A
process validation protocol shall be forwarded to Reliant for review and
approval prior to carrying out the validation. 
A final report will be issued and a copy will be provided to Reliant
Quality.

2.             Equipment Cleaning Validation

2.1           Cardinal is responsible for reviewing
toxicity and safety information for all products they manufacture to set
appropriate cleaning limits to ensure there are no cross contamination issues
between products.  Cardinal shall
demonstrate, through approved protocol and final report, that cleaning
validation has been performed.

3.             Computer

3.1           Cardinal is responsible for
compliance as it pertains to systems validation, electronic records, electronic
records retention, and electronic signatures for those systems used in the
control of the manufacturing processes, analytical testing, receipt, release
and distribution of materials, API, components, and the Product as prescribed
by 21 CFR part 11, and any other current, approved FDA Guidance requirements..

4.             Analytical Test Methods

4.1           Cardinal shall be responsible for
demonstrating the suitability (methods transfer or validation, as appropriate)
of all methodology used to release raw materials, components, and the finished
product, as appropriate.

 

13

REVISION HISTORY

	
  Revision

  Date

  	
   

  	
  Revision
  Description

  
	
  June 2005

  	
   

  	
  New Document

  

 

	
  APPROVALS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Reliant Pharmaceuticals, Inc.

  	
   

  	
  Cardinal Health

  
	
   

  	
   

  	
   

  
	
   

  	
  June 1, 2005

  	
   

  	
   

  	
  06-06-05

  
	
  Signature

  	
  Date

  	
   

  	
  Signature

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Godfrey Baker

  	
   

  	
  Dina Kostakis

  
	
  Director, QA/QC

  	
   

  	
  Quality and Regulatory Affairs Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]