Document:

Exhibit
      10.19.1

     

    CONFIDENTIAL
      INFORMATION OMITTED AND FILED SEPARATELY

    WITH
      SECURITIES AND EXCHANGE COMMISSION

    ASTERISKS
      DENOTE SUCH OMISSION

    

    

    SETTLEMENT
      AGREEMENT AND RELEASE OF CLAIMS

    

    The
      parties hereby agree to settle and resolve their respective claims in the
      Arbitration Genpharm Inc. v Par Pharmaceutical Companies, Inc., AAA Case No.
      50
      180 T
      00007
      06.
      By this Settlement Agreement, the parties intend to amend the Par 40 Agreement
      (including the Par 8 Agreement) and the Par 11 Agreement (collectively, the
      "Agreements")
      to
      implement the settlement terms provided herein which the parties will further
      memorialize in a Restatement of the Agreements consistent with terms of this
      Settlement Agreement. Terms used herein which are defined in the Agreement
      (or
      any of them) and not otherwise defined in this Settlement Agreement shall have
      the same meaning herein as in the applicable Agreement(s):

    

    
      	1.	
              Terminated
                Products

            

    

    

    
      	 	
              (a)

            	 	
              The
                Agreements are terminated by mutual consent with respect to the Products
                identified in Schedule "A" attached (collectively referred to as
                the
                "Terminated
                Products"); 

            

    

     

    
      	 	
              (b)

            	 	
              From and
                after July 1, 2006, there will be no sharing of negative Gross Profits
                earned or incurred by Par with respect to any Terminated Products;
                i.e.
                negative Gross Profits earned or incurred by Par in relation to any
                one or
                more of the Terminated Products will not be offset against
                positive Gross
                Profits earned by Par
                on and after July 1,
                2006 in relation to any other Product or Products (whether another
                Terminated Product or otherwise);

            

    

     

    
      	 	
              (c)

            	 	
              All
                outstanding purchase orders issued by Par to Genpharm for undelivered
                Terminated Products are cancelled without any liability of either
                party to
                the other arising from such cancellation. Par shall
                have the right to return to Genpharm within 20 days of the date hereof,
                at
                Genpharm's cost and without payment by Par of the outstanding invoice
                related thereto, the following shipments of Terminated Products received
                by Par:

            

    

    

    ***

    

    
      
        
          	
                	(d)	
                  To
                    simplify and finalize the relationship of the parties with respect
                    to the
                    Terminated Products, it is agreed that notwithstanding that the
                    potential
                    losses of the parties may not be equal and that each party may
                    be able to mitigate/recover
                    some of the losses it would otherwise incur through the sale
                    of its
                    existing inventory of Products or otherwise, each party will
                    be free to
                    dispose of its inventory of Terminated Products and raw materials
                    related
                    thereto without accounting or reporting to the other any revenue
                    it
                    receives therefrom and shall be solely responsible for all costs,
                    expenses
                    and losses which it incurs in relation to the sale or other disposition
                    or
                    utilization of such inventory or materials and that neither party
                    shall
                    have the right to recover from the other any part of the losses
                    or
                    expenses which it incurs from the sale of its inventory of Terminated
                    Products or from the
                    return of any Terminated Product sold by Par on or after July
                    1, 2006 or
                    otherwise;

                

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        CONFIDENTIAL
          INFORMATION OMITTED AND FILED SEPARATELY

        WITH
          SECURITIES AND EXCHANGE COMMISSION

        ASTERISKS
          DENOTE SUCH OMISSION

      

    

    
 

    
      
        
          	
                	(e)	
                  The
                    parties acknowledge that the reporting and sharing of Gross Profits
                    with
                    respect to those Terminated Products identified with an asterisk
                    on
                    Schedule “D” hereto
                    (the "Cash
                    Products") has
                    been calculated on the cash basis without reserves or accruals
                    for
                    anticipated deductions to be made in calculating Net Sales and
                    that the
                    Gross Profits for the balance of the Terminated Products which
                    Par has
                    sold in the Territory (the "Accrual Products")
                    have
                    been calculated on an accrual basis accruing reserves for estimates
                    of
                    such deductions. Par represents and warrants that Schedule “D” hereto
                    sets forth:

                

        

      

    

    

    
      	 	
              (i)

            	
              with
                respect to each Cash Product, Par's reasonable
                good faith estimate (consistent with the accruals claimed by Par
                in the
                financial statements prepared and reported by Par) of the unaccrued
                but
                anticipated deductions to be made in calculating Net Sales in relation
                to
                the Cash Products
                which have not been taken or recognized in previously reporting Gross
                Profits for such Terminated Product to Genpharm for calendar quarters
                ended on or prior to June 30, 2006;

            

    

     

    
      	 	
              (ii)

            	
              with
                respect to each Accrual Product, the outstanding reserve claimed
                by Par in
                calculating the Net Sales of such Terminated Product for the calendar
                quarter ended June 30, 2006.

            

    

    

    

    The
      parties agree that Par shall
      be
      entitled to recover from Genpharm Genpharm's share
      (based on its sharing percentage
      under the applicable Agreement) of permitted deductions from sales (as
      contemplated in the definition "Net
      Sales") actually
      incurred by Par after June 30, 2006 with respect to sales of the Terminated
      Products by Par prior to July 1, 2006 and shall account to Genpharm for a
      true-up of reserves previously taken by Par with respect to Accrual Products,
      it
      being the intention of the parties that, subject to the limitation set forth
      below, Par recognize, recover and true-up actual Net
      Sales
      with respect to Terminated Products sold prior to July 1, 2006; provided that
      the aggregate amount of such deductions hereafter taken by Par with respect
      to
      previous sales of the Terminated Products, net of credits arising out of the
      reversal of accruals in relation to the Accrual Products, shall not exceed
      the
      positive Gross Profits reported by Par for the June 30, 2006 calendar quarter
      so
      that the net amount which Par may claim from Genpharm will not exceed
      ***.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

      
        CONFIDENTIAL
          INFORMATION OMITTED AND FILED SEPARATELY

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          SECURITIES AND EXCHANGE COMMISSION

        ASTERISKS
          DENOTE SUCH OMISSION

         

      

    

    

    Par
      shall
      report to Genpharm quarterly, at the same time as Par reports to Genpharm on
      a
      quarterly basis under the applicable Agreement with respect to deductions
      hereafter taken from Net Sales of the Terminated Products and, to
      the
      extent Par is entitled to be paid an amount
      by
      Genpharm pursuant to the foregoing, it shall be entitled to deduct such amount
      from the Gross Profits otherwise payable to Genpharm in respect of a calendar
      quarter under the applicable Agreement provided that Par shall provide its
      report to Genpharm prior to making any such deduction and shall notify Genpharm
      in writing of the amount that it is deducting from any such payment pursuant
      thereto. Genpharm will have the right to audit Par's and its Affiliates' books
      and records to verify and confirm the claims made and adjustments which should
      have been made by Par pursuant to this Paragraph (e) and the audit provisions
      contained in the Agreements (as amended hereby) shall apply
      thereto.

    

    
      	 	
              (f)

            	
              Genpharm
                (and its Affiliates) will possess the exclusive right to the Product
                Information for each Terminated Product, will have the exclusive
                right to
                manufacture, promote, market, sell and distribute such Terminated
                Products
                (and to licence Third Parties to do so) and will have the right to
                manufacture, promote, market, sell and distribute any Competing Products
                thereto, in the Territory or elsewhere, without accounting for, or
                sharing
                with Par any
                profits or revenue from such Terminated Product or Competing
                Product;

            

    

    

    
      	 	
              (g)

            	
              Par
                will be free to manufacture, promote, market and sell a Competing
                Product
                (in relation to a Terminated Product) in the Territory or elsewhere
                without accounting for, or sharing with Genpharm any profit
                or revenue from such Competing Product, provided that the Competing
                Product does not use, incorporate or rely on the Product Information
                or
                Genpharm's Confidential
                Information;

            

    

    

    
      	 	
              (h)

            	
              Par
                shall promptly transfer the ANDA for the Product *** tablets to Genpharm
                and shall execute and deliver all directions and authorizations to
                the FDA
                to do so and shall deliver to Genpharm a complete copy of the ANDA
                including all supplements and records required to be kept applicable
                to
                *** (to the extent not already in the possession of Genpharm) and
                Par's
                validation reports related thereto to enable Genpharm to tech-transfer
                the
                manufacture of such products to its own facilities or to those of
                a third
                party selected by it. Par shall reasonably cooperate with Genpharm
                and
                shall, at the request of Genpharm, provide reasonable advice and
                assistance in connection with regulatory filings allowing Genpharm
                to
                manufacture such Terminated
                Products.

            

    

     

    
      
        
        

      

      
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        CONFIDENTIAL
          INFORMATION OMITTED AND FILED SEPARATELY

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          SECURITIES AND EXCHANGE COMMISSION

        ASTERISKS
          DENOTE SUCH OMISSION

      

    

    
 

    
      	2.	
              Continuing
                Product

            

    

    

    Other
      than Terminated Product and Future Product (as defined below), Par will remain
      the exclusive distributor of the remaining Products (collectively, the
"Continuing
      Products" which,
      for purposes of clarification are identified on Schedule "C" hereto), subject
      to
      the terms of the applicable Agreement (as amended hereby).

    

    
      	3.	
              Future
                Products

            

    

    

    
      	 	
              (a)

            	
              Par
                will be the semi-exclusive distributor of those Products identified
                on
                Schedule "'B" annexed hereto (collectively the "Future
                Products"), under the terms of the applicable Agreement (as
                amended hereby) and, with respect to which:

            

    

    

    
      	 	
              (i)

            	
              Par
                will continue to be obligated to report and share Gross Profits with
                Genpharm in accordance with the applicable Agreement;
                

            

    

    

    
      	
            	(ii)	
              Genpharm
                (or its Affiliate) will be permitted to manufacture, sell, promote,
                market, sell and distribute each Future Product (or any Competing
                Product
                thereto) in the Territory, (or elsewhere) without any obligation
                to report
                or share any revenue or profits earned therefrom to or with
                Par.

            

    

    

    
      	 	
              (b)

            	
              With
                respect to each Future Product (other than
                ***):

            

    

    

    
      	
            	(i)	
              Genpharm
                will, at least 12 months prior to the anticipated launch of such
                Future
                Product (as reasonably estimated by Genpharm) give to Par an initial
                notice of:

            

    

    

    (A)
      its
      estimated Transfer Price;

    

    (B)
      the
      estimated launch date of each strength of such Future Product (which may or
      may
      not be the same date for each strength); 

    

    (C)
      the
      proposed packaging configurations for each such strength; 

    

    Par
      will
      have 30 days within which to notify Genpharm in writing whether it is electing
      to terminate the applicable Agreement with respect to such Future Product.
      If
      the proposed launch date precedes the expiry of any patents applicable to such
      Future Product Genpharm shall consult with Par prior to delivering the notice
      of
      its estimated launch date. In this regard, the parties shall, within 10 days
      of
      a request therefor by Genpharm, meet (in person or telephonically) and shall
      in
      good faith discuss all matters reasonably relevant to the selection of the
      estimated launch date including the patent strategy being utilized by Genpharm
      in relation to such unexpired patents (subject to Par entering into a joint
      defence and confidentiality agreement reasonably acceptable to Genpharm). Such
      scheduled meeting shall occur reasonably in advance of the date by which the
      initial notice must be
      delivered, each such estimate and proposal to be made in good faith and based
      upon reasonable documentation in support thereof (where
      applicable).

     

    
      
        
        

      

      
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        CONFIDENTIAL
          INFORMATION OMITTED AND FILED SEPARATELY

        WITH
          SECURITIES AND EXCHANGE COMMISSION

        ASTERISKS
          DENOTE SUCH OMISSION

         

      

    

    

    
      	
            	(ii)	
              Genpharm
                will provide a subsequent notice of its actual Transfer Price at
                least 6
                months prior to the anticipated launch of such Future Product (which
                actual Transfer Price shall apply to Par's Launch Quantities [as
                defined
                below] as well as to the Future Product supplied by Genpharm to Par
                during
                the first 12 month period following receipt of the Product Approval
                for
                such Future Product provided that Genpharm may increase the Transfer
                Price
                of such Product from time to time after the 3rd month of such 12
                month
                period, but only to reflect (1) aggregate increases over the Transfer
                Price at launch of *** in the cost to Genpharm [or its Affiliate]
                to manufacture or acquire such Future Product (excluding increases
                in
                Genpharm or its Affiliate's labour or overhead costs) and/or (2)
                applicable foreign currency fluctuations, in which event Par may
                by
                written notice (to be given within 30 days of the receipt of notice
                of the
                actual Transfer Price):

            

    

    

    (A) terminate
      the applicable Agreement with respect to such Future Product if the actual
      Transfer Price is *** initial estimated Transfer Price and in such event the
      Initial Forecast (as defined below) and all purchase orders delivered by Par
      pursuant thereto will be cancelled without any liability of Par arising out
      of
      such cancellation;

    

    (B)
      revoke any prior notice of termination delivered by Par with respect to such
      Future Product (and reinstate the applicable Agreement with respect to such
      Future Product) if the actual Transfer Price is ***.

    

    
      	
            	(iii)	
              If
                the initial estimated Transfer Price is *** than the actual Transfer
                Price
                with respect to a Future Product in respect of which Par has previously
                elected to terminate the Agreement, Par may request to audit the
                actual
                Transfer Price to confirm same. If the audit determines that the
                initial
                estimated Transfer Price is *** than the actual Transfer Price Par
                will
                have the right to revoke its prior termination and to reinstate the
                Agreement with respect to such Future Product.

            

    

    

    
      	
            	(iv)	
              if
                Par terminates the applicable Agreement with respect to a Future
                Product
                pursuant to (i) or (ii)(A) above, Par will
                not be responsible for Development Costs and Legal Expenses thereafter
                incurred, unless it
                revokes such termination as contemplated
                above. However, Par will continue to be responsible for the Development
                Costs and Legal Expenses incurred prior to the date of termination
                to the
                extent it would otherwise be liable herefor under the applicable
                Agreement
                and, provided Par is not otherwise in breach of the applicable Agreement,
                Par will not be subject to a non-compete with respect to such terminated
                Future Product as a result of its exercise of its right to terminate
                the
                applicable Agreement pursuant to
                this Paragraph (b) or Paragraph (c) below. If Par does not so terminate
                the applicable Agreement with respect to such Future Product, Par
                will,
                subject to Paragraph (c) below, be obligated to Launch and promote;
                market
                and distribute such Future Product in accordance with the applicable
                Agreement.

            

    

     

    
      
        
        

      

      
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        CONFIDENTIAL
          INFORMATION OMITTED AND FILED SEPARATELY

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          SECURITIES AND EXCHANGE COMMISSION

        ASTERISKS
          DENOTE SUCH OMISSION

      

    

    
 

    
      	
            	(v)	
              If
                Genpharm (i) has delivered a good faith estimate of the Transfer
                Price,
                the launch date and the proposed packaging configurations contemplated
                in
                (b)(i) above, and (ii) has determined (acting reasonably and in good
                faith) that it must place an order for the API in preparation of
                the
                Launch of such Future Product, then Genpharm may make a written demand
                for
                an initial forecast (an "Initial
                Forecast") to
                initiate the Launch
                of such Future Product by Par. Par has
                30 days to deliver such Initial Forecast, which forecast will, subject
                to
                (ii) above and to extent accepted by Genpharm as contemplated below,
                represent a binding commitment of Par to purchase the quantities
                of such
                Future Product contemplated therein (the "Launch
                Quantities").

            

    

    

    
      	
            	(vi)	
              If
                Par fails to deliver the Initial Forecast with respect to the Future
                Product within 30 days, Genpharm may give priority to its own requirements
                and those of its Affiliates for the such Future Product (and is only
                obligated to use only commercially reasonable efforts to supply Par
                with
                its Launch Quantity of such Future Product after satisfaction of
                its and
                its Affiliate own requirements for
                same).

            

    

    

    
      	
            	(vii)	
              If
                Par fails
                to deliver the Initial Forecast within 60 days, Genpharm may, at
                any time
                prior to receipt of an Initial
                Forecast, terminate the Agreement with respect to such Future Product
                on
                written notice to Par (in which event Genpharm shall also be free
                to
                licence any third party to sell and distribute such Future Product
                in the
                Territory).

            

    

    

    
      	
            	(c)	
              Genpharm
                may terminate the applicable Agreement with respect to a Future Product
                if
                Par fails to launch such Future Product within 45 days of (A) notice
                from Genpharm that the
                Launch Quantities (or such lesser amount as
                Par shall
                accept) of Future Product is available for pick-up
                at its or its Affiliate's facility (if Genpharm or its Affiliate
                is the
                manufacturer), (B) receipt of Product Approval for such Future Product
                (if
                Par is the manufacturer);
                and (C) the
                expiry of the period contemplated in (c)(i) below
                within which Par may
                delay the launch of such Future Product; provided
                that:

            

    

     

    
      
        
        

      

      
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        CONFIDENTIAL
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          SECURITIES AND EXCHANGE COMMISSION

        ASTERISKS
          DENOTE SUCH OMISSION

      

    

    
 

    
      	
            	(i)	
              Par
                may delay the launch of such Future Product if and only for so long
                as (X)
                the sale or distribution of such Future Product in the Territory
                may give
                rise to patent infringement claim, (Y) there are regulatory issues
                relating to such Future Product which are likely to result in the
                suspension or cancellation of the Product Approval of such Future
                Product
                or a recall of Future Product released in the Territory or (Z) where
                Genpharm has indicated to Par that all strengths of the Future Product
                as
                contemplated in the Agreement would be launched on the same date
                and
                Genpharm has not obtained a Product Approval for all applicable strengths
                of such Future Product.

            

    

    

    
      	
            	(ii)	
              Par
                may terminate
                the applicable Agreement with respect to a Future Product if:
                

            

    

    

    (A)
      without the consent of Par or unless required by the FDA, Genpharm removes
      or
      attempts to remove prior to launch any packaging configuration for any strength
      of such Future Product as provided by Genpharm to Par pursuant to Paragraph
      (b)(i) above, provided that Par may only exercise its right of termination
      pursuant hereto within 30 days of being notified in writing of a removal of
      a
      packaging configuration, failing which Par shall be deemed to have consented
      to
      such change;

    

    (B)
      Genpharm fails to obtain its final Product Approval for any of the strengths
      of
      such Future Product on the estimated date therefor, other than by reason of
      (i)
      the granting of a period of generic exclusivity to the manufacturer or supplier
      of a Competing Product by the FDA or a court (but only for the period of such
      exclusivity); or (ii) acts, failures to act, omissions or delays on the part
      of
      Par in connection with its development or regulatory activities with respect
      to
      such Future Product; provided that Par may only exercise its right of
      termination pursuant hereto within 30
      days
      of
      such estimated date so missed; or

    

    (C)
      a potentially
      enforceable patent infringement claim relating to the Future Product is
      outstanding at the time the final Product Approval for such Future Product
      has
      been obtained which requires Par to
      launch
      at risk; provided that Par may
      only
      terminate this Agreement with respect to such Future Product within 6 months
      of
      the receipt of such Product Approval and while such claim remains
      unsettled.

    

    
      	
            	(d)	
              If
                Genpharm so terminates, Par must pay for (i) the Launch Quantities
                and
                (ii) the landed cost of all raw materials acquired for the purpose
                of
                manufacturing the Launch Quantities (in each case, to the extent
                the Launch Quantities or raw materials are not otherwise utilized)
                (collectively, the "Launch
                Termination Costs'').
                If
                Par so terminates Par shall pay to Genpharm *** of the Launch Termination
                Costs.

            

    

     

    
      
        
        

      

      
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        CONFIDENTIAL
          INFORMATION OMITTED AND FILED SEPARATELY

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          DENOTE SUCH OMISSION

      

    

    
 

    
      	
            	(e)	
              Par
                will pay for *** of the Transfer Price of Future Products that become
                short dated, are unsaleable or are otherwise
                wasted because of (i) delays in receiving Product Approval (unless
                due to
                the gross negligence or willful misconduct of Genpharm), (ii) changes
                to
                the Specifications mutually agreed upon by the parties in order to
                obtain
                or expedite Product Approval or (iii) a good faith decision by Genpharm
                or
                by Par (as contemplated above) not to launch such Future Product
                in the
                circumstances contemplated in (c)(i)(X), (Y) or (Z)above.

            

    

    

    
      	
            	(f)	
              If,
                with respect to a Future Product which is being distributed by both
                Par
                and Genpharm (or its Affiliate) in the Territory, there is a shortage
                of
                supply of such Future Product or of the active pharmaceutical ingredients
                or other components necessary to manufacture such Future Product
                for the
                Territory to satisfy Genpharm's obligations to Par and Genpharm's
                or its
                Affiliate's own requirements of such Future Product, then, subject
                to
                Paragraph 3(b)(vi) above, Genpharm will allocate its available supply
                of
                such Future Product for the Territory to satisfy its obligations
                to
                Par prior
                to meeting its own or its Affiliate's requirements for such Future
                Product
                for the Territory.

            

    

    

    
      	4.	
              Kali
                Competing Products

            

    

    

    
      	
            	(a)	
              Par
                represents and warrants that the only Products that are or were under
                development by Kali Laboratories Inc. ("Kali")
                at
                the time
                Par acquired control of Kali or thereafter and which are Competing
                Products under the Agreement are set forth
                below:

            

    

    

    ***

    

    
      	
            	(b)	
              Par
                further represents and warrants that with respect to those products
                (vii)
                through (xiv) above,
                as of the date of this Settlement Agreement, Kali has terminated
                the
                development of such products prior to completion thereof and that
                neither
                Kali, Par nor any of their respective Affiliates are directly or
                indirectly developing, manufacturing, promoting, marketing or selling
                such
                products in the Territory. Par covenants
                and agrees that Kali will not hereafter develop, nor will any Affiliate
                of
                Par hereafter develop utilizing the Kali product information, any
                such
                Terminated Product for a period of 2
                years;

            

    

    

    
      	
            	(c)	
              Par
                hereby further represents and warrants
                that:

            

    

    

    
      	
            	(i)	
              Par
                and its Affiliate have earned profits to the date hereof (determined
                in
                accordance with US generally accepted accounting principles but excluding
                costs and expenses incurred in relation to the development or regulatory
                approval of such product) from the manufacture and\or commercialization
                of
                *** of not more than *** in the
                aggregate for or in the Territory;
                and

            

    

     

    
      
        
        

      

      
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            	(ii)	
              Par and
                its Affiliates have divested themselves of Kali's *** product and
                no
                longer have any interest therein (financial or otherwise) and will
                terminate all outstanding agreements relating to Kali's *** product
                by
                December 31, 2006, failing which Par will pay to Genpharm *** of
                the Gross
                Profits or other revenue realized by Par from and after the date
                hereof
                from the manufacture or commercialization of *** (but Genpharm shall
                not
                be required to share any losses incurred by Par or its
                Affiliates from
                such commercialization, Par to be entitled to carry forward
                such losses in the
                same manner as contemplated in Paragraph 5(d) below) and will, at
                Genpharm's request,
                enter
                into an agreement with Genpharm to give effect thereto, which agreement
                shall provide
                Genpharm with rights of audit and other rights similar to the parties'
                arrangements with respect to ***. 

            

    

    

    Based
      and
      relying upon such representations and warranties Genpharm hereby waives any
      claim to share in any profit or revenue arising out of the manufacture or Par's
      (Kali’s) *** to the date hereof.

    

    
      	5.	
              Accounting
                and Insufficient Gross
                Profits

            

    

    

    
      	
            	(a)	
              The
                parties agree that the Gross Profits and Net Sales of Future Products
                will
                be determined on an accrual basis in accordance with generally accepted
                accounting principles, and not on a cash basis as now provided in
                the
                Agreement; provided that in calculating Gross Profits and Net Sales
                Par is
                stil1 restricted to those deductions currently permitted under Net
                Sales
                and Gross Profits (except that it may claim reasonable reserves for
                reasonably anticipated deductions based on generally accepted accounting
                principles applied in a manner consistent with Par's reporting of
                its
                financial results and taking into account Par's prior experience
                with
                respect to its customers and the Products in question). Par will
                continue
                to report Gross Profits and Net Sales of Continuing Products on a
                cash
                basis (except where Genpharm has already expressly permitted Par
                to accrue
                deductions in respect of certain of the Continuing
                Products).

            

    

    

    
      	
            	(b)	
              With
                respect to those Continuing Products to be reported on a cash basis,
                Par
                will provide to Genpharm, at the same time as it is required to provide
                its quarterly report under the applicable Agreement a report indicating
                the difference between the Net Sales and Gross Profits reported and
                the
                Net Sales and Gross Profit that would have been reported had the
                same been
                calculated on an accrual basis to enable Genpharm to keep track of
                potential deductions and charges to Net Sales and Gross Profits in
                future
                periods (the difference between Gross Profits actually reported to
                Genpharm and the Gross Profits determined on an accrual basis as
                contemplated herein is hereafter referred to as the "Unrecorded
                Accruals").
                With respect to the Future Products and those Continuing Products
                being
                reported on an accrual basis, Par shall provide to Genpharm a
                reconciliation of reserves and accruals on a quarterly basis (within
                45
                days of the close of each calendar quarter) with respect to each
                Continuing Product and Future Product whose Gross Sales in the prior
                calendar year was at least *** or if Genpharm otherwise requests
                and
                otherwise on an annual basis (within 45 days of the expiry of each
                calendar year).

            

    

     

    
      
        
        

      

      
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        CONFIDENTIAL
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        ASTERISKS
          DENOTE SUCH OMISSION

      

    

    
 

    
      	
            	(c)	
              Either
                party may terminate the applicable Agreement with respect to a Continuing
                Product or a Future Product if the Gross Profit arising out of Net
                Sales
                of such Product is *** of the aggregate Transfer Price of such Product
                included in such calculation of Gross Profits for 2
                consecutive
                calendar quarters. For purposes of this Paragraph (c), where, in
                respect
                of a Continuing Product which is reported on a cash basis, the reported
                Gross Profits for a calendar quarter exceeds the threshold herein
                contemplated but would fail to do so if the Unrecorded Accruals applicable
                to such Product for the calendar quarter in question was deducted
                from the
                reported Gross Profits, such Product shall be deemed to have Gross
                Profits
                for such calendar quarter which is less than the threshold amount
                contemplated herein.

            

    

    

    
      	
            	(d)	
              From
                and after April 1, 2006, Par may not offset any negative Gross Profit
                from
                any of the Continuing Products or Future Products against the positive
                Gross Profits of any other Product or Products Par may, however,
                offset
                the negative Gross Profits of a particular Product against positive
                Gross
                Profits from such Product, but only for the two consecutive calendar
                quarters immediately following the calendar quarter in which such
                negative
                Gross Profit was incurred and, provided further, the losses which
                may be
                carried forward from a prior calendar quarter and applied to a subsequent
                calendar quarter cannot exceed the Gross Profits of such Product
                in such
                subsequent calendar quarter otherwise determined (ie. can not be
                carried
                forward to create a loss in the subsequent calendar
                quarter).

            

    

    

    
      	
            	(e)	
              If
                the Agreement is terminated in respect of a Product (other than as
                a
                result of a breach by Par), the losses incurred in the calendar quarter
                in
                which the Agreement terminates and the losses in the
                immediately prior 2 calendar quarters which are still
                eligible to be carried forward will be
                shared by Genpharm and Par in accordance with the respective sharing
                percentages with respect to the Product in question under the applicable
                Agreement. In addition, the parties will share, in proportion to
                the
                applicable sharing percentages, the loss on their respective inventory
                of
                saleable Product and related raw materials that cannot otherwise
                be used
                which would arise as if
                such inventory and raw materials were destroyed and, within 30 days
                of
                such termination, the parties will determine,
                each acting reasonably and in good faith, how to deal with the then
                aggregate existing inventory of finished products, work in progress
                and
                raw materials to mitigate and minimize such losses and to share any
                revenue earned in mitigating such losses. As well, Product returns,
                subject to the limitations contemplated below, will similarly be
                shared by
                the parties. 

            

    

     

    
      
        
        

      

      
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      	6.	
              Payments

            

    

    

    
      	
            	(a)	
              Par
                will pay to Genpharm the following amounts on or before August 31,
                2006:

            

    

     

    (i) ***;
      

     

    (ii)
       ***;

    

    (iii) ***

    

    ***

    

    
      	7.	
              Additional
                Amendments to the
                Agreements

            

    

    

    
      	
            	(a)	
              Par
                may deduct prompt payment discounts (also referred to as cash or
                term
                discounts), ***of sales. 

            

    

    

    
      	
            	(b)	
              Section
                10.8 of the Par 40 Agreement will be
                deleted.

            

    

    

    
      	
            	(c)	
              Par
                will promptly transfer to Genpharm its ANDA for *** included in such
                ANDA
                by way of amendment) and shall execute and deliver all directions
                and
                authorizations to the FDA to implement same.
                Genpharm
                and Par shall co-operate to ensure that Par remains a site of manufacture
                for the *** Product under such transferred ANDA. Par acknowledges
                and
                agrees that notwithstanding the prior registration of the *** ANDA
                in
                Par's name the *** Product Information (including the Product Information
                relating to the ***) is proprietary and Confidential Information
                of
                Genpharm. Genpharm hereby grants to Par a license (exclusive for
                the
                Territory only to August 1, 2011 and non-exclusive for the Territory
                thereafter) to use such *** Confidential Information manufacture and
                commercialize the *** Product in the Territory, it being understood
                and
                agreed that the *** is not a Product under the Par 40 Agreement and
                that
                the licence of Genpharm to Par contemplated herein with respect to
                the ***
                is a royalty free licence in perpetuity. Par shall indemnify and
                hold
                harmless Genpharm, its Affiliates and their respective directors,
                officers, employees and agents from and against any and all claims,
                demands, actions, proceedings, regulatory enforcement, damages, costs,
                losses, penalties, fines and expenses (including legal fees and
                disbursements and other defence costs) relating to, arising out of
                or in
                any way connected with the direct or indirect manufacture, promote,
                marketing, sale, distribution or use of the *** by, on behalf of
                or
                through Par including, without limitation, any claim made against
                Genpharm
                with respect to such product by reason of its being the holder of
                the ANDA
                for such strength so that as between Par and Genpharm, Par shall
                be deemed to have the responsibility and liability of the ANDA holder
                (including any issues relating to product safety and design). The
                parties
                will co-operate with each other in good faith in relation to other
                regulatory filings and reporting
                with respect to the ***. The indemnities contained herein shall survive
                the expiration or other termination of the Par 40 Agreement.
                

            

    

     

    
      
        
        

      

      
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            	(d)	
              Upon
                termination of the Par 40 Agreement with respect to *** Agreement
                (each a
                "Par
                Manufactured Product")
                

            

    

    

    
      	
            	(i)	
              Par
                shall deliver to Genpharm a complete copy of its Product Dossier
                including
                a copy of the ANDA and validation reports applicable thereto to enable
                Genpharm to tech-transfer the manufacture of such product to its
                own
                facilities or to those of a third party selected by it. Par shall
                reasonably cooperate with Genpharm and shall,
                at
                the request of Genpharm, provide reasonable advice and assistance
                in
                connection with regulatory filings allowing Genpharm to manufacture
                such
                Par Manufactured Product.

            

    

    

    
      	
            	(ii)	
              if
                terminated by Genpharm (other than by reason of a breach of the applicable
                Agreement by Par) and Par is not otherwise in breach of such Agreement
                Genpharm will grant to Par a licence to use its Product Information
                to
                manufacture such Par Manufactured Product for sale in the Territory
                only
                (but not elsewhere) subject to Par paying to Genpharm a Royalty (the
                "Royalty")
                equal
                to *** of the Cost of Goods ("COG",
                being
                the fully burdened manufacturing cost [determined in the same manner
                as
                Manufacturing Cost] if manufactured by Par or its Affiliate or the
                landed
                cost to Par if acquired from a third party manufacturer) of such
                Par
                Manufactured Product sold in the Territory. Par will maintain appropriate,
                complete and accurate records of its and its Affiliate's sales of
                the Par
                Manufactured Products in the Territory and of the applicable COG'S thereof.
                Par shall report
                its sales and COG'S
                and
                shall pay the applicable Royalty quarterly (within
                30 days of the end of each calendar quarter). Genpharm to have the
                right
                to audit Par's and
                its Affiliate's books and records to confirm accuracy of reporting
                and
                payment of such Royalty. The obligations of Par to report and pay
                and the
                rights of Genpharm to audit herein contemplated shall survive the
                expiration or termination of the applicable Agreement. Par will not
                sub-license the Product Information relating to a Par Manufactured
                Product
                to any Person or grant to any Person the right to manufacturer, sell
                or
                distribute the Par
                Manufactured Product without the prior written consent of Genpharm
                (to be
                granted or withheld in Genpharm's absolute discretion), provided
                that with
                Genpharm's consent, not to be unreasonably withheld. Par may sub-contract
                the manufacture of the Par Manufactured Product to a third party
                if such third party enters into a confidentiality agreement with
                Genpharm
                (satisfactory to Genpharm) restricting its use of Genpharm's Product
                Information to the manufacturer of the Par Manufactured Product
                exclusively for Par (and for Genpharm where Par is under an obligation
                to
                supply such Product to Genpharm).

            

    

     

    
      
        
        

      

      
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    In
      the
      circumstance contemplated in Paragraph (d)(ii) above, the parties shall do
      all
      things reasonably necessary to enable each of Genpharm and Par to independently
      sell, market and distribute the Par Manufactured Product (hereafter sometimes
      referred to as "Parallel Product'')
      in
      the
      Territory under Genpharm's ANDA (which in the case of *** is currently
      registered in Par's name). Par
      will
      promptly following termination deliver to Genpharm a complete copy of its
      Product Dossier including a copy of the ANDA and validation reports applicable
      thereto to enable Genpharm to tech-transfer the manufacture of such product
      to
      its own facilities or to those of a third party so that there are at least
      2
      sites of manufacture for such product under the ANDA (the Genpharm site and
      Par's site of manufacture). Until the tech transfer is completed and Genpharm
      is
      able to produce commercial quantities of such Parallel Product, Par will, upon
      request of Genpharm, manufacture and supply such product to Genpharm for sale
      and distribution in the Territory. Par will supply the product in question
      to
      Genpharm at *** of the Manufacturing Cost hereof to Par and the provision of
      the
      Par 40 Agreement (as amended hereby) relating to forecasting, purchase orders,
      supply problems, delivery. inspection, rejection and returns and indemnification
      shall apply to the supply of such product by Par to Genpharm, mutatis mutandis,
      unless the parties otherwise agree.

    

    Each party
      will be solely financially responsible for the sale and use of the Parallel
      Product which it releases in the Territory, and each party shall indemnify
      the
      other arising out of the manufacture (if such party is the manufacturer), sale
      or distribution by it of its Parallel Product or the use thereof in the
      Territory (unless the claim relates to or arises out of the manufacture of
      such
      Product by the other parties). Genpharm will not make any change to the
      Specifications for the Par Manufactured Product or otherwise amend or supplement
      the ANDA which would adversely affect the ability of Par to sell, release,
      or
      distribute such product in the Territory during the term of such licence.
      Genpharm will co-operate with Par in
      amending or supplementing the ANDA as regards the Parallel Product manufactured
      at Par's site upon written request of Par (Par to
      be
      responsible for any applicable FDA fees and charges relating thereto). The
      parties will co-operate with each other in good faith in relation to other
      regulatory filings and reporting with respect to the Parallel
      Products.

    

    
      	
            	(e)	
              Non-compete
                provisions applicable to a party in each Agreement will only apply
                where
                such Agreement has been terminated or terminated in respect of a
                Product
                for a breach by such party or, in the case of Par, where Genpharm
                has
                terminated the Agreement with respect to a Future Product as a result
                of
                Par's breach of its obligations to launch (provided that a party
                cannot
                rely on another termination provision to avoid the non-compete if
                it is
                in breach
                of its obligations under the Agreement at that time). Notwithstanding
                the
                foregoing, if Par terminates an Agreement (or terminates such Agreement
                with respect to a Product or Products only) as a result of a breach
                by
                Genpharm to supply such Product or Products the Non-Compete provisions
                otherwise applicable will not apply to Genpharm unless such breach
                was a
                bad-faith, willful and intentional
                breach.

            

    

     

    
      
        
        

      

      
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        ASTERISKS
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            	(f)	
              Notwithstanding
                any provision of the Agreements, Par, in calculating Net Sales, shall
                not
                be entitled to deduct any amount
                in respect of a direct or indirect return of
                a Product from its customers where Par is or will be selling a Competing
                Product to such customer to replace the returned Product [i.e. if
                Par is
                selling a Competing Product it cannot accept a return of a Genpharm
                Product and replace same with the Competing
                Product.]

            

    

    

    
      	
            	(g)	
              Neither
                party may audit the other in respect of the period prior to April
                1,
                2006 (except
                to the extent necessary to audit a period subsequent to March 31,
                2006). 

            

    

    

    
      	
            	(h)	
              The
                auditing provisions of each Agreement will be amended to clarify
                that:

            

    

    

    
      	
            	(i)	
              "independent"
                means external accountants;

            

    

     

    
      	
            	(ii)	
              the
                determination of the accountant may still be disputed by the audited
                party
                and be subject to arbitration;

            

    

     

    
      	
            	(iii)	
              the
                audited party to provide full co-operation with accountant with a
                view to
                expediting the audit including, in the case where Par is being audited,
                access to customer contracts and commitments to verify compliance
                with
                Section 7.3 of the Par 40 Agreement (or equivalent provision in the
                Par 11
                Agreement).

            

    

    

    
      	
            	(i)	
              The
                parties will engage as soon as reasonably practicable (having regard
                to
                vacation schedules of the parties who will be participating therein)
                in
                good faith discussions with a view to amending the Agreements to
                address,
                in a manner mutually satisfactory to both parties, issues relating
                to
                among other things forecasting, supply and delivery provisions and
                shall
                use reasonable commercial efforts to conclude such discussions and
                negotiations and enter into an agreement implementing any changes
                mutually
                agreed to by the parties on or before October 30,
                2006.

            

    

    

    
      	8.	
              Mutual
                Releases

            

    

    

    
      	
            	(a)	
              Par
                Release to Genpharm

            

    

    

    In
      consideration of the terms of this Settlement Agreement, and other good and
      valuable consideration furnished, the receipt and sufficiency of which is hereby
      acknowledged, Par, on its behalf and on behalf of its present or former parents,
      subsidiaries, members, Affiliates, directors, officers, employees, contractors,
      stockholders, successors and assigns, attorneys, insurers and agents, and any
      person acting by, through or under any of them, hereby releases and forever
      discharges Genpharm. and its present or former parents, subsidiaries, members,
      Affiliates, directors, officers, employees, stockholders, successors and
      assigns, attorneys, insurers and agents, or any person acting by, through or
      under any of them, and including in their respective individual capacities,
      for
      any and all claims, demands, obligations, actions, causes of action, rights,
      damages, costs, losses of service, expenses and compensation of any nature
      whatsoever, and without exception, whether based on statute, tort, contract.
      equity or law, or other theory of recovery, by reason of any and all known
      acts,
      omissions, events or facts occurring prior to the date hereof, except that
      this
      release does not apply to claims based on:

     

    
      
        
        

      

      
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            	(i)	
              the
                Transfer Price and Gross Profit Payment
                owing;

            

    

    

    
      	
            	(ii)	
              Product
                Development Costs and legal expenses payable under the Agreements;
                and

            

    

    

    
      	
            	(iii)	
              the
                parties' obligations pursuant to this Settlement
                Agreement.

            

    

    

    ***

    

    
      	
            	(b)	
              Genpharm
                Release to Par

            

    

    

    In
      consideration of the terms of this Settlement Agreement, and other good and
      valuable consideration furnished, the receipt and sufficiency of which is hereby
      acknowledged, Genpharm, on its behalf and on behalf of its present or former
      parents, subsidiaries, members, Affiliates, directors, officers, employees,
      contractors, stockholders, successors and assigns, attorneys, insurers and
      agents, and any person acting by, through or under any of them, hereby releases
      and forever discharges Par, and
      its
      present or former parents, subsidiaries, members, Affiliates, directors,
      officers, employees, stockholders, successors and assigns, attorneys, insurers
      and agents, or any person acting by, through or under any of them, and including
      in their respective individual capacities, for any and all claims, demands,
      obligations, actions, causes of action! rights, damages, costs, losses of
      service, expenses and compensation of any nature whatsoever, and without
      exception, whether based on statute, tort, contract, equity or law, or other
      theory of recovery, by reason of any and all known acts, omissions, events
      or
      facts occurring prior to the date hereof, except that this release does not
      apply to claims based on:

    

    
      	
            	(i)	
              the
                Transfer Price and Gross Profit Payment
                owing:

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

      
        CONFIDENTIAL
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            	(ii)	
              Product
                Development Costs and legal expenses payable under the Agreements;
                and

            

    

    

    
      	
            	(iii)	
              the
                parties’ obligations pursuant to this Settlement
                Agreement.

            

    

    

    
      	9.	
              Dismissal
                of Arbitration

            

    

    

    Upon
      execution of this Settlement Agreement, the Parties shall dismiss with prejudice
      all of their respective claims in the Arbitration which either were or could
      have been brought or assessed, and concurrent with their dismissal of such
      claims, shall notify the AAA and
      the
      Arbitrator of this Agreement.

    

    
      	10.	
              Binding
                Nature

            

    

    

    The
      terms
      of this Settlement Agreement are binding and the parties will attempt in good
      faith to further amend the Agreements to incorporate the provisions hereof
      and
      any additional amendments the parties deem necessary.

    

    
      	11.	
              Choice
                of Law

            

    

    

    This
      Settlement Agreement shall be interpreted in accordance with and governed by
      the
      laws of the State of New York, applicable to contracts executed and performed
      entirely within New York, without reference to any choice
      of
      law principles in New York.

    

    
      	12.	
              Arbitration

            

    

    

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

    

    
      	13.	
              Execution
                by Counterpart

            

    

    

    This
      Settlement Agreement may be
      executed in one or more counterparts, each of which when so executed and
      delivered shall be deemed to be an original, and all of which when
      taken together shall be deemed to be one and the same instrument. A copy of
      this Settlement
      Agreement delivered by facsimile or other electronic means, or a photocopy
      of
      this Settlement Agreement, executed by a party in counterparts or otherwise,
      shall a constitute a properly executed, delivered and binding document or
      counterpart of the executing party.

    

    [the
      next page is the signing page]

     

    
      
        
        

      

      
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    DATED
      this 14th
      day of August, 2006.

     

    
      	 	 	 
	 	GENPHARM
              lNC.
	 
 	 
 	 
 
	 	Per:  	/s/
              Su Cooke
	 	
              
Name:
              Su Cooke
	 	Title:
              Chief Financial Officer

    

     

    
      	 	 	 
	 	Per:  	/s/
              C. B. Gray
	 	
              
Name:
              C. B. Gray
	 	Title:
              VP, Legal and General Counsel

    

     

    
      	 	 	 
	 	PAR
              PHARMACEUTICAL COMPANIES, INC.
	 
 	 
 	 
 
	 	Per:  	/s/
              Scott Tarriff
	 	
              
Name:
              Scott Tarriff
	 	Title:
              President &CEO

    

     

    
      	 	 	 
	 	Per:  	/s/
              Michael Graves
	 	
              
Name:
              Michael Graves
	 	Title:
              President, Generic Product
              Division

    

     

    
      
        
        

      

      
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    SCHEDULE
      “A”

    TERMINATING
      PRODUCTS

    

    

    ***

     

    
      
        
        

      

      
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    SCHEDULE
      “B”

    FUTURE
      PRODUCTS

    

    

    ***

     

    
      
        
        

      

      
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    SCHEDULE
      “C”

    CONTINUING
      PRODUCTS

    

    

    ***

     

    
      
        
        

      

      
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    SCHEDULE
      “D”

    LOSSES
      & TRUE-UPS

    

    

    ***

     

    
      
        
        

      

      
        21EXHIBIT
      10.37.1 

    

    TERMINATION
      AGREEMENT

    

    This
      Termination Agreement (this “Termination”) is executed this 22nd
      day of
      January, 2007, to be effective as of the Effective Time (as defined below),
      among Abrika Pharmaceuticals, Inc., a Delaware corporation (the “Companv”),
      ACFP, LLLP, a Florida limited liability limited partnership (“ACFP), and Par
      Pharmaceutical Companies, Inc., a Delaware corporation (“Par”).

    

    Background

    

    A.
      Abrika, LLLP, the Company's predecessor in interest, ACFP and Par are parties
      to
      that certain Investors Rights Agreement, dated as of December 3, 2004, as
      amended (the “Agreement”);

    

    B.
      The
      Company entered into an Agreement and Plan of Merger, dated as of November
      20,
      2006, by and among Actavis Inc., a Delaware corporation (“Actavis”), Panthers
      Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Actavis
      (“Merger Sub”), the Company and Alan P. Cohen, solely in his capacity as
      securityholders' representative (the “Merger Agreement”), pursuant to which
      Merger Sub will be merged with and into the Company with the Company continuing
      as the surviving corporation and wholly-owned subsidiary of Actavis (the
“Merger”);

    

    C.
      Pursuant to Section 7.9 of the Merger Agreement, certain agreements are to
      be
      terminated as of the effective time of the Merger (the “Effective Time”);
      and

    

    D.
      The
      parties agree that, immediately upon the Effective Time, all rights and
      obligations of the parties under and with respect to the Agreement shall
      terminate.

    

    Terms
      of Agreement

    

    NOW,
      THEREFORE, for
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereby agree as follows:

    

    1.
      The
      background stated above is true and correct and is incorporated herein by
      reference.

    

    2.
      Each
      of the parties agrees that all rights and obligations of the parties under
      and
      with respect to the Agreement shall be terminated effective immediately at
      (and
      subject to the occurrence of) the Effective Time.

    

    3.
      This
      Termination may be executed in original or by facsimile and in one or more
      counterparts and shall inure to the benefit of, and shall be binding upon,
      the
      parties hereto and their respective successors and assigns.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    4.
      This
      Termination contains the sole and entire agreement among the parties with
      respect to the subject matter hereof and supersedes all other prior agreements
      with respect to the subject matter hereof.

    

    5.
      This
      Termination shall be governed by New York law, without regard to the conflict
      of
      law principles thereof (other than New York General Obligations Law
      Sections.5-1401 and 5-1402).

    

    IN
      WITNESS WHEREOF, the
      parties hereto have executed this Termination to be effective as of the
      Effective Time.

     

     

    
      	 	
              ABRIKA
                PHARMACEUTICALS, INC.

              By:

              Name:
                Scott Lodin

              Title:
                Senior Vice President & General Counsel

              

              ACFP,
                LLLP

              By:

              Name:
                Alan Cohen

              Title:
                Sole Member of Abrika GPNER, LLC, its

              general
                partner

              

              PAR
                PHARMACEUTICAL( COMPANIES. INC.

              By:
                /s/ Thomas J. Haughey

              Name:
                Thomas J. Haughey

              Title:
                Executive Vice President and General
                Counsel

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]