Contracts

Contract Questions

SERVICE AGREEMENT ("Agreement")

between

Jones Packaging, Inc. 5000 Factory Road Anywhere, ND 80000 (hereinafter "SUPPLIER")

and

SMITH Pharmaceuticals

2000 Cheese Street Nowhere, AK 90000 USA (hereinafter "BUYER")

WHEREAS BUYER is a company engaged in the development, and manufacture of pharmaceutical products, WHEREAS SUPPLIER is a company specializes in packaging for the pharmaceutical industry and has certain technical and commercial information and know-how relating to, among other things, performing packaging and labeling of pharmaceutical and other products, into various sized primary and secondary containers,

WHEREAS BUYER and certain of its Affiliates (as defined herein) desire to engage SUPPLIER to provide certain services to BUYER in connection with the packaging of certain of BUYER’s pharmaceutical or other productsand SUPPLIER agrees to supply such services.

NOW THEREFORE, the parties enter into this Services Agreement (“Agreement”) and agree as set forth below. Defined terms used, but not otherwise defined, herein shall have the meaning given such terms in Annex [ ] :

1. SERVICES 1.1 SUPPLIER agrees to Package the Product and BUYER agrees to purchase and pay for the Packaging (which includes the packaging components and other material to be supplied by BUYER) on the terms and conditions set forth in this Agreement. SUPPLIER shall be responsible solely for the Packaging of such Products. BUYER shall be responsible for the manufacturing and testing of bulk Products, testing of Packaged Products, sale and distribution of the Product and the Packaged Products. Additional terms applicable to the Packaging services are described in Annex 1. 1.2 The parties agree that any BUYER Affiliate shall also be entitled to engage SUPPLIER to perform Packaging and related services in accordance with the terms and conditions of this Agreement and request that the Packaged Products be delivered directly to such Affiliate together with the appropriate invoices, provided that any BUYER Affiliate engaging SUPPLIER hereunder agrees in writing to be bound by, and complies with, all terms, covenants and conditions set forth in this Agreement applicable to BUYER, as if each such BUYER Affiliate were originally a party to the Agreement.

2. Duties of SUPPLIER

2.1 SUPPLIER warrants that at the time of delivery to BUYER, the Packaging and the services provided hereunder shall be consistent with and conform to BUYER's specifications attached hereto as Annex 2 and as amended from time to time by BUYER in agreement with the SUPPLIER per the terms in Annex 2 (hereinafter "Specifications").

2.2

2.3. SUPPLIER warrants that the facilities where the Product is Packaged shall always be in full compliance with good manufacturing practice, standards and requirements prevailing in the country where said facilities are located, with the FDA's cGMP requirements, and with BUYER'S quality standards attached hereto as Annex 3 (hereinafter " QA Standards"). **//[Justin: Will the parties enter into a Quality Agreement or will the terms of Annex 3 apply?]//** 2.4 SUPPLIER shall allow BUYER, at its own costs and expense, to visit and audit the facilities where the Product is Packaged during regular business hours and with reasonable prior notice to assure BUYER of the quality standards used. All audits will be conducted during normal business hours and will be reasonable in scope and duration. SUPPLIER will use reasonable efforts to respond to BUYER’s audit observations within thirty (30) days of receipt of a written audit report from BUYER. BUYER is responsible for the safety of its employees at SUPPLIER’s facilities and must follow applicable safety and workplace regulations and must have the appropriate insurance in place to cover such responsibilities. 2.5 The Packaging, Quality Assurance and storage of the Product will be carried out exclusively in the facilities of SUPPLIER. Any change of facilities used for Packaging, Quality Assurance and storage of the Productis to be communicated to and approved by the BUYER.

2.6 The SUPPLIER agrees to comply with all applicable laws and regulations of any Agency, including but not limited to cGMP rules and regulations. SUPPLIER shall be solely responsible for all the necessary permissions and licenses for Packaging of the Product. Renewal of such authorizations is the responsibility of SUPPLIER.

3. Duties of BUYER

3.1 BUYER shall provide a twelve (12) month rolling forecast to SUPPLIER as set forth in Annex [ ].

3.2 BUYER shall share with SUPPLIER all available information that would be useful for the Packaging of the PRODUCT.

3.3 BUYER agrees to comply with all applicable laws and regulations of any Agency, including but not limited to cGMP rules and regulations. BUYER shall have sole responsibility for obtaining any permits or licenses from any Agency necessary or required for the labeling, sale, marketing or entering into commerce of any Product or Packaged Product.

4. PRICES AND TERMS OF DELIVERY

4.1. The prices payable by BUYER and/or its Affiliates to SUPPLIER for the Packaging of the Products shall be as set forth in Annex 1 ("Pricing"). 4.2. The parties must agree in writing on changes, deletions, or additions to the Packaging services ("Changes") as set forth in Annex [ ]. 4.3. The Pricing shall be adjusted annually on January 1st of each year of the Term as follows: (i) labor costs shall be subject to annual increase to reflect any increase in the Producer Price Index, Pharmaceutical Preparations, Ethical (Prescription), commodity code PCU 325412, issued by the Bureau of Labor Statistics, United States Department of Labor over the prior calendar year (based on the publication by the U.S. Department of Labor of the PPI on or about December 15th of the prior calendar year); (ii) cost in materials and supplies shall be subject to annual increase to reflect any increase in SUPPLIER’s costs over the prior calendar year; and (iii) production costs shall be subject to annual increase to reflect any reduction in purchase volume level below anticipated purchase volume. In addition, the parties acknowledge and agree that the Pricing is based on SUPPLIER performing order runs of consistent size and frequency and that the Pricing shall be subject to review and adjustment promptly following the occurrence of any unanticipated fluctuation in order run sizes or frequency. In addition, the parties shall negotiate in good faith changes to the Pricing resulting from changes to Applicable Law that are reasonably likely to materially increase the cost of providing the services. 4.4. Pricing for additional Packaging services that SUPPLIER may agree to provide BUYER shall be defined in agreed-on quotations; which quotations shall be subject to the terms of this Agreement and shall be incorporated by reference to Annex [ ].

4.5 To secure all of BUYER’s existing and future obligations to SUPPLIER, BUYER grants SUPPLIER a security interest in all of its personal property, now owned or hereafter acquired, including the following: all of BUYER’s Accounts, Inventory, Equipment, General Intangibles, Chattel Paper, insurance on the foregoing, and all proceeds of all of the foregoing. BUYER authorizes SUPPLIER to file a UCC-1 financial statement describing the collateral as “all assets”.

5. PAYMENT 5.1 BUYER shall pay SUPPLIER for the Packaging and related Services as outlined in this Agreement. SUPPLIER invoices will be issued to BUYER conncurrently with any shipment of the Packaged Products and BUYER shall make full payment to SUPPLIER at the address specified on the invoice, no later than thirty (30) days from the date of receipt of the invoice. . BUYER requests that SUPPLIER forward each invoice via mail and to the e-mail address dtheil@Smith.com with copy to mlowen@Smith.com. Interest on past due accounts will accrue at a rate of 1.0% per month past thirty (30) days on undisputed invoices.

5.2 If BUYER believes that an invoice or part of an invoice contains an error then the following invoice dispute resolution process may be initiated at BUYER'S option and that invoice or part invoice will then be considered a disputed invoice: i. BUYER shall make the determination to dispute the invoice within fourteen (14) days of the date of the invoice and communicate that decision promptly to SUPPLIER ii BUYER shall pay the undisputed portion of the invoice within thirty (30) days of the invoice as normally required. iii. BUYER shall immediately pay or bring into compliance with thirty (30) day payment requirements all other undisputed invoice payments then outstanding. iv. SUPPLIER and BUYER will work together diligently and in good faith to resolve the invoice dispute as soon as possible v. BUYER will pay that portion of the disputed amount determined to be owing within fourteen (14) days of the resolution dispute.

6. WARRANTY AND RIGHT OF REJECTION**

6.1. If any delivery of PRODUCT fails to comply with the Specifications, BUYER and/or its Affiliates shall inform SUPPLIER thereof promptly upon discovery, but no later than thirty (30) days after receipt of the PRODUCT. 6.2. Without prejudice of any additional rights arising from the delivery of defective PRODUCT, BUYER and/or its Affiliates shall have the right to reject any batch containing PRODUCT that fails to comply with the Specifications. SUPPLIER shall replace such rejected batch with PRODUCT that conforms to the Specifications. THE SUPPLIER will be responsible for the costs associated with the: (i) return of defective PRODUCT to the manufacturing site and (ii) replacement of the defective Product. If there is a dispute between BUYER and SUPPLIER over the quality of the PRODUCT, then the matter may be resolved in arbitration by an independent laboratory to be mutually agreed upon by the BUYER and SUPPLIER.

6.3. BUYER shall have no further claims for indirect or consequential damages against SUPPLIER, except in the event that a loss or injury is caused by negligence, willful misconduct or criminal act or omission of SUPPLIER, 7. FORCE MAJEURE The parties hereto shall not be liable for non-fulfillment of their respective obligations hereunder, if such non-fulfillment is due to strikes, riots, war, invasion, fire, explosion, floods, delay of carrier, shortage or failure in the supply of material, acts of government agencies of instrumentality, judicial action, labor disturbance and/or other contingencies beyond the control of the party affected (hereinafter o Force Majeure >>). The party affected by Force Majeure will provide the other party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use its best endeavors to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. 8. CONFIDENTIALITY AND INTELLECTUAL PROPERTY 8.1. CONFIDENTIALITY 8.1.1 Neither party shall disclose to any third party any information which is not in the public domain ((( Confidential Information ») and which was obtained from the other party in connection with this Agreement. This obligation of secrecy shall not apply to information, which must be disclosed to governmental agencies for PRODUCT registration purposes. In addition, the secrecy obligation shall expire for Confidential Information which: i. is or becomes part of the public domain without a violation of this Agreement; ii. was already in its possession at the time of receipt from the disclosing party, as shown by documentary evidence; iii. after the date of this Agreement is received from a third party whose direct or indirect source is not the disclosing party.

8.1.2. The obligation of secrecy contained in this Article shall survive this Agreement for a period of ten (10) years from the termination date.

8.2 INTELLECTUAL PROPERTY AND TECHNOLOGY TRANSFER: 8.2.1 The term "Intellectual Property" includes, without limitation, rights in patents, patent applications, methods of synthesis, formulae, methods, trade-marks, trade-mark applications, trade-names, trade secrets, inventions, copyright, industrial designs, and know-how and improvements thereof.

8.2.2. For the term of this Agreement, BUYER hereby grants to SUPPLIER, a non-exclusive, paid-up, royalty-free, non transferable terminable license of BUYER'S Intellectual Property which SUPPLIER must use in order to perform the SERVICES and to deliver PRODUCT but shall not be used for any other reason whatsoever. All inventions, ideas, discoveries, developments, methods, data, information, improvements, and biological and chemical materials, (whether or not reduced to practice and whether or not it can be protected under state, federal, or foreign patent, copyright, trade secrecy or similar laws) ("Inventions") which are specific to or dependent on BUYER'S PRODUCT or based on or derived from BUYER'S Confidential Information and conceived, created or developed by the BUYER or SUPPLIER (whether alone or with others) in the course of performing the SERVICES or delivering the PRODUCT are and shall remain the exclusive property of the BUYER, and BUYER may use or pursue them without restriction or additional compensation. The SUPPLIER shall promptly and fully disclose, in writing, to BUYER any and all such Inventions. The SUPPLIER shall maintain complete written records of all such Inventions and of all related work or investigations done or carried out by SUPPLIER at all stage of this project. SUPPLIER agrees to cooperate fully in obtaining patent, copyright or other proprietary protection for such Inventions, all in the name of the BUYER and at the BUYER'S cost and expense, and shall execute and deliver all requested applications, assignments, and other documents, and take such other measures as BUYER may reasonably request in order to perfect and enforce BUYER'S rights in the Inventions (including transfer of possession to BUYER of all Inventions embodied in tangible materials). And hereby appoints BUYER'S attorney to execute and deliver any such documents on its behalf in the event SUPPLIER fails or refuses to do so; provided that BUYER shall give SUPPLIER sixty (60) days notice prior to executing any documents pursuant to such appointment

8.2.3: [Omitted] 8.2.4. Technology Transfer. If the SUPPLIER terminates this Agreement or the BUYER terminates this Agreement under the terms of sections 7, 9.2, or 9.3, or is not in a position to honor this Agreement, then the BUYER will give all reasonable assistance to transmit information to a third party. The technology transfer of the manufacturing know-how of the Manufacturing Process shall be transferred on the BUYER's request within eighteen (18) months upon termination or expiration of the Agreement to the BUYER without any financial or other compensation from the BUYER to the SUPPLIER. If the BUYER decides to seek an alternative manufacturer for any reason, the BUYER must pay a fee that covers the costs of the SUPPLIER's resources (manpower and equipment) used for technology transfer. Such charges are to be agreed upon by the SUPPLIER and BUYER before they are incurred. The SUPPLIER will provide reasonable assistance to the BUYER for the technology transfer to a third party if the BUYER agrees to compensate the SUPPLIER for its efforts. If the BUYER does not agree to compensate the SUPPLIER for the technology transfer to a third party, then the SUPPLIER will not provide any assistance in the technology transfer. The BUYER can expect to receive the PRODUCT on time in full but without any further assistance for technology transfer to a third party. The SUPPLIER shall grant the BUYER a non-exclusive, irrevocable license right (with the right to grant sub-licenses) to IP relating to the Manufacturing Process used for the manufacture of the PRODUCT. 9. TERM AND TERMINATION

9.1. This Agreement shall come into force upon signature by both parties and shall remain in  force for the longer of: (i) a period of seven (7) years valid from the date of this Agreement or    (ii) the period of time during which SUPPLIER is manufacturing PRODUCT on behalf of

BUYER. 9.2. If either party is in breach of any of its obligations under this Agreement and fails to remedy such breach within forty-five (45) days of receipt of written notice from the other party, the non-breaching party may terminate this Agreement with immediate effect with written notice of termination to the breaching party, without prejudice of any other right.

9.3 In the event that either party shall become insolvent or would make an assignment for the benefit of its creditors or proceedings in voluntary or involuntary bankruptcy, files or has filed against it a petition in bankruptcy, or has a receiver appointed a substantial part of its assets, then the other party shall have the right to terminate this Agreement by giving notice in writing.

10. Indemnity 10.1. Indemnification by BUYER i. Subject to Section 10.2, BUYER agrees to indemnify, defend, and hold SUPPLIER, its affiliates and their respective directors, officers, employees and agents (collectively, "Indemnitees") harmless from and against any losses incurred or suffered by the SUPPLIER based on a claim, action or proceeding made or brought by a third party as a result of the use or sale of the BUYER's PRODUCT, except for losses which SUPPLIER would have to indemnify BUYER pursuant to Section 10.2 herein 10.2 Indemnification by SUPPLIER Subject to Section 10.1, SUPPLIER agrees to defend, indemnify and hold the BUYER Indemnitees harmless from and against any losses incurred or suffered by the BUYER based on a claim, action or proceeding made or brought by a third party as a result of any losses relating to arising out of:

a) any infringement or claim of infringement of any patent, trademark or other intellectual property rights based on the manufacture, sale or distribution of the PRODUCT furnished hereunder  b) the failure of the PRODUCT to meet the SPECIFICATIONS as set forth in Annex 3. c) breach of SUPPLIER's representations and warranties in accordance with this Agreement and as mentioned in Section 10.3 herein; or   d) any negligence or willful misconduct by SUPPLIER, or its Affiliates in the manufacture, storage, packaging, handling or shipping of the PRODUCT. 10.3. No Warranty SUPPLIER MAKES NO WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. SUPPLIER MAKES NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF MERCHANTABILITY IN RESPECT OF THE BUYER'S PRODUCT. 11. Limitation of Liability If SUPPLIER fails to materially perform any part of the SERVICES in accordance with the terms of this Agreement, then BUYER's sole remedy shall be to request SUPPLIER to repeat that part of the SERVICES at SUPPLIER's costs. Under no circumstances whatsoever shall either party be liable to the other in contract, tort, negligence, breach of statutory duty or otherwise for (I) any (direct or indirect) loss of profits, of production, of anticipated savings, of business or goodwill or (ii) any other liability, damage, cost or expense of any kind incurred by the other party of an indirect or consequential nature, regardless of any notice of the possibility of such damages. This paragraph 1.1 does not apply to the indemnification provisions of  section 10 herein.

12. RECORDS, REPORTS AND INSPECTION

12.1 All documents, records, and reports associated with the development, manufacture, holding, storage, packaging, or testing of any PRODUCT lot, including investigation reports, shall be retained by SUPPLIER for at least 7 years, or as otherwise required by applicable law. SUPPLIER shall provide copies of all such documents and information to BUYER as reasonably requested. SUPPLIER shall retain samples from each incoming lot of raw materials used in the manufacture of any PRODUCT. SUPPLIER shall store retain samples under conditions consistent with the labeling for a minimum of 1 year after the expiration of the raw material.

12.2 During the term of this Agreement, and for a period of five (5) years after its expiry or termination, SUPPLIER shall, keep at its normal place of business detailed, accurate and up to date records showing any regulatory filings made in relation to the SERVICES (the"Records"). Under no circumstances shall SUPPLIER destroy any Records without giving the BUYER a thirty (30) day prior written notice. 12.3 On no less than ten (10) working days notice from BUYER, SUPPLIER shall make the Records available for inspection at SUPPLIER site during business hours by BUYER or its nominee for the purpose of general review or audit. BUYER, or its nominee, shall be entitled to take copies or extracts from the Records during any such review or audit.

12.4 BUYER shall be solely responsible for its costs in making such review and audit.

12.5 All information disclosed to BUYER, its Affiliates, nominees or Sub-Licensees pursuant to this Section twelve (12) shall be deemed to be Confidential Information of either BUYER or SUPPLIER as the case may be.

12.6 BUYER may enter SUPPLIER's premises upon reasonable notice to SUPPLIER during SUPPLIER's normal business hours for the purpose of reviewing the facilities, procedures and any relevant records relating to the SERVICES (including but not limited to, all batch sheets and records for all manufacturing steps). In addition, BUYER shall have the right to be present during the performance of Services, upon reasonable advance notice to SUPPLIER…. [remainder removed] 13. __Regulatory Filings__: 13.1 BUYER shall have the sole responsibility for filing of all documents with the applicable regulatory authority (such as the United States Food and Drug Administration ("FDA"), the Health Products and Food Branch of Health Canada or the European Medicine Evaluation Agency) (the "Regulatory Authority") and to take any other actions that may be required for the receipt of approval from the Regulatory Authority for the commercial manufacture of the BUYER's PRODUCT. 13.2 If SUPPLIER is selected as the commercial site of manufacture of the PRODUCT which is the subject of the SERVICES under this Agreement, then at least 15 working days prior to filing with any Regulatory Authority any documentation that is required including but not limited to documentations that is equivalent to the FDA's Chemistry and Manufacturing Controls ("CMC") portion of the New Drug Application or of the Drug Master File ("DMF") as the case may be, BUYER shall provide SUPPLIER with a copy of the CMC portion as well as all supporting documents which have been relied upon to prepare the CMC portion. Such disclosure shall permit SUPPLIER to verify that the CMC portion accurately describes what the SUPPLIER has performed and the manufacturing processes that the SUPPLIER will perform pursuant to this Agreement. For avoidance of doubt, at such time as submission of a DMF is appropriate, BUYER shall retain all right, title and interest in the DMF and all responsibilities for filing and prosecution of DMF. SUPPLIER hereby agrees to do all such things to fully vest such rights in BUYER.

14. __Shipping (if applicable):__ Shipments (if applicable) of BUYER's PRODUCT shall be made DDU (as defined in INCOTERMS 2010) to the customer's address for quantities less than 10 kg and CPT (as defined in INCOTERMS 2010) to the airport of destination for quantities greater than 10 kg. Risk of loss or of damage to such PRODUCT shall transfer to the BUYER when the PRODUCT is received and accepted by the BUYER. The PRODUCT shall be transported in accordance with the BUYER's instructions.

15. __Commercial Supply:__ The Parties agree that they will negotiate in good faith and endeavour to finalize on commercially reasonable terms and, if agreement is reached, execute a Manufacturing Services Agreement and a Quality Assurance Agreement (collectively "Agreements") covering the BUYER's PRODUCT whereby SUPPLIER will be the primary supplier of the PRODUCT to BUYER, provided that, SUPPLIER is meeting all its obligations under the Agreements. The Manufacturing Services Agreement will include customary terms and provisions including commercially reasonable and competitive unit pricing for the BUYER's PRODUCT to enable the BUYER to successfully market the final commercial product. 16. __Exclusivity:__ SUPPLIER agrees that it will not perform any service or deliver PRODUCT or salts, derivatives, analogs or prodrugs thereof to any party other than BUYER for the duration of this Agreement and any subsequent Manufacturing Services Agreement for commercial supply of the PRODUCT 17. __Miscellaneous:__ 17.1. Assignment SUPPLIER may not assign any of its rights or delegate any of its duties pursuant to this Agreement without the prior written consent of BUYER, which consent shall not be unreasonably delayed or withheld. BUYER may assign this Agreement to its affiliates and parent corporations or to any third party provided that any such assignment shall not release BUYER from its payment obligations hereunder and any such assignee will agree to be bound by the terms of this Agreement. 17.2. Survival Any termination or expiration of this Agreement shall not affect any outstanding obligations or payments due hereunder prior to such termination or expiration, nor shall it prejudice any other remedies that the parties may have under this Agreement. The Mutual Exchange Confidential Disclosure Agreement dated November 9, 2011 ("Confidentiality Agreement")

and sections 8, 9, 10, 11, 12, and 17.5 of the Agreement shall survive the expiration or termination of this Agreement. 17.3. Independent Contractors The parties are independent contractors and this Agreement shall not be construed to create

between SUPPLIER and the BUYER any other relationship such as, by way of example only,

that of employer-employee, principal, agent, joint-venturer, co-partners or any similar

relationship. 17.4. Other Terms No terms, provisions or conditions of any purchase order or other business form or written authorization used by BUYER or SUPPLIER will have any effect on the rights, duties or obligations of the parties, or otherwise modify, this Agreement, regardless of any failure of BUYER or SUPPLIER to object to such terms, provisions, or conditions unless such document specifically refers to this Agreement and is signed by both parties.

17.5. Insurance Each party shall maintain during the term of this Agreement and any related Manufacturing

Services Agreement and for a period of 3 years thereafter insurance in an amount reasonably

adequate to cover its obligations hereunder. Upon request, each party will provide to the

other Party a certificate evidencing such insurance and will promptly notify the other Party in

the event of the cancellation or notification of intent to cancel, the insurance evidenced by

such certificate. 17.6. Entire Agreement This Agreement constitutes the complete agreement between the parties with respect to this subject matter and supersedes all other prior agreements and understandings, whether written or oral. Any modifications, amendment or supplement to this Agreement must be in writing and signed by authorized representatives of both parties. 17.7. Amendment This Agreement will not be amended or modified except in a writing signed document by each of the parties hereto. 17.8 Notices All notices, requests and other communications required or permitted to be given hereunder or

with respect hereto will be in writing, and may be given by (i) personal delivery, (ii) registered

first-class United States mail, postage prepaid by the sender, return receipt requested, (iii) overnight delivery service, charges prepaid by the sender, or (iv) via facsimile and, in each

case, addressed to the other party at the address for such party as set forth below, and will be

effective upon receipt in the case of (i) (iii) or (iv) above, and five days after mailing in the case

of (ii) above. If to BUYER: Smith Pharmaceuticals, Inc.

1550 East Gude Drive Rockville, MD 20850 Fax #: 301-424-1364 Attention: President and CEO

If to SUPPLIER: For commercial matters: For technical matters:

Attention: President and CEO

17.9. Facsimile This Agreement may be signed in counterparts and by facsimile.

17.10. Choice of Law. This Agreement is governed by and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflict of law thereof. 17.11. Jurisdiction Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to

the non-exclusive jurisdiction of any Delaware State or Federal court and any appellate court

from any thereof; in any suit, action, or proceeding arising out of or relating to this Agreement,

or for recognition or enforcement of any judgment, and each of the parties hereto hereby

irrevocably and unconditionally agrees that all claims in respect of any such action or

proceeding may be heard and determined in such Delaware State court, or, to the extent

permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a

final judgment in any such action or proceeding shall be conclusive and may be enforced in

other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

Without limiting the foregoing, each party agrees that service of process on such party as

provided in Section 17 shall be deemed effective service of process on such party. (i) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest

extent it may legally and effectively do so, any objection which it may now or hereafter have to

the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to herein. (ii) Each of the parties hereto hereby irrevocably waives, to the fullest extent it may

legally and effectively do so, the defense of an inconvenient forum to the maintenance of such

suit, action, or proceeding in any such court, and agrees not to plead the same, and agrees that nothing herein will limit the right to sue in any other jurisdiction if a Delaware State or Federal court of competent jurisdiction sitting in New Castle County, Delaware rules or orders that it will not exercise jurisdiction over any such action or proceeding. (iii) To the extent that a party hereto has or hereafter may acquire any immunity from

jurisdiction of any court or from any legal process (whether through service of notice,   attachment prior to judgment, attachment in aid of execution or execution, on the ground of sovereignty or otherwise) with respect to itself or its property, it hereby irrevocably waives, to the fullest extent it may legally and effectively do so, such immunity in respect of its obligations under this Agreement. (iv) Each of the parties hereto hereby acknowledges that a breach of a material covenant

herein may cause irreparable harm to the non-breaching party and that the remedy or

remedies at law for any such breach may be inadequate. Each of the parties hereto hereby agrees that, in the event of any such breach, in addition to all other available remedies hereunder, the non-breaching party shall have the right to obtain equitable relief to enforce the provisions of this Agreement. (v) l also apply to the Confidentiality Agreement.

18. __Representations__ and Warranties. 18.1. Each party warrants and represents that the terms of this Agreement are not

inconsistent with other contractual and/or legal obligations it may have. 18.2. SUPPLIER represents and warrants to BUYER that neither it nor any of its employees

or consultants engaged in the SERVICES have been "debarred" by the United States Food and

Drug Administration (the "FDA") or other regulatory authorities, nor have any such debarment

proceedings against It or any such employees or consultants been commenced. SUPPLIER will immediately notify the BUYER in writing if any such proceedings have commenced or if a

respective Representative is debarred by the FDA. 18.3. SUPPLIER will comply with all applicable local and United States laws, statutes, rules,

and regulations, including applicable ICH and current FDA guidelines, in the performance of work

under this Agreement. Without limitation, SUPPLIER shall be responsible for obtaining all

necessary permissions and manufacturing licenses for the performance of the Services, in

accordance with the applicable local and United States laws, statutes, rules, and regulations.



SMITH

­­­­­­

_ _ Date: ___ Date:__ _

//Name of Person// Title

ANNEX I SERVICES AND PRICING COMMERCIAL CONDITIONS

Product:

Quality: Quantity: Price:.

Development costs

ANNEX 2 SMITH SPECIFICATIONS

The SUPPLIER will target the specifications indicated by the BUYER during Phase 1 of this project. Further refinement to the original specifications could then be

discussed between the SUPPLIER and the BUYER at the end of Phase 1 after the BUYER has analyzed the sample provided by the SUPPLIER. The BUYER's

approval would be based on the specification it sets forth and also on the certificate of analysis provided by the SUPPLIER upon completion of Phase 1.

.

ANNEX 3 QA STANDARDS

The SUPPLIER must ensure that product's delivery fulfills the requirements of the BUYER and the requirements are replicable based on the agreed upon specification. They include, but are not limited to, internal verification of those results. The SUPPLIER should have established an effective system for managing quality

that involves the active participation of management and appropriate manufacturing

personnel. The system for managing quality should encompass the organizational structure, procedures, processes and resources, as well as activities to ensure confidence that the API will meet its intended Specifications for quality and purity. All quality-related activities should be defined and documented.

All material is expected to comply with local regulations and conform to International Conference on Harmonization (ICH) Q7A Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients as well as any relevant Code of Federal

Regulations (CFR) that may apply.