10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2006

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-9860

BARR PHARMACEUTICALS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	42-1612474
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. — Employer Identification No.)

400 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677-7668
(Address of principal executive offices)

201-930-3300

(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ            Accelerated filer o           Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of October 25, 2006 the registrant had 106,388,167 shares of $0.01 par value common stock outstanding.

BARR PHARMACEUTICALS, INC.

INDEX TO FORM 10-Q

	Page
	Number
Part I Condensed Financial Information
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2006 and June 30, 2006		3
Condensed Consolidated Statements of Operations (unaudited) for the three months ended September 30, 2006 and 2005		4
Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended September 30, 2006 and 2005		5
Notes to Condensed Consolidated Financial Statements (unaudited)		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
Item 4. Controls and Procedures		27
Part II Other Information
Item 1. Legal Proceedings		28
Item 1A. Risk Factors		28
Item 6. Exhibits		33
Signatures		34
EX-10.1: SETTLEMENT AGREEMENT
EX-10.2: PRODUCT DEVELOPMENT AND LICENSE AGREEMENT
EX-10.3: PRODUCT ACQUISITION AND LICENSE AGREEMENT
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.0: CERTIFICATION

2

Part 1. CONDENSED FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Barr Pharmaceuticals, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

(unaudited)

	September 30,			June 30,
	2006			2006
Assets
Current assets:
Cash and cash equivalents	$	273,254		$	24,422
Marketable securities		480,151			577,482
Accounts receivable, net of reserves of $135,627 and $137,297, at September 30, 2006 and June 30, 2006, respectively		184,671			226,026
Other receivables		28,233			50,235
Inventories, net		150,725			134,266
Deferred income taxes		45,569			25,680
Prepaid expenses and other current assets		35,975			70,871
Total current assets		1,198,578			1,108,982
Property, plant and equipment, net of accumulated depreciation of $172,240 and $163,662, at September 30, 2006 and June 30, 2006, respectively		277,492			275,960
Deferred income taxes		29,348			30,204
Marketable securities		13,999			18,132
Other intangible assets, net		472,364			417,258
Goodwill		47,920			47,920
Other assets		28,716			22,963
Total assets	$	2,068,417		$	1,921,419
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	82,601		$	69,954
Accrued liabilities		104,211			99,213
Current portion of long-term debt and capital lease obligations		8,486			8,816
Income taxes payable		40,822			9,336
Total current liabilities		236,120			187,319
Long-term debt and capital lease obligations		7,381			7,431
Other liabilities		60,917			35,713
Commitments & Contingencies (Note 15)
Shareholders’ equity:
Preferred stock, $1 par value per share; authorized 2,000,000; none issued		—			—
Common stock, $.01 par value per share; authorized 200,000,000; issued 109,348,336 and 109,179,208, at September 30, 2006 and June 30, 2006, respectively		1,093			1,092
Additional paid-in capital		594,860			574,785
Retained earnings		1,268,907			1,216,146
Accumulated other comprehensive loss		(171	)		(377	)
Treasury stock at cost: 2,972,997 shares, at September 30, 2006 and June 30, 2006		(100,690	)		(100,690	)
Total shareholders’ equity		1,763,999			1,690,956
Total liabilities and shareholders’ equity	$	2,068,417		$	1,921,419

SEE ACCOMPANYING NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3

Barr Pharmaceuticals, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended
	September 30,
	2006			2005
Revenues:
Product sales	$	300,510		$	266,793
Alliance, development and other revenue		31,860			43,646
Total revenues		332,370			310,439
Costs and expenses:
Cost of sales		81,684			80,062
Selling, general and administrative		97,523			68,572
Research and development		39,969			35,066
Earnings from operations		113,194			126,739
Interest income		6,782			4,475
Interest expense		156			79
Other income (expense), net		(42,865	)		(455	)
Earnings before income taxes		76,955			130,680
Income tax expense		24,194			47,437
Net earnings	$	52,761		$	83,243
Earnings per common share — basic	$	0.50		$	0.80
Earnings per common share — diluted	$	0.49		$	0.78
Weighted average shares — basic		106,311			103,620
Weighted average shares — diluted		108,061			106,290

SEE ACCOMPANYING NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4

Barr Pharmaceuticals, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands of dollars)
(unaudited)

	Three Months Ended
	September 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	52,761		$	83,243
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		18,055			11,456
Stock-based compensation expense		7,124			6,770
Deferred income tax (benefit) expense		(19,151	)		3,421
Loss on derivative instruments, net		42,389			—
Other		(2,838	)		184
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable and other receivables, net		63,357			(49,961	)
Inventories		(16,459	)		9,071
Prepaid expenses		(9,010	)		841
Other assets		(5,760	)		(74	)
Increase (decrease) in:
Accounts payable, accrued liabilities and other liabilities		43,489			307
Income taxes payable		31,486			19,131
Net cash provided by operating activities		205,443			84,389
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(11,342	)		(15,949	)
Acquisition of intangible assets		(63,000	)		—
Purchases of marketable securities		(1,321,528	)		(507,837	)
Sales of marketable securities		1,425,061			316,230
Other		1,626			(3,000	)
Net cash provided by (used in) investing activities		30,817			(210,556	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt and capital leases		(380	)		(362	)
Tax benefit of stock incentives		8,344			14,324
Proceeds from exercise of stock options and employee stock purchases		4,608			22,464
Net cash provided by financing activities		12,572			36,426
Increase (decrease) in cash and cash equivalents		248,832			(89,741	)
Cash and cash equivalents at beginning of period		24,422			115,793
Cash and cash equivalents at end of period	$	273,254		$	26,052
SUPPLEMENTAL CASH FLOW DATA:
Cash paid during the period:
Interest, net of portion capitalized	$	107		$	243
Income taxes	$	3,510		$	10,561

SEE ACCOMPANYING NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5

BARR PHARMACEUTICALS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except for per share amounts)

(unaudited)

1. Basis of Presentation

     The accompanying unaudited interim financial statements included in this Form 10-Q should be read in conjunction with the consolidated financial statements of Barr Pharmaceuticals, Inc. and its subsidiaries (the “Company”) and accompanying notes that are included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006.

     In management’s opinion, the unaudited financial statements reflect all adjustments (including those that are normal and recurring) that are necessary in the judgment of management for a fair presentation of such statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. In preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates.

2. Recent Accounting Pronouncements

     In July 2006, the Financial Accounting Standards Board (the “FASB”) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for the uncertainty in recognizing income taxes in an organization in accordance with FASB Statement No. 109 by providing detailed guidance for financial statement recognition, measurement and disclosure involving uncertain tax positions. FIN 48 requires an uncertain tax position to meet a more-likely-than-not recognition threshold at the effective date to be recognized both upon the adoption of FIN 48 and in subsequent periods. FIN 48 is effective for fiscal years beginning after December 15, 2006. As the provisions of FIN 48 will be applied to all tax positions upon initial adoption, the cumulative effect of applying the provisions of FIN 48 will be reported as an adjustment to the opening balance of retained earnings for that fiscal year. The Company is currently evaluating FIN 48 and the effect on its consolidated financial statements.

     In September 2006, the FASB issued Financial Accounting Standard (“FAS”) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R), which requires an employer to recognize the over-funded or under-funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity. FAS No. 158 also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. This statement is effective for fiscal years ending after December 15, 2006. The Company is currently evaluating FAS No. 158 and the effect on its consolidated financial statements.

     In September 2006, the FASB issued FAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosure about fair value measurements. The statement is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating this statement and the effect on its consolidated financial statements.

     In September 2006, the Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin (“SAB”) 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB 108 requires that public companies utilize a “dual-approach” to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. The Company does not expect that the adoption of SAB 108 will have a material effect on its consolidated financial statements.

6

3. Agreements with Shire PLC

     On August 14, 2006, the Company entered into an arrangement with Shire PLC (“Shire”) consisting of a product acquisition and supply agreement for Adderall IR® tablets, a product development and supply agreement for six proprietary products and a settlement and licensing agreement relating to the resolution of two pending patent cases involving Shire’s Adderall XR®.

     Under the terms of the product acquisition agreement, the Company recorded an intangible asset in the amount of $63,000 related to the acquisition of Adderall IR.

     In addition, under the terms of the product development agreement, the Company received an upfront non-refundable payment of $25,000 and could receive, based on future incurred research and development costs and milestones, an additional $140,000 over the next eight years subject to annual caps of $30,000. In exchange for its funding commitment, Shire obtained a royalty free license to the products identified in the product development agreement in its defined territory (which is generally defined to include all markets other than North America, Central Europe, Eastern Europe and Russia). The Company recognizes revenue under the product development arrangement described above, including the $25,000 upfront payment, as it performs the related research and development. These amounts will be reflected in the “alliance, development and other revenue” line item in the Company’s consolidated statement of operations as costs are incurred over the life of the agreement. Included in other liabilities at September 30, 2006 is $24,876 of deferred revenue related to the above mentioned payments under the product development agreement. The Company also entered into purchase and supply agreements with Shire in conjunction with the product acquisition and product development agreements.

     The settlement and licensing agreement relating to Adderall XR grants the Company certain rights to launch a generic version of Adderall XR. The license is royalty-bearing and exclusive during the Company’s FDA granted six-month period of exclusivity and is non-exclusive and royalty-free thereafter.

4. Marketable Securities

     The amortized cost and estimated market values of marketable securities at September 30, 2006 and June 30, 2006 are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		(Losses)			Value
September 30, 2006
Debt securities	$	485,350	$	—	$	(273	)	$	485,077
Equity securities		9,073		—		—			9,073
	$	494,423	$	—	$	(273	)	$	494,150
June 30, 2006
Debt securities	$	588,421	$	—	$	(592	)	$	587,829
Equity securities		7,785		—		—			7,785
	$	596,206	$	—	$	(592	)	$	595,614

     The cost of investments sold is determined by the specific identification method.

     Debt securities at September 30, 2006 with a market value of $485,077 include $426,475 in commercial paper and market auction debt securities, which are readily convertible into cash at par value with interest rate reset or underlying maturity dates ranging from October 2, 2006 to June 15, 2007, and $58,602 in municipal and corporate bonds and federal agency issues with maturity dates ranging from March 15, 2007 to February 1, 2009.

     Equity securities include amounts invested in connection with the Company’s excess 401(k) and other deferred compensation plans.

5. Inventories, net

     Inventories consist of the following:

	September 30,		June 30,
	2006		2006
Raw materials and supplies	$	88,478	$	86,239
Work-in-process		28,661		22,063
Finished goods		33,586		25,964
Total	$	150,725	$	134,266

7

     Inventories are presented net of reserves of $25,525 at September 30, 2006 and $24,721 at June 30, 2006.

6. Derivative instruments

     During the quarter ended June 30, 2006, the Company entered into a currency option agreement with a bank for the notional amount equal to €1.8 billion at a cost of $48,900 to hedge its foreign exchange risk related to the acquisition of PLIVA d.d. (“PLIVA”). During the quarter ended September 30, 2006 the Company sold a portion of the option, reducing the notional amount to €1.7 billion, for $1,517 in cash resulting in a loss on the sale of $3,227. At September 30, 2006, the fair value of the remaining portion of the option was $14,846 and is classified on the balance sheet in prepaid expenses and other current assets. To reflect the decrease in value of the option from that recorded on the Company’s books at June 30, 2006 (which was $59,200, reflecting an increase in value of $10,300 at that time), a charge of $42,837 was recorded as other expense for the three months ended September 30, 2006.

     In addition, during the quarter ended September 30, 2006 the Company entered into forward exchange contracts in order to secure the necessary currency needed to finalize the PLIVA transaction. These contracts, which were in the notional amount of $300,000, are classified on the balance sheet in prepaid expenses and other current assets. From the date they were entered into until September 30, 2006, these forward-exchange contracts increased in value by $448 which is recorded as other income for the three months ended September 30, 2006.

     The instruments described above do not meet the criteria required to qualify as a foreign currency cash flow hedge as FASB No. 133 Accounting for Financial Instruments and Hedging Activities specifically prohibits hedge accounting for a derivative acquired in connection with a forecasted or firmly committed business combination. Accordingly, the Company adjusts its carrying cost to the fair market value at the end of each period, with the corresponding gain or loss recorded through other income (expense) in the consolidated statement of operations.

7. Goodwill and other intangible assets

     Goodwill and other intangible assets consist of the following at September 30, 2006 and June 30, 2006:

	September 30,		June 30,
	2006		2006
Goodwill	$	47,920	$	47,920
Product licenses	$	45,350	$	45,350
Product rights and related intangibles		478,745		415,745
		524,095		461,095
Less: accumulated amortization		51,731		43,837
Other intangible assets, net	$	472,364	$	417,258

     Amortization expense for the three months ended September 30, 2006 and 2005 was $7,894 and $3,108, respectively. These amounts were recorded as selling, general and administrative expenses. The increase in the value of product rights above reflects the acquisition of Adderall IR from Shire, as discussed in Note 3 above.

     Estimated amortization expense on product licenses and product rights and related intangibles for the years ending June 30, 2007 through 2011 is as follows:

8

2007	$	38,267
2008	$	41,945
2009	$	33,627
2010	$	28,162
2011	$	26,470

     The Company’s product licenses and product rights and related intangibles have weighted-average useful lives of approximately 10 and 17 years, respectively.

8. Accrued liabilities

     Accrued liabilities consist of the following at September 30, 2006 and June 30, 2006:

	September 30,		June 30,
	2006		2006
Profit splits due to third parties	$	23,313	$	22,007
Payroll, taxes & benefits		18,248		21,283
Managed care rebates		12,864		10,370
Medicaid obligations		11,314		12,167
Payable to raw material supplier arising out of the settlement of a patent challenge		6,000		—
Other		32,472		33,386
Total accrued liabilities	$	104,211	$	99,213

9. Long-term Debt

     Senior Credit Facility

     On July 21, 2006, the Company entered into an unsecured senior credit facility (the “Credit Facility”) pursuant to which the lenders will provide the borrowers thereunder with credit facilities in an aggregate amount not to exceed $2,800,000. Of such amount, $2,000,000 is in the form of a five-year term facility, $500,000 is in the form of a 364-day term facility (collectively the “term facilities”), and $300,000 is in the form of a five-year revolving credit facility. The $2,500,000 of term facilities, which bear interest at LIBOR plus 75 basis points, may be drawn only in connection with the Company’s acquisition of PLIVA and for the refinancing of certain indebtedness. The Credit Facility includes customary covenants for agreements of this kind, including financial covenants limiting the total indebtedness of the Company on a consolidated basis.

     In conjunction with the close of the PLIVA acquisition, on October 24, 2006, the Company drew down $2,000,000 of the five-year term facility and $416,000 of the 364-day term facility. The remaining $84,000 of the term facilities is expected to be used to acquire PLIVA shares that remain outstanding, as described in Note 16 below.

     10. Segment Reporting

     The Company operates in two reportable business segments: Generic Pharmaceuticals and Proprietary Pharmaceuticals. Product sales and gross profit information for the Company’s operating segments consist of the following:

9

	Three Months Ended September 30,
	2006					2005
			% of					% of
	$’s		sales			$’s		sales
Product sales:
Generic	$	197,594		66	%	$	207,169		78	%
Proprietary		102,916		34	%		59,624		22	%
Total product sales	$	300,510		100	%	$	266,793		100	%

			Margin					Margin
	$’s		%			$’s		%
Gross profit:
Generic	$	132,070		67	%	$	137,520		66	%
Proprietary		86,756		84	%		49,211		83	%
Total gross profit	$	218,826		73	%	$	186,731		70	%

11. Stock-Based Compensation

     The Company adopted SFAS No. 123 (revised 2004), Share-Based Payment (SFAS 123R), effective July 1, 2005. SFAS 123(R) requires the recognition of the fair value of stock-based compensation in net earnings. The Company has three stock-based employee compensation plans, two stock-based non-employee director compensation plans and an employee stock purchase plan. Stock-based compensation consists of stock options, stock appreciation rights and the employee stock purchase plan. Stock options and stock appreciation rights are granted to employees at exercise prices equal to the fair market value of the Company’s stock at the dates of grant. Generally, stock options and stock appreciation rights granted to employees fully vest three years from the grant date and have a term of 10 years. Stock options granted to directors are generally exercisable on the date of the first annual shareholders’ meeting immediately following the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grants, which generally equals the vesting period.

     The Company utilized the modified prospective transition method for adopting SFAS 123(R). Under this method, the provisions of SFAS 123(R) apply to all awards granted or modified after the date of adoption. In addition, the unrecognized expense of awards not yet vested at the date of adoption, determined under the original provisions of SFAS No. 123, are recognized in net earnings in the periods after the date of adoption. The Company recognized stock-based compensation expense for the three months ended September 30, 2006 and 2005 in the amount of $7,124 and $6,770, respectively. The Company also recorded related tax benefits for the three months ended September 30, 2006 and 2005 in the amount of $2,125 and $1,557, respectively. The effect on net income from recognizing stock-based compensation for the three-month periods ended September 30, 2006 and 2005 was $4,999 and $5,213, or $0.05 per basic and diluted share, respectively.

     The total number of shares of common stock issuable upon the exercise of stock options and stock-settled appreciation rights (“SAR’s”) granted during the quarters ended September 30, 2006 and 2005 was 1,599,400 and 1,516,200, respectively, with weighted-average exercise prices of $48.91 and $46.99, respectively. For all of the Company’s stock-based compensation plans, the fair value of each grant was estimated at the date of grant using the Black-Scholes option-pricing model. Black-Scholes utilizes assumptions related to volatility, the risk-free interest rate, the dividend yield (which is assumed to be zero, as the Company has not paid any cash dividends) and option holder exercise behavior. Expected volatilities utilized in the model are based mainly on the historical volatility of the Company’s stock price and other factors. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect in the period of grant. The model incorporates exercise and post-vesting forfeiture assumptions based on an analysis of historical data. The average expected term is derived from historical and other factors. The stock-based compensation for the awards issued in the respective periods was determined using the following assumptions and calculated average fair values:

10

	Three Months Ended
	September 30,
	2006			2005
Average expected term (years)		5.0			5.0
Weighted average risk-free interest rate		5.10	%		3.72	%
Dividend yield		0	%		0	%
Volatility		32.18	%		36.85	%
Weighted average grant date fair value	$	18.27		$	18.01

     As of September 30, 2006 and 2005, the aggregate intrinsic value of awards outstanding and exercisable was $129,402 and $111,916, respectively. In addition, the aggregate intrinsic value of awards exercised during the three months ended September 30, 2006 was $3,888. The total remaining unrecognized compensation cost related to unvested awards amounted to $51,469 at September 30, 2006 and is expected to be recognized over the next three years. The weighted average remaining requisite service period of the unvested awards was 27 months.

12. Earnings Per Share

     The following is a reconciliation of the numerators and denominators used to calculate earnings per share (“EPS”) in the consolidated statements of operation (in thousands except per share amounts):

	Three Months Ended
	September 30,
	2006		2005
Earnings per common share — basic:
Net earnings (numerator)	$	52,761	$	83,243
Weighted average shares (denominator)		106,311		103,620
Earnings per common share-basic	$	0.50	$	0.80
Earnings per common share — diluted:
Net earnings (numerator)	$	52,761	$	83,243
Weighted average shares		106,311		103,620
Effect of dilutive options and warrants		1,750		2,670
Weighted average shares — diluted (denominator)		108,061		106,290
Earnings per common share-diluted	$	0.49	$	0.78

	2006		2005
Not included in the calculation of diluted earnings per share because their impact is antidilutive:
Stock options outstanding		146		76

13. Comprehensive Income

     Comprehensive income is defined as the total change in shareholders’ equity during the period other than from transactions with shareholders. For the Company, comprehensive income is comprised of net earnings and the net changes in unrealized gains and losses on securities classified for SFAS No. 115 purposes as “available for sale.” Total comprehensive income for the three months ended September 30, 2006 and 2005 was $52,967 and $83,149, respectively.

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14. Other Income (Expense), net

     A summary of other income (expense), net is as follows:

	Three Months Ended
	September 30,
	2006			2005
Loss on venture funds	$	(573	)	$	(141	)
Loss from decline in fair value of foreign currency contracts		(42,389	)		—
Other income (expense)		97			(314	)
Total other income (expense), net	$	(42,865	)	$	(455	)

15. Commitments and Contingencies

Product Liability Insurance

     The Company’s insurance coverage at any given time reflects market conditions, including cost and availability, existing at the time it is written, and the decision to obtain insurance coverage or to self-insure varies accordingly. If the Company were to incur substantial liabilities that are not covered by insurance or that substantially exceed coverage levels or accruals for probable losses, there could be a material adverse effect on its financial statements in a particular period.

     The Company maintains third-party insurance that provides coverage, subject to specified co-insurance requirements, for the cost of product liability claims arising during the current policy period, which began on October 1, 2006 and ends on September 30, 2007, between an aggregate amount of $25,000 and $75,000. The Company is self-insured for up to the first $25,000 of costs incurred relating to product liability claims arising during the current policy period. In addition, the Company has obtained extended reporting periods under previous policies for claims arising prior to the current policy period. The current period and extended reporting period policies exclude certain products; the Company would be responsible for all product liability costs arising from these excluded products.

     The Company has been incurring significant legal costs associated with its hormone therapy litigation, as described below. To date, these costs have been covered under extended reporting period policies that provide up to $25,000 of coverage. As of September 30, 2006, there was approximately $7,200 of coverage remaining under these policies. The Company has recorded a receivable of $3,772 for legal costs incurred and expected to be recovered under these policies as of September 30, 2006. Once the coverage from these extended reporting period policies has been exhausted, future legal and settlement costs will first be covered by the Company’s cash balances, until applicable deductibles and other relevant thresholds are met, and then by a combination of cash balances and other third-party layers.

Indemnity Provisions

     From time-to-time, in the normal course of business, the Company agrees to indemnify its suppliers, customers and employees concerning product liability and other matters. For certain product liability matters, the Company has incurred legal defense costs on behalf of certain of its customers under these agreements. No amounts have been recorded in the financial statements for losses with respect to the Company’s obligations under such agreements.

     In September 2001, Barr filed an Abbreviated New Drug Application (“ANDA”) for the generic version of Sanofi-Aventis’ Allegra^® tablets. Sanofi-Aventis has filed a lawsuit against Barr claiming patent infringement. A trial date for the patent litigation has not been scheduled. In June 2005, the Company entered into an agreement with Teva Pharmaceuticals USA, Inc. which allowed Teva to manufacture and launch Teva’s generic version of Allegra during the Company’s 180 day exclusivity period, in exchange for Teva’s obligation to pay the Company a specified percentage of Teva’s operating profit, as defined, earned on sales of the product. The agreement between Barr and Teva also provides that each company will indemnify the other for a portion of any patent infringement damages

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they might incur, so that the parties will share any such damage liability in proportion to their respective share of Teva’s operating profit of generic Allegra.

     On September 1, 2005, Teva launched its generic version of Allegra. The Company, in accordance with FASB Interpretation No. 45 “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others,” recorded a liability of $4,057 to reflect the fair value of the indemnification obligation it has undertaken.

Litigation Settlement

     On October 22, 1999, the Company entered into a settlement agreement with Schein Pharmaceutical, Inc. (now part of Watson Pharmaceuticals, Inc.) relating to a 1992 agreement regarding the pursuit of a generic conjugated estrogens product. Under the terms of the settlement, Schein relinquished any claim to rights in Cenestin^® in exchange for a payment of $15,000 made to Schein in 1999. An additional $15,000 payment is required under the terms of the settlement if Cenestin achieves total profits, as defined, of greater than $100,000 over any rolling five-year period prior to October 22, 2014. As of September 30, 2006, no liability has been accrued related to this settlement.

Litigation Matters

     The Company is involved in various legal proceedings incidental to its business, including product liability, intellectual property and other commercial litigation and antitrust actions. The Company records accruals for such contingencies to the extent that it concludes a loss is probable and the amount can be reasonably estimated. Additionally, the Company records insurance receivable amounts from third party insurers when appropriate.

     Many claims involve highly complex issues relating to patent rights, causation, label warnings, scientific evidence and other matters. Often these issues are subject to substantial uncertainties and therefore, the probability of loss and an estimate of the amount of the loss are difficult to determine. The Company’s assessments are based on estimates that the Company believes are reasonable. Although the Company believes it has substantial defenses in these matters, litigation is inherently unpredictable. Consequently, the Company could in the future incur judgments or enter into settlements that could have a material adverse effect on its consolidated financial statements in a particular period.

     Summarized below are the more significant matters pending to which the Company is a party. As of September 30, 2006, the Company’s reserve for the liability associated with claims or related defense costs for these matters is not material.

Patent Matters

     Desmopressin Acetate Suit

     In July 2002, the Company filed an ANDA seeking approval from the FDA to market Desmopressin acetate tablets, the generic equivalent of Sanofi-Aventis’ DDAVP product. The Company notified Ferring AB, the patent holder, and Sanofi-Aventis pursuant to the provisions of the Hatch-Waxman Act in October 2002. Ferring AB and Sanofi-Aventis filed a suit in the U.S. District Court for the Southern District of New York in December 2002 for infringement of one of the four patents listed in the Orange Book for Desmopressin acetate tablets, seeking to prevent the Company from marketing Desmopressin acetate tablets until the patent expires in 2008. In January 2003, the Company filed an answer and counterclaim asserting non-infringement and invalidity of all four listed patents. In January 2004, Ferring AB amended their complaint to add a claim of willful infringement.

     On February 7, 2005, the court granted summary judgment in the Company’s favor, which Ferring AB and Sanofi-Aventis have appealed. On July 5, 2005, the Company launched its generic product. On February 15, 2006, the Court of Appeals for the Federal Circuit denied their appeal. Ferring AB and Sanofi-Aventis subsequently filed a petition for rehearing and rehearing en banc, which was denied on April 10, 2006. Ferring AB and Sanofi-Aventis filed a petition for certiorari at the United States Supreme Court on September 11, 2006. On October 30, 2006, the United States Supreme Court denied the petition for certiorari.

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     Fexofenadine Hydrochloride Suit

     In June 2001, the Company filed an ANDA seeking approval from the FDA to market fexofenadine hydrochloride tablets in 30 mg, 60 mg and 180 mg strengths, the generic equivalent of Sanofi-Aventis’ Allegra tablet products for allergy relief. The Company notified Sanofi-Aventis pursuant to the provisions of the Hatch-Waxman Act and, in September 2001, Sanofi-Aventis filed a patent infringement action in the U.S. District Court for the District of New Jersey-Newark Division, seeking to prevent the Company from marketing this product until after the expiration of various patents, the last of which is alleged to expire in 2017.

     After the filing of the Company’s ANDAs, Sanofi-Aventis listed an additional patent on Allegra in the Orange Book. The Company filed appropriate amendments to its ANDAs to address the newly listed patent and, in November 2002, notified Merrell Pharmaceuticals, Inc., the patent holder, and Sanofi-Aventis pursuant to the provisions of the Hatch-Waxman Act. Sanofi-Aventis filed an amended complaint in November 2002 claiming that the Company’s ANDAs infringe the newly listed patent.

     On March 5, 2004, Sanofi-Aventis and AMR Technology, Inc., the holder of certain patents licensed to Sanofi-Aventis, filed an additional patent infringement action in the U.S. District Court for the District of New Jersey – Newark Division, based on two patents that are not listed in the Orange Book.

     In June 2004, the court granted the Company summary judgment of non-infringement as to two patents. On March 31, 2005, the court granted the Company summary judgment of invalidity as to a third patent. Discovery is proceeding on the five remaining patents at issue in the case. No trial date has been scheduled.

     On August 31, 2005, the Company received final FDA approval for its fexofenadine tablet products. As referenced above, pursuant to the agreement between the Company and Teva, the Company selectively waived its 180 days of generic exclusivity in favor of Teva, and Teva launched its generic product on September 1, 2005.

     On September 21, 2005, Sanofi-Aventis filed a motion for a preliminary injunction or expedited trial. The motion asked the court to enjoin the Company and Teva from marketing their generic versions of Allegra tablets, 30 mg, 60 mg and 180 mg, or to expedite the trial in the case. The motion also asked the court to enjoin Ranbaxy Laboratories, Ltd. and Amino Chemicals, Ltd. from the commercial production of generic fexofenadine raw material. The preliminary injunction hearing concluded on November 3, 2005. On January 30, 2006, the Court denied the motion by Sanofi-Aventis for a preliminary injunction or expedited trial. Sanofi-Aventis has appealed the court’s denial of its motion to the U.S. Court of Appeals for the Federal Circuit. Briefing in the appeal has been completed and oral argument is scheduled for November 7, 2006.

     On May 8, 2006, Sanofi-Aventis and AMR Technology, Inc. served a Second Amended and Supplemental Complaint based on U.S. Patent Nos. 5,581,011 and 5,750,703 (collectively, “the API patents”), asserting claims against the Company for infringement of the API (active pharmaceutical ingredient) patents based on the sale of the Company’s fexofenadine product and for inducement of infringement of the API patents based on the sale of Teva’s fexofenadine product. On June 22, 2006, the Company answered the complaint, denied the allegations against it, and asserted counterclaims for declaratory judgment that the asserted patents are invalid and/or not infringed and for damages for violations of the Sherman Act, 15 U.S.C. §§ 1.2.

     Sanofi-Aventis also has brought a patent infringement suit against Teva in Israel, seeking to have Teva enjoined from manufacturing generic versions of Allegra tablets and seeking damages.

Product Liability Matters

     Hormone Therapy Litigation

     The Company has been named as a defendant in approximately 5,000 personal injury product liability cases brought against the Company and other manufacturers by plaintiffs claiming that they suffered injuries resulting from the use of certain estrogen and progestin medications prescribed to treat the symptoms of menopause. The cases against the Company involve the Company’s Cenestin products and/or the use of the Company’s medroxyprogesterone acetate product, which typically has been prescribed for use in conjunction with Premarin or other hormone therapy products. All of these products remain approved by the FDA and continue to be marketed

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and sold to customers. While the Company has been named as a defendant in these cases, fewer than a third of the complaints actually allege the plaintiffs took a product manufactured by the Company, and the Company’s experience to date suggests that, even in these cases, a high percentage of the plaintiffs will be unable to demonstrate actual use of a Company product. For that reason, approximately 3,350 of such cases have been dismissed (leaving approximately 1,650 pending) and, based on discussions with the Company’s outside counsel, several hundred more are expected to be dismissed in the near future.

     The Company believes it has viable defenses to the allegations in the complaints and is defending the actions vigorously.

Antitrust Matters

     Ciprofloxacin (Cipro®) Antitrust Class Actions

     The Company has been named as a co-defendant with Bayer Corporation, The Rugby Group, Inc. and others in approximately 38 class action complaints filed in state and federal courts by direct and indirect purchasers of Ciprofloxacin (Cipro) from 1997 to the present. The complaints allege that the 1997 Bayer-Barr patent litigation settlement agreement was anti-competitive and violated federal antitrust laws and/or state antitrust and consumer protection laws. A prior investigation of this agreement by the Texas Attorney General’s Office on behalf of a group of state Attorneys General was closed without further action in December 2001.

     The lawsuits include nine consolidated in California state court, one in Kansas state court, one in Wisconsin state court, one in Florida state court, and two consolidated in New York state court, with the remainder of the actions pending in the U.S. District Court for the Eastern District of New York for coordinated or consolidated pre-trial proceedings (the “MDL Case”). On March 31, 2005, the Court in the MDL Case granted summary judgment in the Company’s favor and dismissed all of the federal actions before it. On June 7, 2005, plaintiffs filed notices of appeal to the U.S. Court of Appeals for the Second Circuit. The Court of Appeals has stayed consideration of the merits pending consideration of the Company’s motion to transfer the appeal to the U.S. Court of Appeals for the Federal Circuit as well as plaintiffs’ request for the appeal to be considered en banc. Merits briefing has not yet been completed because the proceedings are stayed pending en banc consideration of a similar case.

     On September 19, 2003, the Circuit Court for the County of Milwaukee dismissed the Wisconsin state class action for failure to state a claim for relief under Wisconsin law. On May 9, 2006, the Court of Appeals reinstated the complaint on state law grounds for further proceedings in the trial court, but on July 25, 2006, the Wisconsin Supreme Court granted the defendants’ petition for further review and thus the case remains on appeal, with oral argument currently scheduled for December 12, 2006. On October 17, 2003, the Supreme Court of the State of New York for New York County dismissed the consolidated New York state class action for failure to state a claim upon which relief could be granted and denied the plaintiffs’ motion for class certification. An intermediate appellate court affirmed that decision, and plaintiffs have sought leave to appeal to the New York Court of Appeals. On April 13, 2005, the Superior Court of San Diego, California ordered a stay of the California state class actions until after the resolution of any appeal in the MDL Case. On April 22, 2005, the District Court of Johnson County, Kansas similarly stayed the action before it, until after any appeal in the MDL Case. The Florida state class action remains at a very early stage, with no status hearings, dispositive motions, pre-trial schedules, or a trial date set as of yet.

     The Company believes that its agreement with Bayer Corporation reflects a valid settlement to a patent suit and cannot form the basis of an antitrust claim. Based on this belief, the Company is vigorously defending itself in these matters.

     Tamoxifen Antitrust Class Actions

     To date approximately 33 consumer or third-party payor class action complaints have been filed in state and federal courts against Zeneca, Inc., AstraZeneca Pharmaceuticals L.P. and the Company alleging, among other things, that the 1993 settlement of patent litigation between Zeneca and the Company violated the antitrust laws, insulated Zeneca and the Company from generic competition and enabled Zeneca and the Company to charge artificially inflated prices for tamoxifen citrate. A prior investigation of this agreement by the U.S. Department of Justice was closed without further action. On May 19, 2003, the U.S. District Court dismissed the complaints for failure to state a viable antitrust claim. On November 2, 2005, the U.S. Court of Appeals for the Second Circuit

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affirmed the District Court’s order dismissing the cases for failure to state a viable antitrust claim. On November 30, 2005, Plaintiffs petitioned the U.S. Court of Appeals for the Second Circuit for a rehearing en banc. On September 14, 2006, the Court of Appeals denied Plaintiffs’ petition for rehearing en banc.

     The Company believes that its agreement with Zeneca reflects a valid settlement to a patent suit and cannot form the basis of an antitrust claim. Based on this belief, the Company is vigorously defending itself in these matters.

     Ovcon Antitrust Proceedings

     To date, the Company has been named as a co-defendant with Warner Chilcott Holdings, Co. III, Ltd., and others in complaints filed in federal courts by the Federal Trade Commission (“FTC”), various state Attorneys General and eight private class action plaintiffs claiming to be direct and indirect purchasers of Ovcon-35^®. These actions allege, among other things, that a March 24, 2004 agreement between the Company and Warner Chilcott (then known as Galen Holdings PLC) constitutes an unfair method of competition, is anticompetitive and restrains trade in the market for Ovcon-35 and its generic equivalents. These cases, the first of which was filed by the FTC on or about December 2, 2005, remain at a very early stage, with discovery cut-off dates of December 22, 2006 for the FTC and state cases and March 2, 2007 for the private cases. No trial dates have been set.

     The Company believes that it has not engaged in any improper conduct and is vigorously defending itself in these matters.

     Provigil Antitrust Proceedings

     To date, the Company has been named as a co-defendant with Cephalon, Inc., Mylan Laboratories, Inc., Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals USA, Inc., Ranbaxy Laboratories, Ltd., and Ranbaxy Pharmaceuticals, Inc. (the “Provigil Defendants”) in nine separate complaints filed in the U.S. District Court for the Eastern District of Pennsylvania. These actions allege, among other things, that the agreements between Cephalon and the other individual Provigil Defendants to settle patent litigation relating to Provigil^® constitute an unfair method of competition, are anticompetitive and restrain trade in the market for Provigil and its generic equivalents in violation of the antitrust laws. These cases remain at a very early stage and no trial dates have been set.

     The Company was also named as a co-defendant with the Provigil Defendants in an action filed in the U.S. District Court for the Eastern District of Pennsylvania by Apotex, Inc. The lawsuit alleges, among other things, that Apotex sought to market its own generic version of Provigil and that the settlement agreements entered into between Cephalon and the other individual Provigil Defendants constituted an unfair method of competition, are anticompetitive and restrain trade in the market for Provigil and its generic equivalents in violation of the antitrust laws. The Provigil Defendants have filed motions to dismiss and briefing on those motions is currently underway.

     The Company believes that it has not engaged in any improper conduct and is vigorously defending itself in these matters.

     Medicaid Reimbursement Cases

     The Company, along with numerous other pharmaceutical companies, have been named as a defendant in separate actions brought by the states of Alabama, Alaska, Hawaii, Illinois, Kentucky and Mississippi, the Commonwealth of Massachusetts, the City of New York, and numerous counties in New York. In each of these matters, the plaintiffs seek to recover damages and other relief for alleged overcharges for prescription medications paid for or reimbursed by their respective Medicaid programs.

     The Commonwealth of Massachusetts case and the New York cases, with the exception of the action filed by Erie, Oswego, and Schenectady Counties in New York, are currently pending in the U.S. District Court for the District of Massachusetts. Discovery is underway in the Massachusetts cases, but no trial dates have been set. In the consolidated New York cases, motions to dismiss are under advisement, with no trial dates set. The Erie, Oswego, and Schenectady County cases are pending in state courts in New York, again with no trial dates set.

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     The State of Mississippi case was filed in state court. Discovery is underway, but no trial date has been set. The Alabama, Illinois and Kentucky cases were filed in Alabama, Illinois and Kentucky State courts, removed to federal court, and then remanded back to their respective state courts. Discovery is underway, but no trial dates have been set. The Alabama, Illinois, and Mississippi cases, as well as the actions brought by Erie, Oswego, and Schenectady Counties in New York, were recently removed back to federal court on the motion of a co-defendant, Dey, Inc., although remand motions are on file or anticipated.

     The State of Hawaii case was filed in state court in Hawaii and removed to the U.S. District Court for the District of Hawaii. Hawaii’s motion to remand the case to state court is currently pending. No trial date has been set.

     The State of Alaska case was filed in state court in Alaska on October 6, 2006. This matter is at a very early stage with no trial date set.

     The Company believes that it has not engaged in any improper conduct and is vigorously defending itself in these matters.

     Breach of Contract Action

     On October 6, 2005, plaintiffs Agvar Chemicals Inc., Ranbaxy Laboratories, Inc. and Ranbaxy Pharmaceuticals, Inc. filed suit against the Company and Teva Pharmaceuticals USA, Inc. in the Superior Court of New Jersey. In their complaint, plaintiffs seek to recover damages and other relief, based on an alleged breach of an alleged contract requiring the Company to purchase raw material for the Company’s generic Allegra product from Ranbaxy, prohibiting the Company from launching its generic Allegra product without Ranbaxy’s consent and prohibiting the Company from entering into an agreement authorizing Teva to launch Teva’s generic Allegra product. The court has entered a scheduling order providing for the completion of discovery by March 7, 2007, but has not yet set a date for trial. The Company believes there was no such contract and is vigorously defending this matter.

Other Litigation

     As of September 30, 2006, the Company was involved with other lawsuits incidental to its business, including patent infringement actions, product liability, and personal injury claims. Management, based on the advice of legal counsel, believes that the ultimate outcome of these other matters will not have a material adverse effect on the Company’s consolidated financial statements.

Government Inquiries

     On July 11, 2006, the Company received a request from the FTC for the voluntary submission of information regarding the settlement agreement reached in the matter of Cephalon, Inc. v. Mylan Pharmaceuticals, Inc., et al., U.S. District Court for the District of New Jersey. The FTC is investigating whether the Company and the other parties to the litigation have engaged in unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act by restricting the sale of Modafinil products. In its request letter, the FTC stated that neither the request nor the existence of an investigation indicated that Barr or any other company had violated the law. The Company believes that its settlement agreement is in compliance with all applicable laws and is cooperating with the FTC in this matter.

     On October 3, 2006, the FTC notified the Company it was investigating a patent litigation settlement reached in matters pending in the U.S. District Court for the Southern District of New York between the Company and Shire PLC concerning Shire’s Adderall XR product. To date, the only FTC request of the Company under this investigation has been to preserve relevant documents. The Company intends to cooperate with the agency in its investigation.

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16. Subsequent Events

     PLIVA Acquisition

     On October 24, 2006, the Company’s subsidiary, Barr Laboratories Europe B.V. (“Barr Europe”), completed the acquisition of PLIVA d.d., headquartered in Zagreb, Croatia. Under the terms of the cash tender offer, Barr Europe made a payment of approximately $2,400,000 based on an offer price of HRK 820 per share for all shares tendered during the offer period. The transaction closed with 17,056,977 shares being tendered as part of the process, representing 92% of PLIVA’s total outstanding share capital being tendered to Barr Europe. With the addition of the treasury shares held by PLIVA, Barr Europe now owns or controls in excess of 95% of PLIVA’s voting share capital.

     Under Croatian law, Barr Europe’s ownership of more than 95% of the voting shares in PLIVA permits it to undertake the necessary actions to acquire the remainder of PLIVA’s outstanding share capital. For shareholders who did not tender their shares during the formal tender process, Barr Europe expects to utilize the provisions provided for under Croatian law to acquire the remaining outstanding shares from minority shareholder interests. The Company will undertake the necessary steps to initiate the purchase of all remaining shares at an expected price of HRK 820 per share, the same per share price offered to shareholders during the formal tender period. This process and the subsequent pay out to remaining shareholders is expected to be completed during the quarter ending March 31, 2007.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis addresses material changes in the results of operations and financial condition of Barr Pharmaceuticals, Inc. and subsidiaries for the periods presented. This discussion and analysis should be read in conjunction with the consolidated financial statements, the related notes to consolidated financial statements and Management’s Discussion and Analysis of Results of Operations and Financial Condition included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006, and the unaudited interim consolidated financial statements and related notes included in Item 1 of this report on Form 10-Q.

Business Development Activities

     Agreements with Shire

     On August 14, 2006, we entered into an arrangement with Shire consisting of a product acquisition and supply agreement for Adderall IR® tablets, a product development and supply agreement for six proprietary products and a settlement and licensing agreement relating to the resolution of two pending patent cases involving Shire’s Adderall XR®.

     Under the terms of the product acquisition agreement, we acquired all rights to Adderall IR® tablets from Shire for $63.0 million.

     Under the terms of the product development agreement, we received an upfront non-refundable payment of $25.0 million and could receive, based on future incurred research and development costs and milestones, an additional $140.0 million over the next eight years subject to annual caps of $30.0 million. In exchange for its funding commitment, Shire obtained a royalty-free license to the products identified in the product development agreement in its defined territory (which is generally defined to include all markets other than North America, Central Europe, Eastern Europe and Russia). Revenue under the product development arrangement described above, including the $25.0 million upfront payment, will be recorded in the “alliance, development and other revenue” line item in our consolidated statement of operations and recognized as we incur the related research and developments costs over the life of the agreement. We also entered into purchase and supply agreements with Shire in conjunction with the product acquisition and product development arrangements.

     The settlement and licensing agreement relating to Adderall XR, grants us certain rights to launch a generic version of Adderall XR. The license is exclusive and royalty-bearing during our FDA granted six-month period of exclusivity and is non-exclusive and royalty-free thereafter.

     Acquisition of PLIVA d.d.

     On October 24, 2006, Barr Europe completed the acquisition of PLIVA d.d, headquartered in Zagreb, Croatia. Under the terms of our cash tender offer, we made a payment of approximately $2.4 billion based on an offer price of HRK 820 per share for all shares tendered during the offer period. The transaction has closed with 17,056,977 shares being tendered as part of the process, representing 92% of PLIVA’s total outstanding share capital being tendered to us. With the addition of the treasury shares held by PLIVA, we now own or control in excess of 95% of PLIVA’s voting share capital.

     Under Croatian law, our ownership of more than 95% of the voting shares in PLIVA permits us to undertake the necessary actions to acquire the remainder of PLIVA’s outstanding share capital. For shareholders who did not tender their shares during the formal tender process, we expect to utilize the provisions provided for under Croatian law to acquire the remaining outstanding shares from minority shareholder interests. We are undertaking the necessary steps to initiate the purchase of all remaining shares at an expected price of HRK 820 per share, the same per share price offered to shareholders during the formal tender period. The duration of this process and the subsequent pay out to remaining shareholders is expected to be completed during the quarter ending March 31, 2007. We will include the of operations of PLIVA in our consolidated financial statements beginning October 25, 2006.

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Results of Operations

Comparison of the Three Months Ended September 30, 2006 and September 30, 2005

     The following table sets forth revenue data for the three months ended September 30, 2006 and 2005 ($’s in millions):

	Three Months Ended September 30,
					Change
	2006		2005		$			%
Generic products:
Oral contraceptives	$	121.4	$	95.3	$	26.1			27	%
Other generic		76.2		111.9		(35.7	)		-32	%
Total generic products		197.6		207.2		(9.6	)		-5	%
Proprietary products		102.9		59.6		43.3			73	%
Total product sales		300.5		266.8		33.7			13	%
Alliance, development and other revenue		31.9		43.6		(11.7	)		-27	%
Total revenues	$	332.4	$	310.4	$	22.0			7	%

     Revenues — Product Sales

     Generic Products

     Total generic product sales for the three months ended September 30, 2006 decreased due to lower sales of our other generic products, which were partially offset by higher sales of our generic oral contraceptives.

     Oral Contraceptives

     For the three months ended September 30, 2006, sales of generic oral contraceptives increased 27% to $121.4 million from $95.3 million in the prior year period. This increase was primarily attributable to the launch of Jolessa, our generic version of SEASONALE®, and strong performance by Kariva® due to higher pricing and an increase in market share. Sales of our other generic oral contraceptives were 8% higher in the quarter ended September 30, 2006 than the prior year period.

     Other Generic Products

     For the three months ended September 30, 2006, sales of other generic products decreased 32% to $76.2 million from $111.9 million in the prior year period. The most significant decrease was lower sales of Desmopressin, which we launched during the first quarter of 2005 with six months of FDA-granted exclusivity. Following the expiration of our exclusivity in January 2006 two additional competitors entered the market, the result of which was a 76% decline in sales and 71% decrease in units sold during the three months ended September 30, 2006 as compared to the prior year period. In addition to Desmopressin, lower unit sales of Methotrexate and Mirtazapine, as well as lower pricing for Warfarin Sodium, contributed to the overall sales decline. Partially offsetting these declines were sales of Fentanyl Citrate, our generic version of Cephalon’s Actiq®, which we launched at the end of the September 2006 quarter. Our launch activities carried over into early October and as a result, we expect that sales of Fentanyl Citrate will be significantly higher during our December 2006 quarter.

     Proprietary Products

     For the three months ended September 30, 2006, sales of proprietary products increased 73% over the prior year period, primarily due to: (1) sales of the ParaGard® IUD which we acquired in November 2005, (2) the launch of SEASONIQUE™, (3) sales of the Mircette® oral contraceptive product which we acquired in December 2005, (4) higher sales of Cenestin due largely to customer buying patterns and (5) higher unit sales of our Plan B® emergency contraceptive product.

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     SEASONALE sales totaled $22.4 million for the three-month period ended September 30, 2006, representing a 1% increase over the prior year period. During the quarter ended September 30, 2006 a competitor launched a generic version of SEASONALE. Shortly after this competitor’s launch, we launched Jolessa, which is our own generic SEASONALE, in order to defend our position as a leader in the extended cycle oral contraceptive marketplace. Due to the existence of two generic versions of SEASONALE in the marketplace, we expect sales of SEASONALE to be lower in the coming quarters, which will only partially be offset by sales of Jolessa, which carries a lower gross profit margin than SEASONALE.

      On November 6, 2006, we initiated shipment of the dual-label Plan B^® (levonorgestrel) emergency contraceptive (over the counter “OTC”) OTC/Rx product to our customers. The product will be available in pharmacies across the United States by mid-November. Plan B OTC/Rx dual-label product, which was approved on August 24, 2006, is an OTC product for consumers 18 years of age and older and prescription-only for women 17 and younger, and replaces the Plan B prescription-only product that has been marketed in the United States since 1999.

     Revenues – Alliance, Development and Other Revenue

     Alliance, development and other revenue consists mainly of revenue from profit-sharing arrangements, co-promotion agreements, development agreements, standby manufacturing fees and reimbursements and fees we receive in conjunction with our agreement with the U.S. Department of Defense for the development of the Adenovirus vaccine.

     During the three months ended September 30, 2006, alliance, development and other revenue totaled $31.9 million compared to $43.6 million in the prior year. The decrease was driven by lower revenues from our profit sharing arrangement with Teva, which began in September 2005 and represented 77% of such revenues in the three months ended September 30, 2005, and was negatively impacted by lower volume and pricing due to the launch of other competitors’ products. Partially offsetting this decline was an increase in royalties and other fees under our Co-Promotion Agreement and License and Manufacturing Agreement with Kos Pharmaceuticals relating to Niaspanâ and Advicorâ, under which we began earning royalties in the fourth quarter of fiscal 2005.

     Teva’s 180-day exclusivity period on generic Allegra ended on February 28, 2006. By the end of September 2006, there were two additional competing generic Allegra products on the market. We are aware of other companies that have filed ANDAs with Paragraph IV certifications for generic Allegra. Competition for generic Allegra has and may continue to cause Teva’s Allegra revenues to decrease. Accordingly, our royalties may decline further in future periods.

     Royalties we earn under our co-promotion agreement with Kos are based on the aggregate sales of Niaspan and Advicor in a given quarter and calendar year, up to quarterly and annual maximum amounts. While the annual cap increases each year during the term of our arrangement, which ends July 2012, unless extended by either party for an additional year, the royalty rate and the Company’s promotion-related requirements will decline in calendar 2007 compared to 2006, after which the rate remains fixed throughout the remaining term of the agreement. Due to sales achieved to date during 2006, we expect to reach our annual sales cap for 2006 early in the December quarter and, therefore, expect our royalties earned during the quarter ending December 31, 2006 to be significantly lower than those earned in the prior calendar 2006 quarters.

     Development revenues earned during the quarter include research and development reimbursements from Shire, and the recognition of a portion of the deferred revenue related to the upfront payment we received from Shire. Development revenues earned during the current quarter under the agreements with Shire were not material, however we expect these revenues to increase substantially in future periods as we increase spending on the related development projects.

     Cost of Sales

     Cost of sales includes the cost of products we purchase from third parties, our manufacturing and packaging costs for products we manufacture, our profit-sharing or royalty payments to third parties, including raw material suppliers, changes to our inventory reserves, and stock-based compensation expense of certain departments. Amortization costs of $7.9 million for the three months ended September 30, 2006 and $3.1 million for the prior year period, arising from the acquisition of product rights, are included in selling, general and administrative expense.

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     The following table sets forth cost of sales data, in dollars, as well as the resulting gross margins expressed as a percentage of product sales, for the three months ended September 30, 2006 and 2005 ($’s in millions):

	Three Months Ended September 30,
							Change
	2006			2005			$			%
Generic products	$	65.5		$	69.7		$	(4.2	)		-6	%
Gross margin		67	%		66	%
Proprietary products	$	16.2		$	10.4		$	5.8			56	%
Gross margin		84	%		83	%
Total cost of sales	$	81.7		$	80.1		$	1.6			2	%
Gross margin		73	%		70	%

     Overall margins were higher compared to the prior year primarily due to the increasing contribution from our high-margin proprietary business, as proprietary sales constituted 34% of total sales in the three months ended September 30, 2006 versus 22% in the same period last year.

     The increase in proprietary margins was in large part due to the contributions of ParaGard and Mircette, which were acquired in the second quarter last year, SEASONIQUE, which we launched during the three months ended September 30, 2006, and SEASONALE as these high margin products comprised over 50% of our proprietary sales in the quarter.

     Generic margins were up slightly due to the continued strength of our generic oral contraceptives business and the launch of Fentanyl Citrate (generic Actiq) during the three months ended September 30, 2006. These factors more than offset margin declines in several of our other generics products.

Selling, General and Administrative Expense

     The following table sets forth selling, general and administrative expense for the three months ended September 30, 2006 and 2005 ($’s in millions):

	Three Months Ended September 30,
					Change
	2006		2005		$		%
Selling, general and administrative	$	97.5	$	68.6	$	28.9		42	%

     Selling costs increased $8.8 million, or 29%, during the three months ended September 30, 2006 compared to the same period in the prior year due to higher advertising and promotion spending associated with our recently launched SEASONIQUE and ENJUVIA™ products as well as the inclusion of marketing expenses related to Mircette and ParaGard, which we acquired subsequent to September 30, 2005.

     General and administrative costs for the three months ended September 30, 2006 included a $6.0 million payment to a raw material supplier arising out of the settlement of a patent challenge, while the same period in the prior year included a $4.1 million expense representing an estimate of the fair value of our indemnity obligation to Teva related to the launch of generic Allegra. Other general and administrative expenses were approximately $18.0 million higher as compared to the same period in the prior year. This increase represents approximately $8.0 million of higher IT costs, primarily related to depreciation and amortization of previously capitalized SAP implementation costs and consulting fees, and $5.0 million of higher amortization of acquired intangibles due to the ParaGard and Mircette acquisitions. We expect amortization of intangibles to increase significantly as we begin to amortize the intangibles associated with the acquisition of PLIVA, and, to a lesser extent, Adderall IR, which we acquired from Shire.

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Research and Development

     The following table sets forth research and development expenses for the three months ended September 30, 2006 and 2005 ($’s in millions):

	Three Months Ended September 30,
					Change
	2006		2005		$		%
Research and development	$	40.0	$	35.1	$	4.9		14	%

     Research and development expenses during the three months ended September 30, 2006 increased 14% to $40.0 million as compared to the same period in the prior year. This increase was driven by higher clinical trial costs in our generic and proprietary development programs of $5.9 million, which included higher costs associated with the development of the Adenovirus vaccine. Higher spending in theses areas was partially offset by a decline in third party development costs of $3.1 million.

Other Income (expense), net

     The following table sets forth other income (expense) for three months ended September 30, 2006 and 2005 ($’s in millions):

	Three Months Ended September 30,
							Change
	2006			2005			$			%
Other income (expense), net	$	(42.9	)	$	(0.5	)	$	(42.4	)		-8480	%

     Other expense increased by $42.4 million during the three month period ended September 30, 2006 when compared to the same period in the prior year primarily as a result of a $42.8 million reduction in the value of our foreign currency option related to the PLIVA acquisition. This reduction in fair value as compared to June 30, 2006 reflects several factors including the changes in the exchange rate between the Dollar and the Euro. The remaining portion of our foreign currency option, which had a value of $14.8 million as of September 30, 2006, was sold for $11.0 million during October in connection with the PLIVA acquisition. The difference of $3.8 million will be recorded as other expense in our consolidated results for the period ending December 31, 2006.

Income Taxes

     The following table sets forth income tax expense and the resulting effective tax rate stated as a percentage of pre-tax income for the three months ended September 30, 2006 and 2005 ($’s in millions):

	Three Months Ended September 30,
					Change
	2006		2005		$			%
Income tax expense	$	24.2	$	47.4	$	(23.2	)		-49	%

     Our effective tax rate for the three months ended September 30, 2006 was 31.4%, as compared to 36.3% for the prior year period. The current quarter’s tax rate is lower primarily due to the positive impact by the expiration of the federal and various state and local statutes of limitations for the treatment of certain costs that were associated with a prior acquisition. We expect our effective tax rate for the remainder of the year to be approximately 35.5% excluding the impact of the PLIVA acquisition that was completed on October 24, 2006, since the impact is uncertain and not reasonably estimable.

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Liquidity and Capital Resources

     Our primary source of cash is the collection of accounts and other receivables primarily related to product sales and our alliance, development and other revenues. Our primary uses of cash include financing inventory, research and development, marketing, capital projects and business development activities such as our PLIVA acquisition.

     Within the past 12 months, cash flows from operations have been more than sufficient to fund our cash needs. At September 30, 2006, our cash, cash equivalents and short-term marketable securities totaled $753.4 million, an increase of $151.5 million from our position at June 30, 2006.

Operating Activities

     Our operating cash flows for the quarter ended September 30, 2006 were $205.4 million compared to $84.4 million in the prior year period. The increase in cash flows reflects the timing of certain items including (1) the decrease of accounts receivable and other receivables by $63.4 million and (2) an increase in accounts payable, accrued expenses and other liabilities of $43.5 million. The decrease in accounts receivable was attributable in large part to the receipt of outstanding royalties of $22.0 million relating to prior quarters. The increase in accounts payable, accrued expenses and other liabilities was primarily due to the upfront payment from Shire of $25.0 million, as described above.

Investing Activities

     Our net cash provided by investing activities was $30.8 million for the quarter ended September 30, 2006 compared to net cash used in investing activities of $210.6 million for the prior year period. The cash provided by investing activities in the current period consisted mainly of net sales of marketable securities of $103.5 million reduced by capital expenditures of $11.3 million and the acquisition of product rights of Adderall IR Tablets for $63.0 million as described above. The prior year period included net purchases of marketable securities of $191.6 million and capital expenditures of $15.9 million.

Financing Activities

     Net cash provided by financing activities during the quarter ended September 30, 2006 was $12.6 million compared to $36.4 million in the prior year period. The net cash provided by financing activities in the current quarter reflects the proceeds from the exercise of stock options and employee stock purchases of $4.6 million, and $8.3 million for the tax benefit of stock incentive plans. The net cash provided by financing activities in the prior year period primarily reflects proceeds from the exercise of stock options and employee stock purchases of $22.5 million and the tax benefit of stock incentive plans of $14.3 million. The cash generated by options exercised and employee stock purchases is heavily dependent on the Company’s stock price, which increased during the September quarter of the prior year. The level of proceeds from stock option exercises realized in the prior year quarter was not repeated in the current quarter.

Sufficiency of Cash Resources

     We believe our current cash and cash equivalents, marketable securities, investment balances, cash flows from operations and un-drawn amounts of $300 million under our revolving credit facility are adequate to fund our operations and planned capital expenditures and to capitalize on strategic opportunities as they arise. We have and will continue to evaluate our capital structure as part of our goal to promote long-term shareholder value. To the extent that additional capital resources are required, we believe that such capital may be raised by additional bank borrowings, debt or equity offerings or other means.

     On July 21, 2006, the Company entered into an unsecured senior credit facility (the “Credit Facility”) pursuant to which the lenders provided us with credit facilities in an aggregate amount of $2.8 billion. Of such amount, $2.0 billion is in the form of a five-year term facility, $500 million is in the form of a 364-day term facility (collectively the “term facilities”), and $300 million is in the form of a five-year revolving credit facility. The term facilities bear interest at LIBOR plus 75 basis points. The Credit Facility includes customary covenants for agreements of this kind, including financial covenants limiting our total indebtedness on a consolidated basis. Also in July 2006, a letter of credit totaling approximately €1.9 billion was issued on our behalf under the Credit Facility. The letter of credit, which has been cancelled, was being used to support our tender offer at a cost of 0.875% per annum.

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     In conjunction with the close of the PLIVA acquisition, on October 24, 2006, we drew down $2.0 billion of the five-year term facility and approximately $416 million of the 364-day term facility. The Company will acquire the remainder of PLIVA’s outstanding share capital and pay additional transaction related costs with existing cash balances and/or the remaining $84 million of the 364-day term facility. The combined cost of acquiring the share capital and the transaction costs are approximately $130 million.

Off-Balance Sheet Arrangements

     We do not have any material off-balance sheet arrangements that have had, or are expected to have, an effect on our financial statements, other than the letter of credit totaling approximately €1.9 billion in support of our acquisition of PLIVA, which was cancelled in October upon our acquisition of PLIVA.

Critical Accounting Policies

     The methods, estimates and judgments we use in applying the accounting policies most critical to our financial statements have a significant impact on our reported results. The Securities and Exchange Commission has defined the most critical accounting policies as the ones that are most important to the portrayal of our financial condition and results, and/or require us to make our most difficult and subjective judgments. Based on this definition, our most critical policies are the following: (1) revenue recognition and provisions for estimated reductions to gross product sales; (2) revenue recognition and provisions of alliance, development and other revenue; (3) inventories and inventory reserves; (4) income taxes; (5) contingencies; and (6) acquisitions and amortization of intangible assets. Although we believe that our estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. We review the factors that influence our estimates and, if necessary, adjust them. Actual results may differ significantly from our estimates.

     There are no updates to our Critical Accounting Policies from those described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2006. Please see the “Critical Accounting Policies” sections of that report for a comprehensive discussion of our critical accounting policies.

Recent Accounting Pronouncements

     In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for the uncertainty in recognizing income taxes in an organization in accordance with FASB Statement No. 109 by providing detailed guidance for financial statement recognition, measurement and disclosure involving uncertain tax positions. FIN 48 requires an uncertain tax position to meet a more-likely-than-not recognition threshold at the effective date to be recognized both upon the adoption of FIN 48 and in subsequent periods. FIN 48 is effective for fiscal years beginning after December 15, 2006. As the provisions of FIN 48 will be applied to all tax positions upon initial adoption, the cumulative effect of applying the provisions of FIN 48 will be reported as an adjustment to the opening balance of retained earnings for that fiscal year. We are currently evaluating FIN 48 and the effect on our consolidated financial statements.

     In September 2006, the FASB issued FAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R), which requires an employer to recognize the over-funded or under-funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity. FAS No. 158 also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. We are currently evaluating FAS No. 158 and the effect it may have on our consolidated financial statements.

     In September 2006, the FASB issued FAS No. 157, Fair Value Measurements which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”) and expands disclosure about fair value measurements. The statement is effective for fiscal years beginning after November 15, 2007. We are currently evaluating FAS No. 157 and the effect, if any, on our consolidated financial statements.

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     In September 2006, the SEC staff issued Staff Accounting Bulletin (“SAB”) 108 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB 108 requires that public companies utilize a “dual-approach” to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. We do not expect that the adoption of SAB 108 will have a material effect on our consolidated financial statements.

Forward-Looking Statements

     The preceding sections contain a number of forward-looking statements. To the extent that any statements made in this report contain information that is not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by their use of words such as “expects,” “plans,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates” and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, in no particular order:

• the difficulty in predicting the timing and outcome of legal proceedings, including patent-related matters such as patent challenge settlements and patent infringement cases;

• the difficulty of predicting the timing of FDA approvals;

• court and FDA decisions on exclusivity periods;

• the ability of competitors to extend exclusivity periods for their products;

• our ability to complete product development activities in the timeframes and for the costs we expect;

• market and customer acceptance and demand for our pharmaceutical products;

• our dependence on revenues from significant customers;

• reimbursement policies of third party payors;

• our dependence on revenues from significant products;

• the use of estimates in the preparation of our financial statements;

• the impact of competitive products and pricing on products, including the launch of authorized generics;

• the ability to launch new products in the timeframes we expect;

• the availability of raw materials;

• the availability of any product we purchase and sell as a distributor;

• the regulatory environment;

• our exposure to product liability and other lawsuits and contingencies;

• the cost of insurance and the availability of product liability insurance coverage;

• our timely and successful completion of strategic initiatives, including integrating companies (such as PLIVA) and products we acquire and implementing our new enterprise resource planning system;

• fluctuations in operating results, including the effects on such results from spending for research and development, sales and marketing activities and patent challenge activities;

• our expansion into international markets through the completion of the PLIVA acquisition, and the resulting currency, governmental, regulatory and other risks involved with international operations;

• our ability to service our increased debt obligations as a result of the PLIVA acquisition; and

• other risks detailed from time-to-time in our filings with the Securities and Exchange Commission.

     We wish to caution each reader of this report to consider carefully these factors as well as specific factors that may be discussed with each forward-looking statement in this report or disclosed in our filings with the SEC, as such factors, in some cases, could affect our ability to implement our business strategies and may cause actual results to differ materially from those contemplated by the statements expressed herein. Readers are urged to carefully review and consider these factors. We undertake no duty to update the forward-looking statements even though our situation may change in the future.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Our exposure to market risk for a change in interest rates relates primarily to our investment portfolio of approximately $758.3 million. We do not use, nor have we historically used, derivative financial instruments to manage risk, other than in connection with our acquisition of PLIVA, as discussed below.

     Our investment portfolio consists of cash and cash equivalents and market auction debt securities primarily classified as “available for sale.” The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we maintain our portfolio in a variety of high credit quality debt securities, including U.S., state and local government and corporate obligations, certificates of deposit and money market funds. Over 93% of our portfolio matures in less than three months, or is subject to an interest-rate reset date that occurs within 90 days. The carrying value of the investment portfolio approximates the market value at September 30, 2006 and the value at maturity. Because our investments consist of cash equivalents and market auction debt securities, a hypothetical 100 basis point change in interest rates is not likely to have a material effect on our consolidated financial statements.

     During the quarter ended June 30, 2006, we entered into a currency option agreement with a bank for the notional amount equal to €1.8 billion at a cost of $48.9 million to hedge our foreign exchange risk related to the acquisition of PLIVA. During the quarter ended September 30, 2006 we sold a portion of the option, reducing the notional amount to €1.7 billion, for $1.5 million in cash resulting in a recorded loss on the sale of $3.2 million. The remaining portion of our foreign currency option, which had a value of $14.8 million as of September 30, 2006, was sold during October in connection with the acquisition of PLIVA for proceeds of $11.0 million. The difference of $3.8 million will be recorded in our consolidated results for the period ending December 31, 2006.

     As of September 30, 2006, the Company had outstanding three foreign exchange contracts relating to the PLIVA acquisition that involved the purchase of HRK 1.7 billion, the Croatian currency, for $300 million. Each of these transactions was settled during October 2006, and the Company no longer has any risk associated with these contracts.

     None of our outstanding debt at September 30, 2006 bears interest at a variable rate.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

     The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Company’s Chairman and Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives.

     At the conclusion of the period ended September 30, 2006, the Company carried out an evaluation, under the supervision and with the participation of its management, including the Chairman and Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chairman and Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective in alerting them in a timely manner to information relating to the Company required to be disclosed in this report. There have been no significant changes to any of the disclosure controls and procedures for the period ending September 30, 2006. Additionally, there have not been any material changes in our internal control over financial reporting in the period ending September 30, 2006.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Litigation Matters

     The disclosure under Note 15 — Commitments and Contingencies — Litigation Matters included in Part I of this report is incorporated in this Part II, Item 1 by reference.

Item 1A. Risk Factors

     The statements in this section describe the major risks to our business and should be considered carefully. We provide the following cautionary discussion of risk, uncertainties and possibly inaccurate assumptions relevant to our business. These are factors that, individually or in aggregate, we think could cause our actual results to differ materially from expected and historical results. Our business, financial condition or results of operations could be materially adversely affected by any of these risks.

     We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. See “Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements.”

Competition from other manufacturers of generic drugs affecting our generic products

     The success of our generic business is based in part on successfully developing and bringing to market a steady flow of generic products. We attempt to select our generic products based on the prospects for limited competition from competing generic companies. We do so because we believe that the more generic competitors that market the same generic product, the lower the revenue and profitability we will record for our product. Therefore, if any of our currently marketed products or any newly launched generic product are subject to additional generic competition from one or more competing products, our price and market share for the affected generic product could be dramatically reduced. As a consequence, unless we successfully replace generic products that are declining in profitability with new generic products with higher profitability, our business could be adversely affected.

     Our largest single category of generic products is oral contraceptives, which accounted for approximately $121 million in revenues in our quarter ended September 30, 2006. In addition, we recorded revenues of $10 million or more during that period from each of two other generic products, Desmopressin, and royalties from the sale of a generic version of Allegra by Teva Pharmaceuticals. Two generic manufacturers have already launched a competing generic version of Desmopressin, and there are two competing generic Allegra products in addition to Teva’s. We anticipate added competition to Desmopressin and Allegra over time. In addition, we anticipate increasing competition to our generic oral contraceptives over time. Unless we can replace the anticipated losses of revenues from these products with revenues from new products, our revenues and profitability will suffer.

Competition from other manufacturers of generic drugs affecting our proprietary products

     Upon the expiration or loss of patent protection or regulatory exclusivity periods for one of our branded products, or upon the “at-risk” launch by a generic manufacturer of a generic version of one of our branded products, we can lose the major portion of sales of that product in a very short period, which can adversely affect our business. For example, SEASONALE was our largest selling proprietary product during the year ended June 30, 2006, generating $100 million in revenues. In May 2006, a competitor received tentative FDA approval for a generic version of SEASONALE and subsequently launched their product in September 2006. As the result of generic competition for SEASONALE, our revenues and gross profit contributions from SEASONALE will decline significantly.

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Resolving Paragraph IV patent challenges

     Our operating results have historically included significant contributions from products that arise from the success we have had from our patent challenge activities. However, the success we have had in the past from challenging branded companies’ patents, whether through court decisions that permit us to launch our generic versions of product or through settlements, may not be repeated in the future due to the following:

• an increase in the number of competitors who pursue patent challenges could make it more difficult for us to be first to file a Paragraph IV certification on a patent protected product;

• branded company’s decision to launch an “authorized” generic version of the product will reduce our market share and lower the revenues and gross profits we could have otherwise earned if an “authorized” generic were not launched;

• claims brought by third parties, including the FTC, various states’ Attorneys General and other third-party payers challenging the legality of our settlement agreements could affect the way in which we resolve our patent challenges with the brand pharmaceutical companies; and

• the efforts of brand companies to use legislative and regulatory tactics to delay the launch of generic products.

Impact of “At Risk” launches

     There are situations where we have used our business and legal judgment and decided to market and sell products, subject to claims of alleged patent infringement, prior to final resolution by the courts, based upon our belief that such patents are invalid, unenforceable, or would not be infringed. This is referred to in the pharmaceutical industry as an “at risk” launch. The risk involved in doing so can be substantial because if a patent holder ultimately prevails, the remedies available to such holder include, among other things, damages measured by the profits lost by the holder which are often significantly higher than the profits we make from selling the generic version of the product. Should we elect to proceed in this manner we could face substantial damages if the final court decision is adverse to us. In the case where a patent holder was able to prove that our infringement was “willful”, the definition of which is subjective, such damages may be trebled.

Government Regulation and Managed Care Trends

     The trend toward managed healthcare in the U.S., the growth of organizations such as HMOs and MCOs and legislative proposals to reform healthcare and government insurance programs could significantly influence the purchase of pharmaceutical products, resulting in lower prices and a reduction in product demand. Such cost containment measures and healthcare reform could affect our ability to sell our products and may have a material adverse effect on us. Additionally, reimbursements to patients may not be maintained and third-party payers, which place limits on levels of reimbursement, may reduce the demand for, or negatively affect the price of, those products and could significantly harm our business. We may also be subject to lawsuits relating to reimbursement programs that could be costly to defend, divert management’s attention and could have a material adverse effect on our business.

Development and Regulatory Approval

     Risks and uncertainties particularly apply to whether or when our products will be approved. The outcome of the lengthy and complex process of developing new products is inherently uncertain.

     For our generic business, much of our product development efforts are focused on developing products that are difficult to formulate and/or products that require specialized manufacturing technology. The inability to successfully formulate and pass bioequivalence studies can adversely affect the timing of when we receive approval for our generic products.

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     For our proprietary business, regulatory delays, the inability to successfully complete clinical trials or claims and concerns about safety and efficacy are a few of the factors that could adversely affect the timing of new proprietary product launches. In addition, decisions by regulatory authorities regarding labeling and other matters could adversely affect the availability or commercial potential of our products.

     There can be no assurance as to whether or when we will receive regulatory approval for new products.

Product Manufacturing and Marketing

     Difficulties or delays in product manufacturing or marketing, including, but not limited to, the inability to increase production capacity commensurate with demand, or the failure to predict market demand for, or to gain market acceptance of approved products, including our recent launches of SEASONIQUE and ENJUVIA, could affect future results.

Dependence on third parties

     We rely on third parties to supply us with raw materials, inactive ingredients and other components for our manufactured products and for certain of our finished goods. In many instances there is only a single supplier. In addition, we rely on third-party distributors and alliance partners to provide services for our business, including product development, manufacturing, warehousing, distribution, customer service support, medical affairs services, clinical studies, sales and other technical and financial services for certain of our products. Nearly all third-party suppliers and contractors are subject to FDA, and in some cases DEA, requirements. Our business on some products are dependent on the regulatory compliance of these third parties, and on the strength, validity and terms of our various contracts with these third-party manufacturers, distributors and collaboration partners. Any interruption or failure by these suppliers, distributors and collaboration partners to meet their obligations pursuant to various agreements or obligations with us could have a material adverse effect on our business.

     In addition, our revenues include amounts we earn based on sales generated and recorded by Teva Pharmaceuticals for generic Allegra, and Kos Pharmaceuticals for Niaspan and Advicor. Any factors that negatively impact the sales of these products could adversely impact our revenues and profits.

Customer consolidation

     Our principal customers are wholesale drug distributors and major retail drug store chains. These customers comprise a significant part of the distribution network for pharmaceutical products in the U.S. This distribution network is continuing to undergo significant consolidation marked by mergers and acquisitions among wholesale distributors and the growth of large retail drug store chains. This consolidation may result in these groups gaining additional purchasing leverage and consequently increasing the product pricing pressures facing our business. Additionally, the emergence of large buying groups representing independent retail pharmacies and the prevalence and influence of managed care organizations and similar institutions potentially enable those groups to attempt to extract price discounts on our products. Our net sales and quarterly growth comparisons may be affected by fluctuations in the buying patterns of major distributors, retail chains and other trade buyers. These fluctuations may result from seasonality, pricing, wholesaler buying decisions or other factors.

Cost and Expense Control/Unusual Events

     Growth in costs and expenses, changes in product mix and the impact of acquisitions, divestitures, restructurings, product withdrawals and other unusual events that could result from evolving business strategies, evaluation of asset realization and organizational restructuring could create volatility in our results. Such risks and uncertainties include, in particular, the potentially significant charges to our operating results for items like in-process research and development charges and transaction costs.

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Legal Proceedings

     As described in “Legal Proceedings” in Part II, Item 1 of this Form 10-Q, we and certain of our subsidiaries are involved in various patent, product liability, consumer and commercial litigations and claims; government investigations; and other legal proceedings that arise from time to time in the ordinary course of our business. Litigation is inherently unpredictable, and unfavorable rulings do occur. An unfavorable ruling could include money damages or, in some rare cases, for which injunctive relief is sought, an injunction prohibiting Barr from manufacturing or selling one or more products. Although we believe we have substantial defenses in these matters, we could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations in any particular period.

Availability of product liability insurance

     Our business inherently exposes us to claims relating to the use of our products. We sell, and will continue to sell, pharmaceutical products for which product liability insurance coverage may not be available, and, accordingly, if we are sued and if adverse judgments are rendered, we may be subject to claims that are not covered by insurance as well as claims that exceed our policy limits each of which could adversely impact our results of operations and our financial condition. Additional products for which we currently have coverage may be excluded in the future. In addition, product liability coverage for pharmaceutical companies is becoming more expensive and increasingly difficult to obtain. As a result, we may not be able to obtain the type and amount of coverage we desire.

Acquisitions

     We regularly review potential acquisitions of products and companies complementary to our business. Acquisitions typically entail many risks including, difficulties in integrating operations, personnel, technologies and products. If we are not able to successfully integrate our acquisitions, we may not obtain the advantages that the acquisitions were intended to create, which may adversely affect our business, results of operations, financial condition and cash flows, and our ability to develop and introduce new products. See the discussion below regarding our acquisition of PLIVA.

Managing rapidly growing operations

     We have grown significantly over the past several years, extending our processes, systems and people. Our acquisition of PLIVA, as discussed below, has significantly added to our operations. We have made significant investments in enterprise resource systems and our internal control processes to help manage this incremental activity. We must also attract, retain and motivate executives and other key employees, including those in managerial, technical, sales and marketing and support positions to support our growth. As a result, hiring and retaining qualified executives, scientists, technical staff, manufacturing personnel, qualified quality and regulatory professionals and sales representatives are critical to our business and competition for these people can be intense. If we are unable to hire and retain qualified employees and if we do not continue to invest in systems and processes to manage our growth, our operations could be adversely impacted.

Use of estimates and judgments in applying accounting policies

     The methods, estimates and judgments we use in applying accounting policies have a significant impact of our results of operations (see “Critical Accounting Policies” in Part II, Item 7 of our Form 10-K). Such methods, estimates and judgments are, by their nature, subject to substantial risks, uncertainties and assumptions, and factors may arise over time that leads us to change them. Changes in those methods, estimates and judgments could significantly affect our results of operations.

Changes in Laws and Accounting Standards

     Our future results could be adversely affected by changes in laws and regulations, including changes in accounting standards, taxation requirements (including tax-rate changes, new tax laws and revised tax law interpretations), competition laws and environmental laws in the U.S. and other countries.

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Terrorist Activity

     Our future results could be adversely affected by changes in business, political and economic conditions, including the cost and availability of insurance, due to the threat of future terrorist activity in the U.S. and other parts of the world and related U.S. military action overseas.

Acquisition of PLIVA

     On October 24, 2006, Barr Europe finalized the legal and regulatory requirements to acquire PLIVA, headquartered in Zagreb, Croatia. Under the terms of our cash tender offer, we paid approximately $2.4 billion, or HRK 820 per share for all shares tendered during the offer period. The transaction closed with 17,056,977 shares being tendered as part of the process, representing 92% of PLIVA’s total outstanding share capital being tendered to us. With the addition of the treasury shares held by PLIVA, we now own or control in excess of 95% of PLIVA’s voting share capital.

     We have begun the integration of the two companies. There are a number of operational and financial risks associated with this acquisition. The operational risks include, but are not limited to, the following:

• the necessity of coordinating and consolidating geographically separated organizations, systems and facilities;

• the successful integration of our management and personnel with that of PLIVA and retaining key employees; and

• changes in intellectual property legal protections and remedies, trade regulations and procedures and actions affecting approval, production, pricing, reimbursement and marketing of products.

The financial risks related to this acquisition include, but are not limited to, the following:

• our ability to satisfy obligations with respect to the $2.4 billion of debt that we incurred to help finance this transaction, all of which is at a variable rate of interest based upon LIBOR;

• the ability of the combined company to meet certain revenue and cost synergy objectives;

• charges associated with this transaction, including the write-off of acquired in-process research and development costs, additional depreciation and amortization of acquired assets and interest expense and other financing costs related to the new Credit Facility will negatively impact our net income; and

• our international-based revenues and expenses will be subject to foreign currency exchange rate fluctuations.

     If management is unable to successfully integrate the operations and manage the financial risks, the anticipated benefits of this acquisition may not be realized and it could result in a material adverse effect on our operations and cash flow.

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Item 6. Exhibits

     (a) Exhibits.

Exhibit No.	Description
10.1*	Settlement Agreement, dated August 14, 2006 by and between Barr Laboratories, Inc. and Shire Laboratories Inc.
10.2*	Product Development and License Agreement, dated August 14, 2006 by and between Duramed Pharmaceuticals, Inc. and Shire LLC
10.3*	Product Acquisition and License Agreement, dated August 14, 2006 by and among Duramed Pharmaceuticals, Inc. and Shire LLC, Shire plc
31.1	Certification of Bruce L. Downey pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of William T. McKee pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.0	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	* Certain portions of this exhibit have been omitted intentionally, subject to a confidential treatment request. A complete version of this agreement has been filed separately with the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BARR PHARMACEUTICALS, INC.
Dated: November 9, 2006	/s/ Bruce L. Downey
	Bruce L. Downey
	Chairman of the Board and Chief Executive Officer
	/s/ William T. McKee
	William T. McKee
	Vice President, Chief Financial Officer, and Treasurer (Principal Financial Officer and Principal Accounting Officer)

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EX-10.1

     Pursuant to 17 CFR 240.24b-2, confidential information (indicated by [*]) has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Exhibit 10.1

SETTLEMENT AGREEMENT

Dated as of August 14, 2006

SHIRE LABORATORIES INC.

and

BARR LABORATORIES, INC.

SETTLEMENT AGREEMENT

     THIS SETTLEMENT AGREEMENT, (this “Settlement Agreement”) dated as of this 14th day of August, 2006, is hereby entered into by and between Shire Laboratories Inc., a Delaware corporation with offices located at 725 Chesterbrook Boulevard, Wayne, PA 19087 (“Shire”), and Barr Laboratories, Inc., a Delaware corporation with offices located at 400 Chestnut Ridge Road, Woodcliff Lake, NJ 07677 (“Barr”). Each of Shire and Barr is sometimes referred to herein, individually, as a “Party” and, collectively, as the “Parties.”

RECITALS

     WHEREAS, Shire is the owner of New Drug Application (“NDA”) No. 21-303, which was approved by the Food and Drug Administration (“FDA”) for the manufacture and sale of a pharmaceutical composition containing mixed amphetamine salts for the treatment of Attention Deficit Hyperactivity Disorder, which Shire sells under the trademark Adderall XR (collectively, “Shire Product”);

     WHEREAS, Barr submitted an Abbreviated New Drug Application (“ANDA”) No. 76-536 (“Barr’s ANDA”) to the FDA under § 505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §355(j)) with a paragraph IV certification seeking approval to engage in the commercial manufacture, use, and sale of product asserted to be bioequivalent to Shire Product;

     WHEREAS, the filing of such an ANDA by Barr can be an act of infringement of any patent which claims the drug or the use of such drug under 35 U.S.C. § 271(e)(2)(A);

     WHEREAS, as of August 14, 2006 Barr’s ANDA has failed to receive either tentative or final marketing approval by the FDA;

     WHEREAS, on February 24, 2003, after receiving a paragraph IV notice letter from Barr regarding United States Patent No. 6,322,819 (the “‘819 Patent”), Shire sued Barr for infringing the ‘819 Patent in a civil action in the United States District Court for the Southern District of New York and Barr has asserted certain affirmative defenses and brought certain counterclaims that action, case no. 03-CV-1219 (collectively, the “’819 Case”);

     WHEREAS, on September 2, 2003, after receiving a paragraph IV notice letter from Barr regarding United States Patent No. 6,605,300 (the “‘300 Patent), Shire sued Barr for infringing the ‘300 Patent in a civil action in the United States District Court for the Southern District of New York and Barr has asserted certain affirmative defenses and brought certain counterclaims in that action, case no. 03-CV-6632 (collectively, the “‘300 Case”).

     WHEREAS, the ‘819 Case and the ‘300 Case (collectively referred to as “Litigation #1”) were consolidated for trial on December 15, 2003 in the Southern District of New York before United States District Judge P. Kevin Castel (“Court #1”).

     WHEREAS, Shire has also sued Barr for a declaratory judgment finding the product to be sold under Barr’s ANDA would infringe U.S. Patent No. 6,913,768 (the “‘768 Patent”) in a civil action, Civil Action No. 05-CV-8903 (“Litigation #2”)(“Litigation #2 together with

Litigation #1, the “Pending Litigations”), also in the United States District Court for the Southern District of New York before United States District Judge Richard Owen (“Court #2”);

     WHEREAS, Shire and Barr wish to settle the Pending Litigations and have reached an agreement to settle the Pending Litigations, pursuant to the terms and conditions set forth in this Settlement Agreement together with an associated License Agreement (attached hereto as Exhibit A, the “License Agreement”), an agreed dismissal order and consent judgment in Litigation #1 (“Dismissal Order and Consent Judgment #1”)(attached hereto as Exhibit B), and a consent judgment with regard to Litigation #2 (the “Consent Judgment #2”)(attached hereto as Exhibit C) (the Settlement Agreement, the License Agreement, the Dismissal Order and Consent Judgment #1 and Consent Judgment #2 are collectively referred to as the “Settlement Documents”) (Dismissal Order and Consent Judgment #1 and Consent Judgment #2 are collectively referred to as the “Consent Judgments”);

     WHEREAS, contemporaneously herewith the Parties and their Affiliates are also entering into a Product Acquisition and License Agreement for Shire’s Adderall product, currently being sold under Shire’s NDA No. 11-522, and a Product Development and License Agreement (collectively, the “Associated Agreements”);

     WHEREAS, the Settlement Documents constitute both Shire’s and Barr’s best independent judgment as to the most convenient, effective and expeditious way to mutually settle all prior, present and future disputes that have arisen associated with the filing of Barr’s ANDA and the selling, offering for sale, using and/or importing into the United States of a product under Barr’s ANDA (the “Barr Product”); and

     WHEREAS, except as provided for in Section 15 herein, this Settlement Agreement shall be of no force or effect until such date as the Consent Judgments defined herein are submitted to their respective courts as provided herein and the Consent Judgments are thereafter entered by their respective courts.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements described herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

     1. The Parties consent to the jurisdiction of Court #1 for the purposes of the settlement of Litigation #1 and enforcement of the terms of the Settlement Documents.

     2. The Parties agree that Court #1 has jurisdiction over Litigation #1 and over Shire and Barr (solely for the purpose of this settlement), and that venue is proper in the Southern District of New York.

     3. Barr admits that the commercial manufacture, use, selling, offering for sale, or importing of the Barr Product would infringe ‘768 Patent. Barr admits that it has conducted activities to date, including manufacturing large quantities of Barr Product, that infringe the ‘768 Patent. Barr admits that it has been actively and diligently working to obtain approval of the Barr ANDA to commercially manufacture, use, sell, and offer for sale the Barr Product in the United States. Barr admits that the ‘768 patent is valid and enforceable.

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     4. The Parties consent to the jurisdiction of Court #2 for the purposes of the settlement of Litigation #2 and enforcement of the terms of the Settlement Documents.

     5. The Parties agree that Court #2 has jurisdiction over Litigation #2 and over Shire and Barr (solely for the purpose of this settlement), and that venue is proper in the Southern District of New York.

     6. Barr admits that each of the ‘819 Patent and the ‘300 Patent are valid and enforceable.

     7. Barr agrees that, except as is otherwise expressly provided for in the License Agreement, it shall not commercially make, use, sell, offer for sale or import, directly or indirectly the Barr Product.

     8. Subject to Barr’s continued compliance with the terms of the Settlement Documents, Shire agrees that it will not enforce the ‘819 Patent, the ‘300 Patent and the ‘768 Patent against Barr or its affiliates with respect to the Barr Product or seek relief for equitable or legal damages, or other monetary relief, costs, attorneys fees or interest as a result of infringement by Barr and their retailers, distributors or end users, accrued as to the date hereof.

     9. Barr represents and warrants that it has not granted or assigned to any Third Party, directly or indirectly, any rights under or to Barr’s ANDA and that it will not do so except as may be explicitly provided in the License Agreement.

     10. Shire represents and warrants that it has the right and authority to enforce the ‘819 Patent, the ‘300 Patent and the ‘768 Patent.

     11. Shire and Barr each represents and warrants that it has the full right, authority and power to enter into this Settlement Agreement on its own behalf and that this Settlement Agreement shall create and constitute a binding obligation on its part.

     12. Shire and Barr shall each execute the License Agreement contemporaneously with the execution of this Settlement Agreement and any breach of the License Agreement shall constitute a breach of this Settlement Agreement.

     13. Within five (5) business days following the date of this Settlement Agreement, the Parties shall cause the Consent Judgments to be filed with their respective courts.

     14. To the extent that Court #1 or Court #2 should refuse to enter either of the Consent Judgments, the Parties shall work together in good faith and use their Best Efforts to modify the applicable Consent Judgment to meet the requirements of the applicable Court. If despite such Best Efforts Court #1 refuses to enter a dismissal of the infringement issues in Litigation #1 without prejudice under Fed. R. Civ. P. 41(a)(1)(ii) and also enter a consent judgment that the ‘819 Patent and the ‘300 Patent are valid and enforceable, or if despite such Best Efforts Court #2 refuses to enter a consent judgment of validity, enforceability and infringement of the ‘768 patent, this Settlement Agreement (including without limitation the License Agreement) and the Associated Agreements shall be null and void (also a “Termination Date”). Furthermore, except as provided in Section 15, the Parties agree that this Settlement

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Agreement and the License Agreement shall become effective (the “Effective Date”) only when each of the following occur: (1) Court #1 has entered the Consent Judgment #1 (as may be modified pursuant to this paragraph above); and (2) Court #2 has entered Consent Judgment #2 (as may be modified pursuant to this paragraph above).

     15. This Settlement Agreement and the License Agreement shall be void and of no effect if the Consent Judgments are not entered by their respective courts within thirty (30) days following the date hereof subject to the Parties’ agreement to extend such thirty-day period, such agreement not to be unreasonably withheld.

     16. For purposes of clarity, and despite anything to the contrary in this Settlement Agreement, Sections 11, 12, 13, 14, 15, 16, 17 and 18 shall be immediately effective and binding upon the Parties upon full execution of this Settlement Agreement, unless and until this Settlement Agreement shall be null and void as provided in Section 15.

     17. Within ten (10) business days following the date hereof, each Party shall file or cause to be filed with the U.S. Federal Trade Commission Bureau of Competition (“FTC”) and the Antitrust Division of the U.S. Department of Justice (“DOJ”) this Settlement Agreement and any notifications required to be filed pursuant to Title XI of the Medicare Prescription Drug Improvement and Modernization Act (Subtitle B — Federal Trade Commission Review) signed into law on December 8, 2003 and any other applicable law.

     18. The Parties shall use all commercially reasonable efforts and coordinate to make such filings promptly and to respond promptly to any requests for additional information made by either of such agencies. Each Party reserves the right to communicate with the FTC or DOJ regarding such filings as it believes appropriate. Each Party shall keep the other reasonably informed of such communications and shall not disclose the Confidential Information of the other without such other Party’s consent (not to be unreasonably withheld).

     19. Shire and Barr each will bear their own costs and legal fees for the Pending Litigations.

     20. Confidentiality.

20.1 Confidential Information. As used in this Settlement Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Settlement Agreement or generated pursuant to this Settlement Agreement by one Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Confidential Information shall not include any information or materials that:

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(a) were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

     (b) were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

     (c) became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Settlement Agreement;

     (d) were disclosed to a Party, other than under an obligation of confidentiality, by a third party who had no obligation to the Disclosing Party not to disclose such information to others; or

     (e) were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

     20.2. Confidentiality Obligations. Each of Barr and Shire shall keep confidential all Confidential Information of the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information but in no event less than a reasonable degree of care. Neither Party shall use such Confidential Information for any purpose other than in performance of this Settlement Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who are bound to confidentiality restrictions consistent with the terms herein and who have a need to know such Confidential Information to implement the terms of this Settlement Agreement or enforce its rights under this Settlement Agreement. Upon termination of this Settlement Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party and its Affiliates or their directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall continue to be subject to the provisions of this Section 20.

     20.3. Permitted Disclosure and Use. Notwithstanding Section 20.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the

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provisions of this Settlement Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange regulations. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 20.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. In addition, notwithstanding Section 20.2, the Parties shall cooperate to prepare standardized public responses to anticipated inquiries from the public, press, stockholders, investors and/or analysts with respect to the activities hereunder. Despite the foregoing, each Party agrees that the other Party is free to disclose this Settlement Agreement in its entirety to the United States Federal Trade Commission and the United States Department of Justice, or to any court with jurisdiction over the litigations settled under this Settlement Agreement.

     20.4. Unauthorized Disclosure. The Receiving Party acknowledges and agrees that the Confidential Information of the Disclosing Party constitutes proprietary information and trade secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside disclosure of such Confidential Information shall be presumed to cause irreparable injury to the Disclosing Party.

     20.5. Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and shall cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure. The Receiving Party acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure of Confidential Information and that the Disclosing Party may be entitled, without waiving other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction in the event of such unauthorized disclosure.

     20.6. Confidentiality of this Settlement Agreement. The terms of this Settlement Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Section 20.

     20.7. Terms not defined in this Section 20 shall have the meaning given to such terms in the License Agreement.

     21. In the event that any of the provisions of this Settlement Agreement shall be held by a court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable, such provisions shall be limited or eliminated to the minimum extent necessary so that this Settlement Agreement shall otherwise remain in full force and effect. This Settlement Agreement shall be governed by the laws of the State of New York without regard to the conflicts of law provisions thereof. This Settlement Agreement supersedes all prior discussions and writings and constitutes

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the entire agreement between the Parties with respect to the subject matter hereof. No waiver or modification of this Settlement Agreement will be binding upon either Party unless made in writing and signed by a duly authorized representative of such Party and no failure or delay in enforcing any right will be deemed a waiver. Notices hereunder will be effective only if in writing and upon receipt if delivered personally or by overnight mail carrier or fax, or three (3) days after deposit in the U.S. mail, first class postage prepaid. The prevailing Party in any action to enforce this Settlement Agreement shall be entitled to costs and fees (including attorneys’ fees and expert witness fees) incurred in connection with such action. The individual executing this Settlement Agreement on behalf of a corporation or other legal entity personally represents that he or she is duly authorized to execute this Settlement Agreement on behalf of such entity and that this Settlement Agreement is binding upon such entity. In making and performing this Settlement Agreement, the Parties are acting and shall act as independent contractors. Nothing in this Settlement Agreement shall be deemed to create an agency, joint venture or partnership relationship between the Parties hereto. This Settlement Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bears the signatures of each of the Parties hereto. This Settlement Agreement may be executed in any number of counterparts (including facsimile counterparts), each of which shall be an original as against a Party whose signature appears thereon, but all of which taken together shall constitute one and the same instrument.

[Signature Page Follows]

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[Signature Page to Settlement Agreement]

     IN WITNESS WHEREOF, the Parties hereto have each caused this Settlement Agreement to be executed by their authorized representatives as of the date first above written.

SHIRE LABORATORIES INC.

Date:	August 14, 2006	By:	/s/  Matthew Emmens
		Name:	Matthew Emmens
		Title:	CEO
BARR LABORATORIES, INC.
Date:	August 14, 2006	By:	/s/  Paul Bisaro
		Name:	Paul Bisaro
		Title:	President & C.O.O.

EXHIBIT A

LICENSE AGREEMENT

     THIS LICENSE AGREEMENT (this “Agreement”) dated as of this 14th day of August, 2006 (the “Effective Date”), is hereby entered into by and between Shire LLC, a Kentucky company with offices located at 9200 Brookfield Court, Florence, KY 41042 (together with its Affiliates, “Shire”), and Barr Laboratories, Inc., a Delaware corporation with offices located at 400 Chestnut Ridge Road, Woodcliff Lake, NJ 07677 (“Barr”). Each of Shire and Barr is sometimes referred to herein, individually, as a “Party” and, collectively, as the “Parties.”

R E C I T A L S:

     WHEREAS, Shire is the owner of New Drug Application (“NDA”) No. 21-303, which was approved by the Food and Drug Administration (“FDA”) for the manufacture and sale of a pharmaceutical composition containing mixed amphetamine salts for the treatment of Attention Deficit Hyperactivity Disorder, all strengths of which Shire sells under the tradename Adderall XR (collectively, “Shire Product”);

     WHEREAS, Barr submitted the Barr ANDA (defined below) to the FDA under the Act with a paragraph IV certification seeking approval to engage in the commercial manufacture, use, and sale of product asserted to be bioequivalent to Shire Product;

     WHEREAS, Shire and Barr are parties to the Pending Litigation (defined below) related to the Barr ANDA;

     WHEREAS, Shire and Barr are parties to a certain Settlement Agreement of even date herewith (the “Settlement Agreement”), pursuant to which Shire and Barr are settling the Pending Litigation;

     WHEREAS, in consideration of and in conjunction with the Settlement Agreement, Shire has agreed to grant and Barr has agreed to accept a license under Shire’s Adderall XR Intellectual Property (as defined below) to sell Barr Product (as defined below) and AG Product (as defined below); and

     WHEREAS, this Agreement shall be of no force or effect until such date as the Dismissal Order and the Consent Judgment defined in the Settlement Agreement are submitted to their respective courts as provided for in the Settlement Agreement and the Dismissal Order and the Consent Judgment are thereafter entered by their respective courts.

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

     1. Definitions

EXHIBIT A

          1.1. “Act” shall mean § 505(j) of the Federal Food, Drug, and Cosmetic Act.

          1.2. “Adderall XR” shall mean the pharmaceutical products which are approved for Marketing in the Territory pursuant to the NDA.

          1.3. “Adderall XR Intellectual Property” shall mean (i) U.S. Patent Nos. 6,322,819, 6,605,300, and 6,913,768 and any patent that issues as a result of a reexamination or reissue thereof; (ii) any patent that issues from, or any continuation, continuation-in-part or divisional application relating to, U.S. Patent Application Serial [*]; and (iii) any other present or future U.S. patent owned or controlled by Shire and its Affiliates which may be infringed by the making, using, selling or importing of the Generic Product.

          1.4. “Adverse Drug Experience” has the meaning set forth in 21 C.F.R. § 314.80(a), as amended, supplemented or superceded from time to time.

          1.5. “Affiliate” shall mean a Person that controls, is controlled by or is under common control with a Party. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct the management and policies of such Person, whether by the ownership of at least fifty percent (50%) of the voting stock of such Person (it being understood that the direct or indirect ownership of a lesser percentage of such stock shall not necessarily preclude the existence of control), or by contract or otherwise.

          1.6. “AG Product” shall mean Shire authorized and supplied generically Labeled Adderall XR.

          1.7. “ANDA” shall mean an abbreviated new drug application to the FDA for approval to manufacture and/or sell a pharmaceutical product in the Territory.

          1.8. “Applicable Law” shall mean the applicable Laws, rules, regulations, guidelines and requirements of any Governmental Authority related to the development, registration, Manufacture and Marketing of the Generic Product in the Territory or the performance of either Party’s obligations under this Agreement.

          1.9. “Authorization and License” shall have the meaning assigned to such term in Section 2.3.

          1.10. “Barr ANDA” shall mean ANDA No. 76-536.

          1.11. “Barr Product” shall mean the Generic Equivalent that is the subject of the Barr ANDA.

          1.12. “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banks in New York, New York are authorized or required by Law to close.

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EXHIBIT A

          1.13. “cGMP” shall mean all applicable standards relating to manufacturing practices for active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products, including (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 210 and 211.

          1.14. “Commercially Reasonable Efforts” shall mean efforts and diligence in accordance with the subject Party’s reasonable and sound business, legal, medical and scientific judgment and in accordance with the efforts and resources such Party would use in other aspects of its business that have similar commercial value and market potential, taking into account the competitiveness of the marketplace, the business life-cycle, the proprietary position of the Party and the profitability of the pertinent product.

          1.15. “Compound” shall mean mixed amphetamine salts, as further defined in the NDA.

          1.16. “Confidential Information” shall mean any scientific, technical, formulation, process, Manufacturing, clinical, non-clinical, regulatory, Marketing, financial or commercial information or data relating to the business, projects, employees or products of either Party and provided by one Party to the other by written, oral, electronic or other means in connection with this Agreement.

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

          1.18. “Force Majeure” shall mean acts of God, civil disorders or commotions, acts of aggression, fire, explosions, floods, drought, war, sabotage, embargo, utility failures, a national health emergency, or appropriations of property.

          1.19. “GAAP” shall mean generally accepted accounting principles in effect in the United States from time to time, consistently applied.

          1.20. “Generic Equivalent” shall mean pharmaceutical products that are a Therapeutic Equivalent of Adderall XR (whether approval for marketing in the Territory is sought or obtained pursuant to an ANDA, a 505(b)(2) application, or an NDA Supplement) including all dosages and formulations and all indications of Adderall XR. “Generic Equivalent” shall include the AG Product and the Barr Product.

          1.21. “Generic Product” shall mean the AG Product and the Barr Product.

          1.22. “Governmental Authority” shall mean any court, tribunal, arbitrator, agency, legislative body, commission, official or other instrumentality of (i) any government of any country, or (ii) a federal, state, province, county, city or other political subdivision thereof.

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EXHIBIT A

          1.23. “Label” shall mean any Package (immediate container) labeling designed for use with a product, including the package insert for such product that is approved by the FDA, and “Labeled” or “Labeling” shall have the correlated meaning.

          1.24. “Launch” shall mean the first commercial sale of a product to an unaffiliated Third Party.

          1.25. “Law” or “Laws” shall mean all laws, statutes, rules, codes, regulations, orders, judgments and/or ordinances of any Governmental Authority.

          1.26. “License Effective Date” shall mean the earlier of: (1) April 1, 2009; and (2) [*].

          1.27. “Losses” means any liabilities, damages, costs or expenses, including reasonable attorneys’ fees and expert fees, incurred by any Party that arise from any claim, lawsuit or other action by a Third Party.

          1.28. “Manufacture” shall mean all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, including but not limited to manufacturing Compound or supplies for development, manufacturing of Barr Product or AG Product for commercial sale, packaging, in-process and finished product testing, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, ongoing stability tests and regulatory activities related to any of the foregoing, and “Manufactured” or “Manufacturing” shall have the correlated meaning.

          1.29. “Manufacturing Costs” for each dosage strength of AG Product shall mean [*]. “Manufacturing Costs” for each dosage strength of Barr Product shall mean [*].

          1.30. “Market” shall mean to distribute, promote, advertise, import, market, offer to sell and sell, and “Marketing” or “Marketed” shall have the correlated meaning.

          1.31. “NDA” shall mean new drug application No. 21-303, and all supplements filed pursuant to the requirements of the FDA, including all documents, data and other information concerning Adderall XR which are necessary for FDA approval to Market Adderall XR in the Territory.

          1.32. “Net Profits” means the gross receipts derived from the sale of Generic Product in the United States by Barr (or by its Affiliates), to independent third parties in the United States, less the sum of the following items:

               (a) Import, export, excise and sales taxes and custom duties paid or allowed by the selling party and any other charges imposed by a Governmental Authority upon the production, importation, use or sale of Generic Product by Barr and/or its Affiliates;

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               (b) Estimated and actual credits for returns, refunds, rebates and allowances, or trades to customers for returned or recalled Generic Product;

               (c) Trade, quantity and cash discounts actually allowed;

               (d) Transportation, freight and insurance allowances;

               (e) Rebates to wholesalers, administrative fees in lieu of rebates paid to managed care and other similar institutions, chargebacks and retroactive price adjustments, including Shelf Stock Adjustments, and any other similar allowances which effectively reduce the net selling price; and

               (f) Manufacturing Costs.

               Gross and Net Profits shall be calculated according to GAAP. Sales or transfers between or among Barr and its Affiliates shall be excluded from the computation of Net Profits except where such Affiliates are end users, but Net Profits shall include the subsequent final sales to third parties by such Affiliates.

               Where (i) Generic Product is sold by Barr or its Affiliates as one of a number of items without a separate price; (ii) the consideration for the Generic Product shall include any non-cash element; (iii) the Generic Product shall be transferred in any manner other than an invoiced sale; or (iv) Barr prices Generic Product in order to gain or maintain sales of other products, the gross receipts applicable to any such transaction shall be deemed to be the selling party’s average gross receipts for the applicable quantity of Generic Product during the calendar quarter in which such transaction occurred. If there are no independent sales of Generic Product in the United States at that time, then Barr and Shire shall mutually agree on a surrogate measure to be used in lieu thereof.

          1.33. “Package” shall mean all primary containers, including bottles, cartons, shipping cases or any other like matter used in packaging or accompanying a product, and “Packaged” or “Packaging” shall have the correlated meaning.

          1.34. “Pending Litigation” shall mean the pending litigation Shire Laboratories, Inc., v. Barr Laboratories, Inc., Civil Action No. 03-CV-1219 and 03-CV-6632 (U.S. District Court for the Southern District of New York) and Shire Laboratories Inc. v. Barr Laboratories, Inc. & Impax Laboratories, Inc., Civil Action No. 05-CV-8903 (U.S. District Court for the Southern District of New York).

          1.35. “Permitted Agreement” shall mean an agreement between Barr and any other Person to Market or promote Generic Product after the License Effective Date in accordance with the Authorization and License, or as permitted in Section 4.1.

          1.36. “Person” shall mean any individual, partnership, association, corporation, limited liability company, trust, or other legal person or entity.

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          1.37. “Shelf Stock Adjustment” means the customary practice of providing a purchaser of Generic Product an adjustment to the net purchase price for on-hand inventory in response to an offer from a supplier of a competing Generic Equivalent.

          1.38. “Term” shall have the meaning assigned to such term in Section 15.1.

          1.39. “Territory” shall mean the United States of America and its territories and possessions.

          1.40. “Therapeutic Equivalent” shall have the meaning given to it by the FDA in the current edition of the “Approved Drug Products with Therapeutic Equivalence Evaluations” (the “Orange Book”) as may be amended from time to time during the Term.

          1.41. “Third Party” or “Third Parties” shall mean any Person or entity other than a Party or its Affiliates.

          1.42. “Valid Claim” shall mean an issued and unexpired patent claim which has not been held to be invalid or unenforceable by a court of competent jurisdiction in a final unappealable decision.

     2. License

          2.1. Subject to the terms, conditions and limitations hereof, including the conditions set forth in Section 3, Shire hereby grants to Barr a license, under the Adderall XR Intellectual Property and under any and all statutory and regulatory exclusivities issued by any Governmental Authority to import, Manufacture, have Manufactured and Market Barr Product in the Territory on and after the License Effective Date. Notwithstanding the foregoing, Barr shall have the limited right to Manufacture and/or import reasonable quantities of Barr Product prior to the License Effective Date for the sole purpose of launching and selling such Product in the Territory under the foregoing license on and after the License Effective Date. The license granted under this Section 2.1 shall include the right of Barr to (i) grant sublicenses to its Affiliates, and (ii) to Manufacture Barr Product or to have Barr Product manufactured outside the Territory for sale in the Territory.

          2.2. Solely to the extent that Shire Manufactures and supplies AG Product to Barr pursuant to Section 4 of this Agreement, and subject to the other terms, conditions and limitations hereof, including the conditions set forth in Section 3, Shire hereby authorizes Barr to Market such AG Product in the Territory, but only from and after the License Effective Date. In connection with and solely for purposes of such authorization, Shire hereby grants to Barr a license under the Adderall XR Intellectual Property and under any and all statutory and regulatory authorizations and exclusivities issued by any Governmental Authority to Market such AG Product in the Territory from

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and after the License Effective Date. The license granted under this Section 2.2 shall include the right of Barr to grant sublicenses to its Affiliates.

          2.3. The authorization and license granted by Section 2.1 and Section 2.2 are referred to herein as the “Authorization and License.” Except as provided in Sections 2.1, 2.2 and 16.3, Barr shall not have the right to sublicense or assign any of its rights under the Authorization and License.

     3. Conditions

          3.1. Except to the extent permitted under the Authorization and License, neither Barr nor any of its Affiliates shall: (a) Market any Generic Equivalent that infringes the Adderall XR Intellectual Property or (b) assist or enable any third party to Market, or otherwise contract with any Third Party regarding the Marketing of, any Generic Equivalent (other than as permitted in Section 8.1) that infringes the Adderall XR Intellectual Property. In the event that during the Term of this Agreement Barr challenges the validity or enforceability of any of U.S. Patents 6,322,819, 6,605,300, and 6,913,768 or any reissue thereof or, except as required by Law, otherwise assists or enables or participates with any Third Party to challenge the validity or enforceability of any of the foregoing, Shire shall be free to terminate this Agreement and all obligations provided herein immediately upon written notice to Barr. Notwithstanding anything above to the contrary, Barr is permitted to respond to directives from Governmental Authorities, pursuant to the procedures set forth in Section 10.2 of this Agreement.

          3.2. Nothing set forth herein shall be deemed to prevent or restrict Barr or its Affiliates from Marketing any product which would not infringe the Adderall XR Intellectual Property. The foregoing notwithstanding, Barr hereby agrees to provide Shire with detailed information regarding, and samples of, any Generic Equivalent at least forty-five (45) days before Marketing any such Generic Equivalent in order to give Shire reasonable time to evaluate any possible infringement of the Adderall XR Intellectual Property by such Generic Equivalent.

          3.3. Anything to the contrary notwithstanding, in the event that Barr markets any Generic Equivalent other than: (i) Barr Product or AG Product under the terms of this Agreement, or (ii) any product which would not infringe the Adderall XR Intellectual Property, Shire shall be free to terminate the Authorization and License and this Agreement upon notice to Barr.

          3.4. Nothing in this Agreement shall be deemed to give Shire any control over any marketing exclusivity that may be granted to Barr by the FDA in connection with the Barr ANDA or Barr Product [*].

          3.5. Anything to the contrary notwithstanding, [*] without the prior written consent of Shire, Shire shall be free to terminate the Authorization and License and this Agreement upon notice to Barr.

          3.6. Except as explicitly set forth in this Agreement, nothing contained in this Agreement shall grant (or be construed to grant) to Barr (i) any right, title or

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interest in, to or under the NDA or any Shire intellectual property; (ii) any right to use or reference the NDA; (iii) any right to use any Shire intellectual property outside of the Territory; or (iv) any right to make, have made, use, offer for sale, sell and import any product other than the Barr Product or AG Product as such are permitted herein. Any and all rights not explicitly granted in this Agreement are hereby reserved.

          3.7. Shire has not granted and shall not grant a license to, and has not entered and shall not enter into, any supply agreement or other arrangement that allows any Third Party to market a Generic Equivalent before: (i) the License Effective Date or (ii) the expiration of 180 days following Barr’s launch of a Generic Product, [*].

     4. Authorized Generic

          4.1. In the event a Third Party, without any cooperation or assistance from Barr, Markets a Generic Equivalent in the Territory prior to the License Effective Date, and Shire elects, in its sole discretion, to Market or have Marketed a Generic Product to compete with such Third Party prior to the License Effective Date, then Shire shall appoint Barr as the exclusive (even as to Shire [*]) distributor of the Generic Product for a period of at least [*] following the launch of the Generic Product by Barr, and as a non-exclusive authorized distributor of the Generic Product thereafter. In the event of such election and appointment by Shire, Barr shall have the option, in its sole discretion, to Market AG Product or Barr Product. Notwithstanding the provisions of Section 9.1, Barr shall pay Shire a royalty of [*] during any period prior to the License Effective Date in which Barr is exclusively authorized to Market Generic Product under this Section 4.1. However, this royalty under Section 4.1 shall be [*] if there are two or more Third Parties in addition to Barr Marketing a Generic Product.

          4.2. [*]. Should Shire: (i) [*], (ii) Market the [*], and (iii) choose, in Shire’s sole discretion, to Market or authorize a Third Party to Market [*] then Shire agrees that it shall inform Barr of such decision and shall afford Barr the opportunity, at Barr’s discretion, to exclusively [*]. Barr shall notify Shire within [*] of notice of Shire’s decision to Market such AG New Product of Barr’s decision as to whether it desires to Market the [*]. If Barr so notifies Shire of its desire to Market the [*], Shire and Barr shall negotiate in good faith an agreement with respect to such [*], such agreement to be on terms similar to the terms contained in this Agreement, except that Shire and Barr shall share the [*] from the sale of such [*] to each Party. For purposes of clarity, Shire is under no obligation to choose to Market [*] and may do so in its sole discretion.

     5. Supply of AG Product; Forecasts; Purchase Orders

          5.1. If Barr believes in good faith that it will be unable to obtain a final marketing approval for the Barr ANDA before the License Effective Date, then Barr may elect by providing at least [*] prior written notice to Shire to have Shire supply AG Product to Barr for sale in the Territory from and after the applicable License Effective Date subject to all of the terms and conditions of this Agreement, including this Section 5. Shire shall use Commercially Reasonable Efforts to obtain any required

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approvals for sale of AG Product from the FDA pursuant to a labeling supplement to the NDA.

          5.2. Subject to the terms, conditions and limitations hereof, Shire agrees to supply AG Product to Barr for Marketing pursuant to Section 4 and in accordance with the terms of this Agreement. In order to be in a position to timely and effectively enter the generic market, at Barr’s request, the Parties shall cooperate in good faith to determine and prepare for the License Effective Date, including communicating to one another, on an ongoing basis, developments which may reasonably affect the Launch of AG Product and information necessary to Label the AG Product for sale as a generic by Barr under the NDA.

          5.3. All AG Product supplied will be released for sale under a generic Label in Packaging complying with the NDA. Subject to compliance with the NDA, Barr will provide Shire with appropriate and customary generic Packaging and Labeling which will be utilized by Shire in Manufacturing AG Product. Any costs incurred by Shire in utilizing such Packaging or Labeling, or in meeting other manufacturing specifications (such as tablet imprints) requested by Barr and to which Shire agrees (such agreement not to be unreasonably withheld, delayed or conditioned), including related capital expenditures, shall be included in Manufacturing Costs. Shire shall provide current Manufacturing Costs, for guidance purposes only, within [*] of its receipt of a written request from Barr.

          5.4. Together with the notice from Barr to supply AG Product pursuant to Section 4 of this Agreement, Barr shall provide Shire with a binding purchase order for the quantities of AG Product required for the initial Launch of AG Product (including the first three months of sales) (the “Launch Quantities”). If requested by Barr, Shire shall use Commercially Reasonable Efforts to deliver the Launch Quantities to Barr on or before the License Effective Date, so that Barr may Launch on the License Effective Date.

          5.5. During the Supply Term, Barr shall deliver a quarterly forecast (a “Forecast”) to Shire of the quantities of AG Product, by SKU, which Barr reasonably anticipates it will require for Marketing during the [*] period (“Forecast Period”) beginning three months following the date of such Forecast and shall include quantities required to be delivered during each month of the Forecast Period. The foregoing notwithstanding, Barr shall have no obligation to provide Forecasts or orders beyond the Term of this Agreement. For each such Forecast [*] of the Forecast Period shall be known as the “Purchase Order Period” and the amounts specified in the Forecast for the Purchase Order Period shall constitute a binding purchaser order for such period. In addition, in each subsequent Forecast, the amount ordered for the Purchase Order Period shall not deviate by more than [*] (as to the entire period or any month therein) from the [*] of the immediately preceding Forecast. Other than as specifically provided in this paragraph, the amounts set forth in the Forecasts shall only constitute a non-binding estimate of the AG Product requirements of Barr.

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          5.6. Subject to and in accordance with the terms of Section 5.3 and 5.4, Shire shall make deliveries of AG Product to a single delivery destination specified by Barr no more than five (5) days after Barr’s specified delivery dates. All such shipments of AG Product shall be [*]. In no event shall Shire be required to make more than [*] AG Product during any month. In the event of any inconsistency between the terms and conditions of this Agreement on the one hand, and, on the other hand, the terms and conditions of any other agreement between the Parties, or in Barr’s purchase order or Shire’s invoice or confirmation, then the terms and conditions of this Agreement shall govern to the extent of any such inconsistency or conflict, provided, however, that any terms agreed to in writing by the Parties as reflected in a purchase order, invoice or confirmation that relate specifically to the quantity, quality, Packaging, Labeling, shipment and Manufacturing Costs of AG Product shall govern in the event of any such inconsistency or conflict.

          5.7. Shire shall invoice Barr at the time of each shipment of AG Product at the Manufacturing Cost for such shipment. Barr shall pay each such invoice within [*] of receipt.

          5.8. In addition to the foregoing, the Parties shall work together in good faith and make Commercially Reasonable Efforts to timely satisfy any changes in the quantities and delivery dates of AG Product specified in the Forecasts due to changes in demand.

          5.9. AG Products supplied by Shire shall (i) have a shelf life of at least [*] from the date of Manufacture, (ii) be delivered to Barr within [*] of Manufacture, and (iii) conform to the NDA.

          5.10. All AG Products will be in finished dosage form, filled, Packaged and Labeled for commercial sale in accordance with the terms and conditions of this Agreement, the Quality Agreement (as defined in Section 7), and Applicable Laws.

          5.11. During the Term, and for a period of three (3) years thereafter, Shire shall, and shall ensure that its Affiliates shall, keep at either its normal place of business, or at an off-site storage facility, detailed, accurate and up to date:

(a) records and books of account sufficient to confirm the calculation of the Manufacturing Costs; and

(b) information and data contained in any invoices provided to Barr in connection with this Agreement.

          5.12. On no less than [*] notice from Barr, to the extent that Shire supplies AG Product to Barr, Shire shall make all such records, books of account, information and data concerning the Manufacturing Cost of AG Product available for inspection during normal business hours by Barr or its nominee for the purpose of general review or audit; provided that Barr may not request such inspection more than once in any calendar year. Upon reasonable belief of discrepancy or dispute, Barr’s external auditors shall be entitled to take copies or extracts from such records, books of account,

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information and data (but only to the extent related to the contractual obligations set out in this Agreement) during any review or audit, provided the external auditor signs a confidentiality agreement with Shire providing that such records, books of account, information and data shall be treated as Confidential Information which may be disclosed only to Barr.

          5.13. Barr shall be solely responsible for its costs in making any such review and audit, unless Barr identifies a discrepancy in the calculation of Manufacturing Costs paid by Barr to Shire under this Agreement in any calendar year from those properly payable for that calendar year of [*] or greater, in which event Shire shall be solely responsible for the cost of such review and audit and refund Barr any overpayment. All information disclosed by Shire or its Affiliates pursuant to this Section 5.12 shall be deemed Confidential Information of Shire.

          5.14. Nothing in this Agreement shall restrict the right of Barr to simultaneously Market AG Product and Barr Product.

     6. Quality Assurance; Acceptance

          6.1. Shire represents, covenants and warrants to Barr that:

(a) all AG Product hereunder shall be produced in accordance with cGMP and other Applicable Laws, rules and regulations and that none of the AG Product supplied hereunder shall be adulterated or misbranded as defined by the Act; and

(b) all shipments of AG Product supplied hereunder shall meet the specifications and quality control standards set forth in the NDA or otherwise requested by Barr and approved by Shire.

(c) Shire or a Shire Affiliate will use Commercially Reasonable Efforts to maintain throughout the Term of this Agreement all permits, licenses, registrations and other forms of governmental authorization and approval required in order for Shire to perform its obligations hereunder in accordance with all Applicable Laws.

(d) Shire or a Shire Affiliate owns and possesses all right, title and interest in the NDA.

(e) Shire has the right to grant all of the rights and licenses granted herein to Barr under the Adderall XR Intellectual Property, and it is not under any obligation to any Third Party that conflicts with the terms of this Agreement.

          6.2. Shire shall perform all quality control tests and other inspections required by applicable cGMP standards and the NDA and shall furnish to Barr a certificate of analysis together with each lot of AG Product shipped to Barr. Shire will also provide Barr with Material Safety Data Sheets as required by Applicable Law for the AG Products, and updates of same as necessary.

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          6.3. Shire will promptly notify Barr of any request from the FDA to change AG Product specifications or Labeling and will notify Barr in writing as promptly as practical of any proposed or actual changes in specifications.

          6.4. Barr shall conduct, at its own expense, such tests as it deems necessary to determine the compliance of the AG Product with the requirements of Section 6.1. Barr shall notify Shire as soon as possible after its receipt of each shipment of the AG Product of any non-compliance of the AG Product with the requirements of Section 6.1 revealed by such testing.

          6.5. Subject to the provisions of Section 6.6, Shire shall [*]. Subject only to the indemnification obligations set forth in Section 12.1, Shire shall have no other obligations to Barr in respect of such AG Product or the representations set forth in Section 6.1.

          6.6. If, following the timely delivery of a notice by Barr pursuant to the provisions of Section 6.4, Barr and Shire do not agree that any lot or lots of the AG Product referred to in the notice meets the requirements of Section 6.1, that lot or those lots of the AG Product shall be tested for such compliance, within [*] after notice of the defect is delivered to Shire, by a disinterested Third Party expert selected by the mutual agreement of Barr and Shire. The decision of such Third Party expert with respect to the question of compliance shall be binding upon Barr and Shire for the purposes of Section 6.1 of this Agreement only. The costs of such testing shall be borne by Shire if such lot or lots are found not to meet the requirements of Section 6.1 and by Barr if those lot or lots are found to meet the requirements of Section 6.1.

          6.7. Barr represents, covenants and warrants to Shire that from and after tender to Barr all AG Product Marketed by Barr will be stored, shipped and handled in accordance with cGMP and all Applicable Laws, rules and regulations.

7. Regulatory Responsibilities; Adverse Event Reporting; Recalls

          7.1. As the holder of the NDA, Shire will have sole authority to deal with regulatory matters relating to the NDA or AG Product. During the Term hereof, Shire shall maintain the NDA in accordance with all applicable requirements of the FDA and other Governmental Authorities, including, without limitation, Applicable Law and the filing of all annual and other reports or filings required by the FDA.

          7.2. Barr shall submit to Shire all reports of Adverse Drug Experiences, together with all relevant information possessed by it, and will make all reasonable effort to provide such in time for Shire to meet all periodic and annual safety regulatory obligations to the FDA. Barr shall also promptly submit to Shire all AG Product inquiries or complaints for handling by Shire. Each Party shall cooperate with the other and provide information in its possession to the extent necessary for the other Party to comply with all legal requirements relating to the Manufacture or Marketing of Generic Product and the Parties will use diligent efforts to agree upon a customary pharmacovigilance protocol as promptly as practicable after the date hereof to provide for

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the necessary exchange of adverse event and related information to permit each Party to comply with Applicable Laws and regulations on a timely basis.

          7.3. Each of Shire and Barr will immediately inform the other in writing if it believes one or more lots of any AG Product should be subject to recall from distribution, setting forth the reasons therefore with reasonable specificity. To the extent permitted by legal and public safety requirements, the Parties will confer before initiating any recall. If the Parties do not reach agreement on the need for a recall, either Party may initiate a recall. The Party initiating the recall shall initially bear the cost thereof and shall carry out the recall in accordance with best industry practices. In the event it is determined that a recall resulted from a breach by a Party of any of its representations or warranties hereunder, such Party shall be responsible for the costs of the recall and the cost of any unnecessary or groundless recall or other recall which is not the result of a breach by the other Party or any of its representations and warranties hereunder, shall be borne by the Party initiating or requesting such recall. In no event shall a Party’s liability to the other hereunder exceed the actual out-of-pocket costs incurred or the cost of replacement of AG Product at a price equal to the Manufacturing Costs, as the case may be, and neither Party shall be liable for lost profits or other consequential damages.

          7.4. As the holder of the Barr ANDA, Barr will have sole authority and responsibility to deal with regulatory matters relating to the Barr ANDA or Barr Product including maintaining the Barr ANDA in accordance with all applicable requirements of the FDA, including, without limitation, the filing of all annual and other reports or filings required by the FDA.

          7.5. Shire shall keep, or cause its Affiliates to keep, as required, such samples and such records (or copies thereof) in respect of the AG Products as are required by Applicable Law for such period of time as may be required thereunder.

          7.6. Each of Shire and Barr shall promptly inform the other of any correspondence from the FDA regarding the Generic Products that would materially affect its ability to meet its obligations under this Agreement. Each of Shire and Barr shall notify the other promptly, but in no event later than [*] following the occurrence thereof, of any materially adverse inspections by the FDA or other regulatory authorities which pertain to the Generic Products or to the facilities of such Party or its Affiliate where the Generic Products are being manufactured or stored.

          7.7. Within [*] following the Effective Date, Barr and Shire shall enter into a Quality Agreement in form and content reasonably acceptable to Barr and Shire (“Quality Agreement”). The Quality Agreement will include protocols and specific responsibilities for handling AG Products quality complaints, ADE reports, and professional medical service inquiries in accordance with mutually acceptable procedures and in conformity with Applicable Laws.

     8. Marketing of Generic Product

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          8.1. During the Term, Barr shall not enter into any arrangements or agreements with any other Person to Market or promote Generic Product other than a Permitted Agreement.

          8.2. Barr will have sole discretion in setting the price for the sale of the Generic Product in the Territory.

     9. Royalties And Payments

          9.1. Barr Product Royalty. Barr shall pay to Shire a royalty at the rate of [*] on each sale of Generic Product sold by Barr or its Affiliates [*].

          9.2. Payments due under this Section 9 shall be made within [*] from the end of each calendar quarter in which Generic Product is sold. All such payments shall include an invoice detailing the calculation of Net Sales, Net Profits and the royalties payable hereunder, as each may be applicable.

          9.3. Maintenance of Records. During the Term, and for a period of [*] thereafter, Barr shall, and shall ensure that its Affiliates shall, keep at either its normal place of business, or at an off-site storage facility, detailed, accurate and up to date:

(a) records and books of account sufficient to confirm the calculation of the Net Sales and Net Profits; and

(b) information and data contained in any invoices or reports accompanying any payment to Shire provided to the other Party in connection with this Agreement.

          9.4. Inspection. On no less than [*] notice from Shire, Barr shall make all such records, books of account, information and data concerning this Agreement available for inspection during normal business hours by Shire or its auditors for the purpose of general review or audit; provided that Shire may not request such inspection more than once in any calendar year. Upon reasonable belief of discrepancy or dispute, Shire’s external auditors shall be entitled to take copies or extracts from such records, books of account, information and data (but only to the extent related to the contractual obligations set out in this Agreement) during any review or audit provided the external auditor signs a confidentiality agreement with Barr providing that such records, books of account, information and data shall be treated as Confidential Information of Barr which may be disclosed to Shire.

          9.5. Inspection Costs. Shire shall be solely responsible for its costs in making any such review and audit, unless Shire identifies a discrepancy in the calculation of royalties paid to Shire under this Agreement in any calendar year from those properly payable for that calendar year of [*] or greater, in which event Barr shall be solely responsible for the cost of such review and audit and pay Shire any underpayment. All information disclosed by Barr or its Affiliates pursuant to this Section 9 shall be deemed Confidential Information of Barr.

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     10. Confidentiality

          10.1. Confidential Information. As used in this Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or generated pursuant to this Agreement by one Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Confidential Information shall not include any information or materials that:

(a) were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

(b) were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

(c) became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

(d) were disclosed to a Party, other than under an obligation of confidentiality, by a third party who had no obligation to the Disclosing Party not to disclose such information to others; or

(e) were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

          10.2. Confidentiality Obligations. Each of Barr and Shire shall keep confidential all Confidential Information of the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information but in no event less than a reasonable degree of care. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who are bound to confidentiality restrictions consistent with the terms herein and who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement. Upon termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party and its

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Affiliates or their directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall continue to be subject to the provisions of this Article 10.

          10.3. Permitted Disclosure and Use. Notwithstanding Section 10.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange regulations. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 10.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. In addition, notwithstanding Section 10.2, the Parties shall cooperate to prepare standardized public responses to anticipated inquiries from the public, press, stockholders, investors and/or analysts with respect to the activities hereunder. Despite the foregoing, each Party agrees that the other Party is free to disclose this Agreement in its entirety to the United States Federal Trade Commission and the United States Department of Justice, or to any court with jurisdiction over the litigations settled under the Settlement Agreement between Shire Laboratories Inc. and Barr Laboratories, Inc. dated August 14, 2006.

          10.4. Unauthorized Disclosure. The Receiving Party acknowledges and agrees that the Confidential Information of the Disclosing Party constitutes proprietary information and trade secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside disclosure of such Confidential Information shall be presumed to cause irreparable injury to the Disclosing Party.

          10.5. Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and shall cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure. The Receiving Party acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure of Confidential Information and that the Disclosing Party may be entitled, without waiving other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction in the event of such unauthorized disclosure.

          10.6. Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article 10.

     11. Representations and Warranties of Both Parties

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EXHIBIT A

          With respect to Sections 11.1 and 11.2 below, each of Shire and Barr represents, warrants, and covenants, to the other Party that:

          11.1. Organization and Authority. Such Party is a corporation duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation. Such Party has the requisite corporate power and authority to enter into this Agreement and to perform all of its obligations hereunder. The execution and delivery of this Agreement and the performance by such Party of its obligations hereunder have been authorized by all requisite corporate action on its part. This Agreement has been validly executed and delivered by such Party, and, assuming that this Agreement has been duly authorized, executed and delivered by the other Party, constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

          11.2. Consents and Approvals; No Violations.

(a) Except as otherwise set forth in this Agreement or the Settlement Agreement, no material filing with, and no material permit, authorization, consent such Party of the transactions contemplated by this Agreement, except for those filings, permits, authorizations, consents or approvals, the failure of which to be made or obtained would not materially impair such Party’s ability to consummate the transactions contemplated hereby or materially delay the consummation of the transactions contemplated hereby.

(b) Neither the execution nor the delivery of this Agreement by such Party, nor the performance by such Party of its obligations hereunder, will (i) violate the certificate of incorporation, by-laws or other organizational document of such Party; (ii) conflict in any material respect with or result in a material violation or breach of, or constitute a material default under, any material contract, agreement or instrument to which such Party is a party; or (iii) violate or conflict in any material respect with any material Law, rule, regulation, judgment, order or decree of any court or Governmental Authority applicable to such Party, except in the case of clause (ii) or (iii) for violations, breaches or defaults which would not have a material adverse effect on such Party’s ability to consummate the transactions contemplated hereby.

     12. Indemnities; Product Liability; Insurance

          12.1. Indemnity by Shire. Shire shall defend, indemnify and hold harmless each of Barr and its Affiliates and its and their directors, officers, employees and contractors (“Barr Party”) from and against any and all Losses (“Shire Liability”) arising from or in connection with:

(a) any [*] (“Claim”) resulting from [*] of any Shire Party in connection with the performance of its obligations under this Agreement;

(b) except to the extent subject to indemnification by Barr pursuant to Section 12.2(c), any Claim [*];

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EXHIBIT A

(c) Shire’s [*] in accordance with Applicable Laws, regulations, the NDA or this Agreement;

(d) the [*] by Shire of [*]; or

(e) any [*]by a Shire Party of [*];

except, in each case, to the extent that the Losses are caused by the negligence, breach of the terms of this Agreement, or willful misconduct of a Barr Party.

          12.2. Indemnity by Barr. Barr shall defend, indemnify and hold harmless each of Shire and its Affiliates and its and their directors, officers, employees and contractors (“Shire Party”) from and against any Losses (“Barr Liability”) arising from or in connection with:

(a) any Claim resulting from [*] of any Barr Party in connection with the performance of its obligations under this Agreement;

(b) any Claim [*];

(c) any Claim [*], to the extent that such liability is a result of [*];

(d) the [*] by Barr of [*]; or

(e) any [*] by the Barr Parties of [*];

except, in each case, to the extent that the Barr Liability is caused by the negligence, breach of the terms of this Agreement, or willful misconduct of a Shire Party.

          12.3. Control of Proceedings. A Party seeking indemnification hereunder shall provide prompt written notice to the other Party (and, in any event, within [*]) of the assertion of any claim against such Party as to which indemnity is to be requested hereunder. The indemnifying Party shall have the sole control over the defense of any Claim, provided that, the indemnifying Party shall obtain the written consent of the indemnified Party prior to settling or otherwise disposing of such Claim if as a result of the settlement or Claim disposal the indemnified Party’s interests are in any way adversely affected.

          12.4. No Admissions. The indemnified Party shall [*] in connection with any Barr Liability or Shire Liability (as the case may be), [*] without the prior written consent of the indemnifying Party.

          12.5. Claim Information. Each Party shall promptly:

(a) inform the other by written notice of any actual or threatened Claim to which Sections 12.1 or 12.2 apply;

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EXHIBIT A

(b) provide to the other Party copies of all papers and official documents received in respect of any such Claim; and

(c) cooperate as reasonably requested by the other Party in the defense of any such Claim.

          12.6. Contributory Negligence. If any Shire Liability or Barr Liability is caused by the negligence of both Shire and Barr, [*].

          12.7. Limitation of Liability. Except as may be included in a Claim under Section 12.1 or 12.2, or in the event of a breach of Article 10, in no event shall either Party or their respective Affiliates be liable for [*] based on [*] arising out of this Agreement.

          12.8. Product Liability Insurance. Each Party shall maintain, at its own cost, general commercial liability insurance (including comprehensive product liability) in such amount as Shire and Barr respectively, customarily maintain with respect to its other products and which is reasonable and customary in the U.S. pharmaceutical industry for companies of comparable size and activities but in any event not less than [*]. In the event the insurance policy obtained by a Party is a “claims made” policy (as opposed to an “occurrence” policy), such Party shall obtain comparable insurance for not less than [*] following the expiry or termination of this Agreement. Barr will cause Shire to be named as an additional insured under Barr’s product liability insurance.

          12.9. Irreparable Harm. Barr acknowledges that in the event of [*] would be difficult to calculate and the adequacy of monetary damages calculated at Law would be uncertain. Accordingly, Barr agrees that in any action by Shire seeking [*], Barr shall not assert or plead the availability of an adequate remedy at Law as a defense to the obtaining of any such remedy. The foregoing shall not be in lieu of any other remedy to which Shire may be entitled hereunder in equity or at Law as a result of such a breach.

          12.10. Limitation on Representations, Warranties and Indemnification. NEITHER PARTY SHALL BE DEEMED TO MAKE ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, EXCEPT AS SPECIFICALLY SET FORTH HEREIN. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WITH REGARD TO THE AG PRODUCT TO BE SUPPLIED BY SHIRE HEREUNDER, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED BY EACH PARTY.

     13. Force Majeure

          13.1. Force Majeure. Neither Party shall be entitled to terminate this Agreement or shall be liable to the other under this Agreement for loss or damages attributable to any Force Majeure, provided the Party affected shall give [*] notice

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EXHIBIT A

thereof to the other Party. Subject to Section 13.2, the Party giving such notice shall be excused from such of its obligations hereunder for so long as it continues to be affected by Force Majeure.

          13.2. Continued Force Majeure. If any Force Majeure continues unabated for a period of at least [*], the Parties shall meet to discuss in good faith what actions to take or what modifications should be made to this Agreement as a consequence of such Force Majeure in order to alleviate its consequences on the affected Party.

     14. Trademarks and Trade Names

          14.1. Except for the identification of Shire as manufacturer of AG Product on Packaging or Labeling to the extent required by Law, Barr shall have no right to use any trademark or trade dress of Shire and shall have no rights to any other intellectual property of Shire or its Affiliates (including patents or other intellectual property relating to the shape, consistency, formulation or manufacturing process for the AG Product) other than to the extent of the Authorization and License. This Agreement shall not provide to Shire any right to use (except for the purposes of labeling AG Product for Barr hereunder) any trademark or trade dress of Barr or any rights to any intellectual property of Barr or its Affiliates.

     15. Term and Termination

          15.1. Term. Unless sooner terminated in accordance with the terms hereof, the Term of this Agreement shall extend from the date hereof until the expiration of the last Valid Claim within the Adderall XR Intellectual Property (the “Term”). The foregoing notwithstanding, the obligations of Shire regarding supply of AG Product under this Agreement shall extend from the date hereof only until the [*] anniversary of the License Effective Date (the “Initial Supply Term”). Thereafter, the Initial Supply Term shall automatically be extended for successive twelve (12) month periods (each, an “Additional Supply Term”), unless either Party gives to the other Party not less than [*] written notice of termination prior to the expiration of the Initial Supply Term, or any Additional Supply Term, of this Agreement.

          15.2. Termination. Either Party may terminate this Agreement at any time in the event that the other Party materially breaches this Agreement and, if the material breach is capable of cure, such material breach continues uncured for a period of [*] after written notice thereof; provided, however, in the event that the breaching Party has in good faith commenced such cure within such [*] period, but cannot practically complete such cure within such [*] period, the breaching Party shall have an additional [*] day cure period. The foregoing notwithstanding, in the event a material breach is incapable of cure, without limiting any other rights of the non-breaching Party, including the right to seek injunctive relief, the non-breaching Party shall have the right to terminate this Agreement only if (i) the breach is the result of ongoing willful misconduct by the breaching Party, and (ii) the breaching Party is not providing cooperation to mitigate the breach; or

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EXHIBIT A

          15.3. Effect of Termination. In the event of expiry or termination of this Agreement for any reason:

(a) Barr shall no longer have the right to Market product under the Authorization and License; provided that Barr may continue to Market inventory then on hand for an additional period not to exceed [*], subject to the continued payment to Shire in accordance with Section 9; and

(b) Each Party shall promptly return to the other Party all Confidential Information of the other Party or its Affiliates received during the Term, provided that each Party may keep one copy of such Confidential Information for recordkeeping and compliance purposes.

          15.4. Liability on Termination. The termination or expiry of this Agreement shall not release either of the Parties from any liability which at the time of termination or expiry has already accrued to the other Party, nor affect in any way the survival of any other right, duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to survive such termination or expiry.

          15.5. Surviving Sections. The provisions of Sections 5.11, 5.12, 5.13, 7.5, 9.3, 9.4 and 9.5 and Articles 10, 12, 14, 15 and 16, and any other provisions necessary and proper to give effect to the intention of the Parties as to the effect of the Agreement after termination, shall continue in force in accordance with their respective terms notwithstanding expiry or termination of this Agreement for any reason.

     16. Miscellaneous Provisions

          16.1. Notice.

(a) Any notice or other document given under this Agreement shall be in writing in the English language and shall be given by hand or sent by prepaid mail or fax transmission to the address of the receiving Party as set out in Section 16.2 below unless a different address or fax number has been notified to the other in writing for this purpose.

(b) Each such notice or document shall:

(i) if sent by hand, be deemed to have been given when delivered at the relevant address;

(ii) if sent by prepaid mail, be deemed to have been given five (5) days after posting; or

(iii) if sent by fax be deemed to have been given when transmitted, provided that, a confirmatory copy of such fax transmission shall have been sent by prepaid mail within twenty-four (24) hours of such transmission.

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EXHIBIT A

          16.2. Address for Notice. The address for services of notices and other documents on the Parties shall be:

To Shire	To Barr
Address:	Address:
Shire LLC	Barr Laboratories, Inc.
725 Chesterbrook Boulevard	400 Chestnut Ridge Road,
Wayne, PA 19087	Woodcliff Lake, NJ 07677
United States of America	United States of America
Attention: James J. Harrington, Esq.	Attention: Frederick J. Killion, Esq.
Fax: 484-595-8674	Fax: 888-843-0563

          16.3. Assignment.

(a) Subject to Section 16.3(b), Barr shall not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Shire, such consent not to be unreasonably withheld or delayed.

(b) Each Party shall be entitled to assign all or any of its rights or obligations under this Agreement to an Affiliate or to a successor entity by way of merger or acquisition of substantially all of the assets of such Party; provided the Affiliate or other successor entity expressly assumes in writing those rights, duties and obligations under this Agreement and this Agreement itself, and provided further that the assigning Party shall remain responsible for the assignee’s performance of those rights, duties and obligations.

(c) Subject to the foregoing this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Any assignment or transfer in contravention of the terms of this Agreement shall be null and void.

          16.4. Amendment. This Agreement may not be varied, changed, waived, discharged or terminated orally, except by an instrument in writing signed by the Party against which enforcement of such variation, change, waiver, discharge or termination is sought.

          16.5. Public Announcements. Except as expressly provided for in the Settlement Agreement, neither Party shall make any publicity releases, interviews or other dissemination of information concerning this Agreement or its terms, or either Party’s performance hereunder, to communication media, financial analysts or others without the prior written approval of the other Party, which approval shall not be unreasonably withheld, delayed or conditioned. Notwithstanding anything to the contrary in this Agreement, the Parties understand and agree that either Party, may, if so required, disclose some or all of the information included in this Agreement or other Confidential

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EXHIBIT A

Information of the other Party (i) in order to comply with its obligations under the Law, including the United States Securities Act of 1933, the United States Securities Exchange Act of 1934, (ii) the listing standards or agreements of any national or international securities exchange or The NASDAQ Stock Market or other similar Laws of a Governmental Authority, (iii) to respond to an inquiry of a Governmental Authority or regulatory authority as required by Law, or (iv) in a judicial, administrative or arbitration proceeding. In any such event the Party making such disclosure shall (A) provide the other Party with as much advance notice as reasonably practicable of the required disclosure, (B) cooperate with the other Party in any attempt to prevent or limit the disclosure, and (C) limit any disclosure to the specific purpose at issue.

          16.6. Superiority of Agreement. The Parties agree that the provisions of this Agreement, together with any amendments hereto, shall prevail over any inconsistent statements or provisions contained in any prior discussions, arrangements or comments between the Parties. It is agreed that:

(a) neither Party has entered into this Agreement in reliance upon any representation, warranty or undertaking of the other Party which is not expressly set out in this Agreement;

(b) neither Party shall have any remedy in respect of misrepresentation or untrue statement made by the other Party or for any breach of warranty which is not contained in this Agreement;

(c) this Section 16.6 shall not exclude any liability for, or remedy in respect of, fraudulent misrepresentation; and

(d) notwithstanding the foregoing, the Settlement Agreement shall be deemed of equal dignity to this Agreement and this Agreement shall be construed together with the Settlement Agreement in a consistent manner as reflecting a single intent and purpose.

          16.7. Governing Law. This Agreement shall be governed by and construed in accordance with the internal Laws of the State of New York, without giving effect to principles of conflicts of law. The Parties irrevocably agree that the federal district courts in the State of New York shall have exclusive jurisdiction to deal with any disputes arising out of or in connection with this Agreement and that, accordingly, any proceedings arising out of or in connection with this Agreement shall be brought in the U.S. District Court for the Southern District of New York. Notwithstanding the foregoing, if there is any dispute for which the federal district courts in the State of New York do not have subject matter jurisdiction, the state courts in New York shall have jurisdiction. In connection with any dispute arising out of or in connection with this Agreement, each Party hereby expressly consents and submits to the personal jurisdiction of the federal and state courts in the County, City and State of New York.

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          16.8. Agreement Costs. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement.

          16.9. Counterparts. This Agreement may be executed in any number of counterparts and may be executed by the Parties on separate counterparts, each of which is an original but all of which together constitute the same instrument.

          16.10. Severability. If and to the extent that any provision of this Agreement is held to be illegal, void or unenforceable, such provision shall be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement.

          16.11. Relationship of the Parties. In making and performing this Agreement, the Parties are acting, and intend to be treated, as independent entities; and nothing contained in this Agreement shall be construed or implied to create an agency, partnership, joint venture, or employer and employee relationship between Shire and Barr. Except as otherwise provided herein, neither Party may make any representation, warranty or commitment, whether express or implied, on behalf of, or incur any charges or expenses for or in the name of, the other Party.

          16.12. Construction. The language in all parts of this Agreement shall be construed, in all cases, according to its fair meaning. Shire and Barr acknowledge that each Party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. Whenever used herein, the words “include,” “includes” and “including” shall mean “include, without limitation,” “includes, without limitation” and “including, without limitation,” respectively. The masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others whenever the context so indicates. With respect to any particular action or agreement, the use of the words “Shire shall” or “Shire will” herein shall also mean “Shire shall cause” the particular action to be performed. Similarly, with respect to any particular action or agreement, the use of the words “Barr shall” or “Barr will” herein shall also mean “Barr shall cause” the particular action to be performed. Nothing in this Agreement shall operate to exclude any provision implied into this Agreement by Law and which may not be excluded by Law or limit or exclude any liability, right or remedy to a greater extent than is permissible under Law.

          16.13. Dispute Resolution.

(a) Preliminary Process. If there is a disagreement between the Parties as to the interpretation of this Agreement or in relation to any aspect of the performance by either Party of its obligations under this Agreement, the Parties

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EXHIBIT A

shall, within [*] of receipt of a written request from either Party, meet in good faith and try to resolve the disagreement without recourse to legal proceedings.

(b) Escalation of Dispute. If resolution of the disagreement does not occur within [*] after such meeting, the matter shall be escalated for determination by the President of Barr and Shire’s President, Specialty Pharmaceuticals for resolution, who may resolve the matter themselves or jointly appoint a mediator or independent expert to do so.

(c) Equitable Relief. Nothing in this Section 16.13 restricts either Party’s freedom to seek urgent relief to preserve a legal right or remedy, or to protect a proprietary or trade secret right, or to otherwise seek legal remedies through any available channel if resolution is not otherwise achieved under this Section 16.13.

          16.14. Cumulative Rights. The rights and remedies of each of the Parties under or pursuant to this Agreement are cumulative, may be exercised as often as such Party considers appropriate and are in addition to its rights and remedies under general aw.

          16.15. No Third Party Benefit. This Agreement shall be binding upon and inure solely to the benefit of the Parties hereto, their successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person or Persons any right, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

          16.16. Further Assurance. Each of the Parties shall do, execute and perform and shall procure to be done and perform all such further acts deeds documents and things as the other Party may reasonably require from time to time to give full effect to the terms of this Agreement.

          16.17. Waiver. No failure or delay by either Party in exercising any right or remedy provided by law under or pursuant to this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy.

[Signature Page Follows]

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EXHIBIT A

[Signature Page to the License Agreement]

IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their authorized representatives as of the date first above written.

SHIRE LLC

Date:	August 14, 2006	By:	/s/  Matthew Emmens
		Name:	Matthew Emmens
		Title:	CEO
BARR LABORATORIES, INC.
Date:	August 14, 2006	By:	/s/  Paul Bisaro
		Name:	Paul Bisaro
		Title:	President & C.O.O.

License Agreement Signature Page

EX-10.2

     Pursuant to 17 CFR 240.24b-2, confidential information (indicated by [*]) has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Exhibit 10.2

PRODUCT DEVELOPMENT AND LICENSE AGREEMENT

BY AND BETWEEN

SHIRE LLC

AND

DURAMED PHARMACEUTICALS, INC.

DATED AS OF AUGUST 14, 2006

PRODUCT DEVELOPMENT AND LICENSE AGREEMENT

     This PRODUCT DEVELOPMENT AND LICENSE AGREEMENT (the “Agreement”) is dated as of August 14, 2006 by and among SHIRE LLC, a Kentucky limited liability company having a principal place of business at 9200 Brookfield Court, Florence, Kentucky 41042 (together with its Affiliates, “Shire”), SHIRE plc, a British public limited company having a principal place of business at Hampshire International Business Park, Chineham, Basingstoke, England RG24 8EP, solely for purposes of the provisions of Section 15.10 of this Agreement, and DURAMED PHARMACEUTICALS, INC., a Delaware corporation having a place of business at 400 Chestnut Ridge Road, Woodcliff Lake, NJ 07677 (“Duramed”). Shire and Duramed are sometimes referred to herein individually as a “Party” and together as the “Parties”.

RECITALS

     WHEREAS, Duramed is a pharmaceutical company focused on developing novel pharmaceuticals that are safer and improved versions of widely-prescribed pharmaceutical products, including cervical ring-based female healthcare products;

     WHEREAS, Shire is a worldwide, specialty pharmaceutical company engaged in the development, manufacturing and marketing of pharmaceutical products;

     WHEREAS, Duramed has made a considerable investment in developing certain cervical and vaginal ring technology;

     WHEREAS, Duramed has been conducting research and development on certain pharmaceutical products that use such ring technology with certain pharmaceutical compounds; and

     WHEREAS, pursuant to the terms and conditions of this Agreement, the Parties desire to cooperate on the continued research and development of such pharmaceutical products, and research and development on other pharmaceutical products that use such ring technology with pharmaceutical compounds, with the results of such cooperation to be commercialized by Shire in the Shire Territory and by Duramed in the Duramed Territory.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS

     The following terms shall have the following meanings as used in this Agreement:

     1.1 “Act” means the United States Federal Food, Drug and Cosmetics Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder.

     1.2 “Affiliate” means a Person that controls, is controlled by or is under common control with a Party. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct the management and policies of such Person, whether by the ownership of more than fifty percent (50%) of the voting stock of such Person (it being understood that the direct or indirect ownership of a lesser percentage of such stock shall not necessarily preclude the existence of control), or by contract or otherwise.

     1.3 “Business Day” means any day other than (a) Saturday or Sunday or (b) any other U.S. Federal holiday.

     1.4 “cGCP” means the current Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials, including the requirements in 21 C.F.R. Parts 11, 50, 54, 56, 312, and 314, that provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected.

     1.5 “cGLP” means current Good Laboratory Practices (i) as promulgated under the Act at 21 C.F.R. Part 58, as the same may be amended or re-enacted from time to time and (ii) as required by Law in countries other than the United States where non-clinical laboratory studies are conducted.

     1.6 “cGMP” means all applicable standards relating to manufacturing practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products, including (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 210 and 211 and The Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products as each may be amended from time to time, (b) the principles detailed in the ICH Q7A guidelines, (c) Laws promulgated by any Governmental Authority in any country having jurisdiction over Manufacturing or (d) guidance documents promulgated by any Governmental Authority in any country having jurisdiction over Manufacturing (including but not limited to advisory opinions, compliance policy guides and guidelines).

     1.7 “Clinical Trial Costs” means the [*] incurred by a Party or its Affiliates that is specifically attributable or reasonably allocable to the conduct of clinical trials, and which is payable (a) in the case of such clinical trials conducted by a clinical research organization (“CRO”) or other Third Party on behalf of a Party or its Affiliates, as an out-of-pocket expense to such a CRO, or (b) in the case of such clinical trials conducted by a Party or its Affiliates, at such Party’s or its Affiliate’s actual cost including internal costs and direct expenses.

     1.8 “Collaboration Intellectual Property” means any Inventions, Improvements, Patents, Know-How, or other intellectual property (whether patentable or not) (i) conceived, developed or reduced to practice by either Party or its Affiliates, alone or jointly with each other or a Third Party, during the Reimbursement Period in connection with any Development Plan or the Development of Collaboration Products hereunder, or (ii) existing as of the date of this

2

Agreement and Controlled by Duramed and its Affiliates and related to Collaboration Products or the Development, use or Commercialization of a Collaboration Product.

     1.9 “Collaboration Patents” means any and all Patents included in the Collaboration Intellectual Property.

     1.10 “Collaboration Product” means:

(a)	(i) a pharmaceutical product formulated as a cervical or vaginal ring product that contains or comprises any Compound(s) initially identified on Exhibit A hereto, (ii) any [*], and (iii) any and all Improvements to the foregoing, in each case made during the Reimbursement Period and for which Shire has reimbursed Development Expenses during the Reimbursement Period; and
(b)	the levonorgestrel/ethinyl estradiol tablets 0-15 mg/0.03 mg and ethinyl estradiol tablets 0.01 mg extended-cycle oral contraceptive product of Duramed approved by the FDA on May 25, 2006 under New Drug Application number [*] (“Seasonique”).

     1.11 “Commercialization” means any and all activities directed to the commercial Manufacturing, marketing, offering for sale and selling of a pharmaceutical product. In addition, “Commercialize” means to engage in any of the foregoing activities.

     1.12 “Compound” means any of the compounds set forth on Exhibit A.

     1.13 “Control” means with respect to any intellectual property right or other intangible property, that a Party or one of its Affiliates owns or has a license or sublicense to such item or right, and has the ability to grant access, license or sublicense in or to such right without violating the terms of any agreement or other arrangement with any Third Party.

     1.14 “Development” means all activities relating to the research, development of, and obtaining Regulatory Approval for, a pharmaceutical product, including all test method development, stability testing, toxicology, formulation, process development, cGMP audits (excluding any audits for commercial Manufacture), cGLP audits, cGCP audits, validation, quality assurance/quality control development, preclinical and clinical testing and studies, regulatory affairs and outside counsel regulatory legal services relating to any of the foregoing, and any activities relating to the Manufacture of pharmaceutical products other than commercial quantities thereof.

     1.15 “Development Expenses” means the expenses incurred by Duramed or its Affiliates from and after the Effective Date in carrying out a Development Plan and specifically attributable or reasonably allocable to the Development of a Collaboration Product, including [*] incurred in connection with (i) a Global Development Plan pursuant to Section 3.2.2(c), and/or (ii) seeking Regulatory Approval of a Collaboration Product in [*]. Development Expenses shall include, but are not limited to expenses arising from: [*] for the [*] a Governmental Authority to obtain Regulatory Approval of a Collaboration Product in the United States; and [*] and[*] Collaboration Products[*]. Development Expenses shall exclude (i) [*], (ii) [*] incurred in

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connection with seeking Regulatory Approval outside [*] other than in connection with a Global Development Plan pursuant to 3.2.2(c), (iii) [*], and (iv) [*].

     1.16 “Diligent Efforts” means, with respect to a Party, the efforts and resources that would be used by such Party consistent with prevailing pharmaceutical industry standards for a company of similar size and scope to such Party with respect to a product or potential product at a similar stage in its development or product life and of similar market potential taking into account safety, efficacy and the competitiveness of alternative products in the market or under development.

     1.17 “Drug Approval Application” means an application for Regulatory Approval required before commercial sale or use of a pharmaceutical product as a drug in a regulatory jurisdiction, including a new drug application (“NDA”) or supplemental new drug application or any amendments thereto submitted to the FDA.

     1.18 “Duramed Territory” means the United States, Canada, Albania, Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Liechtenstein, Moldova, Poland, Romania, Russia, Slovakia, Slovenia, Switzerland, Ukraine, Kazakhstan, Macedonia, Lithuania, Latvia, Azerbaijan, Armenia and Georgia, and their respective territories and possessions; provided, however, that in the event that Pliva, dd does not become an Affiliate of Duramed within twelve (12) months of the Effective Date, the Duramed Territory shall thereafter mean only the United States and Canada.

     1.19 “Effective Date” means the effective date as set forth in that certain Settlement Agreement, dated as of August 14, 2006, by and between the Parties (the “Settlement Agreement”).

     1.20 “EMEA” means the European Medicines Agency or any successor agency thereto.

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

     1.22 “First Commercial Sale” means, with respect to a pharmaceutical product and on a country-by-country basis, the first commercial sale after receipt of Regulatory Approval of such product in such country. Sales for clinical studies, compassionate use, named patient programs, sales under a treatment IND, test marketing, any nonregistrational studies, or any similar instance where the product is supplied with or without charge shall not constitute a First Commercial Sale.

     1.23 “GAAP” means generally accepted accounting principles in the U.S., consistently applied.

     1.24 “Governmental Authority” means any court, tribunal, arbitrator, agency, legislative body, commission, official or other instrumentality of (a) any government of any country, (b) a federal, state, province, county, city or other political subdivision thereof or (c) any supranational body, including without limitation the FDA and the EMEA.

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     1.25 “Improvement” means any enhancement or modification of (a) a Collaboration Product’s or Ring Product’s dosage, dosage form or indication, (b) the cervical or vaginal ring, for Ring Products and Collaboration Products based on a cervical or vaginal ring, (c) a [*] that is not a cervical or vaginal ring product, or (d) the process or method for the Manufacture of a Collaboration Product or Ring Product, in each case whether or not patentable, that is developed by or for, invented or acquired by, or comes under the Control of, Duramed or Shire or their respective Affiliates during the Term; provided, however, that (x) with respect to a Ring Product, or a Collaboration Product based on a cervical or vaginal ring, an Improvement shall not include any modification or improvement not used for a cervical or vaginal ring product, and for modifications or improvements used for a cervical or vaginal ring products, only to the extent used for such products, (y) with respect to a [*] that is not a cervical or vaginal ring product, an Improvement shall not include any other delivery system or formulation involving the same compound; provided, however, that if Duramed ceases development of such [*] or an NDA for such [*] was not approved, and Duramed commences development of another delivery system or formulation involving the same compound for such [*] during the Reimbursement Term, such delivery system or formulation involving such compound shall be included as an Improvement, and (z) with respect to a Collaboration Product, Improvements shall not include any active pharmaceutical ingredient other than the applicable Compound, and with respect to a Ring Product, Improvements shall not include any compounds other than [*].

     1.26 “IND” means an Investigational New Drug Application filed with FDA or a similar application filed with an applicable Regulatory Authority outside of the United States such as a clinical trial application (CTA) or a clinical trial exemption (CTX).

     1.27 “Invention” means any discovery (whether patentable or not) conceived during the Term and potentially useful for the Manufacture, use, Development or Commercialization of a product.

     1.28 “Know-How” means any non-public information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation, databases, ideas, discoveries, inventions, improvements, trade secrets, practices, methods, tests, assays, techniques, specifications, processes, formulations, formulae, knowledge, know-how, skill, experience, materials, including pharmaceutical, chemical and biological materials, products and compositions, scientific, technical or test data (including pharmacological, biological, chemical, biochemical, toxicological and clinical test data), clinical study protocols, analytical and quality control data, stability data, studies and procedures, drawings, plans, designs, diagrams, sketches, technology, documentation, and patent-related and other legal information or descriptions.

     1.29 “Law” or “Laws” means all laws, statutes, rules, codes, regulations, orders, judgments and/or ordinances of any Governmental Authority.

     1.30 “Losses” means any and all liabilities, damages, fines, penalties, deficiencies, losses and expenses (including interest, court costs, amounts paid in settlement, reasonable fees of attorneys, accountants and other experts or other reasonable expenses of litigation or other proceedings or of any claim, default or assessment); provided, however, that the term “Losses”

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shall not include any special, consequential, indirect, punitive or similar damages, except to the extent actually paid by a Party pursuant to any Third Party Claim.

     1.31 “Manufacture” means all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, for Development or for commercial sale, packaging, in-process and finished product testing, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, ongoing stability tests and regulatory activities related to any of the foregoing.

     1.32 “Patent” means (a) patents, re-examinations, reissues, renewals, extensions, supplementary protection certificates and term restorations, any confirmation patent or registration patent or patent of addition based on any such patent, (b) pending applications for patents, including without limitation continuations, continuations-in-part, divisional, provisional and substitute applications, and inventors’ certificates, (c) all foreign counterparts of any of the foregoing, and (d) all priority applications of any of the foregoing.

     1.33 “Patent Expenses” means the fees and expenses of outside counsel and payments to Third Parties incurred after the Effective Date in connection with the preparation, filing, prosecution and maintenance of the Collaboration Patents, including the costs of patent interference and opposition proceedings, net of any reimbursement of such expenses by Third Parties.

     1.34 “Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government, or any agency or political subdivisions thereof.

     1.35 “Regulatory Approval” means all approvals (including, without limitation, where applicable, pricing and reimbursement approval and schedule classifications), product and/or establishment licenses, registrations or authorizations of any regional, federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacture, use, storage, import, export, transport, offer for sale, or sale of a pharmaceutical product in a regulatory jurisdiction.

     1.36 “Ring Intellectual Property” means (i) Collaboration Intellectual Property and (ii) any Patents and Know-How (whether patentable or not) existing as of the date of this Agreement and Controlled by Duramed and its Affiliates and related to pharmaceutical products formulated as a cervical or vaginal ring.

     1.37 “Ring Product” means a cervical or vaginal ring product containing the pharmaceutical product known as [*], and any Improvements thereto created by Shire pursuant to the license granted under Section 10.1.

     1.38 “Shire Territory” means all countries in the world, together with their territories and possessions, other than the countries, territories and possessions that are part of the Duramed Territory.

     1.39 “Shire Territory Global Development Expenses” means those Development Expenses of Duramed approved under the Global Development Plan solely with respect to

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obtaining Regulatory Approval of Collaboration Products in the Shire Territory. For the avoidance of doubt, any other Development Expenses of Duramed approved under the Global Development Plan, including for obtaining Regulatory Approval of Collaboration Products in the United States shall not be considered Shire Territory Global Development Expenses.

     1.40 “Supply Agreement” means the supply agreement between Duramed and Shire for the supply of finished Collaboration Products attached hereto as Exhibit B.

     1.41 “Third Party” means any entity other than Duramed or Shire or their respective Affiliates.

     1.42 “Valid Claim” means (a) any claim of an issued and unexpired patent within a Patent which has not been held unenforceable or invalid by a court or other governmental agency of competent jurisdiction in an unappealed or unappealable decision, and which has not been disclaimed or admitted to be invalid or unenforceable through reissue or otherwise, or (b) a pending claim in a pending patent application within a Patent. Notwithstanding subsection (b) above, in the event that a pending claim in a pending patent application does not issue as a valid and enforceable claim in an issued patent within seven (7) years after the earliest date from which such patent application claims priority, such a pending claim shall not be a Valid Claim, unless and until such pending claim subsequently issues as a claim in an issued patent meeting the criteria set forth in clause (a) above, in which case such claim shall be reinstated and be deemed to be a Valid Claim as of the date of issuance of such patent.

     Interpretation. Unless the context of this Agreement otherwise requires, (a) words of one gender include the other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby,” and other similar words refer to this entire Agreement; (d) “including” shall be deemed followed by “without limitation”, “but not limited to” or words of similar meaning; and (e) the terms “Article” and “Section” refer to the specified Article and Section of this Agreement. Whenever this Agreement refers to a number of days, unless otherwise specified, such number shall refer to calendar days.

Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

Agreement	Preamble
Breaching Party	Section 14.2
Carryover Expenses	Section 7.2.1
Ceased Collaboration Product	Section 14.3.1
Collaboration Manager	Section 2.4
Collaboration Product INDs	Section 13.3(b)
Confidential Information	Section 11.1.1
Development Plan	Section 3.2.1
Disclosing Party	Section 11.1.1
Dollars	Section 17.7
Duramed	Preamble
Duramed Marks	Section 12.7.3

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Global Development Plan	Section 3.2.2(c)
Indemnification Claim Notice	Section 15.2
Indemnified Party	Section 15.2
Indemnifying Party	Section 15.2
Indemnitee	Section 15.2
Indemnitees	Section 15.2
Maximum Annual Reimbursement Amount	Section 7.2.1
Maximum Quarterly Reimbursement Amount	Section 7.2.1
Maximum Reimbursement Amount	Section 7.2.1
Milestone Payments	Section 7.2.1
NDA	Section 1.17
Notifying Party	Section 14.2
Parties	Preamble
Party	Preamble
Receiving Party	Section 11.1.1
Recovery	Section 12.4.2(c)(iv)
Reimbursement Period	Section 7.2.1
Reimbursable Expenses	Section 7.2.1
[*]	Section 3.4
[*]	Section 3.4
[*]	Section 3.4
[*]	Section 3.4
[*]	Section 3.4
Representatives	Section 16.1
Seasonique	Section 1.10
Settlement Agreement	Section 1.19
Shire	Preamble
Shire Marks	Section 12.7.3
Steering Committee	Section 2.4
Term	Section 14.1
Third Party Claim	Section 15.1.1
$	Section 17.7

ARTICLE 2

PRODUCT DEVELOPMENT

     2.1 General. The general purpose of this Agreement is the Development and Commercialization of Collaboration Products.

     2.2 Exclusive Development of Certain Ring Products. Duramed acknowledges and agrees that during the Reimbursement Period, all Development of pharmaceutical products comprising a cervical or vaginal ring that contains or comprises any of the Compound(s) identified on Exhibit A hereto by Duramed or its Affiliates, shall be undertaken exclusively with Shire pursuant to the terms of this Agreement.

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     2.3 Collaboration Managers. Each Party shall appoint a senior representative having a general understanding of development, regulatory, manufacturing and marketing issues to act as its Collaboration Manager (a “Collaboration Manager”). Each Collaboration Manager shall be primarily responsible for facilitating the flow of information and otherwise promoting communications and collaboration between the Parties and also internally within the respective Parties. Each Collaboration Manager shall also be responsible for:

          (a) facilitating coordination among the various functions representatives of Duramed or Shire, as appropriate; and

          (b) providing single-point communication for seeking consensus both internally within the respective Party’s organization and together regarding strategy, planning, development, regulatory and manufacturing issues.

     2.4 Steering Committee. As soon as practicable after the Effective Date, the Parties shall form a Steering Committee (the “Steering Committee”), which shall function in accordance with the Steering Committee charter attached hereto as Exhibit C. The members of the Steering Committee shall cooperate in good faith to effectively implement this Agreement and to amicably resolve any disputes or disagreements related to the implementation hereof.

ARTICLE 3

DEVELOPMENT OF COLLABORATION PRODUCTS

     3.1 Overview. Subject to the terms and conditions of this Agreement, (a) Duramed shall be responsible for the Development of Collaboration Products for Commercialization in the Duramed Territory, and (b) Shire shall be responsible for the Development of Collaboration Products for Commercialization in the Shire Territory.

     3.2 Development Plans.

          3.2.1 Scope. The Development of each Collaboration Product under this Agreement shall be governed by a development plan (each, a “Development Plan”). Each Development Plan shall be developed by the responsible Party for review and comment by the Steering Committee, with the overall objective of achieving the commercial potential of the Collaboration Product. Each Development Plan shall describe the proposed overall program of Development for the Collaboration Product for each indication in the Duramed Territory and Shire Territory, as applicable, including [*] and [*] and [*] Regulatory Approval, as well as [*] Drug Approval Applications and Regulatory Approvals. Each of Duramed’s Development Plans shall include a budget for Development Expenses, including separately [*] during the Reimbursement Period.

          3.2.2 Preparation and Review of Development Plans.

               (a) The Development Plan for the Development by Duramed of Collaboration Products for Commercialization in the Duramed Territory shall be prepared by Duramed and shall be delivered to the Steering Committee. Duramed shall consider in good faith any comments from the Steering Committee. The current Development Plans for existing Collaboration Products are attached as Exhibit D hereto.

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               (b) The Development Plan for the Development by Shire of Collaboration Products for Commercialization in the Shire Territory shall be prepared by Shire and shall be delivered to the Steering Committee. Shire shall consider in good faith any comments from the Steering Committee.

               (c) In the event the Steering Committee unanimously agrees that a Collaboration Product (or any aspect of its Development) should be Developed under a global Development program, the Steering Committee shall prepare a global Development Plan (each, a “Global Development Plan”). Once a Global Development Plan is agreed to, [*] under such Global Development Plan. The Development Expenses incurred in the conduct of Development under a Global Development Plan shall be subject to reimbursement pursuant to Section 7.2.

          3.2.3 Updates to Development Plans. As early as necessary in [*] beginning with the [*] after the Effective Date, or otherwise as may be required during any [*], Duramed, Shire or the Steering Committee, as applicable, shall update and prepare the Development Plan for any Collaboration Products for the following [*] to take into account completion, commencement or cessation of Development activities not contemplated by the then-current Development Plan, and submit such proposed, updated Development Plan to the Steering Committee for its review and comment no later than [*].

          3.2.4 Diligence. Each Party shall use Diligent Efforts to carry out the Development of each Collaboration Product for Commercialization. Notwithstanding the foregoing, each Party acknowledges that the other Party makes no representations and/or warranties that any Development Plan will be successful or that the activities hereunder will result in any Collaboration Products suitable for Commercialization.

     3.3 [*] of Collaboration Products. Duramed shall have the right, [*] Development of a then-existing Collaboration Product. Duramed shall not directly or indirectly, alone or with or through a Third Party, [*] Development [*] Collaboration Product[*] provided, however, that in the event [*], Duramed shall have the right [*] Development of such [*]Collaboration Product [*] hereunder to the [*] Development. If Duramed [*] Collaboration Product [*] Development [*] in the [*] in respect of which [*], Shire may [*] Development and Commercialization of such Collaboration Product [*]; provided, however, [*]Development.

     3.4 [*]. In the event that Duramed [*] Development of a [*] Collaboration Product, Duramed may, [*] such Collaboration Product [*]. Duramed shall deliver to Shire a [*] Development of the Collaboration Product [*]. Shire shall have [*] in which to [*] Duramed that it [*] for failing [*] set forth in this Section 3.4. In delivering any [*], Shire shall specify what [*] to complete its [*] of the [*]. Duramed shall use its reasonable best efforts to provide Shire any [*] within [*]of receipt of the [*]. Shire may not [*] so long as (i) such [*] is in the [*]; (ii) such [*] and [*] reasonably demonstrate that such [*] has [*] of at least [*] in [*], provided that any [*] having the [*] to achieve at least [*] in [*] in the United States, as [*], shall be deemed to satisfy this requirement; and (iii) Duramed has the [*] in the Shire Territory.

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ARTICLE 4

REGULATORY ACTIVITIES

          4.1 General Obligations. Duramed shall be responsible for, and use Diligent Efforts in, preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the Duramed Territory. Shire shall be responsible for, and use Diligent Efforts in, preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the Shire Territory. In furtherance of the foregoing, Shire shall have sole discretion with respect to preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products from the EMEA in all European Union member states, regardless of whether any countries within the Duramed Territory are members of the European Union, provided that, [*] seeking Regulatory Approvals for a Collaboration Product [*] of the First Commercial Sale of such Collaboration Product (and the [*] includes any [*]), Duramed shall [*] Regulatory Approval for such Collaboration Product [*].

          4.2 Transfer of Data to Shire. Within [*] after the Effective Date, Duramed shall provide to Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled as of the Effective Date with respect to the existing Collaboration Products, including any study reports in draft or final form. Thereafter on [*], Duramed shall provide to Shire copies of all such data (including any data compiled in support of a Drug Approval Application) as soon as reasonably practicable after such data becomes available or compiled, including any drafts and final versions of any study reports. All disclosures under this Section 4.2 shall be delivered in electronic format. During the Reimbursement Period, on [*], Shire shall provide to Duramed [*] Inventions and Improvements [*] Shire or its Affiliates, [*], during the previous [*].

          4.3 Transfer of Data to Duramed. On [*], Shire shall provide to Duramed copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled by or on behalf of Shire with respect to the Collaboration Products (including any data compiled in support of a Drug Approval Application) as soon as reasonably practicable after such data becomes available or compiled, including any drafts and final versions of any study reports. All disclosures under this Section 4.3 shall be delivered in electronic format. During the Reimbursement Period, on [*], Shire shall provide to Duramed [*] Inventions and Improvements [*] Shire or its Affiliates [*], during the previous [*].

          4.4 Right of Reference.

               4.4.1 Duramed shall permit Shire access to and grant Shire the right to reference and use, for purposes of the Collaboration Products, all data, regulatory filings and regulatory communications associated with any submissions for Regulatory Approval or other issues associated with any Collaboration Product, that is or would be relevant to Shire’s Development or Commercialization of a Collaboration Product in the Shire Territory, or in connection with any Regulatory Approval process within the European Union, including without limitation with the EMEA. To the extent that any such data, regulatory filings or regulatory communications are held by a Third Party, then Duramed shall arrange direct access to the portions of such data, regulatory filings or regulatory communications that are relevant to the activities of Shire that are contemplated by this Agreement.

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               4.4.2 Shire shall permit Duramed access to and grant Duramed the right to reference and use, for purposes of the Collaboration Products, all data, regulatory filings and regulatory communications associated with any submissions for Regulatory Approval or other issues associated with any Collaboration Product, that is or would be relevant to Duramed’s Development or Commercialization of a Collaboration Product in the Duramed Territory. To the extent that any such data, regulatory filings or regulatory communications are held by a Third Party, then Shire shall arrange direct access to the portions of such data, regulatory filings or regulatory communications that are relevant to the activities of Duramed that are contemplated by this Agreement.

          4.5 Meetings.

               4.5.1 In the event that Shire desires Duramed to participate in any meeting, discussion or substantive telephone conference call with any Governmental Authority relating to any Drug Approval Application or Regulatory Approval for Collaboration Products in the Shire Territory or such meetings, discussions or substantive telephone conferences pertaining to member states of the European Union outside the Shire Territory, Shire shall provide Duramed with reasonable advance notice of any such meeting, discussion or conference call and Duramed shall participate with Shire. Shire shall reimburse Duramed for its reasonable out-of-pocket expenses incurred in connection with such participation, and any such reimbursement shall not be credited against the reimbursement provided for in Section 7.2.

               4.5.2 In the event that Duramed desires Shire to participate in any meeting, discussion or substantive telephone conference call with any Governmental Authority relating to any Drug Approval Application or Regulatory Approval for Collaboration Products in the Duramed Territory other than, subject to Section 4.1, those member states in the European Union in the Duramed Territory for which Shire is responsible, Duramed shall provide Shire with reasonable advance notice of any such meeting, discussion or conference call and Shire shall participate with Duramed. Duramed shall reimburse Shire for its reasonable out-of-pocket expenses incurred in connection with such participation.

     4.6 Assistance. Subject to the terms of this ARTICLE 4, each Party agrees to provide the other with all reasonable assistance and take all actions reasonably requested by the other Party that are necessary or desirable to enable the other Party to comply with any Law applicable to the Collaboration Products, including, but not limited to, meeting, reporting and other obligations to maintain and update any Regulatory Approvals for the Collaboration Products.

     4.7 Compliance with Laws. Each Party and its Affiliates and permitted Third Party contractors shall perform its responsibilities under this ARTICLE 4 in accordance with all applicable Laws, including without limitation cGLPs, cGCPs and cGMPs.

ARTICLE 5

COMMERCIALIZATION OF COLLABORATION PRODUCTS

     5.1 Principles of Commercialization. Subject to the terms and conditions of this Agreement, Duramed shall have the sole right and responsibility with respect to Commercializing Collaboration Products in the Duramed Territory. Subject to the terms and

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conditions of this Agreement, Shire shall have the sole right and responsibility with respect to Commercializing Collaboration Products in the Shire Territory.

     5.2 Shire Territory.

               5.2.1 For each Collaboration Product, Shire shall be solely responsible for handling all returns, recalls, order processing, invoicing and collection, distribution, and inventory and receivables arising from sales to Third Parties within the Shire Territory. Duramed may not accept orders from a Third Party for a Collaboration Product or make sales for its own account (except to Shire) or for Shire’s account in the Shire Territory. If Duramed receives any order for a Collaboration Product in the Shire Territory, it shall refer such orders to Shire for acceptance or rejection. Shire shall have the right and responsibility for establishing and modifying the terms and conditions with respect to the sale of all Collaboration Products in the Shire Territory, including any terms and conditions relating to or affecting the price at which the Collaboration Products shall be sold, discounts available to managed care providers, any discount attributable to payments on receivables, distribution of the Collaboration Products, and credits, price adjustments, or other discounts and allowances to be granted or refused.

               5.2.2 In the event that Duramed desires to Commercialize a Collaboration Product in any country of the Shire Territory, Duramed may so notify Shire in writing and the Parties shall meet in person or by teleconference within [*] thereafter to discuss whether Shire desires to relinquish its rights to Commercialize such Collaboration Product in such country and, if so, the Parties shall discuss in good faith commercially reasonable terms to effectuate such transfer of rights. Nothing in this Section 5.2.2 shall be deemed to limit any other rights of the Parties under this Agreement.

     5.3 Duramed Territory.

               5.3.1 For each Collaboration Product, Duramed shall be solely responsible for handling all returns, recalls, order processing, invoicing and collection, distribution, and inventory and receivables arising from sales to Third Parties within the Duramed Territory. Shire may not accept orders from a Third Party for a Collaboration Product or make sales for its own account (except to Duramed) or for Duramed’s account in the Duramed Territory. If Shire receives any order for a Collaboration Product in the Duramed Territory, it shall refer such orders to Duramed for acceptance or rejection. Duramed shall have the right and responsibility for establishing and modifying the terms and conditions with respect to the sale of all Collaboration Products in the Duramed Territory, including any terms and conditions relating to or affecting the price at which the Collaboration Products shall be sold, discounts available to managed care providers, any discount attributable to payments on receivables, distribution of the Collaboration Products, and credits, price adjustments, or other discounts and allowances to be granted or refused.

               5.3.2 In the event that Shire desires to Commercialize a Collaboration Product in any country of the Duramed Territory, Shire may so notify Duramed in writing and the Parties shall meet in person or by teleconference within [*] thereafter to discuss whether Duramed desires to relinquish its rights to Commercialize such Collaboration Product in such country and, if so, the Parties shall discuss in good faith commercially reasonable terms to

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effectuate such transfer of rights. Nothing in this Section 5.3.2 shall be deemed to limit any other rights of the Parties under this Agreement.

          5.4 Shire Regulatory Responsibilities. With respect to the Shire Territory, Shire shall use Diligent Efforts to obtain and maintain all regulatory filings and Regulatory Approvals in the Shire Territory for each Collaboration Product Developed pursuant to this Agreement, including all INDs and Drug Approval Applications. Except as provided in Section 4.1, as between the Parties, Shire shall be solely responsible for all activities in connection with obtaining and maintaining Regulatory Approvals required for the Commercialization of Collaboration Product in the Shire Territory, including all Drug Approval Applications with the EMEA, regardless of whether any countries within the Duramed Territory are member states of the European Union, including in all cases communicating and preparing and filing all reports (including adverse drug experience reports) with the applicable Governmental Authorities.

          5.5 Duramed Regulatory Responsibilities. With respect to the Duramed Territory, and except as provided in Section 5.4, Duramed shall use Diligent Efforts to obtain and maintain all regulatory filings and Regulatory Approvals in the Duramed Territory for each Collaboration Product Developed pursuant to this Agreement, including all INDs and Drug Approval Applications. Except as otherwise provided herein, as between the Parties, Duramed shall be solely responsible for all activities in connection with obtaining and maintaining Regulatory Approvals required for the Commercialization of Collaboration Product in the Duramed Territory, including communicating and preparing and filing all reports (including adverse drug experience reports) with the applicable Governmental Authorities.

          5.6 Pharmacovigilance. As soon as reasonably practicable following the Effective Date, the pharmacovigilance departments of each of Duramed and Shire shall meet and determine the approach to be taken for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Collaboration Products, consistent with the provisions of this Section 5.6. Such approach shall be documented in a separate and appropriate written pharmacovigilance agreement between Duramed and Shire. Each Party agrees to share relevant information it receives (either directly or indirectly) with the other Party in a timely manner so as to allow such other Party to comply with its responsibility to report pharmacovigilance information under this Section 5.6.

          5.7 Diligence in Commercialization. Duramed shall use Diligent Efforts to Commercialize the Collaboration Products in the Duramed Territory; provided that Duramed shall have no specific obligation to Commercialize the Collaboration Products in any particular country or countries. Shire shall use Diligent Efforts to Commercialize the Collaboration Products in the Shire Territory; provided that Shire shall have no specific obligation to Commercialize the Collaboration Products in any particular country or countries..

     5.8 Commercialization Expenses. Duramed shall bear all costs in connection with the Commercialization of Collaboration Products in the Duramed Territory. Shire shall bear all costs in connection with the Commercialization of Collaboration Products in the Shire Territory.

     5.9 Compliance with Laws. Each Party or its permitted Third Party contractors shall perform its responsibilities under this ARTICLE 4 in accordance with all applicable Laws.

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ARTICLE 6

MANUFACTURE AND EXPORTATION OF COLLABORATION PRODUCTS

     6.1 Manufacture and Supply.

          6.1.1 Manufacturing Process. Duramed shall use Diligent Efforts to develop a process for the Manufacture of Collaboration Products and to scale up such process to a level sufficient to Manufacture and supply clinical and commercial supplies of Collaboration Products for the Shire Territory, including the preparation of filings necessary to obtain Regulatory Approval for the Manufacture of Collaboration Products for sale in the Shire Territory and the selection of any Third Party(ies) to engage in the Manufacture and supply of Collaboration Products and components thereof. In the event that Duramed includes the filings referred to in this Section 6.1.1 in Drug Master Files in the Duramed Territory, Shire may reference such Drug Master Files for countries in the Shire Territory in which Shire seeks Regulatory Approval of Collaboration Products. Once such filings are made, no changes to the process for the Manufacture of Collaboration Products for sale in the Shire Territory shall be made without the written consent of Shire, such consent not to be unreasonably withheld, unless such changes are required by Law.

          6.1.2 Supply of Collaboration Product. At the completion of each Development Plan, the Parties shall establish a final finished dosage form for each Collaboration Product. Shire shall purchase from Duramed, and Duramed shall supply to Shire, Collaboration Product in accordance with the terms and conditions of the Supply Agreement.

     6.2 Specifications and Terms of Supply. Duramed shall establish the specifications, including any necessary documentation, certificates of analysis and test results, for the Collaboration Products to be Manufactured under this ARTICLE 6, in each case subject to the prior written approval of Shire, such approval not be unreasonably withheld. The Parties shall endeavor to maintain compatible specifications for Collaboration Products on a worldwide basis, and to minimize the number of distinct specifications in different countries.

     6.3 Exportation of Collaboration Products by Duramed. Duramed shall not actively sell any Collaboration Product outside the countries of the Duramed Territory, and shall not sell Collaboration Product to any Person, inside the Duramed Territory knowing or having reason to believe that the Collaboration Products are likely to be sold in the Shire Territory. Duramed shall not market or promote the Collaboration Products in the Shire Territory.

     6.4 Exportation of Collaboration Products by Shire. Shire shall not actively sell any Collaboration Product outside the countries of the Shire Territory, and shall not sell Collaboration Product to any Person, inside the Shire Territory knowing or having reason to believe that the Collaboration Products are likely to be sold in the Duramed Territory. Shire shall not market or promote the Collaboration Products in the Duramed Territory.

ARTICLE 7

FINANCIAL TERMS

     7.1 Initial Reimbursement for Development Expenses. Shire shall pay to Duramed a one-time fee equal to $25,000,000 within five (5) Business Days after the Effective Date. It is

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intended that such payment serve as reimbursement to Duramed for Development Expenses that Duramed has incurred up to the Effective Date. This fee shall be non-creditable and non-refundable against any future obligations of Shire under this Agreement.

     7.2 Reimbursement of Development Expenses.

          7.2.1 Reimbursement. Subject to the terms and conditions contained herein, Shire shall pay to Duramed, on a calendar quarterly basis, (i) reimbursements of amounts equal to Development Expenses that are incurred by Duramed, and (ii) milestone payments for meeting the milestones set forth in Schedule 7.2.1A and Schedule 7.2.1B (“Milestone Payments”). Shire shall pay such reimbursement to Duramed for an eight (8) year period commencing on the Effective Date (the “Reimbursement Period”), up to an aggregate amount of $140,000,000, provided, however, that such aggregate amount shall be subject to reduction in connection with (a) Milestone Payments paid in respect of Seasonique, as set forth on Schedule 7.2.1A, and (b) Milestone Payments paid in respect of the Ring Product, as set forth on Schedule 7.2.1B (all such Milestone Payments, together with the Development Expenses being referred to collectively as the “Reimbursable Expenses”). Milestone Payments shall be paid at any time during the Term that the applicable milestone is met. Notwithstanding the foregoing, and subject to Section 3.2.2(c), in no event shall the aggregate Reimbursable Expenses (including, for the avoidance of doubt, all Milestone Payments and all Development Expenses) to be paid by Shire hereunder exceed $140,000,000 (the “Maximum Reimbursement Amount”). In no event shall Shire be required to pay Reimbursable Expenses in excess of [*] during any calendar year (the “Maximum Annual Reimbursement Amount”). In addition, any Development Expenses in excess of [*] (the “Maximum Quarterly Reimbursement Amount”) during any calendar quarter (irrespective of Milestone Payments), that Duramed incurs shall never become a Reimbursable Expense, and shall not be counted toward Reimbursable Expenses or the Maximum Reimbursement Amount. For purposes of determining the Maximum Annual Reimbursement Amount or the Maximum Quarterly Reimbursement Amount, amounts for any partial years or quarters will be prorated based on the number of days in such partial calendar year or quarter. Subject to the foregoing, the amount of Reimbursable Expenses in any calendar year in excess of [*], if any (“Carryover Expenses”), including any unreimbursed Carryover Expenses from previous years, shall carry over to the first calendar quarter of the immediately following calendar year during the Reimbursement Period and be reimbursed by Shire as part of the Reimbursable Expenses for such calendar quarter until all Carryover Expenses have been recovered. Carryover Expenses shall be subject to, and count toward, the Maximum Reimbursement Amount and the Maximum Annual Reimbursement Amount, but shall not be subject to, or count toward, the Maximum Quarterly Reimbursement Amount. In the event the Reimbursement Period expires prior to Duramed having incurred Reimbursable Expenses equal to the Maximum Reimbursement Amount, Duramed shall have no right to receive any further payment from Shire. During the Term of this Agreement, no cessation or suspension by Shire of Development of Collaboration Product for the Shire Territory shall affect Shire’s reimbursement obligations under this Section 7.2.1. Shire Territory Global Development Expenses shall be reimbursable hereunder as Development Expenses but shall not be subject to or count toward the Maximum Reimbursement Amount, the Maximum Annual Reimbursement Amount or the Maximum Quarterly Reimbursement Amount.

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          7.2.2 Quarterly Forecasting. By February 28, May 31, August 31, and November 30 each year, Duramed shall provide Shire with a forecast for the current calendar quarter, each calendar quarter remaining in that calendar year and each quarter of the following calendar year, setting forth Duramed’s reasonable projected Reimbursable Expense for each Collaboration Product together with any forecast Carryover Expenses at the end of each of the current calendar year and the following calendar year. Such forecasts shall be provided by Duramed to Shire in good faith.

          7.2.3 Quarterly Reporting. Within thirty (30) days after the end of each calendar quarter during the Reimbursement Period, Duramed shall deliver to Shire a reasonably detailed report setting forth the Reimbursable Expenses for each Collaboration Product that Duramed has incurred during such calendar quarter. Shire shall pay such amount to Duramed within forty-five (45) days after the end of each calendar quarter during the Reimbursement Period, or in any event within fifteen (15) days after Shire’s receipt of the aforementioned report if it is not timely delivered by Duramed after the end of the applicable calendar quarter.

          7.2.4 No Other Payments. Shire shall have no obligation to pay royalties or any other amounts to Duramed in connection with the transactions contemplated under this Agreement other than as expressly set forth in this ARTICLE 7 and as contemplated by the Supply Agreement. Duramed shall be solely responsible for all Development Expenses (other than Shire Territory Global Expenses) which are not Reimbursable Expenses, and all Development Expenses which are Reimbursable Expenses in excess of the Maximum Reimbursement Amount.

          7.2.5 Shire Development Fees. Shire shall be solely responsible for all Development Expenses it incurs with respect the Collaboration Products in the Shire Territory.

ARTICLE 8

PAYMENT TERMS

     8.1 Payment Method. All amounts due to either Party hereunder shall be paid in United States Dollars by wire transfer in immediately available funds to an account designated by such Party. Any payments or portions thereof due hereunder that are not paid by the date such payments are due under this Agreement shall bear interest [*] at the lower of (a) the [*], on the due date (or, if the due date is not a business day, on the last business day prior to such due date), or (b) the [*] on the[*] such [*].

     8.2 Payment Schedules; Reports. The payments due pursuant to Sections 7.1 and 7.2 are due and payable on the dates described therein. The Parties acknowledge that any expenses or costs reported under this Agreement may be based upon estimates, which estimates shall be made in compliance with GAAP consistently applied by such Party in accordance with past practice; provided that when the actual results become known relative to any estimated amount, any difference between the actual results and the estimate is reported and the next payment due hereunder related to such estimated item is appropriately adjusted for such difference. The Parties acknowledge and agree that any reports and payments relating to any cost, expense, or other financial amount shared pursuant to this Agreement for the [*] of any [*]

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shall reflect [*] reconciliations and adjustments, if any, applicable to the previous [*] reported results.

     8.3 Taxes. Duramed shall be responsible for any and all income or other taxes owed by Duramed and required by applicable Law to be withheld or deducted from any of the payments made by or on behalf of Shire to Duramed hereunder, and Shire may deduct from any amounts that Shire is required to pay hereunder an amount equal to such taxes. The Parties shall reasonably cooperate in connection with the other’s efforts to minimize liability for taxes, to the extent legally permissible, and shall reasonably support each other in the event of an audit by any taxing authority. Shire shall not be responsible for payment of any income, franchise, gross receipts or personal property taxes paid by Duramed on Duramed’s income, capital, assets or gross sales as a result of this Agreement.

     8.4 Records Retention; Audit.

          8.4.1 Record Retention. Each Party shall maintain complete and accurate books, records and accounts used for the determination of expenses incurred in connection with the performance of Development or Commercialization activities (including, in the case of Duramed, the calculation of Development Expenses), in sufficient detail to confirm the accuracy of any payments required under this Agreement, which books, records and accounts shall be retained by such Party for [*] after the end of the period to which such books, records and accounts pertain, or longer as is required by applicable Law.

          8.4.2 Audit. Shire shall have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to Duramed, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of Duramed as may be reasonably necessary to verify the accuracy of reimbursement amounts paid by Shire under this Agreement for any calendar year ending not more than three (3) years prior to the date of such request; provided, however, that, Shire shall not have the right to conduct more than [*] in any [*] and that Shire shall not be permitted to audit the same period of time more than [*]. The accounting firm shall disclose to Shire only whether the various expenses subject to reimbursement under this Agreement are correct or incorrect and the specific details concerning any discrepancies. [*] of such [*], in which case [*]. If Duramed disputes the findings pursuant to this Section 8.4.2, the Parties shall meet and discuss such dispute. If such dispute is not resolved within [*], then it shall be subject to ARTICLE 16.

          8.4.3 Payment of Additional Amounts. If, based on the results of any audit, (a) additional payments are owed by Shire to Duramed under this Agreement, then Shire shall make such additional payments, or (b) the payments previously made by Shire to Duramed under this Agreement are in excess of the amounts that were actually required to be made, then Duramed shall return such excess payments, in each case within [*] after the accounting firm’s written report is delivered to the Parties. The provisions of Section 8.1 shall apply to such payment.

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ARTICLE 9

DURAMED LICENSE AND TECHNOLOGY TRANSFER

     9.1 Development License Grant. During the Term of the Agreement, Duramed hereby grants to Shire a nonexclusive, worldwide, fully paid-up license under the Collaboration Intellectual Property to Develop and use Collaboration Products for the purpose of Commercializing Collaboration Products in the Shire Territory. Notwithstanding the foregoing nonexclusive license grant, Duramed shall not undertake clinical trials of a Collaboration Product in any European Union country in the Shire Territory without first obtaining the prior written consent of Shire.

     9.2 Commercialization License Grant. During the Term of the Agreement, Duramed hereby grants to Shire an exclusive (even as to Duramed and its Affiliates), worldwide, fully paid-up license under the Collaboration Intellectual Property to Commercialize Collaboration Products in the Shire Territory. Following the Reimbursement Period, the license granted under the previous sentence shall remain exclusive as to the Commercialization of then-existing Collaboration Products but shall not restrict Duramed from using the Collaboration Intellectual Property for any other purpose, including to Commercialize improved or alternative variants of such Collaboration Products, or products that compete with such Collaboration Products.

     9.3 Technology Transfer in Event of Failure to Supply. In the event Duramed ceases Development or Commercialization of any Collaboration Product and Shire desires to continue such Development or Commercialization in the Shire Territory, then, pursuant to the Supply Agreement, Duramed shall, at its option, either supply the applicable Collaboration Product to Shire or facilitate the transfer of the manufacture of the applicable Collaboration Product to Shire or Shire’s designee in accordance with Article VIII of the Supply Agreement.

ARTICLE 10

LICENSE RELATING TO RING PRODUCT

     10.1 License Relating to Ring Intellectual Property. Duramed hereby grants to Shire an exclusive (even as to Duramed and its Affiliates), worldwide, fully paid-up, irrevocable and perpetual license, with the right to grant sublicenses, under the Ring Intellectual Property, solely to research, Develop, Manufacture, use, and Commercialize the Ring Product throughout the world.

          10.2 Ring Technology Transfer. As soon as practicable following the Effective Date, the Parties shall meet to discuss and identify the Know-How included in the Ring Intellectual Property that Shire believes is most promising to successfully develop the Ring Product. Duramed shall in good faith provide all reasonable information requested by Shire to assist Shire in identifying such Know-How. Upon identifying such Know-How, Duramed shall, and shall cause its Affiliates to disclose to Shire or an Affiliate designated by Shire, such Know-How to enable Shire to engage in Development activities related to Ring Product in accordance with the licenses granted in Section 10.1. Notwithstanding the foregoing, Duramed makes no representations and/or warranties that the Ring Product can be successfully Developed or

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Commercialized or that the Know-How disclosed hereunder will be sufficient for such Development or Commercialization.

ARTICLE 11

CONFIDENTIALITY

     11.1 Confidential Information.

          11.1.1 Confidential Information. As used in this Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or generated pursuant to this Agreement by one Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Confidential Information of Duramed shall include all Collaboration Intellectual Property. Confidential Information shall not include any information or materials that:

               (a) were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

               (b) were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

               (c) became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

               (d) were disclosed to a Party, other than under an obligation of confidentiality, by a third party who had no obligation to the Disclosing Party not to disclose such information to others; or

               (e) were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

          11.1.2 Confidentiality Obligations. Each of Duramed and Shire shall keep confidential all Confidential Information of the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information but in no event less than a reasonable degree of care. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who are bound to confidentiality restrictions consistent with terms herein and who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement. Upon termination of this Agreement, the Receiving

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Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party and its Affiliates or their directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall continue to be subject to the provisions of this ARTICLE 11.

          11.1.3 Permitted Disclosure and Use. Notwithstanding Section 11.1.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange regulations. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 11.1.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. In addition, notwithstanding Section 11.1.2, the Parties shall cooperate to prepare standardized public responses to anticipated inquiries from the public, press, stockholders, investors and/or analysts with respect to the activities hereunder. Despite the foregoing, each Party agrees that the other Party is free to disclose this Agreement in its entirety to the United States Federal Trade Commission and the United States Department of Justice, or to any court with jurisdiction over the litigations settled under the Settlement Agreement between Shire Laboratories Inc. and Barr Laboratories Inc. dated August 14, 2006.

          11.1.4 Unauthorized Disclosure. The Receiving Party acknowledges and agrees that the Confidential Information of the Disclosing Party constitutes proprietary information and trade secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside disclosure of such Confidential Information shall be presumed to cause irreparable injury to the Disclosing Party.

          11.1.5 Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and shall cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure. The Receiving Party acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure of Confidential Information and that the Disclosing Party may be entitled, without waiving other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction in the event of such unauthorized disclosure.

     11.2 Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this ARTICLE 11.

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ARTICLE 12

OWNERSHIP OF INTELLECTUAL PROPERTY

     12.1 Ownership. Duramed shall be the exclusive owner of all right, title and interest in and to all Collaboration Intellectual Property, and Shire hereby assigns to Duramed all right, title and interest therein. Nothing herein shall be construed as granting Shire any rights in any of the foregoing except as expressly provided herein. Shire shall, at the request of Duramed, perform any acts that Duramed may reasonably deem necessary or desirable to evidence or confirm Duramed’s ownership interest in the Collaboration Intellectual Property, including but not limited to making further written assignments in a form determined by Duramed.

     12.2 Patent Filings. Duramed shall have the sole right to prepare, file, prosecute and maintain all Collaboration Intellectual Property throughout the world. In furtherance of the foregoing, Duramed shall be responsible for the conduct of any interference proceedings related to any Collaboration Patent. Except as provided below, Duramed shall be responsible for all Patent Expenses incurred throughout the world. Subject to the following sentence, should Duramed elect not to prepare and/or file any such Collaboration Patent in the Shire Territory, it shall (a) provide Shire with written notice as soon as reasonably possible after making such election but in any event no later than [*] before Shire would be faced with a possible loss of rights, (b) give Shire the right, at Shire’s discretion and expense, to prepare, file, prosecute or maintain the Collaboration Patent in Duramed’s name, and (c) offer reasonable assistance in connection with such preparation, filing, prosecution or maintenance. In the event Duramed determines in its sole discretion, acting in good faith, to maintain certain Collaboration Intellectual Property as a trade secret, Duramed shall have no obligation under the previous sentence.

     12.3 Cooperation. The Parties agree to cooperate in the preparation, filing, prosecution and maintenance of all Patents under this ARTICLE 12, including obtaining and executing necessary powers of attorney and assignments by the named inventors, providing relevant technical reports to the filing Party concerning the Invention disclosed in such Patent, obtaining execution of such other documents which shall be needed in the filing and prosecution of such Patent, and, as requested, updating each other regarding the status of such Patent, and shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to obtain or maintain such Patents.

     12.4 Enforcement and Defense of Patents.

          12.4.1 Infringement of Third Party Patents.

               (a) Third Party Claims; Third Party Royalties. In the event of a Third Party Claim against Shire, Duramed or their respective Affiliates alleging that the making, using, importing, selling or offering to sell a Collaboration Product infringes or shall infringe claims in any patents of a Third Party, the Party first obtaining knowledge of such Third Party Claim shall immediately provide the other Party notice of such Third Party Claim with the related facts in reasonable detail. Shire shall have the sole right to control such defense with respect to any Collaboration Product with an attorney of Shire’s choice if the alleged infringing activity relates solely to the Shire Territory. In such case, Duramed shall have the right to be

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represented by independent counsel at Duramed’s own expense. Duramed shall have the sole right to control such defense with respect to any Collaboration Product with an attorney of Duramed’s choice if the alleged infringing activity relates solely to the Duramed Territory. In such case, Shire shall have the right to be represented by independent counsel at Shire’s own expense. If the alleged infringing activity relates to both the Duramed Territory and the Shire Territory, then the Parties shall have the joint right, but not the obligation, to control such defense with respect to Collaboration Product with an attorney of their mutual agreement. If the Parties are unable to agree on such joint defense, then the Parties shall use good faith efforts to determine the Party to assume control of such defense and choice of counsel. In such case, the other Party shall have the right to be represented by independent counsel at its own expense. If, as a result of a judgment in any litigation or settlement with a Third Party, either Party or its Affiliates is required to pay royalties to any Third Party, such Party shall bear all cost of such royalties.

               (b) Cooperation. If a Party shall become engaged in or participate in any suit described in this Section 12.4.1, the other Party shall cooperate, and shall cause its and its Affiliates’ employees to cooperate, with such Party in all reasonable respects in connection therewith, including giving testimony and producing documents lawfully requested, and using its reasonable and diligent efforts to make available to the other, at no cost to the other (other than reimbursement of actually incurred, reasonable out-of-pocket travel and lodging expenses), such employees who may be helpful with respect to such suit, investigation, claim, interference or other proceeding.

          12.4.2 Prosecution of Infringers.

               (a) Notice. If either Party learns that a Third Party is infringing or allegedly infringing any Collaboration Intellectual Property, or if any Third Party claims that any Collaboration Intellectual Property is invalid or unenforceable, it shall promptly notify the other Party thereof including available evidence of infringement or the claim of invalidity or unenforceability. The Parties shall cooperate and use reasonable efforts to stop such alleged infringement or to address such claim without litigation.

               (b) Enforcement and Defense.

               (i) [*] to take the appropriate steps to enforce or defend any Collaboration Intellectual Property [*], and will have the [*] to take the appropriate steps to enforce or defend any Collaboration Intellectual Property [*]. [*] may take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. [*] for the costs of such enforcement or defense. Notwithstanding the foregoing, [*], to be[*].

               (ii) If, pursuant to Section 12.4.2(b)(i), [*] take the appropriate steps to enforce or defend any Collaboration Patent [*] of the date one Party has provided notice to the other Party pursuant to Section 12.4.2(a) of such infringement or claim, then [*], to bring any such suit, action or proceeding by counsel of its own choice and [*], to be [*].

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               (c) Cooperation; Damages.

               (i) If one Party brings any suit, action or proceeding under this Section 12.4.2, the other Party agrees to be joined as party plaintiff if necessary to prosecute the suit, action or proceeding and to give the first Party reasonable authority to file and prosecute the suit, action or proceeding; provided, however, that neither Party shall be required to transfer any right, title or interest in or to any property to the other Party or any other party to confer standing on a Party hereunder.

               (ii) The Party not pursuing the suit, action or proceeding hereunder shall provide reasonable assistance to the other Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any out-of-pocket expenses incurred by the non-enforcing or defending Party in providing such assistance.

               (iii) Neither Party shall settle or otherwise compromise any such suit, action or proceeding in a way that adversely affects the other Party’s intellectual property rights or its rights or interests with respect to the Collaboration Product without such Party’s prior written consent.

               (iv) Any settlements, damages or other monetary awards (the “Recovery”) recovered pursuant to a suit, action or proceeding brought pursuant to Section 12.4.2 shall be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) with respect to a country in the Duramed Territory or the Shire Territory to be allocated to Duramed or Shire, respectively.

     12.5 Notice of Certification. Duramed and Shire each shall immediately give notice to the other of any certification filed under the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (or its foreign equivalent) claiming that a Collaboration Patent, is invalid or that infringement of a Collaboration Patent, shall not arise from the manufacture, use, offer for sale, sale or importation product by a Third Party. Nothing in this Section 12.5 shall prevent or otherwise limit Duramed’s right to take any and all such actions with regard to the matters described in this Section 12.5 as required by applicable Law.

     12.6 Patent Term Extensions. Duramed and Shire shall cooperate in good faith in gaining patent term extensions due to delay(s) in Regulatory Approval wherever applicable to the Collaboration Patents. However, [*] in determining which Collaboration Patent(s) to [*] compound, composition, article, product, process, or use. Should [*] that a [*] for a Collaboration Patent and [*] of such Collaboration Patent, it shall (a) provide [*] as soon as reasonably possible [*] but in [*], (b) give [*] Collaboration Patent in [*], and (c) offer reasonable assistance in connection with such extension.

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     12.7 Trademarks and Copyrights.

          12.7.1 Product Trademarks. All Collaboration Products shall be marketed and sold worldwide under and in connection with trademarks, trade dress, logos and slogans selected in accordance with this Section 12.7.

          12.7.2 Trademark Selection. Duramed shall have the right and responsibility to select and register trademarks, trade dress, logos and slogans for each Collaboration Product for use in the Duramed Territory. Shire shall have the right and responsibility to select and register trademarks, trade dress, logos and slogans for each Collaboration Product for use in the Shire Territory; provided, that Shire may determine to use a Duramed Mark (as defined below) in connection therewith as further set below in Section 12.7.3.

          12.7.3 Ownership of Trademarks. Duramed shall own, throughout the world, any trademarks, trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for a Collaboration Product which Duramed owns as of the Effective Date or that is otherwise selected and/or registered by Duramed for use in connection with Collaboration Products (collectively, the “Duramed Marks”). Shire shall own, throughout the world, any trademark, trade dress, logo and/or slogans, and all registrations therefor, selected and/or registered by Shire for use in connection with Collaboration Products (collectively, the “Shire Marks”). All goodwill attributable to a Duramed Mark generated by the Commercialization of a Collaboration Product bearing a Duramed Mark shall inure to the benefit of Duramed. All goodwill attributable to a Shire Mark generated by the Commercialization of a Collaboration Product bearing a Shire Mark shall inure to the benefit of Shire. Shire shall not use and/or register any Duramed Marks in the Shire Territory without the prior consent of Duramed. Duramed shall not use and/or register any Shire Marks in the Duramed Territory without the prior consent of Shire, provided, however, that if Shire determines to use a Duramed Mark for the Commercialization of a Collaboration Product in the Shire Territory, Duramed shall grant to Shire, a non-exclusive, royalty-free license, with the right to grant sublicenses, to use such Duramed Mark in the Shire Territory, solely in conjunction with the Commercialization of the Collaboration Products. Shire shall comply with Duramed’s then-current guidelines for trademark usage, a copy of which shall be provided to Shire from time to time, in connection with Shire’s use of such Duramed Mark. Duramed shall solely bear all costs of prosecution of applications to register and to record licenses (if applicable) for, and maintenance of, each Duramed Mark for each Collaboration Product. Shire shall solely bear all costs of prosecution of applications to register and to record licenses (if applicable) for, and maintenance of, each Shire Mark for each Collaboration Product, and any Duramed Marks that Shire elects to use in accordance with the provisions of this Section 12.7.3 within the Shire Territory. Duramed shall cooperate with Shire as reasonably requested by Shire in order to register (in Duramed’s name) any Duramed Marks licensed to Shire under this Section 12.7.3 in the Shire Territory.

     12.8 Enforcements of Trademarks.

               (a) Notice. If either Party learns that a Third Party is infringing or allegedly infringing any Duramed Marks of Shire Marks, or if any Third Party claims that any Duramed Marks of Shire Marks is invalid or unenforceable, it will promptly notify the other Party thereof including available evidence of infringement or the claim of invalidity or

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unenforceability. The Parties will cooperate and use reasonable efforts to stop such alleged infringement or to address such claim without litigation.

               (b) Enforcement and Defense. Duramed will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Duramed Marks throughout the world, and will have the exclusive right (but not the obligation) to take the appropriate steps to enforce or defend any Duramed Marks in the Duramed Territory. Duramed may take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Duramed will be solely responsible for the costs of such enforcement or defense. Notwithstanding the foregoing, Shire will have the right, at its own expense, to be represented in any such action by counsel of its own choice. Shire will have the exclusive right (but not the obligation) to take the appropriate steps to enforce or defend any Shire Marks in the Shire Territory.

               (c) If, pursuant to Section 12.8(a), Duramed fails to take the appropriate steps to enforce or defend any Duramed Marks within the Shire Territory within [*] of the date one Party has provided notice to the other Party pursuant to Section 12.8(a) of such infringement or claim, then Shire will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice and Duramed will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

               (d) Cooperation; Damages.

               (i) If one Party brings any suit, action or proceeding under this Section 12.8, the other Party agrees to be joined as party plaintiff if necessary to prosecute the suit, action or proceeding and to give the first Party reasonable authority to file and prosecute the suit, action or proceeding; provided, however, that neither Party will be required to transfer any right, title or interest in or to any property to the other Party or any other party to confer standing on a Party hereunder.

               (ii) The Party not pursuing the suit, action or proceeding hereunder will provide reasonable assistance to the other Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any out-of-pocket expenses incurred by the non-enforcing or defending Party in providing such assistance.

               (iii) Neither Party will settle or otherwise compromise any such suit, action or proceeding in a way that adversely affects the other Party’s intellectual property rights or its rights or interests with respect to the Duramed Marks of Shire Marks without such Party’s prior written consent.

               (iv) Any Recovery recovered pursuant to a suit, action or proceeding brought pursuant to this Section 12.8 will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) with

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respect to a country in the Duramed Territory or the Shire Territory to be allocated to Duramed or Shire, respectively.

          12.9 Costs of Defense. All of the unrecovered costs, expenses and legal fees (including internal costs, expenses and legal fees) incurred by the Parties in bringing, maintaining and prosecuting any action to maintain, protect or defend the Duramed Marks or Shire Marks shall be borne by the Party bringing, maintaining or prosecuting the relevant action.

ARTICLE 13

REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY

     13.1 Mutual Representations and Warranties. Each of the Parties hereby represents and warrants to the other Party that, as of the date hereof:

               (a) Such Party has full corporate right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement and that it has the right to grant the rights and licenses granted pursuant to this Agreement.

               (b) This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of the Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a Party or by which it is bound, nor violate any Law of any Governmental Authority having jurisdiction over it.

               (c) Such Party has not granted any right to any Third Party that would conflict with the rights granted to the other Party hereunder.

               (d) Such Party has obtained all necessary consents, approvals and authorizations of all Government Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery and performance of this Agreement.

          13.2 Mutual Covenants. Each Party hereby covenants to the other Party that, during the Term:

               (a) Such Party shall not grant any right to any Third Party that would conflict with the rights granted to the other Party hereunder;

               (b) In the course of Development hereunder, such Party shall not use any employee or consultant that, to such Party’s knowledge, is debarred by the FDA (or any foreign equivalent) or is the subject of debarment proceedings by the FDA (or any foreign equivalent).

          13.3 Duramed Representations and Warranties. Duramed hereby represents and warrants to Shire that, as of the date hereof:

               (a) There is no action or proceeding pending or, to Duramed’s knowledge, threatened, with respect to any existing Collaboration Product and/or the Ring

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Intellectual Property (excluding ordinary course patent prosecution activities before the U.S. Patent and Trademark Office and equivalent foreign counterparts and Regulatory Authorities). There are no material unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against Duramed or its Affiliates with respect to existing Collaboration Products and/or the Ring Product.

               (b) Attached hereto as Schedule 13.3(b) is a true, correct and complete list of all INDs (including the INDs referenced in the preceding sentence) and Drug Approval Applications filed with a Governmental Authority relating to Collaboration Products (together, the “Collaboration Product INDs”) and all Collaboration Product INDs are and remain in effect.

               (c) Intellectual Property.

               (i) The Collaboration Intellectual Property includes the Patents set forth in Schedule 13.3(c). Such schedules contain, where relevant for the Shire Territory, all application numbers and filing dates, registration numbers and dates and jurisdiction.

               (ii) Duramed has a good faith belief that the Collaboration Intellectual Property may be configured into a commercial vaginal or cervical ring product, either directly or through Development, that does not infringe the intellectual property rights of any Third Party.

               (iii) Duramed has the right to grant to Shire the licenses set forth in this Agreement, free of any rights, encumbrances or claims of any Third Party and without payment by Shire of any royalties, license fees or other amounts to any Third Party.

               (iv) All Patents included in the Ring Intellectual Property are subsisting and, to Duramed’s knowledge, valid, enforceable and inventorship thereof is properly identified therein. None of such Patents is currently involved in any interference, reissue, reexamination, or opposition proceeding, and neither Duramed nor any of its Affiliates has received any written notice from any person, or has knowledge, of such actual or threatened proceeding.

               (v) To Duramed’s knowledge, there is no unauthorized infringement by a Third Party of Patents included in the Ring Intellectual Property.

               (d) Compliance with Law.

               (i) To Duramed’s knowledge, Duramed, its Affiliates and any Third Party to which Duramed or its Affiliates have subcontracted activities in connection with Compound and existing Collaboration Products, and the Ring Product have, complied with all applicable Laws, permits, governmental licenses, registrations, approvals, concessions, franchises, authorizations, orders,

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injunctions and decrees, including the Act, in the research, Development, Manufacture and use thereof, and have not received any written notice from any Governmental Authority claiming that any such activities as conducted by them are not in such compliance.

               (ii) No Governmental Authority has commenced or, to Duramed’s knowledge, threatened to initiate any action to reject or withdraw the Collaboration Product INDs, or commenced or, to Duramed’s knowledge, threatened to initiate any action to enjoin production of Collaboration Products at any facility, nor has Duramed or any of its Affiliates or, to the knowledge of Duramed, any of its Contractors, received any notice to such effect.

               (iii) Duramed has delivered or otherwise made available to Shire copies of all substantive or material (A) reports of FDA Form 483 inspection observations, (B) establishment inspection reports, (C) warning letters, and (D) other documents that assert ongoing lack of compliance in any material respect with any applicable Laws (including those of the FDA), in each case to the extent received by Duramed or any of its Affiliates or, to the knowledge of Duramed, any of its contractors from the FDA relating to a Collaboration Product and/or Compound, or the Ring Product. Neither Duramed nor any of its Affiliates has received any such reports, letters or other documents from any other Governmental Authority relating to a Collaboration Product and/or the Ring Product.

               (iv) To Duramed’s knowledge, in the course of the Development of the Collaboration Products or the Ring Intellectual Property, Duramed has not used any employee or consultant that is debarred by the FDA or is the subject of debarment proceedings by the FDA.

     13.4 Performance by Affiliates/Third Parties. Either Party may retain Affiliates and/or Third Parties to perform Development and Commercialization activities under this Agreement. Each Party shall remain responsible for and be guarantor of the performance by its Affiliates and Third Parties and shall cause its Affiliates and Third Parties to comply with the provisions of this Agreement in connection with such performance. Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against an Affiliate or Third Party, for any obligation or performance hereunder prior to proceeding directly against such Party. Wherever in this Agreement the Parties delegate responsibility to Affiliates, Third Parties or local operating entities, the Parties agree that such entities may not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way.

     13.5 Disclaimer of Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE 13, DURAMED AND SHIRE MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND DURAMED AND SHIRE EACH SPECIFICALLY DISCLAIMS ANY OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR IMPLIED,

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INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.

     13.6 Limitation of Liability. EXCEPT FOR ANY BREACHES OF SECTIONS 6.3 AND 6.4, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION AND ARISING IN ANY WAY OUT OF THIS AGREEMENT. THE FOREGOING LIMITATIONS SHALL NOT LIMIT EITHER PARTY’S OBLIGATIONS TO THE OTHER PARTY FOR INDEMNIFICATION OF THIRD PARTY CLAIMS UNDER ARTICLE 15.

ARTICLE 14

TERM AND TERMINATION

     14.1 Term. This Agreement shall commence as of the Effective Date and, unless sooner terminated as provided herein, shall expire on the later of (i) the last Valid Claim contained in any Collaboration Patent or (ii) the date when Shire and its Affiliates cease selling the last of its Collaboration Products, but in any event not before eight (8) years after the Effective Date (the “Term”).

     14.2 Termination for Material Breach. Either Party (the “Notifying Party”) may terminate this Agreement on a Collaboration Product-by-Collaboration Product basis at any time in the event the other Party (the “Breaching Party”) has materially breached this Agreement with respect to such Collaboration Product and, if the material breach is capable of cure, such material breach continues uncured for a period of ninety (90) days after written notice thereof by the Notifying Party; provided, however, in the event that the Breaching Party has in good faith commenced cure within such ninety (90) day period, but cannot practically complete such cure within such ninety (90) day period, the Breaching Party shall have an additional ninety (90) day cure period. In the event a material breach is incapable of cure, without limiting any other rights of the Notifying Party, including the right to seek injunctive relief, the non-Breaching Party shall not have the right to terminate this Agreement on a Collaboration Product-by-Collaboration Product basis if (i) the Breaching Party is providing full cooperation to mitigate the breach, and (ii) the breach was not caused by willful misconduct by the Breaching Party.

     14.3 Termination of Commercialization by Shire.

          14.3.1 [*]. Shire may elect to cease Development or Commercialization of any Collaboration Product for the Shire Territory at any time in the Shire Territory (such Collaboration Product, to the extent of the ceased Development activities, the “Ceased Collaboration Product”). In such event Shire shall promptly notify Duramed thereof, and offer Duramed the right to repurchase the Ceased Collaboration Product on terms to be mutually agreed. Without limiting the previous sentence, if at any time [*] under this Agreement [*] Ceased Collaboration Product [*] Collaboration Product, [*] that are the subject [*] upon the [*], including the [*], to be [*]. If [*], or [*] after receipt of [*], whichever occurs first, then [*] on such terms and conditions that, [*].

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     14.4 Upon Termination. Termination of this Agreement shall not affect the obligation of any Party to pay the other Party any amounts due hereunder accrued prior to the termination date hereof. The right to terminate this Agreement shall not prejudice any other right or remedy in equity or at Law of a Party in respect of any breaches of this Agreement. Upon termination of this Agreement by Duramed, all worldwide rights to Commercialize the Collaboration Products shall revert to Duramed. Upon termination by Duramed with the exception of one copy which Shire shall keep for its internal business purposes, Shire shall promptly transfer any materials, information, books and records, and data in its possession relating to Development, Commercialization or to Regulatory Approvals of the Collaboration Products, together with any other books and records of Duramed made available to Shire in furtherance of the transactions contemplated hereby.

     14.5 Survival. The provisions of Sections 8.4, 12.1, 13.6, 14.4, and 14.5, and Articles X, XI, XV, XVI and XVII shall survive [*] this Agreement.

ARTICLE 15

INDEMNIFICATION; INSURANCE

     15.1 Indemnification.

          15.1.1 Indemnification by Shire. Shire hereby agrees to hold Duramed, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a Third Party (each a “Third Party Claim”) resulting directly from (a) any breach by Shire of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (b) the negligence or willful misconduct by Shire or its Affiliates or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, (c) use, handling, storage, sale or other disposition of Collaboration Products (including, without limitation, those Third Party Claims that involve death or bodily injury (or allegations thereof) to any individual or any property other than intellectual property) arising out of activities conducted by or on behalf of Shire or related to the Shire Territory, or (d) the conduct of clinical testing of the Collaboration Products by or on behalf of Shire, except for such matters as Duramed is obligated to indemnify Shire under Section 15.1.2; in each case except to the extent that such Losses result from the negligence or willful misconduct of Duramed.

          15.1.2 Indemnification by Duramed. Duramed hereby agrees to hold Shire, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting directly from (a) any breach by Duramed of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (b) the negligence or willful misconduct by Duramed or its Affiliates or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, (c) manufacture, use, handling, storage, sale or other disposition of Collaboration Products (including, without limitation, those Third Party Claims that involve death or bodily injury (or allegations thereof) to any individual or any property other than intellectual property) arising out of activities conducted by or on behalf of Duramed or related to the Duramed Territory, (d) the conduct of clinical testing of the Collaboration Products

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by or on behalf of Duramed, or (e) Duramed’s (or its agent’s, contractor’s or other designee’s, other than Shire) failure to comply with cGMP, applicable product specifications or applicable Law in connection with the Manufacture of Collaboration Product supplied to Shire hereunder; in each case except to the extent that such Losses result from the negligence or willful misconduct of Shire.

     15.1.3 The rights of indemnification under this Section 15.1 shall be subject to the provisions of Sections 15.2 through 15.8.

     15.2 Notice of Claim. All indemnification claims in respect of any indemnitee seeking indemnity under Section 15.1 (collectively, the “Indemnitees” and each an “Indemnitee”) shall be made solely by the corresponding Party (the “Indemnified Party”). The Indemnified Party shall give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to base a request for indemnification under Section 15.1, but in no event shall the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such Third Party Claim. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party shall furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defense of such Third Party Claim.

     15.3 Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification as provided for in Sections 15.1.1 and 15.1.2 by giving written notice to the Indemnified Party within [*] after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim.

     15.4 Right to Participate in Defense. Without limiting Section 15.3, any Indemnitee shall be entitled to participate in, but not control, the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 15.3 (in which case the Indemnified Party shall control the defense).

     15.5 Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that shall not result in the Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any manner, and as to which the Indemnifying Party shall have acknowledged in

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writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, shall deem appropriate (provided, however that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and shall transfer to the Indemnified Party all amounts which said Indemnified Party shall be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 15.3, the Indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent shall be at the Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with Section 15.3 shall not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 15.3.

     15.6 Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation shall include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.

     15.7 Expenses of the Indemnified Party. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim shall be reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

     15.8 Treatment of Certain Losses. Duramed shall be solely responsible for all Losses from Third Party Claims resulting directly from the use or administration of the Compounds, Collaboration Products prior to the Effective Date.

     15.9 Insurance. Each Party shall obtain and keep in force, through self insurance or otherwise, in a form reasonably acceptable to the other Party hereto, insurance in scope and amount as required by Law applicable to a Party’s activities hereunder and such additional

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amounts as may be reasonably necessary to cover such Party’s indemnity obligations under this Agreement with scope and coverage as is normal and customary in the biotechnology/pharmaceutical industry generally for parties similarly situated. It is understood that such insurance shall not be construed to limit a Party’s liability with respect to its indemnification obligations under this ARTICLE 15. Each Party shall, except to the extent self insured, provide to the other Party upon request a certificate evidencing the insurance such Party is required to obtain and keep in force under this ARTICLE 15.

     15.10 Guaranty. In consideration of [*] under this Agreement, and to induce [*] to enter into this Agreement, [*] under this Agreement, in accordance with the terms and conditions of this Agreement, [*] under this Agreement in accordance with its terms.

ARTICLE 16

DISPUTE RESOLUTION

     16.1 Disputes. The Parties hereby agree that all disputes arising under this Agreement shall be referred to a senior executive of Duramed and a senior executive of Shire (the “Representatives”). If any such matter has not been resolved within [*] of such referral to the Representatives either Party may invoke the provisions of Section 16.2 for such dispute. No dispute resolution procedure set forth in this Agreement shall be construed as an agreement to arbitrate under any federal or state arbitration Law, including but not limited to the Federal Arbitration Act, and shall not deprive a court of competent jurisdiction from resolving any dispute arising under, or related to, this Agreement.

     16.2 Litigation. Any dispute that is not resolved as provided in the preceding Section 16.1, whether before or after termination of this Agreement, may be submitted by either Party only to any court of competent jurisdiction. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York. The Parties unconditionally and irrevocably agree and consent to the exclusive jurisdiction of the courts located in New York, NY and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and further agree not to commence any such action, suit or proceeding except in any such court.

     16.3 Injunctive Relief. Notwithstanding anything to the contrary in this Agreement, either Party shall have the right to seek temporary injunctive relief in any court of competent jurisdiction as may be available to such Party under the Laws and rules applicable in such jurisdiction with respect to any matters arising out of the other Party’s performance of its obligations under this Agreement.

ARTICLE 17

MISCELLANEOUS

     17.1 Entire Agreement; Amendment. This Agreement, including the exhibits attached hereto and thereto (each of which is hereby and thereby incorporated herein and therein by reference), sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between

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the Parties, which shall continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises, agreements, warranties, representations, conditions, and understandings set forth herein are made and deemed effective as of the Effective Date, and that the execution of this Agreement shall not constitute a waiver of any right or claim of either Party as of the Effective Date.

     17.2 Force Majeure. Each Party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure shall include conditions beyond the control of the Parties, including without limitation, an act of God, voluntary or involuntary compliance with any regulation, Law or order of any government, war, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe; provided, however, the payment of invoices due and owing hereunder shall not be delayed by the payer because of a force majeure affecting the payer, unless such force majeure specifically precludes the payment process.

     17.3 Notices. All notices or other communications that are required or permitted under this Agreement shall be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication shall be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For Duramed:	Duramed Pharmaceuticals, Inc.
400 Chestnut	Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 201-930-3330
	Attention: President
with a copy to:	Barr Pharmaceuticals, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 888-843-0563

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	Attention: General Counsel
For Shire:	Shire LLC
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center Princeton, NJ 08540
	Fax: (609) 919-6701
	Attention: Randall B. Sunberg

     17.4 Independent Contractors. In making and performing this Agreement, Shire and Duramed shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and Duramed and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. Except as otherwise provided in this Agreement, each Party shall be solely responsible for its own costs and expenses associated with this Agreement.

     17.5 Non-Solicitation. From and after the Effective Date until the one (1) year anniversary of the termination or expiration of this Agreement, neither Party shall, and shall cause each of its Affiliates not to, directly or indirectly, without the other Party’s prior written consent, solicit the employment of any employee (or former employee bound by a non-competition obligation) of the other Party or its Affiliates with whom it has come in contact in conducting activities under this Agreement; provided, however, that the foregoing provisions shall not apply to (a) a general advertisement or solicitation program that is not specifically targeted at such persons or (b) the solicitation of any employee after such time as such employee’s employment has been terminated by the other Party or its Affiliate.

     17.6 Maintenance of Records. Each Party shall keep and maintain all records required by Law with respect to Collaboration Products and shall make copies of such records available to the other Party upon reasonable request.

     17.7 United States Dollars. References in this Agreement to “Dollars” or “$” shall mean the legal tender of the United States.

     17.8 No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

     17.9 Assignment. Neither Party shall sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of Law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent may be granted, withheld or conditioned at such other

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Party’s sole and absolute discretion); provided, however, that either Party may assign or transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other Party to any Affiliate of such Party, or to any Third Party (a) with which it merges or consolidates, or to which it transfers all or substantially all of its assets to which this Agreement pertains or (b) subject to Section 14.3.1, in part, in connection with the sale or transfer of such Party’s business relating to Commercialization of any Collaboration Product within a particular country. The assigning Party (unless it is not the surviving entity) shall remain jointly and severally liable with, and shall guarantee the performance of, the relevant Affiliate or Third Party assignee under this Agreement, and the relevant Affiliate assignee, Third Party assignee or surviving entity shall assume in writing all of the assigning Party’s obligations under this Agreement. Notwithstanding the foregoing, in the event Duramed sells, transfers, assigns, delegates, pledges, licenses or otherwise disposes of a Collaboration Product(s) to a Third Party (whether pursuant to a joint venture, collaboration or otherwise), Shire shall have no obligation to reimburse such Third Party for any development expenses such Third Party may incur with respect to such Collaboration Product(s); provided, however, that Duramed shall remain entitled to reimbursement pursuant to Section 7.2 for any remaining Collaboration Products up to the Maximum Reimbursement Amount. Any purported assignment or transfer in violation of this Section 17.9 shall be void ab initio and of no force or effect. Notwithstanding anything to the contrary herein, in the event any assignment by Shire hereunder gives rise to any obligation to withhold any amounts payable to Duramed, Shire, or its assignee, shall be entitled to deduct from all payments due under this Agreement the amount of all applicable withholding taxes to the extent Shire, or its assignee, pays such taxes to the appropriate governmental authority on behalf of Duramed. Shire shall properly furnish Duramed with copies of tax receipts evidencing the payment of all such taxes, levies and assessments. Duramed and Shire shall cooperate with each other in obtaining any exemption from, a refund for, or reduced rate of tax available under any applicable law or tax treaty. Notwithstanding the foregoing, Shire shall be liable for, and indemnify Duramed against, any non-U.S. taxes, any value-added or sales taxes, any duties or levies and assessments, howsoever designated or computed that are required to be paid or withheld by Shire on such payments. Shire shall so indemnify Duramed within [*] of Shire’s receipt of notification from Duramed (in accordance with Section 17.3 hereof) that either (i) based upon current facts and circumstances, Duramed does not have or will not have during the applicable tax year any or sufficient foreign tax credits available to utilize to offset such tax liability; or (ii) Duramed has applied for a refund from the taxing authority at issue (such notice to include a copy of such refund application). Notwithstanding anything in this Agreement to the contrary, in the event that withholding taxes are paid on behalf of Duramed by Shire, if Duramed uses a foreign tax credit received as a result of the payment of withholding taxes by Shire and thereby reduces the amount of U.S. income tax that Duramed otherwise would have paid, or otherwise receives a refund, Duramed shall refund to Shire the amount of such reduction with respect to such foreign tax credit or such refund.

     17.10 Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

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     17.11 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

     17.12 Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

     17.13 Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

     17.14 No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

[Signature Page Follows.]

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     IN WITNESS WHEREOF, the Parties have executed this Collaboration and License Agreement in duplicate originals by their proper officers as of the date first written above.

DURAMED PHARMACEUTICALS, INC.
By:	/s/ Fred Wilkinson
	Name Fred Wilkinson
	Title
SHIRE LLC
By:	/s/ Matthew Emmens
	Name Matthew Emmens
	Title  CEO

SHIRE PLC (solely for purposes of Section 15.10)
By:	/s/ Matthew Emmens
	Name Matthew Emmens
	Title  CEO

[Signature Page to Product Development and License Agreement]

EXHIBIT A
INITIAL COLLABORATION PRODUCTS

Compound

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EXHIBIT B

SUPPLY AGREEMENT

SUPPLY AGREEMENT

BETWEEN

SHIRE LLC

AND

DURAMED LABORATORIES, INC.

DATED AS OF

AUGUST 14, 2006

SUPPLY AGREEMENT

     This SUPPLY AGREEMENT (this “Agreement”), dated as of August 14, 2006, by and among Shire LLC, a Kentucky limited liability company having a place of business at 725 Chesterbrook Boulevard, Wayne, Pennsylvania 19087 (“Shire”), and Duramed Pharmaceuticals, Inc., a Delaware corporation having a place of business at 400 Chestnut Ridge Road, Woodcliff Lake, NJ 07677 (“Duramed”) (each a “Party” and collectively, the “Parties”).

RECITALS

     WHEREAS, the Parties have entered into that certain Product Development and License Agreement (the “Product Development Agreement”), dated as of the date hereof, pursuant to which the Parties are developing Collaboration Products (as defined therein), with such Collaboration Products to be commercialized by Duramed in certain geographic regions, and by Shire in the rest of the world (capitalized terms used herein but not defined herein shall have the meanings set forth in the Product Development Agreement);

     WHEREAS, the Product Development Agreement contemplates the Parties entering into this Agreement to govern the supply of Collaboration Products by Duramed to Shire; and

     WHEREAS, Duramed desires to manufacture and/or supply the Collaboration Products to Shire upon the terms and subject to the conditions of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

     “Affiliate” means, with respect to a Party, any entity that directly or indirectly controls, is control led by, or is under common control with, such Party, but only for so long as such control continues. For purposes of this definition, “control” means the power to direct the management and affairs of an entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. In the case of a corporation, the direct or indirect ownership of fifty percent (50%) or more of its outstanding voting shares shall in any case be deemed to confer control, provided that, the direct or indirect ownership of a lower percentage of such securities shall not necessarily preclude the existence of control.

     “API Cost” for a Shire Product means the actual cost paid by Duramed on a pass-through basis for the active pharmaceutical ingredient in such Shire Product. For the avoidance of doubt, all raw material and manufacturing costs of cervical and vaginal rings in a Shire Product shall not be included in the API Cost.

     “Changeover Plan” has the meaning set forth in Section 8.2.

     “Effective Date” means the date on which the Parties have attached mutually agreed Exhibits to this Agreement for the supply of a particular Collaboration Product in accordance with Section 2.1.

     “Force Majeure Event” has the meaning set forth in Section 9.1.

     “Fully Allocated Manufacturing Cost” means the actual cost incurred by Duramed for Manufacturing Shire Product, calculated in accordance with GAAP and using normal standard cost accounting and allocation methods and procedures of Duramed consistently applied and maintained, including, but not limited to, API Cost, all raw material and manufacturing costs of cervical and vaginal rings, and all costs of active and inactive ingredients therein; provided that, for purposes of this Agreement, Fully Allocated Manufacturing Cost shall not include overhead absorption related to significant idle or excess capacity in connection with (i) expansion of an existing facility; or (ii) the construction or validation of any new manufacturing facility of Duramed or any of its Affiliates that may be constructed after the date of this Agreement first written above.

     “Losses” means any and all liabilities, damages, fines, penalties, deficiencies, losses and expenses (including interest, court costs, amounts paid in settlement, reasonable fees of attorneys, accountants and other experts or other reasonable expenses of litigation or other proceedings or of any claim, default or assessment); provided, however, that the term “Losses” shall not include any special, consequential, indirect, punitive or similar damages, except to the extent actually paid by a Party pursuant to any Third Party Claim.

     “Manufacturing” shall mean all activities related to the manufacturing of a Shire Product or any component or ingredient thereof, including packaging, in-process and finished product testing, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, ongoing stability tests and regulatory activities related to any of the foregoing.

     “Net Sales Price” shall mean, [*]

     “Packaging Specifications” means the packaging and labeling specifications for Shire Product set forth on Exhibit B, as amended or supplemented from time-to-time in accordance with Section 3.13.

     “Product Specifications” means the specifications for Shire Product set forth on Exhibit A, as amended or supplemented from time-to-time on mutual agreement of the Parties.

     “Purchase Order” has the meaning set forth in Section 3.2.

     “Rolling Forecast” has the meaning set forth in Section 3.1.

     “Shire Product” means a Collaboration Product to be manufactured hereunder as set forth in Section 2.1.

     “Term” has the meaning set forth in Section 7.1.

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     “Termination Assistance Services” has the meaning set forth in Section 8.1.

ARTICLE II

SUPPLY OF PRODUCTS

     Section 2.1. Collaboration Products. Pursuant to the terms and conditions of this Agreement, Shire shall exclusively purchase from Duramed, and Duramed shall supply to Shire, Shire’s requirements for Collaboration Products, including for Development activities under the Product Development Agreement, in placebo and active forms. Upon Development of a Collaboration Product under the Product Development Agreement, the Parties shall attach hereto mutually agreed Exhibits applicable to the supply of such Collaboration Product. This Agreement, together with such Exhibits, shall be considered a separate agreement for each Collaboration Product. Duramed shall have no obligation to supply any Collaboration Product that has not been reduced to final finished dosage form under the applicable Development Plan, and all Exhibits hereto shall be consistent with such final finished dosage form.

     Section 2.2. Cooperation on Manufacturing Plan. The Parties acknowledge that Duramed will require certain minimum lead times and may have various options for manufacturing Shire Product hereunder, which options may include (i) building a dedicated manufacturing plant, which plant may or may not include excess capacity, (ii) utilizing excess capacity at existing manufacturing plants, (iii) expanding capacity at existing manufacturing plants, or (iv) combinations of the foregoing. Within [*] following the Effective Date (with respect to each Collaboration Product), the Parties shall meet to develop non-binding forecasts for capacity planning purposes of Shire’s anticipated needs for each Shire Product for clinical and commercial purposes over the clinical testing period and (i) the twelve (12) month period following first commercial launch of each Shire Product; and (ii) the 36 month period following the first commercial launch of each Shire Product. Thereafter, the Parties shall meet on an as-required basis, but no less than once each calendar quarter, to update such capacity planning forecast. The Parties shall also reasonably cooperate to develop non-infringing manufacturing techniques for Collaboration Products.

     Section 2.3. Initial Forecast and Purchase Order. At least [*] prior to the first anticipated clinical use or commercial launch for a Shire Product, Shire shall submit to Duramed an initial forecast (the “Initial Forecast”), which Initial Forecast shall be updated thereafter in accordance with Section 3.1. Notwithstanding any other provision of this Agreement, in no event shall Shire submit a Purchase Order for any initial order of a Shire Product [*] prior to the required delivery date for such initial order.

     Section 2.4. Initial Implementation Meeting. No later than thirty (30) days after the receipt of an initial Purchase Order, Duramed and Shire shall hold an initial implementation meeting (at such time and place or by such means as are mutually agreed by the Parties) to develop specific implementation requirements for the supply of Shire Product to Shire. Thereafter, Duramed and Shire shall conduct implementation-planning meetings as reasonably required by the Parties in order to update and discuss (i) the current status of Duramed’s implementation activities, and (iii) the status of any actual and anticipated problem areas, their impact on the work efforts of Duramed, and actions being taken and/or needed to be taken by the Parties in order to reduce the potential impact of such problems.

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ARTICLE III

FORECASTS, ORDERS AND SHIPMENT

     Section 3.1. Forecasted Quantities. [*]

     Section 3.2. Purchase Order Form. Shire shall submit all orders for the purchase of Shire Products using the form of purchase order attached hereto as Schedule 1 (each a “Purchase Order”). Each Purchase Order will be delivered to such location as Duramed designates in writing to Shire from time to time. After Duramed receives a Purchase Order, Duramed shall acknowledge receipt thereof in writing within five (5) business days, either (i) accepting the Purchase Order, or (ii) seeking clarification of the Purchase Order, if necessary. Duramed shall have no obligation to accept any Purchase Order that does not include all information required on Schedule 1 or that is inconsistent with the terms and conditions of this Agreement. In the event that an order is rejected, Duramed and Shire will cooperate in good faith to resolve any supply issues raised by such order. The minimum size of any order placed by Shire will be a full batch in accordance with Exhibit A hereto.

     Section 3.3. Delivery of Shire Product. Upon acceptance of a Purchase Order, Duramed shall deliver all Shire Product by the delivery date covered by such Purchase Order in accordance with the terms of this Agreement and such Purchase Order, including the quantities accepted in each Purchase Order. At the time of delivery to Shire, all Shire Product manufactured hereunder shall meet the Product Specification applicable thereto in all material respects, and shall be finished, packaged, labeled and/or ready for commercial sale by Shire as required in accordance with the Packaging Specifications.

     Section 3.4. Expedited Delivery. Upon the request of Shire to supply the quantities of Shire Product under a Purchase Order on an expedited basis, Duramed shall notify Shire of any expected increased costs that Duramed anticipates it will incur. Subject to prior written approval by Shire of these increased costs, Duramed shall use reasonable efforts to supply the quantities of Shire Product on an expedited basis. Duramed shall not have any liability for any failure to meet any such requested expedited delivery schedule.

     Section 3.5. Excess Purchase Orders. Duramed shall use commercially reasonable efforts to, but shall not be obligated to supply quantities of any Shire Product in excess of 120% of the quantities set forth in the most recent forecast for such quarter. If Duramed believes it will be unable to deliver any additional volume on the date specified by Shire in the applicable Purchase Order, Duramed shall notify Shire in writing as promptly as practicable, and shall provide a proposed alternative delivery schedule. Any agreement on the delivery schedule for such additional volume shall be documented in writing and shall become effective only upon mutual written agreement of both Parties to the terms and conditions thereof.

     Section 3.6. Cancellation of Orders. Shire may not cancel an order without payment to Duramed in full for the order. Duramed shall, in good faith, use commercially reasonable efforts to mitigate the costs of cancellation of any Purchase Order.

     Section 3.7. Conflict. The terms of this Agreement shall prevail over any conflicting, inconsistent or additional terms set forth in any Purchase Order.

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     Section 3.8. Delivery and Risk of Loss. All Shire Products shipped under this Agreement will be shipped Ex-Works (Incoterms 2000) Duramed’s manufacturing facility to such location designated by Shire in the applicable accepted Purchase Order. Shire will pay all freight, insurance charges, taxes, import and export duties, inspection fees and other charges applicable to the sale and transport of Shire Products. Risk of loss to Shire Products shall pass to Shire upon delivery to Shire’s designated carrier. Title to all Shire Products manufactured hereunder shall pass to Shire on payment by Shire for the applicable Shire Product or pro-rata portion thereof.

     Section 3.9. Certificate of Analysis. A Certificate of Analysis (“COA”) will accompany each shipment of Shire Products in the form attached hereto as Schedule 2.

     Section 3.10. Location of Manufacturing. All Shire Products Shire shall be manufactured in a facility that has been designated as an approved manufacturing facility by the applicable Regulatory Approval for such Shire Product. Should Duramed desire to change any of the manufacturing site for a Shire Product, or any component thereof, to a site other than those designated in the applicable Regulatory Approval, Duramed shall notify Shire in writing and the Parties shall thereafter meet to discuss the potential consequences of such a change. Duramed shall not change manufacturing sites for any Shire Product, or any component thereof, except in accordance with the authorization of the applicable Governmental Authority, and the procedures and requirements set forth in this Agreement.

     Section 3.11. Shortage of Materials. In the event that the materials and/or resources required to manufacture and deliver Shire Products to Shire in accordance with this Agreement are, or are reasonably anticipated to become, in short supply such that Duramed may be unable to provide Shire with the quantities of Shire Products set forth in a Purchase Order, Duramed shall notify Shire of such shortage as promptly as practicable. If Duramed so notifies Shire, Duramed and Shire shall promptly meet to discuss how to address the potential shortage. In the event that Duramed, at any time, has any information indicating that it may not be able to supply Shire with all Shire Products in accordance with a confirmed Purchase Order, Duramed shall as soon as practicable provide Shire a written notice to that effect. To the extent that there is any such shortage, Duramed shall allocate on a pro-rata basis the supply of Shire Products and similar Duramed products based on the prior 12 months’ sales for each of Shire and Duramed for such products. Any failure by Duramed to meet its obligations under this Agreement as a result of a general shortage of raw materials (i.e., a shortage that not only affects Duramed, but also affects the general market for such raw materials) shall not be considered a breach of this Agreement provided that Duramed is meeting its obligations under Article IX. To the extent (other than as a result of a Force Majeure Event) that Duramed fails to supply at least 80% of the quantities of Shire Product in the aggregate ordered for a particular calendar quarter for two consecutive calendar quarters, Shire may request and Duramed shall, at its cost and expense, qualify a second source of supply. Such second source shall be qualified and ready to manufacture Shire Product within 12 months following such Shire request. If Duramed fails to qualify and have ready such second source, then Shire shall have the right to qualify and make ready such second source and Duramed shall promptly reimburse Shire for costs and expenses incurred by it in so doing. Such second source shall be used by Duramed to supply Shire Product to Shire under this Agreement at least to the extent required to maintain the second source as a qualified manufacturer of Shire Product.

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     Section 3.12. Product Specifications. Duramed shall manufacture all Shire Product so that, at the time of delivery to Shire, the Shire Product conforms, in all material respects, to the Product Specifications, cGMP and any reasonable requests communicated by Shire to Duramed in order for Shire to comply with any legal or regulatory obligations applicable to Shire. At the time of shipment of Shire Products, the Shire Products shall have a minimum remaining shelf life of not less than that agreed upon by the Parties with respect to the Shire Product at issue as set forth in Exhibit A. On mutual agreement of the Parties, the Parties may modify the Product Specifications of the Shire Product by amendment to Exhibit A, unless such changes are required by any regulatory authority, in which case Shire may unilaterally modify the Product Specifications of the Shire Product. Upon modification of such Product Specifications, Duramed shall use commercially reasonable efforts to alter its manufacturing processes to meet such Product Specifications and shall not be liable for any failure to meet its obligations hereunder while acting in good faith to meet the new Product Specifications.

     Section 3.13. Packaging Specifications. Duramed shall package the Shire Product in accordance with the Packaging Specifications. Changes in the Packaging Specifications shall be subject to the mutual agreement of the Parties on a schedule to be agreed by the Parties, taking into account the time and cost required for Duramed to implement any necessary manufacturing or packaging modifications. Shire shall compensate Duramed for the cost of any inventory of old packaging that cannot be used as a result of any modification by Shire to the Packaging Specifications, and for any other costs incurred as a result of the implementation of the modifications to the Packaging Specifications requested by Shire. Shire will be responsible for ensuring the accuracy of all information contained on all labels for Shire Products and for the compliance of all such labels with applicable Laws and Regulatory Approvals.

     Section 3.14. Facility Maintenance; Inspection; Reports. Duramed shall, at all times, maintain and operate all facilities where Shire Products are manufactured, packaged or tested, and implement required quality control procedures to perform its obligations under this Agreement. Not more than once every twelve (12) months (or more often in the case of a deficiency), Duramed shall permit, or cause its contractors to permit, quality assurance representatives of Shire or designated third parties and representatives of the applicable Government Authority to inspect such facilities upon reasonable advance notice, during normal business hours and on a confidential basis. Duramed shall promptly provide, or cause its contractor to provide, Shire with a copy of any notice from the applicable Government Authority received at the conclusion of an inspection relating to any Shire Product.

     Section 3.15. Subcontracting. Duramed shall have the right to subcontract manufacture and supply under this Agreement to any Affiliate of Duramed or to a Third Party, provided that, (i) Duramed shall procure that such Affiliates and Third Parties comply with the terms and conditions of this Agreement, (ii) Duramed shall be liable for any non-performance or breach by such Affiliate or Third Party, and (iii) any subcontracting to a Third Party shall be subject to Shire’s approval, which approval shall not be unreasonably withheld.

     Section 3.16. Competing Products. Subject to the Product Development Agreement, Shire recognizes and acknowledges that Duramed and its Affiliates have been, and

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will continue to be, actively involved in the field in which the Shire Products may be sold. Shire acknowledges that Duramed and its Affiliates currently, or may in the future, market, sell and distribute products that compete directly with any Shire Product, and may continue to market, sell and distribute these and other competing products throughout the Term of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     Section 4.1. Mutual Representations. Each Party hereby represents and warrants to the other Party, as of the date hereof, as follows:

     (a) Due Authorization. Such Party is a corporation duly incorporated and in good standing (where such concept applies) as of the Effective Date, and the execution, delivery and performance of this Agreement by such Party have been duly authorized by all necessary action on the part of such Party.

     (b) Due Execution. This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

     (c) No Conflict. Such Party’s execution, delivery and performance of this Agreement do not: (i) violate, conflict with or result in the breach of any provision of the charter or by-laws (or similar organizational documents) of such Party; (ii) conflict with or violate any law, rule, regulation or governmental order applicable to such Party or any of its assets, properties or businesses; or (iii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of any agreement to which it is a party.

     (d) Duly Licensed. Such Party is duly licensed, authorized or qualified to do business and is in good standing (where such concept applies) in every jurisdiction in which a license, authorization or qualification is required for the ownership or leasing of its assets or the transaction of business of the character transacted by it, except where the failure to be so licensed, authorized or qualified would not have a material adverse effect on such Party’s ability to fulfill its obligations hereunder.

ARTICLE V

QUALITY ASSURANCE

     Section 5.1. Duramed Compliance. Duramed shall manufacture, fill, package, handle and warehouse the Shire Products in conformity with all applicable laws, cGMP requirements and the Product Specifications. Shire shall maintain all Regulatory Approvals and all permits and licenses issued by any Governmental Authority that are necessary to permit Duramed to manufacture and supply the Shire Products. Duramed shall advise Shire of any information of which it becomes aware arising out of Duramed’s activities hereunder that have adverse regulatory compliance and/or reporting consequences affecting the Shire Products.

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     Section 5.2. Inspections. Duramed shall advise Shire of any requests by any Governmental Authority for inspections of the premises used to manufacture Shire Products. In the event the portion of Duramed’s facilities at which Shire Product are manufactured is inspected by any Governmental Authority, Duramed shall use commercially reasonable efforts to ensure that Shire shall have the right to be present during such inspection. To the extent relating directly to a Shire Product, Duramed shall notify Shire of any alleged violations or deficiencies relating to a facility at which any Shire Products are manufactured, packaged or stored, and, to the extent relating directly to a Shire Product, shall disclose to Shire all relevant portions of any notice of observations or potential violations as well as a copy of its response thereto.

     Section 5.3. Shire Compliance. Shire shall hold, store, handle, ship, deliver, distribute and/or sell the Shire Products (i) in accordance with applicable cGMP requirements, laws and Regulatory Approvals; and (ii) in compliance with the Product Specifications. Shire shall enter into all necessary compliance agreements as may be reasonably required or designated by Duramed, including but not limited to the quality agreement attached hereto as Exhibit C (the “Quality Agreement”) and any other agreements to cover quality assurance and adverse incident reporting, including the safety agreement attached hereto as Exhibit D (the “Safety Agreement”).

     Section 5.4. Quality Control. Upon delivery of Shire Products to Shire, Shire shall be solely responsible for compliance with all Laws and Regulatory Approvals with respect to the Shire Products.

     Section 5.5. Rejection of Delivered Products. Within [*] of receipt of any Shire Product, Shire shall inspect the Shire Product and advise Duramed of any defect whereby the Shire Product does not conform to the Product Specifications. Any Shire Product not refused within [*] shall be deemed accepted subject to Section 5.6 below; provided, however, that such acceptance or deemed acceptance shall not adversely affect any claim for indemnification provided in Article XI. If Shire desires to refuse acceptance, Shire shall, within such thirty (30) day period, inform Duramed of its refusal to accept the defective Shire Product and the reason(s) therefor. In the event that Shire refuses acceptance, Duramed, upon confirmation of the reasons for refusal of the Shire Product, will replace the defective Shire Product or refund the purchase price thereof, at Shire’s option. If Duramed and Shire do not agree on the refusal or rejection of Shire Product, then any Party may refer the matter for final analysis to a specialized laboratory of national reputation acceptable to both Parties for the purpose of determining the results. Any determination by such laboratory shall be final and binding upon the Parties. The cost of any such review by a laboratory shall be borne by Shire if it is determined that the Shire Product conforms to the Product Specifications, and by Duramed if determined that it does not.

     Section 5.6. Latent Defects. Shire shall have the right to refuse and reject any Collaboration Product within [*] from the date Shire becomes aware of a defect in a Shire Product delivered hereunder, in the case of defects that are not evident upon a reasonable initial inspection but which subsequently become evident.

     Section 5.7. Non-Conforming Products. Notwithstanding any other provisions of this Agreement, Shire shall return to Duramed or its designee any Shire Products that do not conform with the Product Specifications at the time of shipment to Shire, or if Shire and

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Duramed mutually agree, to dispose of such Shire Products as Duramed may direct. Duramed shall be responsible for the costs associated with the proper disposal of all such Shire Products not in conformance with the Product Specifications at the time of shipment and shall promptly replace or credit, at the option of Duramed, such non-conforming Shire Products.

     Section 5.8. Cost of Recall. In the event that any Shire Product is quarantined or recalled, or is subject to a stop-sale action, whether voluntary or by the action of any Governmental Authority, or as a result of the revocation or expiration of any Regulatory Approval, any expenses, including any out-of-pocket administrative costs and reasonable fees of any experts or attorneys that may be utilized by either Party, government fines or penalties, related to such recall, quarantine or stop-sale, shall be borne by Shire unless it is determined that the reason for the quarantine, recall or stop-sale action is the result of the breach by Duramed of its obligations under this Agreement, and in such case such expenses shall be shared according to the relative responsibility of each Party. Such determination may be made by the Governmental Authority involved, or by mutual agreement of the Parties following examination and review of all records pertinent to the manufacture of the Shire Product subject to such recall.

     Section 5.9. Regulatory Actions. If any regulatory authority in the Shire Territory takes any action with respect to a Shire Product that requires a response or action by Duramed, Duramed shall use commercially reasonable efforts, at the expense of Shire, to carry out the response or action, at all times in consultation with Shire, and promptly thereafter Duramed shall meet with Shire and agree a suitable plan of action in order to try and rectify and/or address any problem(s) identified by the Regulatory Authority within a reasonable period of time at the expense of Shire. Notwithstanding the foregoing, if any of the above expenses result from Duramed’s breach, negligence or willful misconduct hereunder, then any expenses incurred under this Section 5.9 shall be Duramed’s responsibility.

ARTICLE VI

PRICE AND PAYMENTS

     Section 6.1. Clinical Non-Seasonique Supply Prices. [*]

[*]

     Section 6.2. Commercial Non-Seasonique Supply Prices. [*]

[*]

     Section 6.3. Clinical Seasonique Prices. [*]

[*]

     Section 6.4. Commercial Seasonique Supply Prices. [*]

[*]

     Section 6.5. Unit Price Negotiation. [*].

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     Section 6.6. Records. Duramed shall keep complete and accurate records, consistent with GAAP, of the Fully Allocated Manufacturing Costs and API Costs.

     Section 6.7. Invoices. Duramed may invoice for Shire Product at any time following tender thereof to Shire’s carrier. All invoices shall be sent to a single address specified in writing by Shire. Payment for Shire Product shall be due within [*] after the date of the invoice by check or electronic funds transmission in United States dollars without any offset or deduction of any nature whatsoever. All electronic payments shall be made to such account as Duramed shall have specified in writing to Shire with written confirmation of payment sent by facsimile to such address as Duramed shall have specified in writing to Shire. If Shire fails to pay any undisputed invoiced amount when due, a service charge will be imposed by Duramed equal to the [*] per month or the highest rate permitted by law of the outstanding amount for each month or portion thereof that such amount is overdue.

     Section 6.8. Taxes. The purchase price of Shire Products as determined in accordance with Section 6.1 shall be exclusive of any applicable value added tax and any other taxes, duties and impositions that, if applicable, shall be paid by Shire to Duramed at the same time as the purchase price for such Shire Product. Shire shall bear the cost of any such taxes, duties or impositions of any kind, nature or description applicable to the sale and transportation of Shire Product, and Shire will forthwith pay to Duramed all such amounts upon demand.

     Section 6.9. Separate Sale. Each shipment of Shire Product shall constitute a separate sale, obligating Shire to pay therefor, whether such shipment is in whole or only partial fulfillment of any Purchase Order.

     Section 6.10. Deductions. Shire shall not to make any deductions of any kind from any payments due to Duramed hereunder unless Shire will have received prior written authorization from Duramed authorizing such deduction.

     Section 6.11. Audit.

     (a) Audit. Shire shall have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to Duramed, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of Duramed as may be reasonably necessary to verify the accuracy of amounts paid by Shire under this Agreement for any calendar year ending not more than three (3) years prior to the date of such request; provided, however, that, Shire shall not have the right to conduct more than one such audit in any twelve (12) month period and that Shire shall not be permitted to audit the same period of time more than once. The accounting firm shall disclose to Shire only whether the various expenses subject to reimbursement under this Agreement are correct or incorrect and the specific details concerning any discrepancies. Shire shall bear all costs of such audit, unless the audit reveals a discrepancy in Shire’s favor of more than five percent (5%), in which case Duramed shall bear the cost of the audit. If Duramed disputes the findings pursuant to this Section 6.11, the Parties shall meet and discuss such dispute.

     (b) Payment of Additional Amounts. If, based on the results of any audit, (a) additional payments are owed by Shire to Duramed under this Agreement, then Shire shall make

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such additional payments, or (b) the payments previously made by Shire to Duramed under this Agreement are in excess of the amounts that were actually required to be made, then Duramed shall return such excess payments, in each case within fifteen (15) Business Days after the accounting firm’s written report is delivered to the Parties.

ARTICLE VII

TERM AND TERMINATION

     Section 7.1. Term. The term of this Agreement shall commence on the Effective Date and shall continue until terminated in accordance with this Article VII (the “Term”). Shire may terminate this Agreement as to the supply of particular Shire Product at any time on one (1) years written notice to Duramed. Subject to Article VIII, Duramed may terminate this Agreement as to the supply of particular Shire Product at any time on eighteen (18) months written notice to Shire, provided that Duramed may not terminate this Agreement under this sentence until ten (10) years following the Effective Date. Termination of this Agreement with respect to one or more Shire Products shall not relieve the Parties of any obligations with respect to any other Shire Products, and this Agreement shall remain in effect as to such other Shire Products.

     Section 7.2. Termination of Exclusivity. Notwithstanding the provisions of Section 7.1, the obligations of the Parties under Section 2.1 shall be effective as of the date of execution of this Agreement and may not be terminated except on mutual agreement of the Parties. Termination of this Agreement as to the supply of any particular Shire Product under Section 7.1 shall not affect the rights and obligations of the Parties with respect to the other Shire Products under Section 2.1.

     Section 7.3. Termination for Cause. Either Party may terminate this Agreement as to the supply of a particular Shire Product at any time in the event that the other Party materially breaches this Agreement as to such Shire Product and such material breach continues uncured for a period of ninety (90) days after written notice thereof; provided, however, in the event that the breaching Party has in good faith commenced cure within such ninety (90) day period, but cannot practically complete such cure within such ninety (90) day period, the breaching Party shall have an additional ninety (90) day cure period. In the event a material breach of this Agreement is incapable of cure or cannot be cured in the time periods set forth in the previous sentence acting using commercially reasonable efforts, without limiting any other rights of the non-breaching Party, including the right to seek injunctive relief, the non-breaching Party shall not have the right to terminate this Agreement if (i) the breaching Party is providing full cooperation to resolve and/or mitigate the breach, and (ii) the breach was not caused by willful misconduct by the breaching Party.

     Section 7.4. Survival. The provisions of Sections 5.8 and 7.4, and Articles VIII, X, XI and XII shall survive termination or expiration of this Agreement. Termination of this Agreement shall not affect the obligation of any Party to pay the other Party any amounts due hereunder accrued prior to the termination date hereof. Except in the event of termination by Duramed under Section 7.3, upon termination of this Agreement Duramed shall deliver to Shire on an ex-works basis all manufactured and work-in progress quantities of Shire Product in its possession that have been manufactured in respect of a specific Purchase Order(s) accepted by

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Duramed hereunder subject to payment in advance therefor by Shire. The right to terminate this Agreement shall not prejudice any other right or remedy in equity or at law of a Party in respect of any breaches of this Agreement.

ARTICLE VIII

TERMINATION ASSISTANCE SERVICES

     Section 8.1. Termination Assistance Services. If (i) Duramed terminates this Agreement as to the supply of particular Shire Product under Section 7.1 (and Shire intends to continue Commercializing the applicable Shire Product), or (ii) Shire terminates this Agreement under Section 7.3 (and Shire intends to continue Commercializing the applicable Shire Product), Duramed shall for a period of one (1) year thereafter, upon Shire’s request, provide any cooperation reasonably requested by Shire that may be required to facilitate the transfer of the manufacture of the applicable Shire Product to Shire or Shire’s designee (“Termination Assistance Services”). Shire shall reimburse Duramed for the reasonable costs of Duramed in providing Termination Assistance Services. The rights of Shire under this Section 8.1 shall be without prejudice to the Parties’ rights to pursue legal remedies for breach of this Agreement, either for breaches prior to termination or during the period this Agreement is continued in force post termination.

     Section 8.2. Development of Changeover Plan. If and to the extent requested by Shire, whether prior to, upon, or following termination of this Agreement by Shire, Duramed shall use commercially reasonable efforts to assist Shire in developing a plan that shall specify the tasks to be performed by the Parties in connection with the Termination Assistance Services and the schedule for the performance of such tasks (a “Changeover Plan”). The Changeover Plan shall include descriptions of the services, fees, documentation and access requirements that will promote an orderly transition of the manufacture of Shire Product to Shire or its designee.

     Section 8.3. Know-How, Infrastructure, and Software. In connection with the Termination Assistance Services, Duramed shall make available to Shire or its designee, to the extent owned or controlled by and in the possession of Duramed and reasonably required to manufacture the applicable Shire Product, (i) copies of all applicable requirements, standards, policies, reports and report formats, user manuals, technical manuals, system architecture, processes, operating procedures and other documentation, (ii) copies of flow charts of the manufacturing procedures and work instructions related to manufacturing the relevant Shire Product, (iii) a list of all material equipment, including the source of such equipment, utilized in the production of the applicable Shire Product, (iv) copies of all current specifications, including packaging, for the relevant Shire Product, (v) copies of all standard operating procedures for the manufacturing procedures to be made available to Shire, (vi) all necessary environmental conditions necessary to manufacture the relevant Shire Product and copies of any existing external environmental impact studies based on the materials or methods employed in the manufacturing method to be made available to Shire, and (vii) such other documentation as the Parties may agree.

ARTICLE IX

FORCE MAJEURE

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     Section 9.1. Force Majeure. No Party shall be responsible for failure or delay in performance hereunder due to reasons beyond its reasonable control, including without limitation, by reason of fire, flood, riot, freight embargoes, acts of God or of the public enemy, war or civil disturbances, general shortage of raw materials (i.e., a shortage that not only affects Duramed, but also affects the general market for such raw materials), or any future laws, rules, regulations or acts of any government affecting a Party that would delay or prohibit performance hereunder (a “Force Majeure Event”). Upon the occurrence of a Force Majeure Event, the Party whose performance is so affected shall promptly give notice to the other Party of the occurrence or circumstance upon which it intends to rely to excuse its performance. During the duration of the Force Majeure Event, the Party so affected shall use its reasonable commercial efforts to avoid or remove such Force Majeure Event and shall take reasonable steps to resume its performance under this Agreement with the least possible delay. Any Force Majeure Event must be beyond the control and without the fault or negligence of the Party claiming excusable delay, provided that, breaches by any Party’s subcontractors shall not excuse any delay or failure by that Party.

ARTICLE X

CONFIDENTIALITY

     Section 10.1. Confidential Information. As used in this Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or generated pursuant to this Agreement by one Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Confidential Information shall not include any information or materials that:

(a) were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

(b) were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

(c) became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

(d) were disclosed to a Party, other than under an obligation of confidentiality, by a third party who had no obligation to the Disclosing Party not to disclose such information to others; or

(e) were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the

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other Party, to the extent such Receiving Party has documentary evidence to that effect.

     Section 10.2. Confidentiality Obligations. Each of Duramed and Shire shall keep confidential all Confidential Information of the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information but in no event less than a reasonable degree of care. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who are bound by confidentiality obligations consistent with those contained herein and who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement. Upon termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party and its Affiliates or their directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall continue to be subject to the provisions of this Article X.

     Section 10.3. Permitted Disclosure and Use. Notwithstanding Section 10.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange regulations. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 10.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. In addition, notwithstanding Section 10.2, the Parties shall cooperate to prepare standardized public responses to anticipated inquiries from the public, press, stockholders, investors and/or analysts with respect to the activities hereunder. Despite the foregoing, each Party agrees that the other Party is free to disclose this Agreement in its entirety to the United States Federal Trade Commission and the United States Department of Justice, or to any court with jurisdiction over the litigations settled under the Settlement Agreement between Shire Laboratories Inc. and Barr Laboratories Inc. dated August 14, 2006.

     Section 10.4. Unauthorized Disclosure. The Receiving Party acknowledges and agrees that the Confidential Information of the Disclosing Party constitutes proprietary information and trade secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside disclosure of such Confidential Information shall be presumed to cause irreparable injury to the Disclosing Party.

     Section 10.5. Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and shall cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure. The Receiving Party

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acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure of Confidential Information and that the Disclosing Party may be entitled, without waiving other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction in the event of such unauthorized disclosure.

     11.5 Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article X.

ARTICLE XI

INDEMNIFICATION

     Section 11.1. Indemnification by Shire. Shire hereby agrees to hold Duramed, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a third party (each a “Third Party Claim”) resulting directly from (a) any breach by Shire of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (b) the negligence or willful misconduct by Shire or its Affiliates or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, (c) the Shire Product, including the use, handling, storage, sale or other disposition of Shire Product (including, without limitation, those Third Party Claims that involve product defect, product liability, death or bodily injury (or allegations thereof) to any individual or any property, or (d) infringement of intellectual property based on the Product Specification, Packaging Specifications, manufacture, use, sale, offer for sale, importation or other distribution of Shire Product, except to the extent that such Losses in (a) through (c) result from the negligence or willful misconduct of Duramed, or the breach of this Agreement by Duramed.

     Section 11.2. Indemnification by Duramed. Duramed hereby agrees to hold Shire, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting directly from (a) any breach by Duramed of any of its representations, warranties, covenants or obligations pursuant to this Agreement, or (b) the negligence or willful misconduct of Duramed or its Affiliates or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, or (c) claims that involve product defect, product liability, death or bodily injury (or allegations thereof) to any individual or any property to the extent that such claim results from Duramed’s breach, negligence or willful misconduct hereunder,, except to the extent that such Losses in (a) through (c) result from the negligence or willful misconduct of Shire, or the breach of this Agreement by Shire.

     Section 11.3. Notice of Claim. All indemnification claims in respect of any indemnitee seeking indemnity hereunder (collectively, the “Indemnitees” and each an “Indemnitee”) shall be made solely by the corresponding Party (the “Indemnified Party”). The Indemnified Party shall give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to base a request for indemnification hereunder, but in no event shall the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such Third Party Claim. Each

15

Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party shall furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defense of such Third Party Claim.

     Section 11.4. Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification hereunder by giving written notice to the Indemnified Party within thirty (30) days after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim.

     Section 11.5. Right to Participate in Defense. Without limiting Section 11.4, any Indemnitee shall be entitled to participate in, but not control, the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 11.4 (in which case the Indemnified Party shall control the defense).

     Section 11.6. Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that shall not result in the Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any manner, and as to which the Indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, shall deem appropriate (provided, however that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and shall transfer to the Indemnified Party all amounts which said Indemnified Party shall be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 11.4, the Indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent shall be at the Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with Section 11.4 shall not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the

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Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 11.4.

     Section 11.7. Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation shall include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.

     Section 11.8. Expenses of the Indemnified Party. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim shall be reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

     Section 11.9. Insurance. At all times from the Effective Date until three (3) years following termination or expiration of this Agreement, each of Shire and Duramed will maintain product liability insurance (or self insurance), that is reasonable and customary in the U.S. pharmaceutical industry for companies of comparable size, but in no event less than $10,000,000 per occurrence and $10,000,000 in the aggregate limit of liability per year. Each of Shire and Duramed shall provide written proof of such insurance or self insurance to the other Party upon request.

     11.10. Exclusion of Certain Damages. IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, OR FOR ANY DIRECT OR INDIRECT LOSS OF PROFIT, LOST BUSINESS OPPORTUNITY, LOSS OF OR DISRUPTION TO PRODUCTION OR GOODWILL, EXCEPT TO THE EXTENT SUCH DAMAGES: (A) ARE INCLUDED IN A THIRD-PARTY CLAIM FOR WHICH SUCH PARTY IS INDEMNIFIED HEREUNDER; OR (B) ARE FOR BREACH OF CONFIDENTIALITY OBLIGATIONS.

ARTICLE XII

MISCELLANEOUS

     Section 12.1. Entire Agreement; Amendment. This Agreement, together with the Product Development Agreement, including the exhibits attached hereto and thereto (each of

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which is hereby and thereby incorporated herein and therein by reference), set forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between the Parties, which shall continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises, agreements, warranties, representations, conditions, and understandings set forth herein are made and deemed effective as of the Effective Date, and that the execution of this Agreement shall not constitute a waiver of any right or claim of either Party as of the Effective Date.

          Section 12.2. Notices. All notices or other communications that are required or permitted under this Agreement shall be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication shall be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For Duramed:	Duramed Laboratories, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 201-930-3330
	Attention: President
with a copy to:	Barr Pharmaceuticals, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 888-843-0563
	Attention: General Counsel
For Shire:	Shire LLC
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center

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Princeton, NJ 08540

Fax: (609) 919-6701

Attention: Randall B. Sunberg

          Section 12.3. Independent Contractors. In making and performing this Agreement, Shire and Duramed shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and Duramed and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. Except as otherwise provided in this Agreement, each Party shall be solely responsible for its own costs and expenses associated with this Agreement.

          Section 12.4. Maintenance of Records. Each Party shall keep and maintain all records required by Law with respect to the Shire Products and shall make copies of such records available to the other Party upon reasonable request.

          Section 12.5. United States Dollars. References in this Agreement to “Dollars” or “$” shall mean the legal tender of the United States.

          Section 12.6. No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

          Section 12.7. Assignment. Neither Party shall sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of Law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent may be granted, withheld or conditioned at such other Party’s sole and absolute discretion); provided, however, that either Party may assign or transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other Party to any Affiliate of such Party, or to any Third Party (a) with which it merges or consolidates, or to which it transfers all or substantially all of its assets to which this Agreement pertains or (b) in part, in connection with the sale or transfer of such Party’s business relating to Commercialization of a Collaboration Product within a particular country. The assigning Party (unless it is not the surviving entity) shall remain jointly and severally liable with, and shall guarantee the performance of, the relevant Affiliate or Third Party assignee under this Agreement, and the relevant Affiliate assignee, Third Party assignee or surviving entity shall assume in writing all of the assigning Party’s obligations under this Agreement. Any purported assignment or transfer in violation of this Section 12.7 shall be void ab initio and of no force or effect. Notwithstanding anything to the contrary herein or in the Product Development Agreement, in the event any assignment by Shire hereunder gives rise to any obligation to withhold any amounts payable to Duramed, Shire, or its assignee, shall be entitled to deduct from all payments due under this Agreement the amount of all applicable withholding taxes to the extent Shire, or its assignee, pays such taxes to the appropriate governmental authority on behalf of Duramed. Shire shall properly furnish Duramed with copies of tax receipts evidencing the payment of all such taxes, levies and assessments. Duramed and Shire shall cooperate with each other in obtaining any exemption from, a refund for, or reduced rate of tax available under any applicable law or tax treaty. Notwithstanding the foregoing, Shire shall be liable for, and

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indemnify Duramed against, any non-U.S. taxes, any value-added or sales taxes, any duties or levies and assessments, howsoever designated or computed that are required to be paid or withheld by Shire on such payments. Shire shall so indemnify Duramed within forty-five (45) days of Shire’s receipt of notification from Duramed (in accordance with Section 12.2 hereof) that either (i) based upon current facts and circumstances, Duramed does not have or will not have during the applicable tax year any or sufficient foreign tax credits available to utilize to offset such tax liability; or (ii) Duramed has applied for a refund from the taxing authority at issue (such notice to include a copy of such refund application). Notwithstanding anything in this Agreement to the contrary, in the event that withholding taxes are paid on behalf of Duramed by Shire, if Duramed uses a foreign tax credit received as a result of the payment of withholding taxes by Shire and thereby reduces the amount of U.S. income tax that Duramed otherwise would have paid, or otherwise receives a refund, Duramed shall refund to Shire the amount of such reduction with respect to such foreign tax credit or such refund.

          Section 12.8. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

          Section 12.9. Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be reasonably necessary or appropriate in order to carry out the purposes and intent of this Agreement.

          Section 12.10. Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good fait effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

          Section 12.11. Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

          Section 12.12. No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective representatives thereunto duly authorized, all as of the date first written above.

SHIRE LLC
By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO
DURAMED PHARMACEUTICALS, INC.
By:	/s/ Fred Wilkinson
Name:	Fred Wilkinson
Title:	President & C.O.O.

SHIRE plc, a British public limited company having a principal place of business at Hampshire International Business Park, Chineham, Basingstoke, England RG24 8EP, hereby guarantees in the performance of Shire of all obligations of Shire under this Agreement, in accordance with the terms and conditions of this Agreement, including any applicable notice or cure periods.

SHIRE PLC
By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO

[Signature Page to Shire Products Supply Agreement]

EXHIBIT A

PRODUCT SPECIFICATIONS

All Shire Product supplied hereunder shall have a remaining expiry period of:

(a)	Not less than [*] months, if the shelf life is [*] months;
(b)	Not less than [*] months, if the shelf life is [*] months; and
(c)	Not less than [*] months, if the shelf life is [*] months.

EXHIBIT B

PACKAGING SPECIFICATIONS

EXHIBIT C

STEERING COMMITTEE CHARTER

A.	Purpose and Functions of the Steering Committee.
	The Steering Committee will (i) enable, coordinate and guide the activities of the Parties relating to the development of Collaboration Products, (ii) define and implement, on an ongoing basis, a technology roadmap, and (iii) implement the Agreement and, without limiting the rights of the Parties under ARTICLE 16, resolve any disputes or disagreements related to the implementation thereof.
B.	Development Plans. Upon delivery of each Development Plan to the Steering Committee, each Party shall review the Development Plan and provide written comments and suggestions to the Steering Committee within [*] after receipt. The Steering Committee may incorporate any such revisions that it deems appropriate and will provide a recommendation of the Development Plan to each of the Parties. Notwithstanding the foregoing, Shire shall make all final decisions with respect to Development Plans affecting the Shire Territory and Duramed shall make all final decisions with respect to Development Plans in the Duramed Territory.
C.	Reporting. The Steering Committee shall report to the Parties from time to time, but in no event less often than once each quarter. Such report shall describe all projects undertaken in performance of each Development Plan. Such report also shall include any other information reasonably requested by the Parties.
D.	Steering Committee Responsibilities. The Steering Committee shall have the duty and authority to perform the functions described above and the following additional functions:

(a)	General oversight of the activities of the Parties under this Agreement, including the progress of work under each Development Plan.
(b)	Review of quarterly reports before such reports are sent to the Parties regarding the progress of the Parties’ efforts under each Development Plan.
(c)	Review of the technology budget and quarterly spending in connection with each Development Plan.

E. Membership and Procedure.

1. Membership on the Committee.

(a) Members. The Steering Committee members (each a “Member”) will include the Collaboration Managers, [*].

(b)

Qualifications. The qualifications of any Member shall be determined in the discretion of the Party that appoints such Member.

(c)

Removal and Vacancies. Each Party may, in its sole discretion, remove any Member appointed by it to the Steering Committee. If any Member is removed or resigns from the Steering Committee or otherwise ceases to serve on the Steering Committee for any reason (e.g., by reason of the separation of such Member from employment by the Party that appointed such Member, such Member’s death or disability, etc.), the Party that appointed such Member shall promptly notify the other Party of such Member’s withdrawal from the Steering Committee. On notice to the other Party, any vacancy on the Steering Committee shall be filled by the Party that appointed the Member who resigned from, was removed from, or for any other reason ceased to serve on the Steering Committee .

     2. Additional Attendees at Steering Committee Meetings. The Steering Committee may establish rules with respect to the attendance at the Steering Committee meetings of staff and other invitees. All such rules shall be consistently applied to both Parties.

     3. Voting. Each Member shall be entitled to one (1) vote to be cast by such Member. No vote may be cast by proxy. Except as expressly provided below, all actions, determinations or resolutions of the Steering Committee at a meeting shall require the affirmative vote of the Members present at such meeting at which a quorum (meaning more than half of the total number of Members) is present; provided that [*] may be [*], and the [*] not be [*] action, decision, determination or resolution.

     4. Notice; Waiver; Meeting Location. The Steering Committee shall meet at least [*]. Such meetings shall be held upon not less than [*] written notice. Additional meetings of the Steering Committee shall be held (A) at such other times as may be determined by the Steering Committee, or (B) at the request of the Collaboration Manager of either Party upon not less than [*] written notice. The Duramed Collaboration Manager shall determine the location of each meeting of the Steering Committee taking into account any travel considerations by Members of the Steering Committee. Notice may be provided in writing, via facsimile, or email to each Member. The presence of any Member at a meeting shall constitute a waiver of notice of the meeting with respect to such Member, unless such Member declares at the meeting that such Member objects to the notice as having been improperly given. The Steering Committee shall cause written minutes to be prepared of all actions taken by the Steering Committee and shall cause a copy thereof to be delivered to each Member within [*]. No action may be taken by the Steering Committee without a meeting to consider the matter unless each Party issues a written waiver of such meeting and unless a consent or consents in writing, setting forth the action so taken, are signed by the Members of the Steering Committee having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all the Members of the Steering Committee were present and voted.

     5. Meetings by Telecommunications. Members of the Steering Committee shall have the right to participate in all meetings of the Steering Committee in person, by means of a conference telephone, or by videoconference or similar telecommunications service by means of

which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting. Any reference in this Exhibit to attendance or participation by a Member at a meeting of the Steering Committee shall be deemed to refer to attendance in person or attendance by means of a telecommunications service pursuant to this paragraph.

     6. Compensation of Members of the Steering Committee. The Members of the Steering Committee, in their capacity as such, shall not receive compensation, except with respect to any Member as such Member and the Party that appointed such Member shall otherwise mutually agree. Each Party shall bear the cost and expenses incurred by its appointed Members of the Steering Committee in connection with the activities of the Steering Committee.

     7. Conflicts. In the event of any conflict between the provisions of this Exhibit and the provisions of the Collaboration Agreement, the provisions of the Collaboration Agreement shall control.

EXHIBIT D

DEVELOPMENT PLANS

(see attached)

SCHEDULE 7.2.1A

SEASONIQUE MILESTONE PAYMENTS

Event	Payment
Filing of Drug Approval Application under EMEA for Seasonique	$[*]
Regulatory Approval under EMEA for Seasonique	$[*]
Filing of Drug Approval Application under EMEA for first new indication for Seasonique	$[*]
Regulatory Approval under EMEA for first new indication for Seasonique	$[*]
First calendar year in which annual net sales in Shire Territory for Seasonique exceed $50 million	$[*]
Second calendar year in which annual net sales in Shire Territory for Seasonique exceed $100 million	$[*]

SCHEDULE 7.2.1B

RING PRODUCT MILESTONE PAYMENTS

Event	Payment
Successful completion of Phase I clinical trials for Ring Product	$[*]
Successful completion of Phase I clinical trials for Ring Product	$[*]
Successful completion of Phase III clinical trials for Ring Product	$[*]
Filing of Drug Approval Application under EMEA for Ring Product	$[*]
Regulatory Approval under EMEA for Ring Product	$[*]
First calendar year in which annual net sales in Shire Territory for Ring Product exceed $50 million	$[*]
Second calendar year in which annual net sales in Shire Territory for Ring Product exceed $100 million	$[*]

SCHEDULE 13.3(b)

COLLABORATION PRODUCT INDs

[*]
[*]
[*]
[*]
[*]
[*]

Schedule 13.3(c)

Jurisdiction	Patent No.	Grant Date	Application No.	Filing Date
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]

EXHIBIT C

QUALITY AGREEMENT

EXHIBIT D

SAFETY AGREEMENT

SCHEDULE 1

FORM OF PURCHASE ORDER

SCHEDULE 2

FORM OF COA

EX-10.3

     Pursuant to 17 CFR 240.24b-2, confidential information (indicated by [*]) has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Exhibit 10.3

PRODUCT ACQUISITION AND LICENSE AGREEMENT
(Adderall®)

BY AND AMONG

SHIRE LLC,

SHIRE PLC

AND

DURAMED PHARMACEUTICALS, INC.

DATED AS OF AUGUST 14, 2006

ARTICLE 1	DEFINITION	1
ARTICLE 2	SALE OF ASSETS, LICENSES AND CLOSING	6
2.1	Sale of Assets	6
2.2	Licenses and Other Rights	8
2.3	[*]	8
2.4	Assumed Liabilities	8
2.5	Purchase Price	9
2.6	Independence of Purchase Price Obligation	9
2.7	Closing	9
2.8	Allocation of Purchase Price	9
2.9	Delivery of Purchased Assets	10
ARTICLE 3	REGULATORY MATTERS	10
3.1	Filings with Regulatory Authorities Regarding Transfer of Registrations	10
3.2	Responsibility for the Product	10
3.3	Marketing Activities	11
3.4	Right of Reference	11
ARTICLE 4	REPRESENTATIONS AND WARRANTIES	11
4.1	Representations and Warranties of Shire	11
4.2	Disclaimer of Warranties	14
4.3	Representations and Warranties of Duramed	14
4.4	Survival of Representations/Warranties	15
4.5	Brokers	15
ARTICLE 5	CONDITIONS TO CLOSING	16
5.1	Conditions to Obligations of Duramed	16
5.2	Conditions to Obligations of Shire	16
ARTICLE 6	COVENANTS	17
6.1	HSR Filing	17
6.2	Conduct of the Business Until Closing	18
6.3	Post-Closing Orders and Payments	18
6.4	Right to Investigate	18
6.5	Retention of Records	19
6.6	Non-Solicitation	19
6.7	Managed Markets	19

i

6.8	Returns	20
6.9	Certain Sales	21
ARTICLE 7	INDEMNIFICATION	21
7.1	Indemnification by Shire	21
7.2	Indemnification by Duramed	21
7.3	Limitation of Liability	22
7.4	No Consequential Damages	22
7.5	Procedures for Indemnification for Third Party Claims	23
7.6	Losses That Are Not Third Party Claims	24
7.7	Termination of Indemnification Obligations	24
7.8	Other Matters	24
7.9	Other Limitations	25
7.10	Exclusive Remedy	25
7.11	Net Losses and Subrogation	26
ARTICLE 8	TERMINATION	26
8.1	Termination Prior to Closing	26
8.2	Effect of Termination Prior to Closing	27
ARTICLE 9	PATENT PROSECUTION, MAINTENANCE AND ENFORCEMENT	27
9.1	Discretionary Duty to Maintain	27
9.2	Abandonment of Maintenance by Shire	27
9.3	Patent Marking	27
9.4	Suits for Infringement of the Licensed Patents	27
ARTICLE 10	DISPUTE RESOLUTION	28
10.1	Disputes	28
10.2	Litigation	28
10.3	Injunctive Relief	28
ARTICLE 11	GENERAL PROVISIONS	28
11.1	Payment of Transaction Expenses	28
11.2	Access to Information Post-Closing	28
11.3	Notices	29
11.4	Entire Agreement; Amendment	30
11.5	Assignment	30

ii

11.6	Headings	30
11.7	Independent Parties	30
11.8	No Waiver	30
11.9	Severability	30
11.10	Counterparts	31
11.11	No Third Party Beneficiaries	31
11.12	Further Actions	31
11.13	No Strict Construction	31
11.14	Public Disclosure	31
11.15	Bulk Sales Laws	31

iii

PRODUCT ACQUISITION AND LICENSE AGREEMENT

     THIS PRODUCT ACQUISITION AND LICENSE AGREEMENT is dated as of August 14, 2006, by and among Shire LLC, a Kentucky limited liability company (together with its Affiliates, “Shire”), Shire plc a British public limited company, and Duramed Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware (“Duramed”). Shire and Duramed are sometimes referred to herein individually as a “Party” and together as the “Parties”.

RECITALS

     WHEREAS, Shire is in the business of formulating, manufacturing, marketing and distributing the pharmaceutical product known as Adderall IR®;

     WHEREAS, Shire owns the pharmaceutical product known as Adderall IR® and all the assets relating to the Adderall Business; and

     WHEREAS, Shire desires to sell, transfer, convey and license to Duramed, and Duramed desires to purchase, acquire and license from Shire, certain rights to the Adderall IR® product and certain assets relating to the Adderall Business, and Duramed wishes to assume certain liabilities relating to such product, all on the terms set forth herein;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE 1
DEFINITIONS

     The following terms shall have the following meanings as used in this Agreement:

     1.1 “Act” means the United States Federal Food, Drug and Cosmetic Act, as amended.

     1.2 “Adderall Business” means the business of formulating, manufacturing, and distributing the pharmaceutical product known as Adderall IR®; provided, however, that the Adderall Business shall not include any Adderall product other than the Product, including Adderall XR or [SPD465].

     1.3 “Adderall XR” means the extended release mixed amphetamine pharmaceutical product currently sold under NDA#21-303.

     1.4 “Affiliate” means a Person that, directly or indirectly, through one or more intermediates, controls, is controlled by, or is under common control with, the Person specified. For the purposes of this definition, control shall mean the direct or indirect ownership of (a) in the case of corporate entities, securities authorized to cast more than fifty percent (50%) of the votes in any election for directors, (b) in the case of non-corporate entities, more than fifty

percent (50%) ownership interest with the power to direct the management and policies of such non-corporate entity, or (c) such lesser percentage as may be the maximum percentage allowed to be owned by a foreign corporation under the applicable laws or regulations of a particular jurisdiction of the equity having the power to vote in the election of directors or to direct the management and policies of such Person.

     1.5 “Agreement” means this Agreement and all exhibits and schedules attached hereto.

     1.6 “Books and Records” means all books, records, manuals and other materials (in any form or medium) relating primarily to the Purchased Assets or the Adderall Business, including all records and materials maintained at the headquarters of Shire, advertising matter, catalogues, price lists (including any pricing for the Product made available to any Federal, State or local authorities), correspondence, mailing lists, lists of customers, distribution lists, photographs, production data, sales and promotional materials and records, purchasing materials and records, manufacturing and quality control records and procedures, blueprints, research and development files, records, data and laboratory books, accounting records, and sales order files.

     1.7 “Business Day” means any day except a Saturday, Sunday or a day on which a commercial bank in New York, New York is authorized to close.

     1.8 “Duramed Labeled Product” means Product sold or distributed after the Closing by or on behalf of Duramed bearing the NDC number of Duramed or any of its Affiliates.

     1.9 “Duramed Material Adverse Effect” means any adverse change, circumstance or effect that, individually or in the aggregate with all other adverse changes, circumstances and effects, has or is reasonably likely to have, a material adverse effect on the ability of Duramed to consummate the transactions contemplated by this Agreement, including the ability to pay the Purchase Price when due.

     1.10 “Contract” means any agreement, contract, commitment or other instrument or arrangements (whether written or oral) (x) by which any of the Purchased Assets are bound or affected or (y) to which Shire is bound relating to the Purchased Assets, in each case as amended, supplemented, waived or otherwise modified.

     1.11 “Excluded Intellectual Property” means the (a) Shire Trademark, (b) Product Trademark, (c) Licensed Patents, (d) Product Trade Dress, and (e) Intellectual Property that does not primarily relate to the Product.

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

     1.13 “Finished Goods” means a manufactured Product packaged and ready for sale to the ultimate customer in the Territory.

     1.14 “Governmental Authority” means any federal, state, local or other government or any court of competent jurisdiction, legislature, governmental agency, administrative agency

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or commission or other governmental authority or instrumentality having jurisdiction in the Territory.

     1.15 “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     1.16 “Intellectual Property” means all (a) Patents, (b) mask works and copyrights in works of authorship of any type, including computer software and industrial designs, registrations and applications for registration thereof, (c) trademark registrations and applications for registration thereof, (d) trade secrets, know-how and other confidential or proprietary technical, business and other information, and all rights in any jurisdiction to limit the use or disclosure thereof, and (e) rights to sue and recover damages or obtain injunctive relief for past and future infringement, dilution, misappropriation, violation or breach thereof; in each case, solely to the extent the foregoing relates to the Territory.

     1.17 “Liabilities” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, or determined or determinable, including those arising under any laws, action or governmental order and those arising under any contract, agreement, arrangement, commitment or undertaking, or otherwise.

     1.18 “Licensed Patents” mean the Patent(s) listed in Schedule 1.18.

     1.19 “Lien” means any mortgage, pledge, hypothecation, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting trust agreement, interest, equity, option, lien, , whether arising by Contract or otherwise.

     1.20 “Losses” means any and all Liabilities, damages, fines, penalties, deficiencies, losses and expenses (including interest, court costs, amounts paid in settlement, reasonable fees of attorneys, accountants and other experts or other reasonable expenses of litigation or other proceedings or of any claim, default or assessment); provided, however, that the term “Losses” shall not include any special, consequential, indirect, punitive or similar damages, except to the extent actually paid by a Party pursuant to any Third Party Claim.

     1.21 “NDA” means a New Drug Application pursuant to Section 505 of the Act (21 U.S.C. Section 355) submitted to the FDA or any successor application or procedure.

     1.22 “Patents” means all patents, patent applications and statutory invention registrations, including reissues, divisions, continuations, continuations-in-part, supplementary protection certificates, extensions and reexaminations thereof, all inventions disclosed therein, all rights therein provided by international treaties and conventions, and all rights to obtain patents and registrations thereto.

     1.23 “Permitted Liens” means (i) Liens for Taxes not yet due and payable or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on Shire’s books or (ii) Liens that, individually and in the aggregate, do not restrict, hinder, or otherwise encumber or impair the ownership of or right to use the Purchased Assets or sell of Product.

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     1.24 “Person” means any individual, firm, corporation, partnership, limited liability company, trust, unincorporated organization or other entity or a government agency or political subdivision thereto, and shall include any successor (by merger or otherwise) of such Person.

     1.25 “Pharmacovigilance Agreement” means the Pharmacovigilance Agreement to be executed at Closing by Shire and Duramed substantially in the form attached hereto as Exhibit A.

     1.26 “Product” means the pharmaceutical product in all dosage forms identified in [*].

     1.27 “Product Domain Name” means the domain name “adderall.com” and all other domain names that include “Adderall” in any manner or form and that are owned or registered by Shire.

     1.28 “Product Material Adverse Effect” means any adverse event, circumstance, fact, condition or effect that is materially adverse to the operations or results of operation, properties or prospects of the Adderall Business, the Purchased Assets, the Licenses, or the Product Trademark, other than any event, change, circumstance or effect relating to (a) the economy of the United States in general, (b) in general to the industries in which the Product is sold and not specifically relating to the Product, or (c) changes, circumstances and effects relating to the announcement of the transactions contemplated by this Agreement.

     1.29 “Product NDA” means NDA#11-522, and any and all supplements or amendments filed pursuant to FDA requirements.

     1.30 “Product Trade Dress” means the tablet logo, including the lettering of the Product name and, specifically, the letters “AD”, the size, shape and color of the tablet, together with all other features that are intrinsic to the tablet as currently marketed and sold, provided that Product Trade Dress does not include any packaging associated with the sale, marketing or distribution of the Product.

     1.31 “Product Trademark” means the trademark, trade names, brand names, including all registrations and applications for registration thereof and all renewals, modifications and extensions thereof, listed on Schedule 1.31, used by Shire or its Affiliates in connection with the manufacture, marketing, sale and distribution of the Product, and any rights existing under common law relating thereto.

     1.32 “Regulatory Approval” means the technical, medical and scientific licenses, registrations, authorizations, approvals, permits, consents (including approvals of NDAs, supplements and amendments, pre- and post- approvals, pricing and third party reimbursement approvals, and labeling approvals) of any Regulatory Authority necessary for the development (including the conduct of clinical trials), distribution, marketing, promotion, offer for sale, use, import, export or sale of Product in the Territory.

     1.33 “Regulatory Authority” means any national (e.g., the FDA), regional, state or local regulatory agency, department, bureau, commission, council, court or other Governmental Authority in the Territory.

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     1.34 “Settlement Agreement” means that certain Settlement Agreement, dated as of August 14, 2006, by and between the Parties.

     1.35 “Shire Labeled Product” means Product bearing the NDC number of Shire or any of its Affiliates.

     1.36 “Shire Trademark” means the “Shire” name or any variation thereof and, other than the Product Trade Dress, the Product Trademark and the Product Domain Name, all trademarks, trade names, brand names, trade dress, logo types, symbols, domain names (including registrations and applications for registration thereof and all renewals, modifications and extensions thereof) used by Shire or its Affiliates in connection with the manufacture, marketing, sale and distribution of their products.

     1.37 “Supply Agreement” means the Supply Agreement to be executed at Closing by Shire or its Affiliate and Duramed for the supply of Product, in substantially the form attached hereto as Exhibit C.

     1.38 “Survival Period” means the period of survival of representations and warranties as set forth in Section 4.4.

     1.39 “Taxes” (and with correlative meaning, “Tax,” “Taxes,” and “Taxable”) shall mean all taxes of any kind imposed by a federal, state, local or foreign Governmental Authority, including those on, or measured by or referred to as, income, gross receipts, financial operation, sales, use, ad valorem, value added, franchise, profits, license, excise, stamp, premium, property, transfer or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by such Governmental Authority with respect to such amounts.

     1.40 “Technical Data” means all technical, scientific, chemical, biological, pharmacological, and toxicological data generated primarily for the Product.

     1.41 “Territory” means the United States and the states, territories, possessions and protectorates thereof, the District of Columbia and the Commonwealth of Puerto Rico.

     1.42 “Trademark License Agreement” means the Trademark License Agreement to be executed at Closing by Shire or its Affiliate and Duramed relating to the use of the Product Trademark, in substantially the form attached hereto as Exhibit B.

Interpretation. Unless the context of this Agreement otherwise requires, (a) words of one gender include the other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby,” and other similar words refer to this entire Agreement; (d) “including” shall be deemed followed by “without limitation”, “but not limited to” or words of similar meaning; and (e) the terms “Article” and “Section” refer to the specified Article and Section of this Agreement. Whenever this Agreement refers to a number of days, unless otherwise specified, such number shall refer to calendar days.

- 5 -

Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

Acquisition Transaction	Section 6.6(b)
AMP	Section 6.7(b)
Assumed Liabilities	Section 2.4(a)
Chargeback Contracts	Section 6.7(e)
Chargebacks	Section 6.7(a)
Closing	Section 2.7(a)
Closing Date	Section 2.7(a)
Duramed	Preamble
Duramed Disclosure Schedule	Section 4.3
Defaulting Party	Section 8.1(c)
DMFs	Section 3.4
Excluded Assets	Section 2.1(c)
FDA Letter	Section 3.1
Financial Information	Section 4.1(d)
General Assignment and Assumption	Section 2.7(c)
Indemnitee	Section 7.5(a)
Indemnitor	Section 7.5(a)
Licenses	Section 2.2(a)
Managed Market Activities	Section 6.7(a)
Parties	Preamble
Party	Preamble
Purchase Price	Section 2.5
Purchased Assets	Section 2.1(a)
Rebate Contracts	Section 6.7(d)
Rebates	Section 6.7(a)
Representatives	Section 10.1
Retained Liabilities	Section 2.4(b)
SEC	Section 11.14(a)
Shire	Preamble
Shire Disclosure Schedule	Section 4.1
Third Party Claim	Section 7.5(a)
Transaction Agreements	Section 11.4

ARTICLE 2
SALE OF ASSETS, LICENSES AND CLOSING

     2.1 Sale of Assets.

          (a) On the Closing Date, and subject to the terms and conditions of this Agreement, Shire will, and will cause its Affiliates to, sell, assign, convey and transfer to Duramed, and Duramed will purchase and accept from Shire and its Affiliates, all of Shire’s and its Affiliates’ right, title and interest in and to the following assets (collectively, the “Purchased Assets”):

- 6 -

               (i) the Product NDA;

               (ii) the Book and Records; provided that any lists included therein may be redacted as necessary to conceal information pertaining to products other than the Product;

               (iii) the Technical Data;

               (iv) all unfulfilled customer orders for the Product arising in the Territory as of the Closing Date (a list of such orders to be provided to Duramed on or prior to the Closing) and any future customer orders received by Shire for the Product;

               (v) to the extent their transfer is permitted by law, all Regulatory Approvals, including all applications therefor;

               (vi) all refunds or credit of Taxes relating to the foregoing attributable to any period following the Closing;

               (vii) any guarantees, warranties, indemnities and similar rights in favor of Shire or its Affiliates with respect to any of the foregoing; and

               (viii) all rights to causes of action, lawsuits, judgments, claims and demands of any nature available to or being pursued by Shire or its Affiliates with respect to the Adderall Business or the ownership, use, function or value of any of the foregoing, whether arising by way of counterclaim or otherwise.

          (b) Notwithstanding Section 2.1(a) above, the transfer of the Product NDA shall occur in accordance with the provisions of Article 3.

          (c) For purposes of clarification, the Purchased Assets shall not include any assets, rights or interests other than those specifically listed or described in Section 2.1(a). Without limiting the generality of the foregoing, the Parties agree and acknowledge that the Purchased Assets shall not include: (i) the Excluded Intellectual Property, (ii) any and all NDAs or other product approvals and Technical Data related to Adderall XR or anything else related to the approval, sale, marketing or manufacturing of Adderall XR, (iii) any Adderall product other than the Product, and (iv) any plant, real property, equipment, accounts receivable, cash and cash equivalents, employees or any refund or credit of Taxes attributable to any period of time prior to the Closing Date (collectively, the “Excluded Assets”). Duramed acknowledges and agrees that Shire may retain a copy of all or part of the Books and Records that it delivers to Duramed under Section 2.1(a)(ii) for use with products of Shire or its Affiliates other than the Product or to the extent required under applicable law provided that the copy of the Books and Records so retained shall be treated as Duramed’s confidential information.

     2.2 Licenses and Other Rights.

          (a) Subject to the terms and conditions of this Agreement, Shire hereby grants, or shall cause its Affiliates to grant, to Duramed the following licenses (collectively, the “Licenses”):

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               (i) a worldwide, irrevocable, perpetual, fully-paid, exclusive (even as to Shire) right and license, with the right to sublicense under the Licensed Patents, to use, market, have marketed, offer for sale, import for sale, sell and have sold Products in the Territory;

               (ii) an irrevocable, fully-paid, perpetual, exclusive (even as to Shire) right and license under the Product Trade Dress solely to the extent necessary for Duramed to distribute, market and sell the Product in the Territory.

          (b) With respect to this Agreement, any Intellectual Property or other rights of Shire not expressly granted to Duramed under the provisions of this Agreement shall be retained by Shire, including the right to conduct such studies and clinical trials within and without the Territory as may be necessary or useful for Shire to obtain Regulatory Approvals solely for the purpose of selling products other than Product.

     2.3 [*]. From and after the Closing Date, Shire [*] Duramed or its Affiliates [*] Duramed’s [*] Product in the Territory on the basis that such [*] Shire or of [*] as of the Closing Date or [*].

     2.4 Assumed Liabilities.

          (a) As of the Closing Date, Duramed shall assume, be responsible for and pay, perform and discharge when due the following (collectively, the “Assumed Liabilities”):

               (i) any Liabilities arising from the sale of any Product after the Closing Date, including any product liability, breach of warranty, Patent or trademark infringement claim, or any other action or claim (excluding any Liabilities relating to voluntary or involuntary recalls of Shire Labeled Product, or any Liabilities of Shire under the Supply Agreement) brought, asserted or filed by any third party or Regulatory Authority;

               (ii) any Liabilities arising after the Closing Date relating to the Purchased Assets;

               (iii) subject to Section 6.7, all Medicare, Medicaid and state program rebates in connection with Duramed Labeled Product sold after the Closing Date;

               (iv) subject to Section 6.7, all chargebacks, rebates or any other post-sale rebates, refunds, price adjustments and other similar payments, credits or liabilities in connection with the Duramed Labeled Product, sold after the Closing Date; and

               (v) subject to Section 6.7, credits, utilization based rebates, reimbursements, and similar payments to buying groups, insurers and other institutions in connection with Duramed Labeled Product sold after the Closing Date.

          (b) Notwithstanding any provision hereof or any schedule or exhibit hereto or thereto, and regardless of any disclosure to Duramed, Duramed shall not assume any liabilities, obligations or commitments of Shire other than the Assumed Liabilities, including such liabilities

- 8 -

           relating to or arising out of the ownership of the Purchased Assets on or prior to the Closing (the “Retained Liabilities”).

     2.5 Purchase Price. Subject to the terms and conditions set forth herein, in consideration of the sale, assignment, conveyance, license and delivery of the Purchased Assets and the Licenses, and as consideration for the execution and delivery of the Trademark License Agreement, Duramed will pay to Shire a cash payment of Sixty-Three Million Dollars ($63,000,000), in the manner described in Section 2.7(b), (the “Purchase Price”).

     2.6 Independence of Purchase Price Obligation. All payments made or to be made by Duramed to Shire in respect of Purchase Price shall be non-refundable and independent of any obligations that Shire or its Affiliates may have to Duramed under any other agreement.

     2.7 Closing.

          (a) The closing of the transactions contemplated hereby (the “Closing”) will take place at the offices of Morgan, Lewis & Bockius LLP in Princeton, New Jersey at 10:00 A.M. Eastern Time on the third (3rd) Business Day following the satisfaction or waiver of all conditions or obligations of the Parties set forth in Sections 5.1 and 5.2, or at such other time, date and place as Duramed and Shire agree. The actual date of the Closing is referred to as the “Closing Date.”

          (b) At the Closing, Duramed will pay the Purchase Price in full in cash without any deductions or offsets by wire transfer of immediately available funds to a bank account or accounts to be designated by Shire prior to Closing.

          (c) At the Closing, Shire will assign and transfer to Duramed all of Shire’s right, title and interest in and to the Purchased Assets, by delivery of a general assignment, assumption and bill of sale in the form of Exhibit D (the “General Assignment and Assumption”) or any other bill of sale or assignment documents reasonably requested by Duramed.

          (d) At the Closing, Duramed will assume from Shire the due payment, performance and discharge of the Assumed Liabilities by delivery of the General Assignment and Assumption.

          (e) At or prior to the Closing, the Parties shall execute and deliver to one another the agreements listed in Sections 5.1(h) and 5.2(h).

     2.8 Allocation of Purchase Price. The Purchase Price shall be allocated among the Purchased Assets, the Licenses, the Trademark License Agreement and the Supply Agreement as set forth on Schedule 2.8 hereto. Duramed and Shire agree to report the sale and purchase of the Purchased Assets, and the rights granted or assets transferred under the Licenses and the Trademark License Agreement for Tax purposes in accordance with the allocations set forth on Schedule 2.8 hereto, or as otherwise agreed to at a later date by the Parties if such Schedule is not attached as of the Closing Date.

- 9 -

     2.9 Delivery of Purchased Assets. At the Closing or as soon as possible thereafter, Shire shall deliver to Duramed, all of the Purchased Assets. Following the Closing, Shire shall reasonably cooperate with Duramed and grant to Duramed and its employees, attorneys, accountants, officers, representatives, and agents, reasonable access to Shire’s personnel to fully transfer and disclose to Duramed all of the Purchase Assets.

ARTICLE 3
REGULATORY MATTERS

     3.1 Filings with Regulatory Authorities Regarding Transfer of Registrations. Prior to Closing, Shire and Duramed will establish a mutually acceptable and prompt communication and interaction process to ensure to Duramed the prompt and orderly transfer of the Product NDA. Promptly after Closing, the Parties shall file with the FDA and any other relevant Regulatory Authorities all information required in order to transfer the Product NDA from Shire to Duramed, including the letter to the FDA authorizing the transfer in the form attached hereto as Exhibit E (the “FDA Letter”). Where required, Duramed shall also promptly file an application or license variation to Regulatory Authorities or other government/health agencies. Shire shall file the information required of a former owner, and Duramed shall file the information required of a new owner, at each Party’s own expense. Both Duramed and Shire also agree to use all commercially reasonable efforts to take any actions required by the Regulatory Authorities or other government/health agencies to effect the transfer of the Product NDA from Shire to Duramed, and hereby further agree to cooperate with each other in order to effectuate the foregoing transfer of Product NDA at Duramed’s expense. The Parties agree to use all commercially reasonable efforts to complete the filing of the transfer of the Product Registrations within [*] from the Closing Date. Shire may retain an archival copy of the Product Registrations, including supplements and records that are required to be kept under 21 C.F.R. §314.81, but such retention shall not be deemed a license to Shire of such information nor be deemed to constitute any Shire ownership interest therein.

     3.2 Responsibility for the Product. From and after the Closing Date, and in no event later than the effective date of the transfer to Duramed of the applicable NDA, Duramed shall assume all regulatory responsibilities under applicable laws in connection with the Product and the Product NDA, including (a) responding to all medical inquiries, (b) responsibility for reporting any adverse drug events in connection with the Product, (c) responsibility for compliance with the Prescription Drug Marketing Act of 1987, as the same may be amended from time to time, and (d) responsibility for any and all fee obligations for holders or owners of approved NDAs and Regulatory Approvals relating to the Product, including those defined under the Prescription Drug User Fee Act of 1992, as the same may be amended from time to time. In connection therewith, Shire shall promptly after Closing deliver to Duramed all records, documentation and other information that Shire has prepared or has had prepared regarding the development, efficacy, safety and legal compliance of the Product, including all correspondence with Regulatory Authorities or other government/health agencies related to the Product. Shire acknowledges that pursuant to the terms of the Pharmacovigilance Agreement, Shire shall be responsible for compliance with certain of the foregoing obligations following the Closing. Without limiting Shire’s obligations under the Pharmacovigilance Agreement, Shire shall cooperate with Duramed following the Closing to provide reasonable assistance in connection with Duramed’s regulatory obligations related to the Product for a period of [*].

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     3.3 Marketing Activities. Immediately following the Closing, Shire and Duramed shall send correspondence to each customer and supplier of the Product, and any other relevant third party agreed to by Shire and Duramed, informing each such party of the sale and transfer of the Product to Duramed, in substantially the form attached hereto as Exhibit F.

     3.4 Right of Reference. Duramed shall grant Shire a right of cross-reference or right of reference, including as that term is defined in 21 C.F.R. Section 314.3(b), to all existing Regulatory Approvals, Drug Master Files (“DMFs”), and other regulatory submissions relating to the Product. At Shire’s request [*], Duramed shall provide a copy of any regulatory application or file relating to Product that is the subject of a right of cross-reference or right of reference pursuant to this Section.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

     4.1 Representations and Warranties of Shire. Shire represents and warrants to Duramed solely as of the date of this Agreement, subject to such exceptions as are specifically disclosed in the disclosure schedule supplied by Shire to Duramed and dated as of the date hereof (the “Shire Disclosure Schedule”) as follows:

          (a) Organization and Standing. Shire is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, with full corporate power and authority to carry on the Adderall Business and to own or lease and to operate its properties in the places where such business is conducted and such properties are owned, leased or operated.

          (b) Power and Authority. Shire has all requisite corporate power and authority to execute, deliver, and perform this Agreement, and the other Transaction Agreements, and the other agreements and instruments to be executed and delivered by it pursuant hereto and thereto, and to consummate the transactions contemplated herein and therein.

          (c) No Conflicts. The execution, delivery and performance by Shire of this Agreement and the other Transaction Agreement, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a violation of or a default under (with or without the giving of notice or the lapse of time or both) (i) any applicable law, (ii) the certificate of incorporation or by-laws or other organizational documents of Shire, or (iii) any Contract or other contract, agreement, instrument, judgment, order or decree to which Shire is a party or by which Shire may be bound or affected.

          (d) Financial Information. Shire has provided to Duramed [*], and for the [*] (“Financial Information”). Such information was derived from the books and records of Shire and was prepared by Shire in good faith and fairly presents, in all material respects, the sales of Product in the Territory for the periods shown. No representations or warranties whatsoever are made with respect to any financial projections.

          (e) Corporate Action; Binding Effect. Shire has duly and properly taken all action required by law, its organizational documents, or otherwise, to authorize the execution, delivery, and performance by it of this Agreement, the other Transaction Agreements, and the

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           other agreements and instruments to be executed and delivered by it pursuant hereto and thereto and the consummation of transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by Shire and constitutes, and the other Transaction Agreements and the other agreements and instruments contemplated hereby and thereby when duly executed and delivered by Shire will constitute, legal, valid, and binding obligations of Shire enforceable against it in accordance with their respective terms, except as enforcement may be affected by bankruptcy, insolvency, or other similar laws and by general principles of equity.

          (f) Consents. No consent or approval of, or filing with or notice to, any Regulatory Authority or Governmental Authority is required or necessary to be obtained by Shire or on its behalf in connection with the execution, delivery, and performance of this Agreement or to consummate the transactions contemplated hereby and thereby, except (i) in connection with the transfer of the Product Registrations, (ii) the notification requirements of the HSR Act, or (iii) as relates solely to Duramed.

          (g) Assets.

               (i) Shire or one of its Affiliates owns and has good and marketable title to all the Purchased Assets, in each case free and clear of any and all Liens other than Permitted Liens.

               (ii) Except for Excluded Assets, there are no assets or properties used in the operation of the Adderall Business and owned by any Person other than Shire that will not be sold or licensed to Duramed hereunder. The Purchased Assets [*] for the [*] or are [*], and [*] and, [*] Shire [*] the Purchased Assets [*] or in the [*] with the [*].

          (h) Litigation or Disputes. Except as set forth on Schedule 4.1(h), there is no claim, action, suit, demand, citation, grievance, subpoena, inquiry, proceeding, investigation, or arbitration relating to the Product, the Purchased Assets or the Adderall Business pending or, to Shire’s knowledge, threatened against Shire or any of its Affiliates by or before any Regulatory Authority, federal, state, or other governmental court, department, commission, or board (whether domestic or foreign). Except as set forth on Schedule 4.1(h), there is not currently outstanding against Shire or any of its Affiliates any judgment, decree, injunction, rule or order of any Regulatory Authority or Governmental Authority relating to the Purchased Assets or the Adderall Business.

               (i) Licensed Patents, Technical Data and Other Intellectual Property.

               (i) Shire owns or has the lawful right and license to use the Licensed Patents.

               (ii) Shire has not received any written notice, and Shire otherwise has no knowledge of, the infringement by any Person of any Licensed Patent or the Technical Data.

               (iii) Shire owns all of the Technical Data. The Technical Data contains all of the technical, scientific, chemical, biological, pharmacological and toxicological data generated by Shire for the Product.

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               (iv) Shire has the full right, power and authority to grant the Licenses as described herein.

               (v) The Licensed Patents have been duly registered with, filed in or issued by, as the case may be, the United States Patent and Trademark Office and the Canadian Intellectual Property Office.

               (vi) No claim or demand of any Person has been made nor is there any proceeding that is pending, or to the knowledge of Shire, threatened, which (i) challenges the rights of Shire in respect of the Licensed Patents, Technical Data, Product Trademark or Product Trade Dress or (ii) asserts that Shire or any of its Affiliates is infringing, or is otherwise in conflict with, or is required to pay any royalty, license fee, charge or other amount with regard to, any such Intellectual Property of any third party. None of the Licensed Patents, Technical Data, Product Trademark or Product Trade Dress is subject to any outstanding order, ruling, decree, judgment or stipulation by or with any court, arbitrator, or administrative agency. To Shire’s knowledge, the sale of the Product does not infringe or otherwise conflict with any rights of any Person in respect of any Intellectual Property.

          (j) Compliance with Laws. Shire has conducted its operations in connection with the Purchased Assets and the manufacture and sale of the Product in the Territory in material compliance with all applicable laws. Except as set forth on Schedule 4.1(j), Shire has not received any written notice of violation of any applicable law from any Regulatory Authority or Governmental Authority relating to the Adderall Business, the Purchased Assets or the Product within the past [*].

          (k) Regulatory Issues. Except as set forth in Schedule 4.1(k), during the [*] prior to the date of this Agreement, with respect to the Product in the Territory, the Purchased Assets or the Adderall Business, neither Shire nor any of its Affiliates has received or been subject to (i) any FDA Form 483’s relating to the Product, (ii) any FDA Notices of Adverse Findings relating to the Product, or (iii) any warning letters or other written correspondence from the FDA or any other Regulatory Authority concerning the Product in which the FDA or such other Regulatory Authority asserted that the operations of Shire were not in compliance with applicable law, with respect to the Product or the Adderall Business. Except as discussed in Schedule 4.1(k) or as would not have a Product Material Adverse Effect, during the last [*] there has not been any occurrence of any product recall, market withdrawal or replacement, or post-sale warning conducted by or on behalf of Shire concerning the Product, any product recall, market withdrawal or replacement conducted by or on behalf of any entity as a result of any alleged defect in the Product or the Technical Data.

          (l) Product Warranties. Except for warranties arising solely pursuant to applicable law, (i) Shire has not made any warranties express or implied, written or oral, to any third party with respect to the Product and (ii) there are no pending or threatened claims with respect to any such warranty, and except for the warranties arising solely pursuant to applicable law, Shire has no any liability with respect to any such warranty, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due.

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          (m) Taxes. There are no Liens for Taxes upon the Purchased Assets or the rights granted under the Licenses except for Permitted Liens. None of the Purchased Assets is “tax-exempt use property” within the meaning of Section 168 of the Code.

          (n) Other. In the past [*], to Shire’s knowledge (i) there has not been a Product Material Adverse Effect that is not otherwise generally known to the public, and (ii) the Product has been distributed by Shire only in the United States.

     4.2 Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED HEREIN, SHIRE PROVIDES THE PURCHASED ASSETS AND LICENSES “AS IS” AND SHIRE DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH REGARD TO THE PURCHASED ASSETS AND THE LICENSES, INCLUDING THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.

     4.3 Representations and Warranties of Duramed. Duramed represents and warrants to Shire, subject to such exceptions as are specifically disclosed in the disclosure schedule supplied by Duramed to Shire and dated as of the date hereof (the “Duramed Disclosure Schedule”), as follows:

          (a) Organization and Standing. Duramed is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.

          (b) Power and Authority. Duramed has all requisite corporate power and authority to execute, deliver, and perform this Agreement, and the other Transaction Agreements, and the other agreements and instruments to be executed and delivered by it pursuant hereto and thereto, and to consummate the transactions contemplated herein and therein.

          (c) No Conflicts. The execution, delivery and performance by Duramed of this Agreement and the other Transaction Agreement, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a violation of or a default under (with or without the giving of notice or the lapse of time or both) (i) any law applicable to Duramed, (ii) the certificate of incorporation or by-laws or other organizational documents of Duramed or (iii) except as set forth in Section 4.3(c) of Duramed Disclosure Schedule, any Contract or other contract, agreement, instrument, judgment, order or decree to which Duramed is a party or by which Duramed may be bound or affected, except in the case of clauses (iii), as would not have a Duramed Material Adverse Effect.

          (d) Corporate Action; Binding Effect. Duramed has duly and properly taken all action required by law, its organizational documents, or otherwise, to authorize the execution, delivery, and performance by it of this Agreement, the other Transaction Agreements, and the other agreements and instruments to be executed and delivered by it pursuant hereto and thereto and the consummation of transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by Duramed and constitutes, and the other Transaction Agreements and the other agreements and instruments contemplated hereby and thereby when duly executed and delivered by Duramed will constitute, legal, valid, and binding obligations of Duramed enforceable against it in accordance with their respective terms, except as enforcement

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           may be affected by bankruptcy, insolvency, or other similar laws and by general principles of equity.

          (e) Litigation or Disputes; Compliance with Laws. There is no claim, action, suit, demand, citation, grievance, subpoena, inquiry, proceeding, investigation, or arbitration pending or, to Duramed’s knowledge, threatened against Duramed by or before any Regulatory Authority, federal, state, or other governmental court, department, commission, or board (whether domestic or foreign) and, to Duramed’s knowledge, Duramed is not in violation of or in default with any applicable law, the result of any of which, either individually or cumulatively, would have a Duramed Material Adverse Effect.

          (f) Consents. No consent or approval of, or filing with or notice to, any Regulatory Authority or Governmental Authority is required or necessary to be obtained by Duramed in connection with the execution, delivery, and performance of this Agreement or the other Transaction Agreements or to consummate the transactions contemplated hereby and thereby, except (i) in connection with the transfer of the Product Registrations, (ii) the notification requirements of the HSR Act or (iii) as relates solely to Shire.

          (g) Financing. As of the date of this Agreement, Duramed has access to, and as of the Closing Date, Duramed will have, sufficient funds necessary to pay the Purchase Price.

     4.4 Survival of Representations/Warranties. All of the representations and warranties of Shire contained in Section 4.1 shall survive the Closing and continue in full force and effect for a period of [*] thereafter, provided that (a) all representations and warranties provided in Sections 4.1(b), 4.1(c), 4.1(f), and 4.1(g), shall survive [*] and (b) the representations and warranties set forth in Section 4.1(m) shall survive until [*] after the end of the applicable statute of limitations. All of the representations and warranties set forth of Duramed contained in Section 4.3 shall survive the Closing and continue in full force and effect for a period of [*] thereafter, provided that all representations and warranties provided in Sections 4.3(b), 4.3(c), 4.3(d) and 4.3(f) shall survive [*].

     4.5 Brokers. Each Party represents that no agent, broker, investment banker, financial advisor or other Person, is or will be entitled to any brokers’ or finder’s fee or any other commission or similar fee in connection with this Agreement or any of the transactions contemplated hereby.

ARTICLE 5
CONDITIONS TO CLOSING

     5.1 Conditions to Obligations of Duramed. The obligations of Duramed hereunder to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing, as applicable, of each of the following conditions (all or any of which may be waived in whole or in part by Duramed, but only in writing, in its sole discretion):

          (a) Representations and Warranties. The representations and warranties made by Shire in this Agreement shall be true and correct in all material respects on and as of the Closing Date as though made on and as of the Closing Date or, in the case of representations and warranties made as of a specified date earlier than the Closing Date, on and as of such earlier date.

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          (b) Performance. Shire shall have performed and complied with, in all material respects, the agreements, covenants and obligations required by this Agreement to be so performed or complied with by Shire at or before the Closing.

          (c) Orders and Laws. There shall not be in effect on the Closing Date any judgment, order, decree, ruling or charge restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement. No court or other Governmental Authority shall have determined any applicable law to make illegal the consummation of the transactions contemplated hereby, and no proceeding with respect to the application of any such applicable law to such effect shall be pending.

          (d) HSR. The applicable waiting period under the HSR Act, if any, shall have been terminated or expired.

          (e) Effective Date. The Settlement Agreement shall have become effective in accordance with its terms.

          (f) Deliveries. Shire shall have executed and delivered the item described in Section 2.7(d).

          (g) FDA Letter. The FDA Letter shall have been executed by Duramed and Shire in preparation for filing.

          (h) Product Material Adverse Effect. There shall not have occurred, or be continuing, a Product Material Adverse Effect.

          (i) Other Agreements. Duramed and Shire or its Affiliate shall have executed and delivered the other Transaction Agreements.

     5.2 Conditions to Obligations of Shire. The obligations of Shire hereunder to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing, as applicable, of each of the following conditions (all or any of which may be waived in whole or in part by Shire, but only in writing, in its sole discretion):

          (a) Representations and Warranties. The representations and warranties made by Duramed in this Agreement shall be true and correct in all material respects on and as of the Closing Date as though made on and as of the Closing Date or, in the case of representations and warranties made as of a specified date earlier than the Closing Date, on and as of such earlier date.

          (b) Performance. Duramed shall have performed and complied with, in all material respects, the agreements, covenants, and obligations required by this Agreement to be so performed or complied with by Duramed at or before the Closing.

          (c) Orders and Laws. There shall not be in effect on the Closing Date any judgment, order, decree, ruling or charge restraining, enjoining, or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement. No court or other Governmental Authority shall have determined any applicable law to make illegal

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           the consummation of the transactions contemplated hereby or by the other Transaction Agreements, and no proceeding with respect to the application of any such applicable law to such effect shall be pending.

          (d) HSR. The applicable waiting period under the HSR Act, if any, shall have been terminated or expired.

          (e) Effective Date. The Settlement Agreement shall have become effective in accordance with its terms.

          (f) Deliveries. Duramed shall have executed and delivered to Shire the items described in Section 2.7(b) and 2.7(d).

          (g) FDA Letter. The FDA Letter shall have been executed by Shire and Duramed in preparation for filing.

          (h) Other Agreements. Duramed and Shire or its Affiliate shall have executed and delivered the other Transaction Agreements.

ARTICLE 6
COVENANTS

     6.1 HSR Filing.

          (a) To the extent necessary, each of Duramed and Shire shall simultaneously with the filing of the Settlement Agreement with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice, file with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice any notification and report form required of it in the reasonable opinion of both Parties under the HSR Act with respect to the transactions contemplated hereby. The Parties shall cooperate with one another to the extent necessary in the preparation of any notification and report form required to be filed under the HSR Act and in the response to any request for information, including any Second Request for information issued under the HSR Act. Each Party shall be responsible for its own costs and expenses associated with any filing under the HSR Act; provided, however, that Duramed shall be responsible for all filing fees required by the HSR Act.

          (b) Duramed and Shire will cooperate and use all reasonable efforts to make all other registrations, filings and applications, to give all notices and to obtain as soon as practicable all governmental and other consents, transfers, approvals, orders, qualifications, authorizations, permits and waivers, if any, and to do all other things, necessary or desirable for the consummation of the transactions contemplated hereby.

          (c) Duramed shall be [*] of this Agreement, or [*] of the HSR waiting period by the FTC and/or DOJ, including [*] Section 7A(e) of the Clayton Act and 16 C.F.R. Section 803.20 .

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     6.2 Conduct of the Business Until Closing. Except for the actions taken or omitted to be taken pursuant to the prior written consent of Duramed, which consent shall not be unreasonably withheld or delayed, from the date of this Agreement until the Closing, Shire shall:

          (a) carry on the Adderall Business in, and only in, the ordinary course, in substantially the same manner as heretofore conducted;

          (b) perform in all material respects all of its obligations under any agreements and instruments relating to or affecting the Purchased Assets, and comply in all material respects with all laws applicable to it, the Purchased Assets or the Adderall Business;

          (c) not enter into or assume any material agreement, contract or instrument relating to the Purchased Assets, or enter into or permit any material amendment, supplement, waiver or other modification in respect thereof; and

          (d) not make any material change in the selling, distribution, pricing, advertising or collection practices for the Product, including any special effort or program to sell, consign or solicit order for the Product to customers or to discount, factor or collect sooner than normal any accounts receivable.

     6.3 Post-Closing Orders and Payments. From and after the Closing Date, Shire shall (i) not accept any purchase orders on behalf of Duramed, (ii) promptly deliver to Duramed any purchase orders for Product received after the Closing and any payments received from third parties for Product purchased from Duramed after the Closing, and (iii) refer all inquiries it shall receive with respect to the Product, to Duramed or its designee. Likewise, Duramed shall promptly deliver to Shire any payments Duramed receives from third parties for Product purchased from Shire prior to the Closing.

     6.4 Right to Investigate. After the date hereof up to the Closing, Shire shall afford to representatives of Duramed reasonable access to offices, plants, properties, books and records of Shire relating to the Product and the Purchased Assets, during normal business hours, in order that Duramed may have an opportunity to make such reasonable investigations as it desires with respect to the Product.

     6.5 Retention of Records. Shire will, and will cause each of its Affiliates to, retain all books and records relating to the Adderall Business and the Purchased Assets in the United States in accordance with Shire’s record retention policies as presently in effect or as otherwise required by law.

     6.6 Non-Solicitation.

          (a) During the period commencing upon the signing of this Agreement and ending upon the first anniversary of the Closing Date, Duramed (which for purposes of this Section 6.6 includes its Affiliates) shall not, either directly or indirectly, solicit, recruit, induce, encourage or attempt to solicit, recruit, induce or encourage any employee of Shire or its Affiliates who work, or at any time within [*] prior to the Closing Date, worked, on matters involving the Product to terminate his or her employment relationship with Shire or its Affiliates and become employed by Duramed or become employed by an independent contractor for

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           Duramed, whether or not such employee is a full-time employee and whether or not such employment relationship is pursuant to a written agreement or is at-will. Nothing in this Section 6.6(a) shall apply if the employee is hired in response to a public advertisement or general solicitation disseminated by either Party.

          (b) Prior to the Closing Date, neither Shire nor any of its Affiliates or any Person acting on their behalf shall (i) solicit or encourage any inquiries or proposals for, or enter into any discussions with respect to, the acquisition of any properties and assets held for use in connection with, necessary for the conduct of, or otherwise material to, the Adderall Business (an “Acquisition Transaction”) or (ii) furnish or cause to be furnished any non-public information concerning the Adderall Business to any Person (other than Duramed), for purposes of facilitating an Acquisition Transaction. Shire shall promptly notify Duramed of any inquiry or proposal received by Shire with respect to any such Acquisition Transaction. Shire shall not sell, transfer or otherwise dispose of, grant any option or proxy to any Person with respect to, create any Lien upon, or transfer any interest in, any Purchased Asset, other than in the ordinary course of business and consistent with this Agreement.

     6.7 Managed Markets.

          (a) On the Closing Date and to the extent permitted by applicable law, Duramed shall become responsible for the marketing and promotion of Duramed Labeled Product across all managed market and government segments in the Territory and with respect thereto, shall have exclusive responsibility for: (i) contract execution, (ii) government reporting, rebate and chargeback processing and payment, federal supply schedule calculations and pricing schedules, (iii) contract compliance, monitoring and audits, and (iv) contract administration and claims processing (collectively, the “Managed Market Activities”). Without limiting the generality of the foregoing, with respect to rebates under Medicaid and federal supply service contracts, Duramed shall assume following the Closing Date responsibility therefor under its own Medicaid and federal supply service contracts. On or prior to the Closing Date Duramed shall have obtained its own NDC number for the Product and shall ensure that all sales of Product by Duramed can be accomplished under the NDC number of Duramed. Duramed shall use its new NDC numbers on all invoices, orders and other communications with customers and Regulatory Authorities or other governmental entities. Following the Closing Date, Duramed shall be responsible for the processing, payment, administration and support of (x) all chargebacks under any government, managed market or other contract (“Chargebacks”) and (y) all rebates due pursuant to any United States government (federal or state) rebate program under any government, managed market or other contract (“Rebates”) for Duramed Labeled Product. Shire shall be responsible for the processing, payment, administration and support of all Chargebacks and Rebates for Shire Labeled Product.

          (b) Shire shall provide Duramed with all information relating to the Product and the prices thereof that Duramed reasonably requires in order to comply with applicable rules and regulations relating to Medicaid Rebates. When requested, such information shall be provided by Shire to Duramed promptly, and in any event, within [*] after Duramed’s written request therefor. Promptly after the Closing Date, Shire shall provide Duramed with the baseline Average Manufacturers Price (“AMP”) for the Product. Within [*] after the end of the [*] after

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           the Closing Date, Duramed shall calculate a unit (tablet/capsule) AMP and “Best Price” for the Product and provide such calculations in writing to Shire.

          (c) Shire shall provide to Duramed within [*] after request therefor all information reasonably requested by Duramed to enable Duramed to calculate the price to be paid for each Product by a “covered entity” under the Public Health Service Act, as defined in 42 U.S.C. § 256b(a)(4).

          (d) Shire shall use reasonable best efforts to terminate all Contracts providing for the payment of commercial Rebates with respect to the Product (“Rebate Contracts”) as of the [*] following the Closing. Shire shall not assign to Duramed, and Duramed shall not assume from Shire, any of the Rebate Contracts. Shire shall continue processing Rebates owed under the Rebate Contracts with respect to Product dispensed prior to the termination of such Rebate Contracts. Upon Closing, Shire shall issue a letter to commercial Rebate customers advising such customers of Shire’s responsibilities in connection with Rebate Contracts and associated Rebates.

          (e) Shire shall use reasonable best efforts to terminate all Contracts providing for payment of Chargebacks to government and commercial customers with respect to Product (“Chargeback Contracts”) upon Closing. Shire shall not assign to Duramed, and Duramed shall not assume from Shire, any of the Chargeback Contracts. Upon Closing, Shire shall issue a letter to the trade (wholesalers and distributors) and to commercial Chargeback customers advising such customers of Shire’s responsibilities in connection with Chargeback Contracts and associated Chargebacks and administrative fees.

     6.8 Returns. From and after the Closing Date (a) Shire shall be solely responsible, at its own cost and expense, for the processing, payment, administration and support of all returns of Shire Labeled Product, regardless of when the return is made, and (b) Duramed shall be solely responsible, at its own cost and expense, for the processing, payment, administration and support of all returns of Duramed Labeled Product. If any quantities of Duramed Labeled Products are returned to Shire, Shire shall notify Duramed as soon as practicable and ship them to the facility designated by Duramed at Duramed’s cost. Shire, at its option, may advise the customer who made the return that Duramed Labeled Products should have been returned to Duramed. At Duramed’s request, Shire shall destroy the Duramed Labeled Products and Duramed shall reimburse Shire for such cost of destruction. If any quantities of Shire Labeled Products are returned to Duramed, Duramed shall notify Shire as soon as practicable and ship them to the facility designated by Shire at Shire’ cost. At Shire’s request, Duramed shall destroy Shire Labeled Products and Shire shall reimburse Duramed for such cost of destruction.

     6.9 Certain Sales. Duramed shall not sell any Product following the Closing Date under Shire’s NDC Number or any Shire labeling or packaging material for the Product. Shire shall not sell any Product following the Closing except pursuant to the Supply Agreement.

ARTICLE 7
INDEMNIFICATION

     7.1 Indemnification by Shire. From and after the Closing, Shire shall reimburse and indemnify Duramed, Duramed’s Affiliates, and their respective officers, directors, employees,

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and agents in respect of, and hold each of them harmless from and against, any and all Losses suffered, incurred, or sustained by any of them or to which any of them becomes subject, resulting from, arising out of, or relating to:

          (a) the Retained Liabilities or the Excluded Assets;

          (b) any misrepresentation or breach of representation or warranty by Shire made or contained in this Agreement;

          (c) any failure of Shire to materially perform or observe any covenant or agreement to be performed or observed by Shire pursuant to this Agreement;

          (d) any action or inaction of Shire with respect to the Purchased Assets prior to the Closing Date, except for Losses arising as a result of Liabilities expressly included in the Assumed Liabilities; and

          (e) any product liability claim with respect to the Shire Labeled Product sold prior to the Closing.

     7.2 Indemnification by Duramed. From and after the Closing, Duramed shall reimburse and indemnify Shire, Shire’s Affiliates and their respective officers, directors, employees, and agents in respect of, and hold each of them harmless from and against, any and all Losses suffered, incurred, or sustained by any of them or to which any of them becomes subject, resulting from, arising out of, or relating to:

          (a) the Assumed Liabilities;

          (b) any misrepresentation or breach of representation or warranty by Duramed made or contained in this Agreement;

          (c) any failure by Duramed to materially perform or observe any covenant or agreement to be performed or observed by Duramed pursuant to this Agreement; and

          (d) any action or inaction of Duramed with respect to the Purchased Assets after the Closing Date.

     7.3 Limitation of Liability.

          (a) Notwithstanding anything to the contrary contained in this Agreement, no amounts of indemnity shall be payable as a result of any claim in respect of a Loss arising under Section 7.1 unless and until the indemnified parties thereunder have suffered, incurred, sustained, or become subject to Losses referred to in such Sections in excess of [*] in the aggregate (in which event the indemnifying Party shall be liable for the entire amount of such Losses).

          (b) The maximum aggregate liability of Shire under this Article 7 shall not exceed [*], provided, however, that Losses related to or arising out of any Third Party Claim shall not be subject to any such limitation.

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          (c) Notwithstanding anything to the contrary contained in this Agreement, no amounts of indemnity shall be payable as a result of any claim in respect of a Loss arising under Sections 7.1 or 7.2:

               (i) with respect to any Loss, to the extent that the Party seeking indemnification had a reasonable opportunity, but failed, in good faith to mitigate the Loss; or

               (ii) with respect to any Loss, to the extent that such Loss is caused by (A) any misrepresentation or breach of warranty, covenant or agreement by the Party seeking indemnification in the Agreement or (B) the gross negligence or intentional misconduct of such Party or its Affiliates or any of their respective officers, directors, employees, or agents.

          (d) No Party hereto shall be entitled to any indemnification under Section 7.1(b) or Section 7.2(b), as applicable, if (i) the other Party shall have notified such Party in writing on or prior to the Closing Date, or disclosed to such Party in the Shire Disclosure Schedule or the Duramed Disclosure Schedule, as applicable and as may be supplemented or amended prior to the Closing Date, of the breach of, or inaccuracy in, such representation or warranty and (ii) such Party has permitted the Closing to occur.

     7.4 No Consequential Damages. IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EXCEPT TO THE EXTENT THAT SUCH DAMAGES ARISE FROM THIRD PARTY CLAIMS SUBJECT TO INDEMNIFICATION UNDER ARTICLE 7.

     7.5 Procedures for Indemnification for Third Party Claims.

          (a) In the case of a third party claim or demand (“Third Party Claim”) made by any Person who is not a Party to this Agreement (or an Affiliate thereof) as to which a Party (the “Indemnitor”) may be obligated to provide indemnification pursuant to this Agreement, such Party seeking indemnification hereunder (“Indemnitee”) will notify the Indemnitor in writing of the Third Party Claim (and specifying in reasonable detail the factual basis for the Third Party Claim and to the extent known, the amount of the Third Party Claim) reasonably promptly after becoming aware of such Third Party Claim; provided, however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually prejudiced as a result of such failure.

          (b) If a Third Party Claim is made against an Indemnitee, the Indemnitor will be entitled, within [*] after receipt of written notice from the Indemnitee of the commencement or assertion of any such Third Party Claim, to assume the defense thereof (at the expense of the Indemnitor) with counsel selected by the Indemnitor and reasonably satisfactory to the Indemnitee, for so long as the Indemnitor is conducting a good faith and diligent defense. Should the Indemnitor so elect to assume the defense of a Third Party Claim:

               (i) the Indemnitor will not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that if under applicable standards of professional conduct a conflict of

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interest exists between the Indemnitor and the Indemnitee in respect of such claim, such Indemnitee shall have the right to employ separate counsel (which shall be reasonably satisfactory to the Indemnitor) to represent such Indemnitee with respect to the matters as to which a conflict of interest exists and in that event the reasonable fees and expenses of such separate counsel shall be paid by such Indemnitor; and provided further, that the Indemnitor shall only be responsible for the reasonable fees and expenses of one separate counsel for such Indemnitee;

               (ii) so long as the Indemnitor is conducting the defense of the Third Party Claim in accordance with Section 7.1 or 7.2, as the case may be, the Indemnitee may retain separate co-counsel at its sole cost and expense and participate if reasonably practicable in the defense of the Third Party Claim;

               (iii) the Indemnitor will promptly supply to the Indemnitee copies of all material correspondence and documents relating to or in connection with such Third Party Claim and keep the Indemnitee informed of developments relating to or in connection with such Third Party Claim, as may be reasonably requested by the Indemnitee (including providing to the Indemnitee on reasonable request updates and summaries as to the status thereof); and

               (iv) all Indemnitees shall reasonably cooperate with the Indemnitor in the defense thereof (such cooperation to be at the expense, including reasonable legal fees and expenses, of the Indemnitor).

          (c) If the Indemnitor does not elect to assume control of the defense of any Third Party Claim within the [*] period set forth above, or if such good faith and diligent defense is not being or ceases to be conducted by the Indemnitor, the Indemnitee shall have the right, at the expense of the Indemnitor, after [*] notice to the Indemnitor of its intent to do so, to undertake the defense of the Third Party Claim for the account of the Indemnitor (with counsel selected by the Indemnitee), and to compromise or settle such Third Party Claim, exercising reasonable business judgment.

          (d) If the Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee for a Third Party Claim, the Indemnitee will agree to any settlement, compromise, or discharge of such Third Party Claim that the Indemnitor may recommend that by its terms obligates the Indemnitor to pay the full amount of Losses (whether through settlement or otherwise) in connection with such Third Party Claim and unconditionally and irrevocably releases the Indemnitee completely from all Liability in connection with such Third Party Claim; provided, however, that, without the Indemnitee’s prior written consent, the Indemnitor shall not consent to any settlement, compromise, or discharge (including the consent to entry of any judgment), and the Indemnitee may refuse to agree to any such settlement, compromise, or discharge, that provides for injunctive or other nonmonetary relief affecting the Indemnitee. If the Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee for a Third Party Claim, the Indemnitee shall not (unless required by law) admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnitor’s prior written consent (which consent shall not be unreasonably withheld or delayed).

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     7.6 Losses That Are Not Third Party Claims. Any claim on account of Losses which does not involve a Third Party Claim shall be asserted by reasonably prompt written notice (stating in reasonable detail, the basis of such claim and a reasonable estimate of the amount thereof) given by the Indemnitee to the Indemnitor. For a period of [*] from and after receipt of the written notice, the Parties shall attempt in good faith to resolve such claim for indemnification. If the Parties are unable to resolve such claim, the Indemnitee may thereafter pursue any and all remedies at its disposal to enforce said indemnification claim.

     7.7 Termination of Indemnification Obligations. The obligations of each Party to indemnify, defend and hold harmless the other Party and other Indemnitees (a) pursuant to Sections 7.1(b) and 7.2(b) shall terminate when the applicable Survival Period expires pursuant to Section 4.4, and (b) pursuant to Sections 7.1(a), (c), (d) and (e), and Sections 7.2(a), (c) and (d) shall survive until the earlier of the expiration of the applicable statute of limitations, if any, and the sixth (6th) anniversary of the Closing Date; provided, however, that such obligations to indemnify, defend, and hold harmless shall not terminate with respect to any individual item as to which the Indemnitee shall have before the expiration of the Survival Period, made a claim by delivering a written notice (stating in reasonable detail the basis of such claim and a reasonable estimate of the amount thereof) to the Indemnitor.

     7.8 Other Matters. In the event of payment in full by an Indemnitor to any Indemnitee in connection with any Third Party Claim, such Indemnitor will be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third Party Claim against any claimant or plaintiff asserting such Third Party Claim or against any other Person. Such Indemnitee will cooperate with such Indemnitor in a reasonable manner, and at the cost and expense of such Indemnitor, in prosecuting any subrogated right or claim.

     7.9 Other Limitations.

          (a) For the avoidance of doubt and without limitation to the provisions of Articles 4 and 5, an Indemnitor shall have no obligation to indemnify, defend and hold harmless an Indemnitee from and against any portion of Losses under Section 7.1 or Section 7.2 to the extent that such portion of such Losses results directly from any action taken by, or at the express written request of, such Indemnitee. Neither Party nor any of its respective Affiliates shall have or be subject to any liability to the other Party, its Affiliates or any other Person resulting from the distribution to, or use of any information, documents or materials made available to it by the other Party, including any information, documents or materials in any data rooms, management presentations or other form in expectation of the transactions contemplated hereby.

          (b) No liability shall arise in respect of any breach of any representation, warranty, covenant or agreement herein to the extent that liability for such breach occurs (or is increased) directly as a result of any retrospective application of a change in applicable law, or in accounting policies, procedures or practices, announced by a Governmental Authority or, if not announced in advance of taking effect, taking effect, after the Closing Date, unless Shire or Duramed, as the case may be, knew of any such retrospective application of a change in applicable law, or in such accounting policies, procedures or practices at the time of Closing.

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          (c) No Party shall be entitled to recover any Losses or other amounts due from the other Party pursuant to this Agreement by retaining or setting off amounts (whether or not such amounts are liquidated or reduced to judgment) against any amounts due or to become due from such first Party to such second Party hereunder or under any Transaction Agreement or under any document or instrument delivered pursuant hereto or thereto or in connection herewith or therewith. For the avoidance of doubt, the foregoing is without prejudice to any right of set-off expressly provided for in any Transaction Agreement, which does not involve setting off amounts due under this Agreement.

          (d) All amounts paid by Shire or Duramed under this Article 7 shall be treated for all purposes as adjustments to the Purchase Price except to the extent such treatment is not permitted by applicable law. In the event that treatment as an adjustment to the Purchase Price is disputed by any taxing authority, the Party receiving notice of such dispute shall promptly notify and consult with the other Party concerning resolution of such dispute.

     7.10 Exclusive Remedy. Other than in the case of fraud, the indemnification provided to any Person pursuant to this Article 7 shall be such Person’s sole remedy for any claims arising hereunder, or otherwise in connection with or arising out of the transactions described herein, including any breach by any Party hereto of any representation, warranty, or covenant contained in this Agreement, or in any certificate or document (to the extent such certificate or documents relate to matters covered by the representation, warranties, or covenants contained herein) required to be delivered in connection herewith, provided that nothing herein shall limit the rights of either Party to seek and obtain injunctive relief to specifically enforce the other Party’s obligations.

     7.11 Net Losses and Subrogation.

          (a) Notwithstanding anything contained herein to the contrary, the amount of any Losses incurred or suffered by an Indemnitee shall be calculated after giving effect to: (i) any insurance proceeds received by the Indemnitee (or any of its Affiliates) with respect to such Losses; (ii) any Tax benefit realized by the Indemnitee (or any of its Affiliates) arising from the facts or circumstances giving rise to such Losses; and (iii) any recoveries obtained by the Indemnitee (or any of its Affiliates) from any other third party. Each Indemnitee shall exercise its reasonable efforts to obtain such proceeds, benefits and recoveries, provided that the Indemnitee shall not be obligated to make such an insurance claim if the Indemnitee in its reasonable judgment believes that the cost of pursuing such an insurance claim together with any corresponding increase in insurance premiums or other chargebacks to the Indemnitee, as the case may be, would exceed the value of the claim for which the Indemnitee is seeking indemnification. If any such proceeds, benefits or recoveries are received by an Indemnitee (or any of its Affiliates) with respect to any Losses after the Indemnitee (or any Affiliate) has received the benefit of any indemnification hereunder with respect thereto, the Indemnitee (or such Affiliate) shall pay to the Indemnitor the amount of such proceeds, benefits or recoveries (up to the amount of the Indemnitor’s payment).

          (b) Upon making any payment to an Indemnitee in respect of any Losses, the Indemnitor will, to the extent of such payment, be subrogated to all rights of the Indemnitee (and its Affiliates) against any third party in respect of the Losses to which such payment relates. Such

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           Indemnitee (and its Affiliates) and Indemnitor will execute upon request all instruments reasonably necessary to evidence or further perfect such subrogation rights.

ARTICLE 8
TERMINATION

     8.1 Termination Prior to Closing. This Agreement may be terminated at any time prior to Closing:

          (a) by mutual written consent of Duramed and Shire;

          (b) by Duramed or Shire in the event that any competent Governmental Authority indicates its intention to initiate a judicial or administrative action to obtain an order, decree or ruling to restrain, enjoin, or otherwise prohibit the transactions contemplated by this Agreement, and such order, decree, ruling, or other action shall have become final and non-appealable; or

          (c) by a Party in the event that the other Party (the “Defaulting Party”) shall have breached, or failed to comply with, any of such Defaulting Party’s obligations under this Agreement, or any representation or warranty made by the Defaulting Party shall have been incorrect in any material respects when made; or

          (d) by either Duramed or Shire if the Closing is not consummated pursuant to the terms of this Agreement prior to December 31, 2006, provided that the right to terminate the Agreement under this Section 8.1 (c) shall not be available to a Party hereto if such Party has failed to perform in all material respects its obligation under this Agreement and such failure has been the cause of, or results in, the failure of the Closing to occur on or before such date.

     8.2 Effect of Termination Prior to Closing. In the event of termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of either Party hereto except (a) as set forth in Section 11.1, and (b) nothing herein shall relieve either Party from Liability for any breach of this Agreement prior to such termination.

ARTICLE 9
PATENT PROSECUTION, MAINTENANCE AND ENFORCEMENT

     9.1 Discretionary Duty to Maintain. Shire may, at its sole discretion and cost, maintain the Licensed Patents.

     9.2 Abandonment of Maintenance by Shire. Shire shall notify Duramed in the event it decides at any time to discontinue the maintenance of any Licensed Patent. Such notification shall be given at least [*] prior to the date on which such patent will become abandoned. Duramed shall then have the option, exercisable upon written notification to Shire, to assume full responsibility, at its discretion and sole cost, for prosecution of the affected maintenance of such patent. In the event Duramed exercises such option, such Licensed Patent shall be assigned to Duramed. Shire shall provide all assistance reasonably necessary to assign to the Duramed all rights, interests and titles of such Licensed Patent.

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     9.3 Patent Marking. Duramed and its sublicensees and Affiliates shall mark all Products made under this Agreement with a notice in accordance with 35 U.S.C. §287.

     9.4 Suits for Infringement of the Licensed Patents. If Shire or Duramed becomes aware of infringement of any patent included in the Licensed Patents by a third party, such Party shall promptly notify the other Party in writing to that effect. If, prior to the expiration of [*] from said notice, Shire has not obtained a discontinuance of such infringement or brought suit in such country against the third party infringer and such infringement is relevant in a material respect to a Product or the Purchased Assets, then Duramed shall have the right to bring suit in such country against such infringer and join Shire as a party. The foregoing shall not preclude the Parties from jointly seeking such discontinuance or bringing suit and, in any event, each Party will cooperate with the other in any suit and will have the right to consult with the other and be represented by its own counsel at its own expense. Prior to disposition of any moneys recovered, the expenses of the Parties in bringing suit shall be reimbursed out of the moneys recovered, with the Party bringing the suit being reimbursed first, then fifty percent (50%) of the remainder, if any, of moneys recovered by either Party upon final judgment or settlement of any infringement suit shall be retained by the Party bringing the suit, and fifty percent (50%) shall be paid to the other Party; provided, however, that (a) if Shire has not obtained a discontinuance of such infringement or brought suit against the third party infringer and Duramed determines to bring such suit, Duramed shall be entitled to one hundred percent (100%) of such remainder, and (b) in no event shall any Party who has not voluntarily joined in the relevant action be entitled to recovery of any damages hereunder. No settlement by a Party bringing a suit shall diminish the rights or interests of the other Party without the other Party’s written consent.

ARTICLE 10
DISPUTE RESOLUTION

     10.1 Disputes. The Parties hereby agree that all disputes arising under this Agreement shall be referred to a senior executive of Duramed and a senior executive of Shire (the “Representatives”). If any such matter has not been resolved within [*] of such referral to the Representatives either Party may invoke the provisions of Section 10.2 for such dispute. No dispute resolution procedure set forth in this Agreement shall be construed as an agreement to arbitrate under any federal or state arbitration Law, including the Federal Arbitration Act, and shall not deprive a court of competent jurisdiction from resolving any dispute arising under, or related to, this Agreement.

     10.2 Litigation. Any dispute that is not resolved as provided in the preceding Section 10.1, whether before or after termination of this Agreement, may be submitted by either Party only to any court of competent jurisdiction. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York. The Parties unconditionally and irrevocably agree and consent to the exclusive jurisdiction of the courts located in New York, NY and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and further agree not to commence any such action, suit or proceeding except in any such court.

     10.3 Injunctive Relief. Notwithstanding anything to the contrary in this Agreement, either Party shall have the right to seek temporary injunctive relief in any court of competent

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jurisdiction as may be available to such Party under the Laws and rules applicable in such jurisdiction with respect to any matters arising out of the other Party’s performance of its obligations under this Agreement.

ARTICLE 11
GENERAL PROVISIONS

     11.1 Payment of Transaction Expenses. All legal fees and other expenses incurred on behalf of Shire in connection with the negotiation of this Agreement and the consummation of the transactions contemplated herein will be borne by Shire, whether or not the Closing shall have occurred. All legal fees and other expenses incurred on behalf of Duramed in connection with the negotiation of this Agreement and the consummation of the transactions contemplated herein will be borne by Duramed, whether or not the Closing shall have occurred.

     11.2 Access to Information Post-Closing. After the Closing, Duramed agrees to cooperate with Shire and to grant to Shire and its employees, attorneys, accountants, officers, representatives, and agents, during normal business hours and upon at least [*] advance notice, reasonable access to Duramed’s management personnel and to the records relating to the Product (including the Product Registrations) and to permit copying at Shire’s expense or, where reasonably necessary, to loan original documents relating to the Purchased Assets during the period the Purchased Assets were owned by Shire for the sole purposes of (a) any financial reporting or tax matters (including any financial and tax audits, tax contests, tax examination, preparation of any Shire’s tax returns or financial records) relating to the Product, (b) any claims or litigation involving Shire and the Purchased Assets relating to the Product, (c) any investigation of Shire being conducted by any federal, state, or local governmental authority relating to the Product, (d) any matter relating to any indemnification or representation or warranty or any other term of this Agreement, or (e) any similar or related matter. Duramed shall maintain, to the extent required by applicable law, but in any event for not less than six (6) years, all such records and documents in the United States of America and shall not destroy or dispose of any such records and documents prior to the end of such required or six (6) year period without the prior written consent of Shire.

     11.3 Notices. All notices or other communications that are required or permitted under this Agreement shall be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication shall be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For Duramed:	Duramed Pharmaceuticals, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 201-930-3330 Attention: President

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with a copy to:	Barr Pharmaceuticals, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 888-843-0563
	Attention: General Counsel
For Shire:	Shire LLC
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center
	Princeton, NJ 08540
	Fax: (609) 919-6701
	Attention: Randall B. Sunberg

     11.4 Entire Agreement; Amendment. This Agreement, the Pharmacovigilance Agreement, the Trademark License Agreement and the Supply Agreement, including the exhibits and schedules attached hereto and thereto (each of which is herby and thereby incorporated herin and therein by reference) (collectively, the “Transaction Agreements”), sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between the Parties, which shall continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises, agreements, warranties, representations, conditions, and understandings set forth herein are made and deemed effective as of the Effective Date, and that the execution of this Agreement shall not constitute a waiver of any right or claim of either Party as of the Effective Date.

     11.5 Assignment. Neither this Agreement nor any of the rights or obligations of the Parties hereunder may be assigned by either Party without the prior written consent of the other Party; provided, however, that (a) Shire or Duramed may assign this Agreement to an Affiliate, and (b) following the Closing, either Party shall be entitled, without the prior written consent of the other, to assign its rights and obligations hereunder in connection with a merger or similar reorganization or the sale or all or substantially all of its assets. Any attempted assignment or delegation in contravention hereof shall be null and void. Subject to the foregoing, this

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Agreement and all rights and powers granted and obligations created hereby will bind and inure to the benefit of the Parties and their respective successors and assigns.

     11.6 Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

     11.7 Independent Parties. In making and performing this Agreement, Shire and Duramed shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and Duramed and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party.

     11.8 No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

     11.9 Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

     11.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

     11.11 No Third Party Beneficiaries. No Person other than Shire and Duramed and permitted assignees hereunder shall be deemed an intended beneficiary hereunder or have any right to enforce any term of this Agreement.

     11.12 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

     11.13 No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

     11.14 Public Disclosure. No announcement or other disclosure, public or otherwise, concerning the financial or other terms of this Agreement shall be made, either directly or indirectly, by any Party without first obtaining the written approval of the other Party and agreement upon the nature and text of such announcement or disclosure, such approval and agreement not to be unreasonably withheld or delayed. Notwithstanding the foregoing:

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          (a) Each Party agrees that disclosures may need to be made to the Securities and Exchange Commission (“SEC”) and other Regulatory Authorities and each Party agrees that it shall reasonably cooperate with the other with respect to all disclosures regarding this Agreement to such Regulatory Authorities. In addition, the Parties will coordinate in advance with each other in connection with the redaction of certain provisions of this Agreement with respect to any SEC filings, and each Party shall use reasonable efforts to seek confidential treatment for such terms; provided, however, that each Party shall ultimately retain control over what information to disclose to the SEC or any other such agencies.

          (b) The Parties shall be free to publicly disclose information contained in any materials that have been previously approved for disclosure by the other Party, without further approvals from the other Party hereunder, to the extent there have been no material additions or changes thereto.

     11.15 Bulk Sales Laws. The Parties hereby waive compliance with any UCC bulk sales or comparable statutory provisions of each applicable jurisdiction.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be duly executed as of the date first above written

SHIRE LLC
By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO
SHIRE LLC
By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO
DURAMED PHARMACEUTICALS, INC.
By:	/s/ Fred Wilkinson
Name:	Fred Wilkinson
Title:	President & C.O.O.

[Signature Page to Product Acquisition and License Agreement]

EXHIBIT A

ADDERALL^® IR PHARMACOVIGILANCE AGREEMENT

DATE: As of August 14, 2006
PARTIES:

(1) SHIRE DEVELOPMENT, INC., having its place of business at 725 Chesterbrook Boulevard, Wayne, PA 19087-5637 (“Shire”)

(2) DURAMED PHARMACEUTICALS, INC., having its place of business at 400 Chestnut Ridge Road, Woodcliff Lake, NJ 07677 (“Duramed”).

RECITALS

(A)	With effect from August 14, 2006, Shire and Duramed entered into a Product Acquisition and License Agreement (the “Acquisition and License Agreement”) with respect to the promotion of the Product (as defined below) in the Territory (as defined below).
(B)	Pursuant to the terms of the Acquisition and License Agreement, the Parties are obligated to enter into this Agreement to provide for the Parties’ respective obligations in relation to medical information and pharmacovigilance services for the Product.
(C)	In consideration of the above recitals and the mutual promises, covenants and obligations as set out in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, and intending to be legally bound, the Parties agree as follows.

OPERATIVE PROVISIONS

1	INTERPRETATION
1.1	In this Agreement:
	“Acquisition and License Agreement” has the meaning given to it in Recital (A).
	“Adverse Event” means any untoward medical occurrence in a patient or clinical investigator subject administered the Product and which does not necessarily have a causal relationship with this treatment for which the Product is used. An adverse event can therefore be any unfavorable and unintended sign (including an abnormal laboratory finding), symptom, or disease temporally associated with the

use of a medicinal (investigational) product, whether or not related to the Product. A pre-existing condition that worsened in severity after administration of the Product would be considered an adverse event.

“Awareness Date” or “Clock Date” means the date on which a Party first becomes aware of an Adverse Event or a Suspected Adverse Drug Reaction and, in relation to a third party Representative of a Party, such as clinical research organizations or distributors, that have contractual and/or regulatory obligations to report Adverse Events or a Suspected Adverse Drug Reaction to that Party, the date on which such third parties first become aware of that Adverse Event or a Suspected Adverse Drug Reaction. For both Parties this is considered day zero.

“Business Day” means a day (other than a Saturday or Sunday) on which banks in the United States are open for business.

“Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or generated pursuant to this Agreement.

“Effective Date” has the meaning given to it in the Acquisition and License Agreement.

“Marketing Authorization” means any authorization granted by a Regulatory Authority required to permit the commercial marketing and sale of the Product in the Territory.

“Medical Information” means information about the Product including, but not limited to, clinical and technical matters such as therapeutic uses for both the licensed and unlicensed indications, drug interactions, drug-disease information, Adverse Events, product stability and other product characteristics.

“Periodic Safety Report” means a safety report generated at set times and in accordance with FDA guidelines for the purpose of demonstrating the current risk/benefit analysis of the Product according to present knowledge and produced to provide a historical perspective on the safety issues surrounding the Product.

“Product” has the meaning given to it in the Acquisition and License Agreement.

“Reference Safety Information” means the recognized Adverse Reactions to the Product contained in all or any one of Shire’s Developmental Core Safety Information (DCSI) in an investigator’s brochure, Shire’s Company Core Safety Information (CCSI) in a marketed product Company Core Data Sheet (CCDS) and Shire’s official local product labeling (including the local Summary of Product Characteristics (SPC)).

“Regulatory Approval” means the granting of all necessary regulatory and governmental approvals by a regulatory or other governmental body required to market and sell the Product in the Territory.

“Regulatory Authority” means any competent regulatory authority or other governmental body responsible for granting any Regulatory Approval.

“Representatives” has the meaning set forth in Section 16.1.

“Safety Issue” means any event, report, data or information, which could cause a re-evaluation of the safety of the Product including, but not limited to, Suspected Adverse Drug Reaction and Unexpected Suspected Adverse Drug Reaction.

“Serious Adverse Event” means any Adverse Event in relation to any dose of the administered Product that:

A.	results in death;
B.	is life threatening;
C.	requires in-patient hospitalization or prolongation of existing hospitalization;
D.	results in persistent or significant disability or incapacity; or
E.	is a congenital anomaly or birth defect.

Medical and scientific judgment should be exercised in deciding whether expedited reporting for the Product is appropriate in other situations, such as medically important events that may not be immediately life-threatening or result in death or hospitalization but may jeopardize the patient or may require intervention to prevent one of the other outcomes listed above. These should also usually be considered as Serious Adverse Events.

“Serious Suspected Adverse Drug Reaction” means any Suspected Adverse Drug Reaction in relation to any dose of the administered Product that:

A.	results in death;
B.	is life threatening;
C.	requires in-patient hospitalization or prolongation of existing hospitalization;
D.	results in persistent or significant disability or incapacity; or
E.	is a congenital anomaly or birth defect.

Medical and scientific judgment should be exercised in deciding whether expedited reporting for the Product is appropriate in other situations, such as medically important events that may not be immediately life-threatening or result in death or hospitalization but may jeopardize the patient or may require intervention to prevent one of the other outcomes listed above. These should also usually be considered as Serious Suspected Adverse Drug Reactions.

“Signal” means an unexpected observation of an event in relation to treatment with the Product which deviates so much from expectations that it calls for immediate and greater attention, including (but not limited to) unlabelled Suspected Adverse Drug Reactions, increased frequency or severity of labeled Suspected Adverse Drug Reactions and any change in the risk/benefit/profile of the Product.

“Spontaneous Report” means a communication from an individual (e.g., a health care professional, consumer) to a company or regulatory authority that describes a Suspected Adverse Drug Reaction or medication error. It does not include cases identified from information solicited by the applicant or contractor, such as individual case safety reports or findings derived from a study, company-sponsored patient support program, disease management program, patient registry, including pregnancy registries, or any organized data collection scheme. It also does not include information compiled in support of class action lawsuits.

“Suspected Adverse Drug Reaction” means a noxious and unintended response to any dose of the Product for which there is a reasonable possibility that the Product caused the response. In this definition, the phrase “a reasonable possibility” means that the relationship cannot be ruled out.

“Territory” has the meaning given to it in the Acquisition and License Agreement.

“Unexpected Suspected Adverse Drug Reaction” means any Suspected Adverse Drug Reaction that is not included in the current U.S. labeling for the Product.

“Valid Safety Reports” means the minimum information required for expedited reporting which should at least include all of the following:

A.	an identifiable patient;
B.	a suspected medicinal product or therapeutic device;
C.	an identifiable reporter; and
D.	a Suspected Adverse Drug Reaction or an Adverse Event.

	“Warm Transfer” means the direct connection of a patient, and such patient’s name and contact information, to an appropriate party following receipt of that patient’s initial telephone call.
1.2	In this Agreement, unless the context otherwise requires:

A.	references to “persons” includes individuals, bodies corporate (wherever incorporated), unincorporated associations and partnerships;
B.	reference to a “Party” is to a Party to this Agreement and “Parties” is to both of them;
C.	the headings are inserted for convenience only and do not affect the construction of the Agreement;
D.	references to one gender includes both genders; and
E.	any reference to an enactment or statutory provision is a reference to it as it may have been, or may from time to time be amended, modified, consolidated or re-enacted.

1.3	The Schedules comprise part of and shall be construed in accordance with the terms of this Agreement. In the event of any inconsistency between the Schedules and the terms of this Agreement, the terms of this Agreement shall prevail.
1.4	Terms used in this Agreement, which are not otherwise defined within the Agreement or the Acquisition and License Agreement shall have the meaning given to them in accordance with FDA Regulations or Guidelines and Shire Standard Operating Procedures (SOPs). In the event of any conflict between Shire’s SOP’s and FDA guidelines, FDA guidelines shall prevail.
2	PURPOSE
2.1	In consideration of the mutual obligations contained in this Agreement, the Parties have agreed to provide for the procedures relating to the exchange of safety and pharmacovigilance information for the Product between Shire and Duramed in order to comply with worldwide regulatory reporting requirements for the Product.
2.2	As between Shire and Duramed, Shire shall have the following responsibilities:

a. Shire shall handle all telephone calls and other communications that it may receive regarding the items in Section 3.1, including Adverse Events and/or Suspected Adverse Drug Reactions in accordance with the terms of this Agreement. Except to the extent required by law, responding to private third parties regarding complaints, notices and inquiries as to Adverse Events, Suspected Adverse Drug Reactions, or data, documents

or reports related to any of them. Shire shall process all Adverse Events and/or Suspected Adverse Drug Reactions and prepare the data, documents or reports related to them in a final format that is suitable for Duramed to submit to the Regulatory Authority.

b.

Shire shall inform Duramed within three (3) Business Days of any communications of any kind received by Shire from any Regulatory Authority involving safety issues in relation to the Product outside of the Territory, although the Parties acknowledge that the Product is not sold outside of the Territory. To the extent that Shire is required by law to respond, Shire shall, if there is time to do so, submit its response to Duramed before submitting it to the Regulatory Authority. Duramed will provide Shire access to Duramed’s safety data required to respond to a Regulatory Authority request and written approval of and/or comments on such response within a timeframe sufficient to meet any deadlines imposed by the requesting Regulatory Authority. Shire shall, to the extent permitted by law, cooperate fully with Duramed and keep Duramed fully informed as to Regulatory Agency requests received by Shire within the scope of this paragraph and Shire’s responses.

c.

Shire shall, within three (3) Business Days inform Duramed in the event that, at any time, Shire identifies potential safety issues, including calls or communications that Shire receives directly from, private or government, third party in relation to the Product and will provide such further assistance, as Shire and Duramed shall agree.

2.3 Except as specifically set forth in paragraph 2.2 above, Duramed shall have following responsibilities:

a.	Duramed shall refer all drug safety and pharmacovigilance related queries from healthcare providers or their staff, or any third party in relation to the Product. The Shire contact to receive this information is identified in Section 11.1 of this agreement as the “Appointed Medical Information Contact”.
b.	Duramed shall ensure compliance and correspond with the U.S. Regulatory Authority on reporting requirements related to Adverse Events and Suspected Adverse Drug Reactions, including but not limited to FDA requirements, submission of Periodic Safety Reports, 15-day safety reports and MedWatch reports. Duramed reserves the right to exercise final control over its submissions and response to Regulatory Agency communications directed to, and requiring a response from, Duramed.
c.	Duramed shall ensure that there is a mechanism available during normal business hours to receive notices regarding any safety issue under this Agreement;

d.	Duramed shall handle all telephone calls and other communications that it may receive regarding Adverse Events and/or Suspected Adverse Drug Reactions in accordance with the terms of this Agreement;
e.	Duramed shall inform Shire within three (3) Business Days of any communications of any kind received by Duramed from any Regulatory Authority involving safety issues in relation to the Product in the Territory. To the extent that Duramed is required by law to respond, Duramed shall, if there is time to do so, submit its response to Shire before submitting it to the Regulatory Authority. Shire will provide Duramed with safety data required to respond to a Regulatory Authority request and written approval of and/or comments on such response within a timeframe sufficient to meet any deadlines imposed by the requesting Regulatory Authority. Duramed reserves the right to exercise final control over its response to Regulatory Agency communications directed to, and requiring a response from, Duramed, to the extent required by Duramed, in its sole judgment, in order to maintain Duramed’s compliance with all applicable legal requirements. Duramed shall, to the extent permitted by law, cooperate fully with Shire and keep Shire fully informed as to Regulatory Agency requests received by Duramed within the scope of this paragraph and Duramed responses.
f.	Duramed shall within three (3) Business Days inform Shire in the event that, at any time, Duramed identifies potential safety issues in relation to the Product and will provide such further assistance, as Shire and Duramed shall agree.

3	SCOPE
3.1	This Agreement covers:

a.	all Spontaneous Reports of Adverse Events and Suspected Adverse Drug Reactions in relation to the Product;
b.	all Serious Suspected Adverse Drug Reactions arising from post-marketing surveillance with the Product;
c.	all information required for periodic reporting in relation to the Product;
d.	all other information as required by Regulatory Authorities for the Product; and
e.	the provision of Medical Information to support third party inquiries.

4	LANGUAGE OF ALL EXCHANGE AND TERMINOLOGY
4.1	The language of all information exchanged pursuant to this Agreement, including reports to Regulatory Authorities, shall (unless specifically stated otherwise) be in English, or if any other language, accompanied by a translation into English. In the event of any conflict between the English text and the text in any other language, the English text shall prevail.
5	CONTACT PERSONNEL AND METHODS FOR ADVERSE EVENT TRANSMISSION
5.1	The names and details of contact personnel for Shire and Duramed are detailed in Schedule 1.
5.2	Any changes in names or details of any of the contact personnel for a Party in relation to the Product must be notified by that Party to the other Party in writing to the address set out in Schedule 1 as soon as reasonably practicable after the change occurs.
5.3	Any notice given under this Agreement shall be in writing and (i) personally delivered or (ii) sent by fax or (iii) e-mail to the address of the other Party as set out in Schedule 1 (or such other address as may have been notified in writing from time to time by a Party to the other Party) and any such notice shall be deemed to have been served at the time of delivery (if personally delivered) or upon receipt of confirmation of transmission by the sender’s fax machine (if sent by fax) and in the case of email upon receipt of delivery confirmation by the sender’s computer (if sent by e-mail).
6	SAFETY DATABASE
6.1	The safety information generated pursuant to this Agreement shall be added to the safety database for the Product and shall be held and maintained by Shire and shall be the central repository for all drug safety information received worldwide for the Product.
6.2	The safety database shall be used for all drug safety and pharmacovigilance regulatory responses and purposes for the Product.
6.3	Shire shall provide all safety information reasonably requested by Duramed from Shire’s safety database to provide a response to answer any drug safety and pharmacovigilance related queries in relation to the Product and to meet all regulatory requirements. Shire will provide the information within a reasonable timeline according to the urgency of request. Upon termination of this Agreement, Shire shall transfer the safety database for the Product to Duramed as soon as reasonably practicable.

6.4	With the exception of FDA exchange, which may be implemented at some future point in time, and except as otherwise set forth herein, Duramed shall not have direct access to the safety database for security and data privacy reasons.
7	EXCHANGE OF ADVERSE EVENT AND SUSPECTED ADVERSE DRUG REACTION INFORMATION
7.1	All notification and response periods referred to in this Agreement (unless otherwise specified) will be in calendar days in accordance with FDA regulations.
7.2	The relevant period for any notification or response for either Party (including their Representatives) will commence on the Awareness Date.
7.3	Duramed will attempt to Warm Transfer all calls related to the Product covered in Section 3.1 including Adverse Event and Suspected Adverse Drug Reactions calls to Shire at (888) 300-6414 at the time of receipt. Prior to transferring the call, Duramed staff will obtain a name and contact number. If the Warm Transfer is not successful, Duramed will fax the caller’s name and contact information to Shire’s Pharmacovigilance Department at (866) 557-4473 within two Business Days of receipt. Shire will be responsible for the intake of the Adverse Events and Suspected Adverse Drug Reactions and preparing MedWatch reports for any Adverse Reaction occurring. All written Adverse Events and Suspected Adverse Drug Reactions received by Duramed will be forwarded to Shire within two Business Days of receipt. If Shire directly receives calls related to the Product that is an Adverse Event or Suspected Adverse Drug Reactions, Shire will inform Duramed’s “Appointed Medical Information Contact” within two Business Days of receipt
7.4	Shire shall ensure that there is a mechanism available 24-hour/7 days per week to receive notices for any safety issue under this Agreement.
7.5	Upon receipt of any report from Duramed under Section 7.3, Shire will notify Duramed of receipt of the report as soon as possible; however in no event longer than two Business Days thereafter. Any report from is considered transmitted only after an acknowledgement of receipt is received from Shire.
7.6	Shire will provide final written reports to Duramed by day 12 for an expedited (15 day) report and at least 5 days prior the periodic due date in order for Duramed’s submissions to meet all 15-day safety report and periodic/PSUR regulated timelines.
7.7	No later than the 15th day of each month, Shire will provide a line listing including reported term, manufacturing number, demographics and a narrative for each report received from Duramed the previous month.

	Reports received from Literature Reviews
7.8	Shire will be responsible for monitoring the worldwide scientific literature to meet global regulatory reporting requirements and for monitoring drug safety for the Product. Once an Adverse Event or a Suspected Adverse Drug Reaction has been identified, Shire will assess it according to seriousness and where appropriate report it as a literature report quoting the reference for the article for onward reporting by Duramed to the appropriate Regulatory Authority in the Territory.
	Management of Follow up information Follow up of initial reports
7.9	Shire shall be responsible for all follow-up activities for any Adverse Events occurring in the Territory.
7.10	Duramed shall notify Shire of any additional information it reasonably requires regarding an Adverse Event occurring in the Territory that Shire has notified it of pursuant to this Section 7 and Shire will use its reasonable endeavors to obtain the additional information within two (2) Business Days. Shire shall notify Duramed of the outcome of the additional information obtained by Shire for submission to the Regulatory Authority, if necessary.
8	ASSESSMENT OF ADVERSE EVENTS
	Assessment of Listedness (Expectedness)
8.1	All Adverse Events and Suspected Adverse Drug Reactions will be reported to Shire irrespective of any assessment regarding listedness (expectedness).
8.2	Shire shall be responsible for assessing all Adverse Events and Suspected Adverse Drug Reactions in the Territory and shall determine if any report is required to be made to the Regulatory Authorities in accordance with Section 10. Pursuant to Section 2.3, . Duramed reserves the right to exercise final control over its submissions and response to the Regulatory Authority communications directed to, and requiring a response from, Duramed.
9	SAFETY ISSUES/SIGNALS AND REGULATORY INQUIRIES INVOLVING SAFETY ISSUES
9.1	Shire shall, within 24 hours of it becoming aware, notify Duramed of any significant safety issues other than individual ADRs referenced in Section 7 in relation to the Product. Shire and Duramed shall discuss in good faith how to deal with any such significant safety issues and shall co-operate with the reasonable requests of the other Party in relation to such issues. Significant safety issues relating to the Product may occur as a result of a request from a Regulatory Authority; potential changes in the risk/benefit of the Product; Product quality

	issues that may have a clinical impact such as Product contamination or deterioration; external influences such as media or literature and ongoing safety surveillance.
9.2	Shire and Duramed agree to reasonably collaborate on any labeling changes that are safety related. Duramed is responsible for the maintenance of labeling changes to the Product and will notify Shire of all safety related changes.
9.3	Should Shire become aware of any potential safety signal, Shire shall promptly notify Duramed.
10	REGULATORY AUTHORITY INTERACTION
	Expedited Reporting Responsibilities
10.1	Subject to Sections 7.6 to 7.10, Shire will be responsible for assessing the “reportability” and submitting reports of Serious Suspected Adverse Drug Reactions for the Product (according to current FDA regulations) to Duramed to be submitted to the Regulatory Authority.
10.2	Either Party shall permit the other Party or its representatives to inspect, review and audit of its operations concerning Pharmacovigilance and adverse event collection and reporting in line with FDA regulations, in accordance with the terms of this Agreement. Any information obtained through such inspections, reviews and audits shall be treated as confidential information of the audited Party. Such audits, reviews and inspections shall be conducted during normal business hours, upon reasonable notice, and no more than once per year (other than in an emergency situation), and in a manner that does not unreasonably interfere with ongoing operations. The date and time of the audit will be determined and agreed on by both parties, but shall be scheduled to occur within four (4) weeks of the audit request, unless otherwise agreed. It is understood that Regulatory Agency inspections of each Party’s facilities occur periodically and audits will not be conducted in such a way as to conflict with those inspections.
	Periodic Reporting
10.3	Shire shall prepare and submit to Duramed pursuant to Section 7.6 the Periodic Safety Report for the Product in the Territory, according to its internal standard operating procedures and in the format as detailed in 21CFR 314. The periodicity of the Periodic Safety Report will be according to the International Birth Date of the Product.
10.4	Prior to regulatory submission, there should be discussion between the Parties to promote harmonization and co-ordination if any safety signals or proposed amendments to the Reference Safety Information are recommended. However, this must be achieved within the applicable regulatory timeframe.

11	MEDICAL INFORMATION/QUESTIONS
11.1	Duramed shall transfer all Medical Information inquiries received from third Parties in the Territory regarding the Product to the person or persons specified in Schedule 1 (“Appointed Medical Information Contact”).
11.2	If the inquiry is a request for information in connection with a report of an Adverse Event or Suspected Adverse Drug Reaction, Duramed shall confirm to the Appointed Medical Information Contact that the report has been notified to Shire in accordance with Sections 7.3 and 7.6.
12	AMENDMENTS TO THIS SAFETY AGREEMENT
12.1	This Safety Agreement becomes effective on the Effective Date.
12.2	If a Party becomes aware of any change of law or regulation which affects any of the matters the subject of this Agreement, it shall notify the other Party of any such change. The Parties shall promptly meet and discuss any such changes and negotiate in good faith any amendments to this Agreement, which either Party honestly believes are necessary or desirable as a result of such changes.
12.3	Revision of attachments (Schedules) will not require that this Safety Agreement be re-issued and signed off, but shall require the written agreement of both Parties.
12.4	Changes in company personnel and methods of communication must be conveyed immediately to both Parties, to ensure the correct and timely flow of information.
13	CONFIDENTIALITY
13.1	Each Party agrees and undertakes that it will treat and keep confidential all Confidential Information, which may become known, to that Party from the other Party.
14	DURATION AND TERMINATION
14.1	This Agreement commences on the Effective Date and shall continue in force until terminated by either Party in accordance with Section Error! Reference source not found..
14.2	[*]
15	CONSEQUENCES OF TERMINATION
15.1	Articles 13, 15, 16 and 17 shall survive the termination of this Agreement.

15.3	The termination or expiration of this Agreement shall not release either of the Parties from any liability which at the time of termination or expiration has already accrued to the other Party, nor affect in any way the survival of any other right, duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to survive such termination or expiration.
16	RESOLVING DISPUTES
16.1	The Parties hereby agree that all disputes arising under this Agreement shall be referred to a senior executive of Duramed and a senior executive of Shire (the “Representatives”). If any such matter has not been resolved within fifteen (15) Business Days of such referral to the Representatives either Party may invoke the provisions of Section 16.2 for such dispute. No dispute resolution procedure set forth in this Agreement shall be construed as an agreement to arbitrate under any federal or state arbitration Law, including but not limited to the Federal Arbitration Act, and shall not deprive a court of competent jurisdiction from resolving any dispute arising under, or related to, this Agreement.
16.2	Any dispute that is not resolved as provided in the preceding Section 16.1, whether before or after termination of this Agreement, may be submitted by either Party only to any court of competent jurisdiction. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York. The Parties unconditionally and irrevocably agree and consent to the exclusive jurisdiction of the courts located in New York, NY and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and further agree not to commence any such action, suit or proceeding except in any such court.
16.3	Notwithstanding anything to the contrary in this Agreement, either Party shall have the right to seek temporary injunctive relief in any court of competent jurisdiction as may be available to such Party under the Laws and rules applicable in such jurisdiction with respect to any matters arising out of the other Party’s performance of its obligations under this Agreement.
17	GENERAL PROVISIONS
17.1	Except as expressly provided for in this Agreement, no variation to the terms of this Agreement shall be effective unless in writing and signed on behalf of each Party by a director or other authorised person.
17.3	Failure by either Party on one or more occasions to avail itself of a right conferred by this Agreement shall not be construed as a waiver of such Party’s right to enforce such right or any other right.

17.4 This Agreement and the Acquisition and License Agreement contain the entire agreements and understandings between the Parties and supersede all previous agreements and understandings between the Parties with respect to the subject matter of this Agreement. In the event of a conflict between the terms of any of the aforementioned agreements, the Acquisition and License Agreement shall control to the extent of any inconsistency. Each Party acknowledges that, in entering into this Agreement, it is not relying on any representation or warranty (whether made orally or in writing) except as expressly provided in this Agreement.

     In Witness Whereof, this Agreement has been signed by the authorized representatives of the Parties on the day and year first written above.

SIGNED for and on behalf of	)	/s/ Matthew Emmens
SHIRE DEVELOPMENT, INC.	)	Signature
		CEO
		Print Name and Title
SIGNED for and on behalf of	)	/s/ Fred Wilkinson
DURAMED PHARMACEUTICALS, INC		Signature
		President & C.O.O.
		Print Name and Title

[Signature Page to Pharmacovigilance Agreement]

SCHEDULE 1

Contact Information

EXHIBIT B

TRADEMARK LICENSE AGREEMENT

          This TRADEMARK LICENSE AGREEMENT (this “Agreement”) is entered into as of August 14, 2006, by and among Shire LLC, a Kentucky limited liability company (together with its Affiliates, “Shire”), and Duramed Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware (“Duramed”) (each a “Party” and collectively, the “Parties”).

RECITALS

          WHEREAS, Shire is in the business of formulating, manufacturing, marketing and distributing the pharmaceutical product known as Adderall IR™ and owns the pharmaceutical product known as Adderall IR™;

          WHEREAS, pursuant to that certain Product Acquisition and License Agreement, executed concurrently herewith (the “Product Acquisition Agreement”) Shire is selling to Duramed certain rights to the Adderall IR™ product and certain assets relating to the Adderall Business (as defined in the Product Acquisition Agreement);

          WHEREAS, pursuant to the terms and conditions of this Agreement, Shire desires to license to Duramed, and Duramed desires to acquire, a license to use certain trademark rights related to the Adderall Business; and

          WHEREAS, the execution of this Agreement is a condition of the Parties entering into the Product Acquisition Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and in the Product Acquisition Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I
DEFINITIONS

          1.1 Any capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in the Product Acquisition Agreement. The following capitalized terms shall have the following meanings when used in this Agreement:

          1.2 “Affiliate” means a Person that, directly or indirectly, through one or more intermediates, controls, is controlled by, or is under common control with, the Person specified. For the purposes of this definition, control shall mean the direct or indirect ownership of (a) in the case of corporate entities, securities authorized to cast more than fifty percent (50%) of the votes in any election for directors, (b) in the case of non-corporate entities, more than fifty percent (50%) ownership interest with the power to direct the management and policies of such non-corporate entity, or (c) such lesser percentage as may be the maximum percentage allowed

           to be owned by a foreign corporation under the applicable laws or regulations of a particular jurisdiction of the equity having the power to vote in the election of directors or to direct the management and policies of such Person.

          “Licensed Activities” shall mean the manufacture, advertising, marketing, promoting, selling and distributing of the Product.

          “Licensed Marks” shall mean the trademarks set forth on the attached Schedule A.

          “Losses” means any and all liabilities, damages, fines, penalties, deficiencies, losses and expenses (including interest, court costs, amounts paid in settlement, reasonable fees of attorneys, accountants and other experts or other reasonable expenses of litigation or other proceedings or of any claim, default or assessment); provided, however, that the term “Losses” shall not include any special, consequential, indirect, punitive or similar damages, except to the extent actually paid by a Party pursuant to any Third Party Claim.

          “Product” shall mean the pharmaceutical product in all dosage forms identified in NDA # 11-522, as may be amended or supplemented from time-to-time in accordance with applicable law.

          “Promotional Materials” shall mean any materials used in connection with the Licensed Activities, including web sites, press releases, finished and unfinished commercials, and copies of related text and story boards, and other content, for all television, radio, online, print or other advertisements, and all packaging, labels, documentation and all other materials that either include any of the Licensed Marks or are used or distributed in connection with a Product.

          “Person” shall mean an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

          “Term” shall have the meaning set forth in Article IV of this Agreement.

          “Territory” shall mean the United States, and its territories and possessions.

ARTICLE II
TERMS AND CONDITIONS

          2.1 Grant of License. Subject to the terms and conditions of this Agreement, Shire grants to Duramed an exclusive, fully-paid-up, royalty-free, license during the Term of this Agreement to use the Licensed Marks in connection with the Licensed Activities in the Territory. During the Term of this Agreement, Shire shall have no right to license any third party to use any Licensed Mark, or to use any Licensed Mark itself or through any of its Affiliates, in connection with an oral immediate release mixed amphetamine salt pharmaceutical product or other oral immediate release pharmaceutical product for treating Attention Deficit Hyperactivity Disorder.

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          2.2 Limitations on Use. All rights not expressly granted to Duramed under this Agreement are reserved to Shire. Without limiting the generality of the foregoing, Duramed shall not have the right to use any of the Licensed Marks: (i) other than in connection with the Licensed Activities, (ii) as a trade name, Duramed name, or fictitious business name, or (iii) other than in accordance with this Agreement. Duramed shall not use or authorize any other Person to use the Licensed Marks outside the Territory during or after the Term.

          2.3 Ownership. As between the Parties, Shire owns all right, title and interest in and to the Licensed Marks and the goodwill associated with the Licensed Marks, and any use of the Licensed Marks by Duramed and any associated goodwill shall inure to the benefit of Shire. Except as expressly set forth in this Agreement, Duramed shall have no right, title or interest in or to the Licensed Marks. Duramed shall not, during or after the Term, in any jurisdiction: (i) challenge Shire’s title or rights in and to the Licensed Marks, or the validity of the Licensed Marks or any applications and registrations thereof, or (ii) register, attempt to register or assist any Person other than Shire in registering, any of the Licensed Marks or any confusingly similar variations thereof. In no event shall Duramed use any of the Licensed Marks in a manner that may tarnish or disparage Shire or Shire’s rights in any of the Licensed Marks.

          2.4 Marking. All Promotional Materials shall clearly state that Shire owns the Licensed Marks. Duramed shall use the following form of such notice, in a clearly visible or audible (as appropriate) manner: “ADDERALL^® is a registered trademark of Shire LLC, used under license.” Duramed shall have the right to use the Licensed Marks in combination with other marks, names or symbols of Duramed without Shire’s consent (so long as they do not include terms identical or confusingly similar to terms that Shire uses).

          2.5 Protection of the Licensed Marks. At Shire’s request and sole expense, Duramed shall cooperate fully and in good faith with Shire in securing, protecting, enforcing and defending Shire’s rights in the Licensed Marks. Without limiting the generality of the foregoing, Duramed shall execute any and all documents, and take any actions, as deemed necessary in the reasonable opinion of Shire, to confirm or otherwise establish or maintain the validity, or enforceability of, and Shire’s rights in and to, the Licensed Marks.

          2.6 Domain Name. Shire acknowledges that Duramed shall have the right to register and maintain a web site at www.adderallir.com. Upon termination of this Agreement, Duramed shall transfer to Shire any domain names that incorporate any of the Licensed Marks.

          2.7 Quality Control Standards. Duramed shall maintain the quality of the Product at the same or better level of quality as the therapeutic equivalent of the Product marketed by Barr Laboratories, Inc. under ANDA No. 40-422 as of the Effective Date and comply materially with all applicable laws and regulations governing the provision of the Product. Duramed shall not alter or modify the Licensed Marks in any way. As long as this Agreement is in effect, Duramed shall provide to Shire representative samples of the Product and Promotional Materials pursuant to Shire’s request; provided that such request shall not be made more than once every six (6) months.

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ARTICLE III
INFRINGEMENT

          3.1 If Shire or Duramed becomes aware of infringement of any Licensed Marks by a third party, such Party shall promptly notify the other Party in writing to that effect. If, prior to the expiration of ninety (90) days from said notice, Shire has not obtained a discontinuance of such infringement or brought suit in the Territory against the third party infringer and such infringement is relevant in a material respect to the Product, then Duramed shall have the right to bring suit against such infringer and join Shire as a party. The foregoing shall not preclude the Parties from jointly seeking such discontinuance or bringing suit and, in any event, each Party will cooperate with the other in any suit and will have the right to consult with the other and be represented by its own counsel at its own expense. Prior to disposition of any moneys recovered, the expenses of the Parties in bringing suit shall be reimbursed out of the moneys recovered, with the Party bringing the suit being reimbursed first, then the remainder, if any, of moneys recovered by either Party upon final judgment or settlement of any infringement suit shall be retained by the Party bringing the suit. No settlement by a Party bringing a suit shall diminish the rights or interests of the other Party without the other Party’s written consent.

ARTICLE IV
TERM AND TERMINATION

          4.1 Term. This Agreement shall commence on the Effective Date and shall continue for an initial term of ten (10) years (the “Initial Term”). This Agreement shall automatically renew for successive additional ten (10) year terms (each a “Renewal Term”) unless earlier terminated in accordance with this Article IV (the Initial Term, together with any successive Renewal Terms, being the “Term”).

          4.2 Termination for Cause. Shire may terminate this Agreement at any time in the event Duramed materially breaches this Agreement and such material breach continues uncured for a period of 180 days after written notice thereof; provided, however, in the event Duramed has in good faith commenced cure within such 180 day period, but cannot practically complete such cure within such 180 day period, Duramed shall have an additional 180 day cure period. In the event a material breach of this Agreement is incapable of cure, without limiting any other rights of Shire, including the right to seek injunctive relief, Shire shall not have the right to terminate this Agreement if (i) Duramed is providing full cooperation to mitigate the breach, and (ii) the breach was not caused by the willful misconduct by Duramed.

          4.3 Non-Use. Shire may terminate this Agreement on written notice to Duramed if Duramed ceases using the Licensed Marks in connection with the Licensed Activities for a period of two (2) years or more.

          4.4 Upon Termination. Upon any termination of this Agreement by either Party for any reason: (i) all rights granted to Duramed shall immediately terminate, and (ii) Duramed shall immediately cease all use of the Licensed Marks.

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ARTICLE V
LIMITED WARRANTIES, DISCLAIMER AND LIMITATIONS

          5.1 Mutual Representations. Each Party hereby represents and warrants to the other Party as follows:

          (a) Due Authorization. Such Party is a corporation duly incorporated and in good standing (where such concept applies) as of the Effective Date, and the execution, delivery and performance of this Agreement by such Party have been duly authorized by all necessary action on the part of such Party.

          (b) Due Execution. This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

          (c) No Conflict. Such Party’s execution, delivery and performance of this Agreement do not: (i) violate, conflict with or result in the breach of any provision of the charter or by-laws (or similar organizational documents) of such Party; (ii) conflict with or violate any law, rule, regulation or governmental order applicable to such Party or any of its assets, properties or businesses; or (iii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of any agreement to which it is a party.

          (d) Duly Licensed. Such Party is duly licensed, authorized or qualified to do business and is in good standing (where such concept applies) in every jurisdiction in which a license, authorization or qualification is required for the ownership or leasing of its assets or the transaction of business of the character transacted by it, except where the failure to be so licensed, authorized or qualified would not have a material adverse effect on such Party’s ability to fulfill its obligations hereunder.

          5.2 Shire Representations and Warranties. Shire hereby represents and warrants to Duramed that, as of the Effective Date:

          (a) There is no action or proceeding pending or, to Shire’s knowledge, threatened, with respect to any Licensed Marks. There are no material unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against Shire or its Affiliates with respect to any Licensed Marks.

          (b) To Shire’s knowledge, the use of the Licensed Marks does not infringe or misappropriate the intellectual property rights of any third party. Neither Shire nor any of its Affiliates has received any written notice from any Person, or has knowledge of, any actual or threatened claim or assertion that the use of the Licensed Marks infringes or misappropriates the intellectual property rights of any third party.

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          (c) Shire has the right to grant to Duramed the licenses set forth in this Agreement, free of any rights or claims of any third party and without payment by Shire of any royalties, license fees or other amounts to any Third Party.

          (d) All Licensed Marks are subsisting and, to Shire’s knowledge, valid and enforceable.

          (e) To Shire’s knowledge, there is no infringement by a third party of any Licensed Marks.

          5.3 DISCLAIMER. EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE V, SHIRE DOES NOT MAKE, AND SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE CONCERNING ANY MATTER SUBJECT TO THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT.

ARTICLE VI
INDEMNIFICATION

          6.1 Indemnification by Shire. Shire hereby agrees to hold Duramed, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a third party (each a “Third Party Claim”) resulting directly from (a) any breach by Shire of any of its representations, warranties, covenants or obligations pursuant to this Agreement, and (b) any claim that the use of the Licensed Marks as permitted hereunder infringes the intellectual property rights of any third party.

          6.2 Indemnification by Duramed. Duramed hereby agrees to hold Shire, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting directly from (a) any breach by Duramed of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (b) except for such matters as Shire is obligated to indemnify Duramed under 6.1, use of the Licensed Marks in connection with Licensed Activities, including claims based on product liability of the Product.

          6.3 Notice of Claim. All indemnification claims in respect of any indemnitee seeking indemnity under 6.1 or 6.2 (collectively, the “Indemnitees” and each an “Indemnitee”) shall be made solely by the corresponding Party (the “Indemnified Party”). The Indemnified Party shall give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to base a request for indemnification under 6.1 or 6.2, but in no event shall the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such Third Party Claim. Each Indemnification Claim Notice shall contain a description of the claim and the nature and amount of such Loss (to

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           the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party shall furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defense of such Third Party Claim.

          6.4 Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification as provided for in under 6.1 and 6.2 by giving written notice to the Indemnified Party within thirty (30) days after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim.

          6.5 Right to Participate in Defense. Without limiting 6.3, any Indemnitee shall be entitled to participate in, but not control, the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with 6.3 (in which case the Indemnified Party shall control the defense).

          6.6 Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim that shall not result in the Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any manner, and as to which the Indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, shall deem appropriate (provided, however that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and shall transfer to the Indemnified Party all amounts which said Indemnified Party shall be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with 6.3, the Indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent shall be at the Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with 6.3 shall not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with 6.3.

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          6.7 Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation shall include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.

          6.8 Expenses of the Indemnified Party. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim shall be reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

ARTICLE VII
MISCELLANEOUS

          7.1 Entire Agreement; Amendment. This Agreement, together with the Product Acquisition Agreement, including the exhibits attached hereto and thereto (each of which is hereby and thereby incorporated herein and therein by reference), set forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between the Parties, which shall continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises, agreements, warranties, representations, conditions, and understandings set forth herein are made and deemed effective as of the Effective Date, and that the execution of this Agreement shall not constitute a waiver of any right or claim of either Party as of the Effective Date.

          7.2 Notices. All notices or other communications that are required or permitted under this Agreement shall be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication shall be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal

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           delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For Duramed:	Duramed Pharmaceuticals, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 201-930-3330
	Attention: President
with a copy to:	Barr Pharmaceuticals, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 888-843-0563
	Attention: General Counsel
For Shire:	Shire LLC
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center
	Princeton, NJ 08540
	Fax: (609) 919-6701
	Attention: Randall B. Sunberg

          7.3 Independent Contractors. In making and performing this Agreement, Shire and Duramed shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and Duramed and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. Except as otherwise provided in this Agreement, each Party shall be solely responsible for its own costs and expenses associated with this Agreement.

          7.4 No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

          7.5 Governing Law. This Agreement shall be governed by and construed under the substantive laws of the State of New York without giving effect to the choice of law provisions thereof.

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     7.6 Assignment. Neither Party shall sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent may be granted, withheld or conditioned at such other Party’s sole and absolute discretion); provided, however, that either Party may assign or transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other Party to any Affiliate of such Party, or to any third party with which it merges or consolidates, or to which it transfers all or substantially all of its assets to which this Agreement pertains. The assigning Party (unless it is not the surviving entity) shall remain jointly and severally liable with, and shall guarantee the performance of, the relevant Affiliate or third party assignee under this Agreement, and the relevant Affiliate assignee, third party assignee or surviving entity shall assume in writing all of the assigning Party’s obligations under this Agreement. Any purported assignment or transfer in violation of this 7.6 shall be void ab initio and of no force or effect.

     7.7 Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

     7.8 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be reasonably necessary or appropriate in order to carry out the purposes and intent of this Agreement.

     7.9 Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

     7.10 Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

     7.11 No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective representatives thereunto duly authorized, all as of the date first written above.

SHIRE PLC
By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO
SHIRE LLC
By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO
DURAMED PHARMACEUTICALS, INC.
By:	/s/ Fred Wilkinson
Name:	Fred Wilkinson
Title:	President & C.O.O.

[Signature Page to Trademark License Agreement]

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SCHEDULE A

Licensed Marks

				Serial No./	Reg. No./
Mark	Owner	Country	Goods/Services	Filing Date	Reg. Date
[*]	[*]	[*]	[*]	[*]	[*]

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EXHIBIT C

SUPPLY AGREEMENT

BETWEEN

SHIRE LLC

AND

DURAMED LABORATORIES, INC.

DATED AS OF

AUGUST 14, 2006

SUPPLY AGREEMENT

     This SUPPLY AGREEMENT (this “Agreement”), dated as of August 14, 2006, by and among Shire LLC, a Kentucky limited liability company having a place of business at 725 Chesterbrook Boulevard, Wayne, Pennsylvania 19087 (“Shire”), and Duramed Pharmaceuticals, Inc., a Delaware corporation having a place of business at 400 Chestnut Ridge Road, Woodcliff Lake, NJ 07677 (“Duramed”) (each a “Party” and collectively, the “Parties”).

RECITALS

     WHEREAS, the Parties have entered into that certain Product Acquisition and License Agreement (the “Product Acquisition Agreement”), dated as of the date hereof, pursuant to which Shire shall sell and license to Duramed assets and rights relating to the Products (as defined in the Product Acquisition Agreement) Shire (capitalized terms used herein but not defined herein shall have the meanings set forth in the Product Development Agreement);

     WHEREAS, the Product Acquisition Agreement contemplates the Parties entering into this Agreement to govern the supply of Products by Shire to Duramed; and

     WHEREAS, Shire desires to manufacture and/or supply the Products to Duramed upon the terms and subject to the conditions of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

     “Affiliate” means, with respect to a Party, any entity that directly or indirectly controls, is control led by, or is under common control with, such Party, but only for so long as such control continues. For purposes of this definition, “control” means the power to direct the management and affairs of an entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. In the case of a corporation, the direct or indirect ownership of fifty percent (50%) or more of its outstanding voting shares shall in any case be deemed to confer control, provided that, the direct or indirect ownership of a lower percentage of such securities shall not necessarily preclude the existence of control.

     “API Cost” for a Product means the actual cost paid by Shire on a pass-through basis for the active pharmaceutical ingredient in such Product.

     “Changeover Plan” has the meaning set forth in Section 8.2.

     “Effective Date” shall mean the Closing Date, as such term is defined in the Product Acquisition Agreement.

     “Force Majeure Event” has the meaning set forth in Section 9.1.

     “Losses” means any and all liabilities, damages, fines, penalties, deficiencies, losses and expenses (including interest, court costs, amounts paid in settlement, reasonable fees of attorneys, accountants and other experts or other reasonable expenses of litigation or other proceedings or of any claim, default or assessment); provided, however, that the term “Losses” shall not include any special, consequential, indirect, punitive or similar damages, except to the extent actually paid by a Party pursuant to any Third Party Claim.

     “Manufacturing” shall mean all activities related to the manufacturing of a Product or any component or ingredient thereof, including packaging, in-process and finished product testing, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, ongoing stability tests and regulatory activities related to any of the foregoing.

     “Packaging Specifications” means the existing packaging and labeling specifications for Product, other than changes resulting from a new NDC Number and replacement of the Shire name with Duramed’s name, as amended or supplemented from time to time in accordance with Section 3.13.

     “Product Specifications” means the specifications for Product set forth in the Product NDA.

     “Purchase Order” has the meaning set forth in Section 3.2.

     “Rolling Forecast” has the meaning set forth in Section 3.1.

     “Product” has the meaning set forth in the Product Acquisition Agreement.

     “Supply Price” means (a) with respect to Products included in the Initial Order, [*]

     “Term” has the meaning set forth in Section 7.1.

     “Termination Assistance Services” has the meaning set forth in Section 8.1.

ARTICLE II

SUPPLY OF PRODUCTS

     Section 2.1. Purchase of Products. Pursuant to the terms and conditions of this Agreement, Duramed shall purchase from Shire, and Shire shall supply to Duramed Products.

     Section 2.2. Initial Forecast and Purchase Order. (a) Promptly following the date hereof, Duramed shall submit to Shire (i) an initial non-binding forecast (the “Initial Forecast”), which Initial Forecast shall be updated thereafter in accordance with Section 3.1; and (ii) Duramed’s initial Purchase Order (the “Initial Order”) for Products.

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     (b) Refund for Certain Product Included in the Initial Order. After the Effective Date, Duramed will use its commercially reasonable efforts to sell the Products included in the Initial Order on a first-in, first-out basis. In the event that any product included in the Initial Order cannot be sold by Duramed prior to the date on which such Product has reached twelve (12) months of remaining shelf life, Shire will reimburse Duramed for amounts paid by Duramed under Section 6.1 of this Agreement for such unsellable Products included in the Initial Order. For reference purposes, Schedule 3 sets forth the quantities of inventory of Products in finished goods form held by Shire as of the date hereof.

     (c) No later than the Closing Date, Shire shall sell and deliver to Duramed such quantities of Products reflected in such Initial Order, all in Shire labeled packaging, unless Duramed engages a Third-Party to repackage the Product with Duramed labeling at Duramed’s sole cost and expense. Other than the Initial Order, in no event shall Duramed submit a Purchase Order for Products less than three (3) months prior to the required delivery date for such order.

     Section 2.3. Assignment of Shire Supply Agreement. At Duramed’s request, commencing as of and after the date hereof, Shire shall use its commercially reasonable best efforts to provide reasonable cooperation to assist in the assignment of Shire’s existing third party supply agreement with respect to the Product to Duramed, including assisting Duramed in obtaining diligence information and other data in connection with such third party supply agreement. Duramed shall not be obligated to accept assignment of such third party supply contract other than at Duramed’s sole option and discretion.

     Section 2.4 CBE 30 Request. As promptly as practicable (but in no event more than three business days ) following the date hereof, Shire shall file a “CBE 30” request to designate Duramed (or such other party as Duramed may designate in its discretion) as an alternative packager/repackager for the Products using Duramed labels. Share shall provide reasonable assistance, at Duramed’s costs, to assist Duramed in obtaining a minimum of [*] of saleable finished goods inventory of the Products bearing Duramed labeling and artwork no later than two business days following Closing.

     Section 2.5 Purchase Prior to Closing. Prior to the Effective Date, Duramed (or its designee) shall have the option to purchase such amount of existing Shire inventory of the Products existing and in the possession of Shire for the purpose of repackaging such inventory into finished goods inventory bearing Duramed labeling and artwork. Any such purchase of inventory prior to the Effective Date shall correspondingly reduce the amount of inventory Duramed is obligated to purchase in the Initial Order pursuant to Section 2.3 hereof.

ARTICLE III

FORECASTS, ORDERS AND SHIPMENT

     Section 3.1. Forecasted Quantities. At the beginning of each calendar month following the Initial Forecast under Section 2.3 and each month thereafter, Duramed shall provide an updated rolling forecast of Duramed’s estimated requirements for quantities of such Product over the [*] period commencing after the date of such forecast, with expected order amounts, order dates and delivery dates (each such forecast a “Rolling Forecast”). Except as provided below, such Rolling Forecasts shall represent Duramed’s reasonable estimates for

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planning purposes only and shall not obligate Duramed to purchase any such quantities. Each Rolling Forecast shall be made by Duramed in good faith, taking into account reasonable projections of demand for Products including, without limitation, demand in line with prescription trends, and allowing for reasonable safety stock. Shire shall use commercially reasonable efforts to ensure sufficient manufacturing capacity to meet the Rolling Forecast. Duramed shall forecast in amounts comprising full batch quantities for each Product. The first three (3) months of any given Rolling Forecast for a Product delivered after the Effective Date shall be binding upon Duramed and Duramed shall be required to issue a Purchase Order for such amount of Product. No portion of any Rolling Forecast issued by Duramed prior to the Effective Date shall be binding upon Duramed.

     Section 3.2. Purchase Order Form. Duramed shall submit all orders for the purchase of Products using the form of purchase order attached hereto as Schedule 1 (each a “Purchase Order”). Each Purchase Order will be delivered to such location as Shire designates in writing to Duramed from time to time. After Shire receives a Purchase Order, Shire shall acknowledge receipt thereof in writing within five (5) business days, either (i) accepting the Purchase Order, or (ii) seeking clarification of the Purchase Order, if necessary. Shire shall have no obligation to accept any Purchase Order that does not include all information required on Schedule 1 or that is inconsistent with the terms and conditions of this Agreement. In the event that an order is rejected, Shire and Duramed will cooperate in good faith to resolve any supply issues raised by such order. The minimum size of any order placed by Duramed will be a full batch.

     Section 3.3. Delivery of Product. Upon acceptance of a Purchase Order, Shire shall deliver all Product by the delivery date covered by such Purchase Order in accordance with the terms of this Agreement and such Purchase Order, including the quantities accepted in each Purchase Order. At the time of delivery to Duramed, all Product manufactured hereunder shall meet the Product Specification applicable thereto in all material respects, and shall be finished, packaged, labeled and/or ready for commercial sale by Duramed as required in accordance with the Packaging Specifications.

     Section 3.4. Expedited Delivery. Upon the request of Duramed to supply the quantities of Product under a Purchase Order on an expedited basis, Shire shall notify Duramed of any expected increased costs that Shire anticipates it will incur. Subject to prior written approval by Duramed of these increased costs, Shire shall use reasonable efforts to supply the quantities of Product on an expedited basis. Shire shall not have any liability for any failure to meet any such requested expedited delivery schedule.

     Section 3.5. Excess Purchase Orders. Shire shall use commercially reasonable efforts to, but shall not be obligated to supply quantities of any Product in excess of 120% of the quantities set forth in the most recent forecast for such quarter. If Shire believes it will be unable to deliver any additional volume on the date specified by Shire in the applicable Purchase Order, Shire shall notify Duramed in writing as promptly as practicable, and shall provide a proposed alternative delivery schedule. Any agreement on the delivery schedule for such additional volume shall be documented in writing and shall become effective only upon mutual written agreement of both Parties to the terms and conditions thereof.

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     Section 3.6. Cancellation of Orders. Duramed may not cancel an order without payment to Shire in full for the order. Shire shall, in good faith, use commercially reasonable efforts to mitigate the costs of cancellation of any Purchase Order.

     Section 3.7. Conflict. The terms of this Agreement shall prevail over any conflicting, inconsistent or additional terms set forth in any Purchase Order.

     Section 3.8. Delivery and Risk of Loss. All Products shipped under this Agreement will be shipped Ex-Works (Incoterms 2000) Shire’s manufacturing facility to such location designated by Duramed in the applicable accepted Purchase Order. Duramed will pay all freight, insurance charges, taxes, import and export duties, inspection fees and other charges applicable to the sale and transport of Products. Risk of loss to Products shall pass to Duramed upon delivery to Duramed’s designated carrier. Title to all Products manufactured hereunder shall pass to Duramed on payment by Duramed for the applicable Product or pro-rata portion thereof.

     Section 3.9. Certificate of Analysis. A Certificate of Analysis (“COA”) will accompany each shipment of Products in the form attached hereto as Schedule 2.

     Section 3.10. Location of Manufacturing. All Products shall be manufactured in a facility that has been designated as an approved manufacturing facility by the applicable Regulatory Approval for such Product. Should Shire desire to change any of the manufacturing site for a Product, or any component thereof, to a site other than those designated in the applicable Regulatory Approval, Shire shall notify Duramed in writing and the Parties shall thereafter meet to discuss the potential consequences of such a change. Shire shall not change manufacturing sites for any Product, or any component thereof, except in accordance with the authorization of the applicable Governmental Authority, and the procedures and requirements set forth in this Agreement.

     Section 3.11. Shortage of Materials. In the event that the materials and/or resources required to manufacture and deliver Products to Duramed in accordance with this Agreement are, or are reasonably anticipated to become, in short supply such that Shire may be unable to provide Duramed with the quantities of Products set forth in a Purchase Order, Shire shall notify Duramed of such shortage as promptly as practicable. If Shire so notifies Duramed, Shire and Shire shall promptly meet to discuss how to address the potential shortage. In the event that Shire, at any time, has any information indicating that it may not be able to supply Duramed with all Products in accordance with a confirmed Purchase Order, Shire shall as soon as practicable provide Duramed a written notice to that effect. Any failure by Shire to meet its obligations under this Agreement as a result of a general shortage of raw materials shall not be considered a breach of this Agreement provided that Shire is meeting its obligations under Article IX. To the extent (other than as a result of a Force Majeure Event) that Shire fails to supply at least 80% of the quantities of Product in the aggregate ordered for a particular calendar quarter for two consecutive calendar quarters, Duramed may request and Shire shall, at its cost and expense, qualify a second source of supply. Such second source shall be qualified and ready to manufacture Product within 12 months following such Duramed request. If Shire fails to qualify and have ready such second source, then Duramed shall have the right to qualify and make ready such second source and Shire shall promptly reimburse Duramed for costs and

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expenses incurred by it in so doing. Such second source shall be used by Shire to supply Product to Duramed under this Agreement at least to the extent required to maintain the second source as a qualified manufacturer of Product.

     Section 3.12. Product Specifications. Shire shall manufacture all Product so that, at the time of delivery to Duramed, the Product conforms, in all material respects, to the Product Specifications, cGMP and any reasonable requests communicated by Duramed to Shire in order for Duramed to comply with any legal or regulatory obligations applicable to Duramed. At the time of shipment of Products, the Products shall have a minimum remaining shelf life of not less than 18 months. On mutual agreement of the Parties, the Parties may modify the Product Specifications of the Product by amendment, unless such changes are required by any regulatory authority, in which case Duramed may unilaterally modify the Product Specifications of the Product. Upon modification of such Product Specifications, Shire shall use commercially reasonable efforts to alter its manufacturing processes to meet such Product Specifications and shall not be liable for any failure to meet its obligations hereunder while acting in good faith to meet the new Product Specifications.

     Section 3.13. Packaging Specifications. After the initial Purchase Order, Shire shall package all Products in accordance with the Packaging Specifications. Changes in the Packaging Specifications shall be subject to the mutual agreement of the Parties on a schedule to be agreed by the Parties, taking into account the time and cost required for Shire to implement any necessary manufacturing or packaging modifications. Duramed shall compensate Shire for the cost of any inventory of old packaging that cannot be used as a result of any modification by Duramed to the Packaging Specifications, and for any other costs incurred as a result of the implementation of the modifications to the Packaging Specifications requested by Duramed. Duramed will be responsible for ensuring the accuracy of all information contained on all labels for Products and for the compliance of all such labels with applicable Laws and Regulatory Approvals.

     Section 3.14. Facility Maintenance; Inspection; Reports. Shire shall, at all times, maintain and operate all facilities where Products are manufactured, packaged or tested, and implement required quality control procedures to perform its obligations under this Agreement. Not more than once every [*] (or more often in the case of a deficiency), Shire shall permit, or cause its contractors to permit, quality assurance representatives of Duramed or designated third parties and representatives of the applicable Government Authority to inspect such facilities upon reasonable advance notice, during normal business hours and on a confidential basis. Shire shall promptly provide, or cause its contractor to provide, Duramed with a copy of any notice from the applicable Government Authority received at the conclusion of an inspection relating to any Product.

     Section 3.15. Subcontracting. Shire shall have the right to subcontract manufacture and supply under this Agreement to any Affiliate of Shire or to a Third Party, provided that, (i) Shire shall procure that such Affiliates and Third Parties comply with the terms and conditions of this Agreement, (ii) Shire shall be liable for any non-performance or breach by such Affiliate or Third Party, and (iii) any subcontracting to a Third Party shall be subject to Duramed’s approval, which approval shall not be unreasonably withheld.

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     Section 3.16. Competing Products. Subject to the Product Development Agreement, each of the Parties recognizes and acknowledges that the other and/or its Affiliates have been, and will continue to be, actively involved in the field in which the Products may be sold. Each Party acknowledges that the other Party and/or its Affiliates currently, or may in the future, market, sell and distribute products that compete directly with any Product, and may continue to market, sell and distribute these and other competing products throughout the Term of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     Section 4.1. Mutual Representations. Each Party hereby represents and warrants to the other Party, as of the date hereof, as follows:

     (a) Due Authorization. Such Party is a corporation duly incorporated and in good standing (where such concept applies) as of the Effective Date, and the execution, delivery and performance of this Agreement by such Party have been duly authorized by all necessary action on the part of such Party.

     (b) Due Execution. This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

     (c) No Conflict. Such Party’s execution, delivery and performance of this Agreement do not: (i) violate, conflict with or result in the breach of any provision of the charter or by-laws (or similar organizational documents) of such Party; (ii) conflict with or violate any law, rule, regulation or governmental order applicable to such Party or any of its assets, properties or businesses; or (iii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of any agreement to which it is a party.

     (d) Duly Licensed. Such Party is duly licensed, authorized or qualified to do business and is in good standing (where such concept applies) in every jurisdiction in which a license, authorization or qualification is required for the ownership or leasing of its assets or the transaction of business of the character transacted by it, except where the failure to be so licensed, authorized or qualified would not have a material adverse effect on such Party’s ability to fulfill its obligations hereunder.

ARTICLE V

QUALITY ASSURANCE

     Section 5.1. Shire Compliance. Shire shall manufacture, fill, package, handle and warehouse the Products in conformity with all applicable laws, cGMP requirements and the Product Specifications. Duramed shall maintain all Regulatory Approvals and all permits and licenses issued by any Governmental Authority that are necessary to permit Shire to manufacture and supply the Products. Shire shall advise Duramed of any information of which it becomes

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aware arising out of Shire’s activities hereunder that have adverse regulatory compliance and/or reporting consequences affecting the Products.

     Section 5.2. Inspections. Shire shall advise Duramed of any requests by any Governmental Authority for inspections of the premises used to manufacture Products. In the event the portion of Shire’s facilities at which Product are manufactured is inspected by any Governmental Authority, Shire shall use commercially reasonable efforts to ensure that Duramed shall have the right to be present during such inspection. To the extent relating directly to a Product, Shire shall notify Duramed of any alleged violations or deficiencies relating to a facility at which any Products are manufactured, packaged or stored, and, to the extent relating directly to a Product, shall disclose to Duramed all relevant portions of any notice of observations or potential violations as well as a copy of its response thereto.

     Section 5.3. Duramed Compliance. Duramed shall hold, store, handle, ship, deliver, distribute and/or sell the Products (i) in accordance with applicable cGMP requirements, laws and Regulatory Approvals; and (ii) in compliance with the Product Specifications. Duramed shall enter into all necessary compliance agreements as may be reasonably required or designated by Shire, including but not limited to the quality agreement attached hereto as Exhibit A (the “Quality Agreement”) and any other agreements to cover quality assurance and adverse incident reporting, including the safety agreement.

     Section 5.4. Quality Control. Upon delivery of Products to Duramed, Duramed shall be solely responsible for compliance with all Laws and Regulatory Approvals with respect to the Products.

     Section 5.5. Rejection of Delivered Products. Within [*] of receipt of any Product, Duramed shall inspect the Product and advise Shire of any defect whereby the Product does not conform to the Product Specifications. Any Product not refused within [*] shall be deemed accepted subject to Section 5.6 below; provided, however, that such acceptance or deemed acceptance shall not adversely affect any claim for indemnification provided in Article XI. If Duramed desires to refuse acceptance, Duramed shall, within such [*] period, inform Shire of its refusal to accept the defective Product and the reason(s) therefor. In the event that Duramed refuses acceptance, Shire, upon confirmation of the reasons for refusal of the Product, will replace the defective Product or refund the purchase price thereof, at Duramed’s option. If Shire and Duramed do not agree on the refusal or rejection of Product, then any Party may refer the matter for final analysis to a specialized laboratory of national reputation acceptable to both Parties for the purpose of determining the results. Any determination by such laboratory shall be final and binding upon the Parties. The cost of any such review by a laboratory shall be borne by Duramed if it is determined that the Product conforms to the Product Specifications, and by Shire if determined that it does not.

     Section 5.6. Latent Defects. Duramed shall have the right to refuse and reject any Collaboration Product within [*] from the date Duramed becomes aware of a defect in a Product delivered hereunder, in the case of defects that are not evident upon a reasonable initial inspection but which subsequently become evident.

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     Section 5.7. Non-Conforming Products. Notwithstanding any other provisions of this Agreement, Duramed shall return to Shire or its designee any Products that do not conform with the Product Specifications at the time of shipment to Duramed, or if Duramed and Shire mutually agree, to dispose of such Products as Shire may direct. Shire shall be responsible for the costs associated with the proper disposal of all such Products not in conformance with the Product Specifications at the time of shipment and shall promptly replace or credit, at the option of Shire, such non-conforming Products.

     Section 5.8. Cost of Recall. In the event that any Product is quarantined or recalled, or is subject to a stop-sale action, whether voluntary or by the action of any Governmental Authority, or as a result of the revocation or expiration of any Regulatory Approval, any expenses, including any out-of-pocket administrative costs and reasonable fees of any experts or attorneys that may be utilized by either Party, government fines or penalties, related to such recall, quarantine or stop-sale, shall be borne by Duramed unless it is determined that the reason for the quarantine, recall or stop-sale action is the result of the breach by Shire of its obligations under this Agreement, and in such case such expenses shall be shared according to the relative responsibility of each Party. Such determination may be made by the Governmental Authority involved, or by mutual agreement of the Parties following examination and review of all records pertinent to the manufacture of the Product subject to such recall.

     Section 5.9 Regulatory Actions. If any regulatory authority in the Territory takes any action with respect to a Product that requires a response or action by Shire, Shire shall use commercially reasonable efforts, at the expense of Duramed, to carry out the response or action, at all times in consultation with Duramed, and promptly thereafter Shire shall meet with Duramed and agree a suitable plan of action in order to try and rectify and/or address any problem(s) identified by the Regulatory Authority within a reasonable period of time at the expense of Duramed. Notwithstanding the foregoing, if any of the above expenses result from Shire’s breach, negligence or willful misconduct hereunder, then any expenses incurred under this Section 5.9 shall be Shire’s responsibility.

ARTICLE VI

PRICE AND PAYMENTS

     Section 6.1. Supply Prices. The unit price payable by Duramed for each Product shall be [*].

     Section 6.2. Unit Price Negotiation. [*]

     Section 6.3. Records, Audit. Shire shall keep complete and accurate records, consistent with GAAP, of the Supply Price. Duramed shall have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to Shire, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of Shire as may be reasonably necessary to verify the accuracy of amounts paid by Duramed under this Agreement for any calendar year ending not more than three (3) years prior to the date of such request; provided, however, that, Duramed shall not have the right to conduct more than one such audit in any twelve (12) month period and that Duramed shall not be permitted to audit the same period of time more than once. The

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accounting firm shall disclose to Duramed only whether the various expenses subject to reimbursement under this Agreement are correct or incorrect and the specific details concerning any discrepancies. Duramed shall bear all costs of such audit, unless the audit reveals a discrepancy in Duramed’s favor of more than[*], in which case Shire shall bear the cost of the audit. If Shire disputes the findings pursuant to this Section 6.3, the Parties shall meet and discuss such dispute. If such dispute is not resolved within forty-five (45) days, then it shall be subject to the dispute resolution provisions contained herein.

     Section 6.4. Invoices. Shire may invoice for Product at any time following tender thereof to Duramed’s carrier. All invoices shall be sent to a single address specified in writing by Duramed. Payment for Product shall be due within forty-five (45) days after the date of the invoice by check or electronic funds transmission in United States dollars without any offset or deduction of any nature whatsoever. All electronic payments shall be made to such account as Shire shall have specified in writing to Duramed with written confirmation of payment sent by facsimile to such address as Shire shall have specified in writing to Duramed. If Duramed fails to pay any undisputed invoiced amount when due, a service charge will be imposed by Shire equal to [*].

     Section 6.5. Taxes. The Supply Price shall be exclusive of any applicable value added tax and any other taxes, duties and impositions that, if applicable, shall be paid by Duramed to Shire at the same time as the purchase price for such Product. Duramed shall bear the cost of any such taxes, duties or impositions of any kind, nature or description applicable to the sale and transportation of Product, and Duramed will forthwith pay to Shire all such amounts upon demand.

     Section 6.6. Separate Sale. Each shipment of Product shall constitute a separate sale, obligating Duramed to pay therefor, whether such shipment is in whole or only partial fulfillment of any Purchase Order.

     Section 6.7. Deductions. Duramed shall not to make any deductions of any kind from any payments due to Shire hereunder unless Duramed will have received prior written authorization from Shire authorizing such deduction.

     Section 6.8. Audit.

     (a) Audit. Duramed shall have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to Shire, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of Shire as may be reasonably necessary to verify the accuracy of amounts paid by Duramed under this Agreement for any calendar year ending not more than [*] prior to the date of such request; provided, however, that, Duramed shall not have the right to conduct more than one such audit in any [*] period and that Duramed shall not be permitted to audit the same period of time more than once. The accounting firm shall disclose to Duramed only whether the various expenses subject to reimbursement under this Agreement are correct or incorrect and the specific details concerning any discrepancies. Duramed shall bear all costs of such audit, unless the audit reveals a discrepancy in Duramed’s favor of more than [*], in which case Shire shall bear the

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cost of the audit. If Shire disputes the findings pursuant to this Section 6.8, the Parties shall meet and discuss such dispute.

     (b) Payment of Additional Amounts. If, based on the results of any audit, (a) additional payments are owed by Duramed to Shire under this Agreement, then Duramed shall make such additional payments, or (b) the payments previously made by Duramed to Shire under this Agreement are in excess of the amounts that were actually required to be made, then Shire shall return such excess payments, in each case within fifteen (15) Business Days after the accounting firm’s written report is delivered to the Parties.

ARTICLE VII

TERM AND TERMINATION

     Section 7.1. Term. Subject to the occurrence of the Closing, the term of this Agreement shall commence on the Effective Date and shall continue until terminated in accordance with this Article VII (the “Term”). Duramed may terminate this Agreement as to the supply of particular Product at any time on six (6) months written notice to Shire. Subject to Article VIII, Shire may terminate this Agreement as to the supply of particular Product at any time on eighteen (18) months written notice to Duramed, provided that Shire may not terminate this Agreement under this sentence until ten (10) years following the Effective Date. Termination of this Agreement with respect to one or more Products shall not relieve the Parties of any obligations with respect to any other Products, and this Agreement shall remain in effect as to such other Products.

     Section 7.2. Termination Upon Assignment. Duramed shall also have the right to terminate this Agreement in the event that Shire’s existing Third Party supply agreement is assigned to Duramed, effective immediately upon the effectiveness of such assignment but subject to Section 7.4.

     Section 7.3 Termination for Cause. Either Party may terminate this Agreement as to the supply of a particular Product at any time in the event that the other Party materially breaches this Agreement and such material breach continues uncured for a period of ninety (90) days after written notice thereof; provided, however, in the event that the breaching Party has in good faith commenced cure within such ninety (90) day period, but cannot practically complete such cure within such ninety (90) day period, the breaching Party shall have an additional ninety (90) day cure period. In the event a material breach of this Agreement is incapable of cure or cannot be cured in the time periods set forth in the previous sentence acting using commercially reasonable efforts, without limiting any other rights of the non-breaching Party, including the right to seek injunctive relief, the non-breaching Party shall not have the right to terminate this Agreement if (i) the breaching Party is providing full cooperation to resolve and/or mitigate the breach, and (ii) the breach was not caused by willful misconduct by the breaching Party.

     Section 7.4. Survival. The provisions of Sections 5.8 and 7.4, and Articles VIII, X, XI and XII shall survive termination or expiration of this Agreement. Termination of this Agreement shall not affect the obligation of any Party to pay the other Party any amounts due hereunder accrued prior to the termination date hereof. Except in the event of termination by Shire under Section 7.3, upon termination of this Agreement Shire shall deliver to Duramed on

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an ex-works basis all manufactured and work-in progress quantities of Product in its possession that have been manufactured in respect of a specific Purchase Order(s) accepted by Shire hereunder subject to payment in advance therefor by Duramed. The right to terminate this Agreement shall not prejudice any other right or remedy in equity or at law of a Party in respect of any breaches of this Agreement.

ARTICLE VIII

TERMINATION ASSISTANCE SERVICES

     Section 8.1. Termination Assistance Services. If (i) Shire terminates this Agreement as to the supply of Product under Section 7.1 (and Duramed intends to continue marketing and selling the Product), or (ii) Duramed terminates this Agreement under Section 7.1 or 7.2 (and Duramed intends to continue marketing and selling the Product), Shire shall for a period of one (1) year thereafter, upon Duramed’s request, provide any cooperation reasonably requested by Duramed that may be required to facilitate the transfer of the manufacture of the applicable Product to Duramed or Duramed’s designee (“Termination Assistance Services”). Duramed shall reimburse Shire for the reasonable costs of Shire in providing Termination Assistance Services. The rights of Duramed under this Section 8.1 shall be without prejudice to the Parties’ rights to pursue legal remedies for breach of this Agreement, either for breaches prior to termination or during the period this Agreement is continued in force post termination.

     Section 8.2. Development of Changeover Plan. If and to the extent requested by Duramed, whether prior to, upon, or following termination of this Agreement by Duramed, Shire shall use commercially reasonable efforts to assist Duramed in developing a plan that shall specify the tasks to be performed by the Parties in connection with the Termination Assistance Services and the schedule for the performance of such tasks (a “Changeover Plan”). The Changeover Plan shall include descriptions of the services, fees, documentation and access requirements that will promote an orderly transition of the manufacture of Product to Duramed or its designee.

     Section 8.3. Know-How, Infrastructure, and Software. In connection with the Termination Assistance Services, Shire shall make available to Duramed or its designee, to the extent owned or controlled by and in the possession of Shire and reasonably required to manufacture the applicable Product, (i) copies of all applicable requirements, standards, policies, reports and report formats, user manuals, technical manuals, system architecture, processes, operating procedures and other documentation, (ii) copies of flow charts of the manufacturing procedures and work instructions related to manufacturing the relevant Product, (iii) a list of all material equipment, including the source of such equipment, utilized in the production of the applicable Product, (iv) copies of all current specifications, including packaging, for the relevant Product, (v) copies of all standard operating procedures for the manufacturing procedures to be made available to Duramed, (vi) all necessary environmental conditions necessary to manufacture the relevant Product and copies of any existing external environmental impact studies based on the materials or methods employed in the manufacturing method to be made available to Duramed, and (vii) such other documentation as the Parties may agree.

ARTICLE IX

FORCE MAJEURE

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     Section 9.1. Force Majeure. No Party shall be responsible for failure or delay in performance hereunder due to reasons beyond its reasonable control, including without limitation, by reason of fire, flood, riot, freight embargoes, acts of God or of the public enemy, war or civil disturbances, general shortage of raw materials, or any future laws, rules, regulations or acts of any government affecting a Party that would delay or prohibit performance hereunder (a “Force Majeure Event”). Upon the occurrence of a Force Majeure Event, the Party whose performance is so affected shall promptly give notice to the other Party of the occurrence or circumstance upon which it intends to rely to excuse its performance. During the duration of the Force Majeure Event, the Party so affected shall use its reasonable commercial efforts to avoid or remove such Force Majeure Event and shall take reasonable steps to resume its performance under this Agreement with the least possible delay. Any Force Majeure Event must be beyond the control and without the fault or negligence of the Party claiming excusable delay, provided that, breaches by any Party’s subcontractors shall not excuse any delay or failure by that Party.

ARTICLE X

CONFIDENTIALITY

     Section 10.1. Confidential Information. As used in this Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or generated pursuant to this Agreement by one Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Confidential Information shall not include any information or materials that:

(a) were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

(b) were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

(c) became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

(d) were disclosed to a Party, other than under an obligation of confidentiality, by a third party who had no obligation to the Disclosing Party not to disclose such information to others; or

(e) were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

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     Section 10.2. Confidentiality Obligations. Each of Duramed and Shire shall keep confidential all Confidential Information of the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information but in no event less than a reasonable degree of care. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who are bound by confidentiality obligations consistent with those contained herein and who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement. Upon termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party and its Affiliates or their directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall continue to be subject to the provisions of this Article X.

     Section 10.3. Permitted Disclosure and Use. Notwithstanding Section 10.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange regulations. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 10.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. In addition, notwithstanding Section 10.2, the Parties shall cooperate to prepare standardized public responses to anticipated inquiries from the public, press, stockholders, investors and/or analysts with respect to the activities hereunder. Despite the foregoing, each Party agrees that the other Party is free to disclose this Agreement in its entirety to the United States Federal Trade Commission and the United States Department of Justice, or to any court with jurisdiction over the litigations settled under the Settlement Agreement between Shire Laboratories Inc. and Barr Laboratories Inc. dated August 14, 2006.

     Section 10.4. Unauthorized Disclosure. The Receiving Party acknowledges and agrees that the Confidential Information of the Disclosing Party constitutes proprietary information and trade secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside disclosure of such Confidential Information shall be presumed to cause irreparable injury to the Disclosing Party.

     Section 10.5. Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and shall cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure. The Receiving Party acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure of Confidential Information and that the Disclosing Party may be entitled, without

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waiving other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction in the event of such unauthorized disclosure.

     Section 10.6. Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Section 10.6.

ARTICLE XI

INDEMNIFICATION

     Section 11.1. Indemnification by Duramed. Duramed hereby agrees to hold Shire, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a third party (each a “Third Party Claim”) resulting directly from (a) any breach by Duramed of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (b) the negligence or willful misconduct by Duramed or its Affiliates or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, (c) the Product, including the use, handling, storage, sale or other disposition of Product (including, without limitation, those Third Party Claims that involve product defect, product liability, death or bodily injury (or allegations thereof) to any individual or any property, or (d) infringement of intellectual property based on the Product Specification, Packaging Specifications, manufacture, use, sale, offer for sale, importation or other distribution of Product, except to the extent that such Losses in (a) through (d) result from the negligence or willful misconduct of Shire or it’s third party supplier of Product or breach of this Agreement by Shire.

     Section 11.2. Indemnification by Shire. Shire hereby agrees to hold Duramed, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting directly from (a) any breach by Shire of any of its representations, warranties, covenants or obligations pursuant to this Agreement, or (b) the negligence or willful misconduct of Shire or its Affiliates or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, or (c) claims that involve product defect, product liability, death or bodily injury (or allegations thereof) to any individual or any property to the extent that such claim results from Shire’s breach, negligence or willful misconduct hereunder, or the negligence or willful misconduct of Shire’s third party supplier of Products, except to the extent that such Losses in (a) through (c) result from the negligence or willful misconduct of Duramed, or the breach of this Agreement by Duramed.

     Section 11.3. Notice of Claim. All indemnification claims in respect of any indemnitee seeking indemnity hereunder (collectively, the “Indemnitees” and each an “Indemnitee”) shall be made solely by the corresponding Party (the “Indemnified Party”). The Indemnified Party shall give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to base a request for indemnification hereunder, but in no event shall the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such Third Party Claim. Each

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Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party shall furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defense of such Third Party Claim.

     Section 11.4. Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification hereunder by giving written notice to the Indemnified Party within thirty (30) days after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim.

     Section 11.5. Right to Participate in Defense. Without limiting Section 11.4, any Indemnitee shall be entitled to participate in, but not control, the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 11.4 (in which case the Indemnified Party shall control the defense).

     Section 11.6. Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that shall not result in the Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any manner, and as to which the Indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, shall deem appropriate (provided, however that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and shall transfer to the Indemnified Party all amounts which said Indemnified Party shall be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 11.4, the Indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent shall be at the Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with Section 11.4 shall not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the

16

Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 11.4.

     Section 11.7. Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation shall include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.

     Section 11.8. Expenses of the Indemnified Party. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim shall be reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

     Section 11.9. Insurance. At all times from the Closing Date until [*] following termination or expiration of this Agreement, each of Shire and Duramed will maintain product liability insurance (or self insurance), that is reasonable and customary in the U.S. pharmaceutical industry for companies of comparable size, but in no event less than [*] per occurrence and [*] in the aggregate limit of liability per year. Each of Shire and Duramed shall provide written proof of such insurance or self insurance to the other Party upon request.

     Section 11.10. Exclusion of Certain Damages. IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, OR FOR ANY DIRECT OR INDIRECT LOSS OF PROFIT, LOST BUSINESS OPPORTUNITY, LOSS OF OR DISRUPTION TO PRODUCTION OR GOODWILL, EXCEPT TO THE EXTENT SUCH DAMAGES: (A) ARE INCLUDED IN A THIRD-PARTY CLAIM FOR WHICH SUCH PARTY IS INDEMNIFIED HEREUNDER; OR (B) ARE FOR BREACH OF CONFIDENTIALITY OBLIGATIONS.

ARTICLE XII

MISCELLANEOUS

     Section 12.1. Entire Agreement; Amendment. This Agreement, together with the Product Acquisition Agreement, including the exhibits attached hereto and thereto (each of which is hereby and thereby incorporated herein and therein by reference), set forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties,

17

representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between the Parties, which shall continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises, agreements, warranties, representations, conditions, and understandings set forth herein are made and deemed effective as of the Effective Date, and that the execution of this Agreement shall not constitute a waiver of any right or claim of either Party as of the Effective Date.

     Section 12.2. Notices. All notices or other communications that are required or permitted under this Agreement shall be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication shall be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For Duramed:	Duramed Laboratories, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 201-930-3330
	Attention: President
with a copy to:	Barr Pharmaceuticals, Inc.
	400 Chestnut Ridge Road
	Woodcliff Lake, NJ 07677
	Phone: 201-930-3300
	Fax: 888-843-0563
	Attention: General Counsel
For Shire:	Shire LLC
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center
	Princeton, NJ 08540
	Fax: (609) 919-6701

18

Attention: Randall B. Sunberg

     Section 12.3. Independent Contractors. In making and performing this Agreement, Shire and Duramed shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and Duramed and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. Except as otherwise provided in this Agreement, each Party shall be solely responsible for its own costs and expenses associated with this Agreement.

     Section 12.4. Maintenance of Records. Each Party shall keep and maintain all records required by Law with respect to the Products and shall make copies of such records available to the other Party upon reasonable request.

     Section 12.5. United States Dollars. References in this Agreement to “Dollars” or “$” shall mean the legal tender of the United States.

     Section 12.6. No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

     Section 12.7. Assignment. Neither Party shall sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of Law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent may be granted, withheld or conditioned at such other Party’s sole and absolute discretion); provided, however, that either Party may assign or transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other Party to any Affiliate of such Party, or to any Third Party (a) with which it merges or consolidates, or to which it transfers all or substantially all of its assets to which this Agreement pertains or (b) in part, in connection with the sale or transfer of such Party’s business relating to Commercialization of a Collaboration Product within a particular country. The assigning Party (unless it is not the surviving entity) shall remain jointly and severally liable with, and shall guarantee the performance of, the relevant Affiliate or Third Party assignee under this Agreement, and the relevant Affiliate assignee, Third Party assignee or surviving entity shall assume in writing all of the assigning Party’s obligations under this Agreement. Any purported assignment or transfer in violation of this Section 12.7 shall be void ab initio and of no force or effect. Notwithstanding anything to the contrary herein or in the Product Acquisition Agreement, in the event any assignment by Duramed hereunder gives rise to any obligation to withhold any amounts payable to Shire under this Agreement, Duramed shall pay Shire in full, without regard to any amounts so withheld, subject to Shire’s obligation to reimburse Duramed upon Shire’s recovery from the applicable taxing authority of any amounts so withheld. Notwithstanding the foregoing, Duramed shall be liable for, and indemnify Shire against, any non-U.S. taxes, any value-added or sales taxes, any duties or levies and assessments, howsoever designated or computed that are required to be paid or withheld by Duramed on such payments. Duramed shall so indemnify Shire within forty-five (45) days of Shire’s receipt of notification from Shire (in accordance with Section 12.2 hereof) that either (i) based upon current facts and circumstances, Shire does not have or will not have during the applicable tax year any or

19

sufficient foreign tax credits available to utilize to offset such tax liability; or (ii) Shire has applied for a refund from the taxing authority at issue (such notice to include a copy of such refund application). Notwithstanding anything in this Agreement to the contrary, in the event that withholding taxes are paid on behalf of Shire by Duramed, if Shire uses a foreign tax credit received as a result of the payment of withholding taxes by Duramed and thereby reduces the amount of U.S. income tax that Shire otherwise would have paid, or otherwise receives a refund, Shire shall refund to Duramed the amount of such reduction with respect to such foreign tax credit or such refund.

     Section 12.8. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

     Section 12.9. Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be reasonably necessary or appropriate in order to carry out the purposes and intent of this Agreement.

     Section 12.10. Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good fait effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

     Section 12.11. Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

     Section 12.12. No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

[signature page follows]

20

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective representatives thereunto duly authorized, all as of the date first written above.

SHIRE LLC
By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO
DURAMED PHARMACEUTICALS, INC.
By:	/s/ William McKee
Name:	William McKee
Title:	Sr. V.P., Chief Financial Officer & Treasurer

SHIRE plc, a British public limited company having a principal place of business at Hampshire International Business Park, Chineham, Basingstoke, England RG24 8EP, hereby guarantees in the performance of Shire of all obligations of Shire under this Agreement, in accordance with the terms and conditions of this Agreement, including any applicable notice or cure periods.

SHIRE PLC

By:	/s/ Matthew Emmens
Name:	Matthew Emmens
Title:	CEO

[Signature Page to Adderall IR Supply Agreement]

1

EXHIBIT A

QUALITY AGREEMENT

2

SCHEDULE 1
FORM OF COA

3

SCHEDULE 3 – REFERENCE INVENTORY AMOUNTS OF FINISHED GOODS PRODUCT
HELD BY SHIRE AS OF THE DATE HEREOF

ADDERALL IR
DOSAGE	# OF BOTTLES OF 100 TABLETS
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

4

EXHIBIT D

GENERAL ASSIGNMENT AND BILL OF SALE

     THIS GENERAL ASSIGNMENT AND BILL OF SALE (this “General Assignment”), dated as of September 29, 2006, is made and entered into by and between Shire LLC, a Kentucky limited liability company (“Shire”), and Duramed Pharmaceuticals, Inc., a Delaware corporation (“Duramed”). All capitalized words and terms used in this General Assignment and not defined herein shall have the respective meanings ascribed to them in the Product Acquisition and License Agreement, dated as of August 14, 2006 (the “Agreement”).

     WHEREAS, Shire and Duramed have entered into the Agreement pursuant to which Shire, among other things, desires to sell, transfer, convey and license to Duramed Shire’s right, title and interest in and to certain rights to the Product and the Purchased Assets, and Duramed wishes to assume certain liabilities relating to the Product; and

     WHEREAS, in performance of their respective obligations under the Agreement, Shire and Duramed desire to execute and deliver this General Assignment.

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

     1. Shire does hereby sell, assign, convey and transfer unto Duramed the Purchased Assets. Duramed and its successors and assigns are to have and to hold all of such Purchased Assets unto Duramed and its successors and assigns forever.

     2. This General Assignment shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, successors, trustees, transferees and permitted assigns.

     3. Each of the parties agrees that it will, from time to time after the date hereof, without further consideration, execute, acknowledge and deliver all such further acts, assignments, transfers, conveyances, evidences of title, assumptions and assurances as may be required to carry out the intent of this General Assignment and to sell, assign, convey, transfer and deliver the Purchased Assets to Duramed.

     4. This General Assignment is made in accordance with, and is subject to, all of the terms and conditions set forth in the Agreement. Except as otherwise expressly set forth herein, the terms and conditions of the Agreement shall control the terms and conditions of this General Assignment.

     5. This General Assignment may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. This General Assignment may be executed by facsimile signatures, which signatures shall have the same force and effect as original signatures.

     IN WITNESS WHEREOF, the parties hereto have executed this General Assignment and Assumption as of the date first above written.

SHIRE LLC
By:	/s/ Matthew Emmens
	Name: Matthew Emmens
	Title:   CEO
DURAMED PHARMACEUTICALS, INC.
By:	/s/ Fred Wilkinson
	Name: Fred Wilkinson
	Title:   President & C.O.O.

EXHIBIT E

Form of FDA Letter

[DATE]

Thomas Laughren, MD
Director, Division of Psychiatry Products
Office of Drug Evaluation I
Centre for Drug Evaluation and Research
Document Control Room
Food and Drug Administration
5901-B Ammendale Road
Beltsville, MD 20705-1266

ARTICLE 1 NDA 11-522
ADDERALL (MIXED SALTS OF A SINGLE-ENTITY AMPHETAMINE PRODUCT)
TABLETS

ARTICLE 2 CHANGE IN OWNERSHIP OF AN APPLICATION

Reference is made to NDA 11-522 for Adderall Tablets; and to 21 CFR § 314.72 pertaining to a change in ownership of an application.

This is to notify the agency that Duramed Pharmaceuticals, Inc., (“Duramed”), a subsidiary of Barr Pharmaceuticals, Inc, is the regulatory agent for Duramed Pharmaceuticals, Inc. In accordance with provisions of §314.72, we are submitting an application form signed by the new owner along with the following information:

1.	Duramed commits to the agreements, promises, and conditions made by Shire, the former owner of NDA 11-522, and contained in the application;
2.	The change in ownership is effective [DATE]; and
3.	Duramed has a complete copy of the approved application, including supplements and records that are to be kept under 21 CFR § 314.81

All future correspondence regarding NDA 11-522 should be directed to:

Joseph A. Carrado, M.Sc., R.Ph.

Vice President, Clinical Regulatory Affairs

Duramed Research, Inc.

One Belmont Avenue, 11^th Floor

Bala Cynwyd, PA 19004

Phone (610) 747 2910

Fax: (610) 747 6607

Also, please find attached a copy of Shire’s Transfer of Ownership letter, dated [DATE], for the Division’s convenience.

If you have any questions or require any additional information, please contact the undersigned at (610) 747-2910.

Sincerely,

Joseph A. Carrado, M.S.c., R.Ph.

Vice President

Clinical Regulatory Affairs

EXHIBIT F

Form of Correspondence to Third Parties

SCHEDULE 1.18

Licensed Patents

[*]

SCHEDULE 1.31

Product Trademark

				Serial No./	Reg. No./
Mark	Owner	Country	Goods/Services	Filing Date	Reg. Date
[*]	[*]	[*]	[*]	[*]	[*]

SCHEDULE 2.8

Allocation of Purchase Price

SCHEDULE 4.1

Shire Disclosure Schedule

SCHEDULE 4.1(h)
Litigation

1. Branson v. Shire Richwood Inc.

     Filed on October 3, 2002 in the Circuit Court, Boone County, Kentucky, plaintiff, claims that an alleged psychotic episode leading to the death of her child was caused by the her ingestion of Adderall. The Court filed the Judgment on April 17, 2006 and plaintiff failed to file a notice of appeal of the jury’s defense verdict by the deadline to appeal, May 17, 2006.

2. [*]

3. UZammit v. Shire US Inc.

     Pio Peter Zammit, the plaintiff, claims that his ingestion of 20mg of Adderall caused him to suffer a heart attack on April 24, 2002. Plaintiff claims negligence and failure to warn strict products liability for failing to adequately warn of the risks of heart attack while taking Adderall. Plaintiff is currently appealing the District Court’s dismissal of the case to the Sixth Circuit. Shire has filed a motion to dismiss plaintiff’s appeal.

4. [*]

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF BRUCE L. DOWNEY PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bruce L. Downey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Barr Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a15(f) and 15(d)-15(f) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2006

/s/ Bruce L. Downey  

Bruce L. Downey 

Chairman of the Board and Chief Executive Officer 

35

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF WILLIAM T. MCKEE PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William T. McKee, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Barr Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a15(f) and 15(d)-15(f) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2006

/s/ William T. McKee  

William T. McKee 

Vice President, Chief Financial Officer, and Treasurer 

36

EX-32.0

EXHIBIT 32.0

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of Barr Pharmaceuticals, Inc. (the “Company”), for the purposes of 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 9, 2006

/s/Bruce L. Downey                     
Bruce L. Downey
Chairman of the Board and Chief Executive Officer

/s/William T. McKee                     
William T. McKee
Vice President, Chief Financial Officer, and Treasurer

A signed original of this written statement required by Section 906 has been provided to Barr Pharmaceuticals, Inc. and will be retained by Barr Pharmaceuticals, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

37