Akorn Manufacturing, Inc.

October 18, 1995


Mr. Tim J. Toney
President
Akorn Manufacturing, Inc.
150 South Wyckles Road
P.O. Box 1220
Decatur, IL 62525


Re: Development Of: Sodium Chloride Injection, U.S.P. 0.9%,
Tetracaine Hydrochloride Injection, U.S.P. 1% & Epinephrine
Injection, U.S.P.


Supply Of: Sodium Chloride Injection, U.S.P. 0.9%, Tetracaine
Hydrochloride Injection, U.S.P. 1%, Epinephrine Injection,
U.S.P., Dextrose Injection, U.S.P. 10%, Ephedrine Sulfate
Injection, U.S.P. and Sterile Water for Injection, U.S.P.


Dear Tim:


In connection with our recent discussions and correspondence,
this letter is intended as a binding agreement relative to (i)
the development by Akorn Manufacturing, Inc. ("Akorn") of Sodium
Chloride Injection, U.S.P. 0.9% ("Sodium Chloride"), Tetracaine
Hydrochloride Injection, U.S.P. 1% ("Tetracaine Hydrochloride")
and Epinephrine Injection, U.S.P. ("Epinephrine"), to include a
complete Product Development Report on each of those three
products, and (ii) the provision by Akorn to Jordan
Pharmaceuticals, Inc. ("Jordan") of Sodium Chloride, Tetracaine
Hydrochloride, Epinephrine, Dextrose Injection, U.S.P. 10%
("Dextrose"), Ephedrine Sulfate Injection, U.S.P. ("Ephedrine
Sulfate") and Sterile Water for Injection, U.S.P. ("Sterile
Water") in specified sizes and formats. The proposed terms and
conditions of the agreement (the "Agreement") are as follows:


Product Development.


Subject to the terms and conditions of this Agreement, Akorn
agrees to perform the necessary development work in order to
manufacture and supply Sodium Chloride, Tetracaine Hydrochloride
and Epinephrine (the "Development Products") to Jordan in
accordance with the respective specifications for such products
set forth in Exhibit 1 attached hereto. As part of such
development work, Akorn shall prepare and properly document a
complete Product Development Report for each Development Product,
and shall produce three (3) lots of each of the Products for
stability studies, consisting of the number of units per lot for
each Development Product set forth in Exhibit 2 attached hereto.
The Product Development Report shall contain the data relating to
the development work for each Development Product, and shall
contain, at a minimum, the information summarized in the section
headings of the report as listed in Exhibit 9 attached hereto,
and any other development work reasonably necessary for
marketable product.


Jordan agrees to pay Akorn the amounts set forth in Exhibit 3
attached hereto (the "Development Cost") for the development of
each of the Development Products. Development Costs shall not
include the costs of the three lots of each of the Products for
stability studies produced during the development work, which
Products shall be paid for by Jordan pursuant to Paragraph 2(b),
below. Akorn shall invoice Jordan for thirty percent (30%) of
the specified Development Cost for a Development Product upon
Akorn's commencement of development work, an additional thirty
percent (30%) of the specified Development Cost at such time as
Akorn commences stability studies of such Product, and the
balance of the Development Cost at such time as Akorn has
submitted a Product Development Report for such Development
Product to Jordan indicating successful completion of all product
development activities, and Jordan has accepted such report.


Akorn will use its commercial best efforts to complete its
development work with respect to all three Development Products
by March 31, 1996. In performing its development work, Akorn
shall give first priority to the development of the Tetracaine
Hydrochloride, second priority to the development of Sodium
Chloride, and third priority to the development of Epinephrine.
Akorn will also use its best efforts to ensure that its
development work and stability studies satisfy Food and Drug
Administration ("FDA") requirements.


Akorn agrees that Jordan shall be entitled to all information
pertaining to the development work and stability studies,
including master batch records and analytical methods and
results. Akorn shall, at Akorn's expense, promptly provide all
of such information to Jordan upon its request. All stability
batch test data and all actual Product(s) produced as a result of
said tests shall be the exclusive property of Jordan, and Akorn
shall not have the right to use said test data or Product(s) for
or on behalf of itself (except for meeting its obligations to
Jordan) or any other party without Jordan's prior written
consent. All other information obtained in the development of
the Products shall be the non-exclusive property of Jordan and
Akorn shall be entitled to use any such information to produce
the Products for any other party, including Akorn. However, in
the event Akorn does generate its own stability data, stability
batch records and stability batches for the purpose of marketing
and selling the Product (s) to any party other than Jordan, Akorn
shall refund to Jordan fifty (50%) per cent of the Development
cost (as set out in Exhibit 3), attributable to such Product(s).


Agreements to Purchase and Supply Products.


Subject to the terms and conditions of this Agreement, Jordan
hereby agrees to purchase from Akorn, for the term of this
Agreement, one hundred percent (100%) of Jordan's purchase
requirements for Sodium Chloride, Tetracaine Hydrochloride,
Epinephrine, Dextrose, Ephedrine Sulfate and Sterile Water (the
"Products") in accordance with the respective specifications for
such products set forth in Exhibit 1 attached hereto, and Akorn
hereby agrees to supply to Jordan, during the term of this
Agreement, all of Jordan's purchase requirements for such
Products. Notwithstanding the foregoing, Jordan may terminate its
obligations under this Paragraph, as to any Development Product,
should Akorn fail to provide Jordan with a complete Product
Development Report as to that Product.


Jordan hereby agrees to provide Akorn, within thirty (30) days of
execution of this Agreement, and thereafter ninety (90) days
prior to each year for which this Agreement is in effect, with an
annual forecast of its estimated purchase requirements for the
Products for such year. Thereafter, Jordan agrees to place
irrevocable rolling 90-day purchase orders for its actual
purchase requirements. Such forecasts shall enable Akorn to
manufacture the Products in whole batch increments as specified
in Exhibit 4 attached hereto. Marketable Products produced by
Akorn in the stability runs shall be deemed part of an initial
purchase order and shall be purchased by Jordan as any other
Product.


Jordan agrees that its purchases of each Product within any year
shall not be less than the minimum annual purchase commitment for
such Product specified in Exhibit 5; provided, however, Jordan
shall have no obligation to purchase the minimum annual purchase
commitment of Sterile Water specified in Exhibit 5 after December
31, 1997 unless and to the extent it has purchase orders for such
minimum quantities from its customers after such date.
Satisfaction of the minimum purchase commitments shall be
determined on a basis corresponding with the anniversary dates of
this Agreement. The minimum purchase order for Sterile Water for
the period in which December 1997 falls within shall be
appropriately prorated. Notwithstanding anything in this
Subparagraph (c) to the contrary, Jordan may purchase quantities
of one or more Products within a year without being in violation
of its minimum purchase commitments so long as the aggregate
dollar volume of purchases for all of the Products exceed the
aggregate minimum purchase commitments specified in Exhibit 5.
Additionally, Jordan agrees to use its best efforts to purchase
additional sizes of Sterile Water from Akorn, and to purchase new
development sizes of Sterile Water and Calcium Chloride for
Injection, USP from Akorn, provided Akorn is able to meet
Jordan's specifications.


Akorn agrees to use its commercial best efforts to accommodate
Jordan's request to change the amount of Products specified in
its purchase orders and/or the delivery dates for such Products,
and anticipates that all reasonable requests will be
accommodated. Nevertheless, Jordan understands that Akorn's
ability to source Product purchases within any pending 90-day
period are subject to limitations based upon lead times it is
required to give its suppliers, and that Akorn therefore cannot
guarantee that any requested changes in quantities ordered and/or
delivery dates within such 90-day period following the requested
change can be effectuated. Jordan agrees to pay any additional
costs incurred by Akorn to accommodate Jordan's request.


Notwithstanding anything in this Agreement to the contrary, to
the extent that Akorn cannot supply Jordan's purchase
requirements, Jordan shall have the right to purchase any
shortfall in its purchase requirements from another vendor
without restriction. Should Akorn fail to fill any two
consecutive purchase orders for any Product within one hundred
twenty (120) days of the order, it shall be deemed to be unable
to supply Jordan's purchase requirements for the purposes of the
preceding sentence.


Notwithstanding anything in this Agreement to the contrary,
Jordan shall have the right to manufacture any of the Products
should it acquire the facilities to do so provided Jordan gives
Akorn at least twelve (12) months prior written notice. If such
notice is provided by Jordan, it shall be released from its
purchase obligations for such Products hereunder.


Additional Products.


Commencing April 1, 1996, Akorn agrees that it shall use its
commercial best efforts to perform the necessary development work
in order to manufacture and supply to Jordan two new products per
year which shall be jointly agreed to by Akorn and Jordan (the
"Additional Products"). The parties agree to negotiate in good
faith as to the development cost, minimum annual purchase
commitments, and pricing for each of the Additional Products, and
such agreement shall be a condition precedent to Akorn's
obligation to develop the Additional Products. Upon such
agreement, this Agreement and Exhibits 1 though 8 hereof shall be
amended to make appropriate reference to the Additional Products.
The development of the Additional Products (including payment of
the development costs) shall be governed by the terms of
Paragraph 1, and the Additional Products shall be deemed to be
Development Products for the purposes of Paragraph 1 as well as
any other applicable provisions of this Agreement. The
Additional Products shall also be deemed to be Products under
Paragraph 2 and, as such, shall be governed by the provisions of
Paragraph 2 as well as any other applicable provisions of this
Agreement.


(b) Jordan may specify that one of the two Additional Products per
year specified in Paragraph 3(a) above be an ANDA Product. Any
such ANDA Additional Product, shall be considered for all
purposes as a Development Product, and subject to the provisions
of Paragraph 1 above, with the following modifications. Jordan
shall own, exclusively, the stability data, stability batch
records, stability batches as well as Jordan's ANDA filing with
the FDA for the ANDA Additional Product. Jordan's ownership of
the remaining data and information comprising the ANDA shall be
non-exclusive and subject to the provisions of Paragraph 1(d),
except that should Akorn use the non-exclusive ANDA data along
with its own stability data, stability batch records, and
stability batches to file its own ANDA to market and sell any
Additional Products to any party other than Jordan, Akorn shall
refund to Jordan forty (40%) per cent of the development cost
attributable to such Additional Product.


4. Quality Standards. The Products shall meet all applicable
United States Pharmacopeia ("U.S.P.") and Food and Drug
Administration ("F.D.A.") regulations, including Good
Manufacturing Practices, as such regulations may be in place at
the time of delivery.


5. Manufacturing, Packaging and Labeling Standards. Akorn
warrants that the Products shall be manufactured, packed and
labeled in accordance with the standards and requirements set
forth in Exhibit 6 attached hereto. Akorn shall assume the
responsibility for the sourcing and purchasing of raw materials
and components for the manufacture and packaging of the Products
excepting labels and inserts, which will be provided by Jordan at
its cost. Labels and inserts may be either in Jordan's name or
that of its customers. Akorn and Jordan shall jointly develop
label copy, with Akorn being responsible for ensuring that the
label copy, including both content and layout, satisfies
applicable U.S.P. and FDA regulations. Notwithstanding the
foregoing, Akorn shall retain the responsibility and sole
authority to select label stock and insert stock compatible with
its machinery.


6. Price. Jordan agrees to pay Akorn with respect to its supply
of the Products the applicable price specified in Exhibit 7
attached hereto, subject to adjustment as hereinafter provided.
Beginning on the second annual anniversary date of this
Agreement, and on each annual anniversary date thereafter, the
specific price for the Products shall be increased by an amount
equal to the percentage increase, if any, in the rate of
inflation for the expiring year relative to the prior year
thereto, but not to exceed five percent (5%). The rate of
inflation shall be determined using the Producer Price Index
(#063) published by the United States Bureau of Labor Statistics
(the "Index"). In order to avoid any delays in calculating the
increase, the percentage increase in the Index for any expiring
year shall be determined by comparing the published Index for the
month which occurs three months prior to the expiration of the
year to the Index for the corresponding month for the immediately
preceding year. For purposes of making calculations, all
percentages shall be rounded to the nearest tenth of a
percentage, and all monetary amounts shall be rounded to the
cent.


7.Delivery and Payment Terms.


(a) The Products shall be delivered F.O.B. place of origin to the
Jordan warehouse located in California or any designee of Jordan
located within the continental United States, provided said
shipments are in whole batch increments as specified in Exhibit 4
attached hereto. Freight method and carrier shall be selected
and directly paid by Jordan. All customs, duties, costs, taxes,
insurance premiums and other exp ...