Non-exclusive Distribution Dated 9/13/94

EXHIBIT 10.31


NON EXCLUSIVE DISTRIBUTION AGREEMENT
EXCLUSIVE SUPPLY AGREEMENT


This Agreement, entered into as of the 13th day of September,
1994, by and between MOVA PHARMACEUTICAL CORPORATION ("MOVA"), a


Puerto Rico corporation, having offices in Caguas, Puerto Rico, and
PAR PHARMACEUTICAL, INC., a New York corporation, having offices in
One Ram Ridge Road, Spring Valley, New York 10977 ("PAR").


WITNESSETH:


WHEREAS, MOVA manufactures and sells pharmaceutical products and
has represented that it has developed a generic version of cimetidine
(defined hereinafter as the "Product"); and


WHEREAS, PAR distributes a line of generic versions of branded
pharmaceutical products such as the Product; and


WHEREAS, PAR would like to distribute the Product as manufactured
by MOVA and MOVA is willing to supply the Product to PAR for such
purpose, all upon the terms and conditions of this Agreement;


NOW, THEREFORE, in consideration of the foregoing premises, which
are hereby incorporated as substantive part of this Agreement, and in
consideration of the performance of the mutual covenants and promises
herein contained, MOVA and PAR have agreed as follows:


ARTICLE 1 - DEFINITIONS
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1.1 The Product. The "Product" shall mean cimetidine (300mg.,
-----------
400mg., and 800mg.) and any future dosage strength for which the FDA
approves an Abbreviated New Drug Application with an AB rating when
compared with the corresponding strength of Tagemet (cimetidine)
tablets.


1.2 The ANDA. The "ANDA" shall mean the Abbreviated New Drug
--------
Application for the Product which has been submitted to the FDA by
MOVA, including any amendments or supplements thereto.


1.3 The FDA. The "FDA" shall mean the United States Food and Drug
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Administration.


1.4 Patents. The "Patents" shall mean any issued patents or patent
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rights held by third parties which would be infringed by the
manufacture, use or sale of the Product to be sold by MOVA to PAR
pursuant to the terms of this Agreement.


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1.5 Patents Expiration Day. The "Patents Expiration Day" shall mean
----------------------
the day on which all of the Patents have expired or are no longer in
effect.


1.6 Availability Date. The "Availability Date" shall mean the date
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on which MOVA is first legally permitted and able to ship commercial
quantities of the Product in the interstate commerce of the USA.


1.7 Approval Date. The "Approval Date" shall mean the date on which
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MOVA is in receipt of all required regulatory approvals for the
manufacture and sale of the Product.


1.8 Purchase Term. The "Purchase Term" shall mean the five (5) year
-------------
period that begins on the date the first order for Product is shipped
after the Approval Date.


1.9 Average Selling Price. The "Average Selling Price" shall mean the
---------------------
actual Net Sales of Product by shelf keeping unit sold by PAR to
unrelated third parties per calendar quarter divided by the total
number of units of each shelf keeping unit of Product sold in the said
calendar quarter.


1.10 Net Sales. "Net Sales" shall mean the gross sales for each shelf
---------
keeping unit of Product less the following:


(i) trade, quantity or cash discounts, if any, allowed or paid;


(ii) chargebacks, shelf stock adjustments, returns, credits or
allowances, if any, given or made on account of Products
previously delivered; and


(iii) Federal, State or local government rebates whether in
effect now or enacted at any time during the term of this
Agreement.


1.11 Net Profit. "Net Profit" shall mean the Net Sales for each shelf
----------
keeping unit of Product less the Base Price as specified in Exhibit A
hereof.


1.12 Purchase Price. The "Purchase Price" shall mean the base price as
--------------
specified in Exhibit A hereof, plus a percent of Actual Net Profits
per shelf keeping unit to be determined as follows:


(i) [ ] % in the event the Availability Date occurs by
Patents Expiration Day;


(ii) [ ] % in the event the Availability Date occurs
within the first sixty (60) days following the
Patents Expiration Day;


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(iii) [ ] % in the event the Availability Date occurs
during the second sixty (60) days following the
Patents Expiration Day; or


(iv) [ ] % in the event the Availability Date occurs
more than one hundred twenty (120) days following the
Patents Expiration Day.


1.13 Base Price. "The Base Price" shall mean the base price per shelf
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keeping unit as specified in Exhibit A hereof. The Base Price set
forth in Exhibit A shall remain firm through December 31, 1994. The
Base Price will be adjusted on January 1st. every year, commencing on
January 1, 1995 for the annual change in the CPI for the previous
year.


1.14 USA. The "USA" shall mean the United States of America and the
---
District of Columbia, its territories and possessions, excluding the
Commonwealth of Puerto Rico and the U.S. Virgin Islands.


1.16 Affiliate. "Affiliate" shall mean, with respect to either party,
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all corporations or other business entities which, directly or
indirectly, are controlled by, control or are under the common control
with that party. For this purpose, the meaning of the word "control"
shall include, but not be limited to, ownership of more than fifty
percent (50%) of the voting shares or interest of such corporation or
other business entity.


1.17 CPI. "CPI" shall mean the Consumer Price Index published by the
---
Puerto Rico Department of Labor.


1.18 Competitive Product. "Competitive Product" shall mean versions
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of the Product which are manufactured by other pharmaceutical
companies for which the FDA approves an Abbreviated New Drug
Application with an AB rating when compared with the corresponding
strength of Tagemet (cimetidine) tablets.


1.19 Active Ingredient. "Active Ingredient" shall mean Cimetidine as
-----------------
defined in the USP.


ARTICLE 2 - SUPPLY
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2.1 Purchase and Sale. Subject to the terms and conditions of this
-----------------
Agreement, MOVA shall supply and PAR shall purchase from MOVA
substantially all of PAR's requirements for the Product in the USA
from the Approval Date and throughout the Purchase Term. PAR shall
not purchase the Product or any product having the same active
ingredient, strength and indication as the Product, from any party
other than MOVA after the Approval Date and throughout the


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Purchase Term except that PAR may purchase the Product or any such
product from any party pursuant to Paragraph 2.4 and Article 14
hereunder. It is understood and agreed that PAR may purchase the
Product from third parties before the Approval Date, including
accepting shipments of the Product made after the Approval Date
pursuant to orders submitted by PAR before the Approval Date. PAR
shall have the non-exclusive right to sell, market and distribute the
Product in the USA. It is understood and agreed further that PAR may,
but is not obligated to, purchase the Product for sale in countries
outside of the USA. Notwithstanding the foregoing purchase
obligations, if as a result of a merger, acquisition or other similar
extraordinary corporate transaction PAR becomes an Affiliate of a
corporate entity (a "Merger Party") who at the time of such
transaction either manufactures or has filed an ANDA for the
manufacture of a Competitive Product, then PAR may purchase such
Competitive Product from the Merger Party one (1) year after giving
MOVA written notice of such intent, and provided further that, within
ninety (90) days from the date of the merger, acquisition or other
similar extraordinary transaction, PAR notifies MOVA of the occurrence
of such transaction and of its intent of purchasing the Competitive
Product from the Merger Party. At the time of such notice, the
restrictions contained in Paragraph 2.7 hereof, with respect to sales
by MOVA to certain parties, shall no longer be applicable.


2.2 Forecasts. As early as reasonably possible (but no later than
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thirty (30) days prior to the date which MOVA notifies PAR should be
the Availability Date) and thirty (30) days prior to every calendar
quarter thereafter, PAR shall give to MOVA a written forecast of the
quantities of the Product, including quantities for each strength and
unit size of the Product, and delivery dates that PAR anticipates it
will order from MOVA during the two (2) calendar quarters following
the date of the written forecast. Such forecast shall not create a
binding obligation on the part of either MOVA or PAR, except as
provided in Paragraph 2.3 hereof. However, PAR shall use all
reasonable efforts to make each forecast as accurate as possible. PAR
shall promptly advise MOVA of any significant changes in its estimated
forecast of Product.


2.3 Orders. PAR shall submit written purchase orders to MOVA for the
------
quantities of the Product, including the quantity of each strength and
unit size and delivery dates, which PAR desires to purchase under this
Agreement. For the first three (3) month period of each forecast
given by PAR pursuant to Paragraph 2.2 hereof, PAR shall submit
purchase orders to MOVA for at least the greater of: seventy-five
percent (75%) of the forecasted quantities for that period on the then
current forecast or fifty percent (50%) of the forecasted quantities
for that period as shown on the immediately preceding forecast. If
applicable, each purchase order shall specify the country in which the
Product is to be resold by PAR. Regardless of the quantities ordered,
MOVA shall use all reasonable efforts to deliver the full quantities
of the Product (each strength and unit size) ordered by


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PAR. Deliveries of the Product ordered by PAR to the destination
designated by PAR will be made within sixty (60) days following the
date on which PAR submitted the purchase order unless a later delivery
date has been specified by PAR.


2.4 Inability to Supply. Within thirty (30) days following its
-------------------
receipt of each forecast according to Paragraph 2.2 hereof, MOVA shall
advise PAR in writing if it is unable to supply the entire quantity
forecasted. PAR shall have the right to purchase from third parties
such quantities of the Product for which MOVA shall have advised that
it will be unable to supply, for as long as MOVA's inability to supply
continues.


2.5 Shipments. Delivery shall be f.o.b. Caguas, Puerto Rico, freight
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and insurance prepaid by MOVA. Product shall be shipped by MOVA
according to PAR's instructions, to PAR's facility at One Ram Ridge
Road, Spring Valley, NY 10977; provided, however, that should PAR
-------- -------
instruct MOVA to ship to another location, MOVA shall do so and PAR
shall reimburse for any incremental costs involved.


2.6 Purchase Price and Payment. MOVA shall invoice PAR the Base
---------------------------
Price for all shelf keeping units in each shipment of Product
delivered to PAR. Such amount shall be payable sixty (60) days from
receipt of the invoice therefor. At the end of each calendar quarter,
PAR shall determine and advise MOVA of the Actual Net Profits obtained
from the sale of the Product by PAR during such calendar quarter.
Within twenty (20) days after the end of each such quarter, PAR shall
pay to MOVA, the difference between the Base Price and the Purchase
Price times the actual number of shelf keeping units actually sold
during said calendar quarter. Payment will be made only with respect
to Product actually shipped by PAR during such calendar quarter. In
addition, within thirty (30) days after the end of each calendar
quarter, PAR shall provide MOVA with a report of the number of units
of Product shipped and returned, gross sales of Product and Net Sales
of Product during such calendar quarter and the number of units of
Product inventory remaining under PAR's control at the end of such
calendar quarter.


2.7 Sales to certain customers. Throughout the term of this
--------------------------
Agreement, MOVA agrees not to knowingly sell the Product to the
customers listed in Exhibit B hereof. MOVA shall not knowingly sell
the Product to any third party to whom PAR shall have sold the Product
under PAR's label within the sixty (60) day period immediately
following the Availability Date, provided however, that such
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restriction shall end one (1) year after the end of the aforementioned
sixty (60) day period.


2.8 Conflicting Terms. In ordering and delivering the Product, PAR
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and MOVA may use their standard forms, but nothing in such forms shall
be construed to


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amend or modify the terms of this Agreement and in case of conflict
herewith, the terms of this Agreement shall control.


ARTICLE 3 - QUALITY
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3.1 Quality Control. Prior to each shipment of the Product, MOVA
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shall perform such quality control procedures to verify that each
shipment of the Product made under this Agreement conforms to the
specifications for the Product contained in the approved ANDA and
otherwise complies with the representations and w ...