ASSET PURCHASE AGREEMENT

Exhibit 10.19

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (this “Agreement”) is made and entered into as of July 20, 2004, by and between Cornerstone Pharmaceuticals Ltd., an Anguilla company with offices located at 8000 Regency parkway, Suite 430, Cary, North Carolina 27511 (“Cornerstone”) and Vintage Pharmaceuticals, LLC, a Delaware limited liability company with offices located at 130 Vintage Drive, Huntsville, Alabama 35811 (“Vintage”).

RECITALS

     Vintage has received FDA approval for two (2) products, one containing Propoxyphene Napsylate/Acetaminophen 100/325mg Tab, ANDA #76-743, and one containing Propoxyphene Napsylate/Acetaminophen 100/500mg Tab ANDA #76-750 (the “Product(s)” as defined below).

     Subject to the terms and conditions of this Agreement, Vintage desires to sell to Cornerstone, and Cornerstone desires to purchase from Vintage, the Purchased Assets (as defined below).

AGREEMENT

     Now, therefore, in consideration of the premises and the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties agree as follows:

ARTICLE I
DEFINITIONS

      Section 1.01 Defined Terms.

     As used in this Agreement, the following defined terms have the meanings described below:

     “Cornerstone’s Transfer Letter to the FDA” means the letter attached hereto as Exhibit A-l and incorporated herein by reference notifying the FDA of the change in ownership of the Product(s) ANDA(S), which shall be sent to the FDA upon Cornerstone’s payment in full of the Deferred Purchase Price (as defined below).

     “Action or Proceeding” means any action, suit, proceeding, arbitration, inquiry, hearing, assessment with respect to fines or penalties, or litigation (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental or Regulatory Authority.

[***] Confidential portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission.

     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person. “Control” and, with correlative meanings, the terms “controlled by” and “under common control with,” means the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, resolution, regulation or otherwise.

     “ANDA(S)” means Abbreviated New Drug Application for the Products.

     “Bill of Sale and Assignment” means a Bill of Sale and Assignment in the form attached hereto as Exhibit B.

     “Books and Records” means all files, documents, papers, and records in the possession of Vintage and/or Cornerstone pertaining to the Product(s), the Product(s) Intellectual Property and/or the Marketing Materials.

     “Calendar Quarter” means the three month periods beginning on each January 1, April 1, July 1 and October 1.

     “Contract” means any and all legally binding commitments, contracts, leases, indentures, purchase orders, leases, or other agreements, whether written or oral, including all amendments thereto.

     “DEA” means the United States Drug Enforcement Agency, and any successor agency or entity thereto that may be established hereafter.

     “Encumbrance” means any mortgage, pledge, security interest, deed of trust, lease, lien, Liability, adverse claim, levy, charge, easement, right of way, covenant, restriction, or other encumbrance, third-party right or retained right of any kind whatsoever, or any conditional sale agreement.

     “FDA” means the United States Food and Drug Administration.

     “Governmental or Regulatory Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States or any state, county, city or other political subdivision thereof.

     “Know-How” means all Product(s) specifications; manufacturing, physical chemistry and formulation know-how; analytical testing methods and validations; technical knowledge; practices and procedures; formulae; confidential information; analytical methodology; processes; methods; preclinical, clinical, stability and other data and results; market studies; and all other experience and know-how, in each case in tangible form, whether or not patentable, with respect to the Product(s).

     “Law” means any federal, state or local law, statute or ordinance or any rule, regulation, or published guidelines promulgated by any Governmental or Regulatory Authority, including all regulations and guidances of the FDA or the DEA.

     “Liability” means any obligations, debts or liability (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, matured or unmatured, determinable or undeterminable, and due or to become due).

     “Manufacturing Agreement” means the Manufacturing Agreement attached hereto as Exhibit C between the Parties containing terms mutually acceptable to both Parties involving the exclusive right of Vintage to manufacture and supply the Product(s) to Cornerstone for a five (5) year period.

     “Marketing Materials” means all marketing and promotional materials useable with respect to the marketing and sale of the Product(s) to the extent such materials are within the possession of Vintage.

     “Net Sales of the Product(s)” means the gross amount invoiced by Cornerstone or its Affiliates for sales of the Product(s) to third persons (not including an Affiliate of Cornerstone), less (i) trade, quantity and/or cash discounts actually allowed; (ii) discounts, refunds, rebates, chargebacks, retroactive price adjustments and any other allowances, credits or payments which effectively reduce the net selling price; (iii) accruals for Product(s) returns and allowances, up to an annual maximum of [***] percent ([***]%); and (iv) the Product Price, as defined in the Manufacturing Agreement. Inter-company accruals will not be considered in the calculation of “Net Sales.” With respect to accruals for Product(s) returns and allowances, within sixty (60) after the end of each calendar year, the parties shall reconcile such actual Product returns and allowances with the estimated accruals. In the event such accruals are greater than the actual returns and allowances, Cornerstone shall pay such additional Royalty Payments as may be due Vintage pursuant to Section 3.03. All such amounts and calculations will be determined from books and records maintained in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).

     “Order” means any writ, judgment, decree, injunction or similar order of any Governmental or Regulatory Authority (in each such case whether preliminary or final).

     “Party” means each of Cornerstone and Vintage and “Parties” mean Cornerstone and Vintage collectively.

     “Patents” means all U.S. patents, patent applications, and statutory invention registrations (including any provisional applications and invention disclosures) with respect to the Product(s).

     “Person” means any natural person, corporation, general partnership, limited partnership, limited liability company, joint venture, proprietorship, other business organization, trust, association, or other entity, or any Governmental or Regulatory Authority.

[***] Confidential portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission.

     “Product(s)” means Propoxyphene Napsylate and APAP 100/325mg Tablets and Propoxyphene Napsylate and APAP 100/500mg Tablets, and Product(s) means either of them.

     “Product(s) Intellectual Property” means any and all of the following, intellectual property rights owned or licensed by Vintage that are used or useful in the manufacture, sale, use, promotion, marketing and/or distribution of the Product(s): (i) Patents; (ii) Know-How; (iii) copyrights in any copyrightable Marketing Material; (iv) the Product(s) Trademarks; and (v) any trade dress related to the Product(s).

     “Purchased Assets” means the following: (i) all rights, title and interest in and to the Product(s), including all rights to the promotion, marketing, sale, distribution and manufacturing thereof; (ii) the Product(s) Intellectual Property, (iii) the Marketing Materials; and (iv) the Books and Records. For purposes of clarification, the Purchased Assets do not include equipment.

     “Trademarks” means all United States trademarks, trade names, brand names, logotypes, symbols, service marks, designs, and trade names related to the Product(s).

     “Vintage’s Transfer Letter to the FDA” means the letter attached hereto as Exhibit A-2 and incorporated herein by reference notifying the FDA of the change in ownership of the Product(s) ANDA(S), which shall be sent to the FDA upon Cornerstone’s payment in full of the Deferred Purchase Price.

      Section 1.02 Construction of Certain Terms and Phrases.

     Unless the context of this Agreement otherwise requires, when used in this Agreement: (a) words of any gender include each other gender; (b) the terms “hereof,” “herein,” “hereto,” “hereby” and derivative or similar words refer to this entire Agreement; (c) the term “including,” “include” or “includes” shall be deemed to be followed by “without limitation”; and (d) references to currency means U.S. Dollars. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless business days are specified. This Agreement shall be deemed to be drafted jointly by all the Parties and shall not be specifically construed against any Party hereto based on any claim that such Party or its counsel drafted this Agreement.

ARTICLE II

PURCHASE AND SALE OF PURCHASED ASSETS

      Section 2.01 Purchase and Sale of Purchased Assets.

     Subject to the terms and conditions of this Agreement, at the Closing, Vintage shall sell, transfer, convey, assign and deliver to Cornerstone, free and clear from all Encumbrances (except with respect to Vintage), and Cornerstone shall purchase, acquire and accept from Vintage, all right, title and interest, as of the Closing, in and to the Purchased Assets in existence as of the Closing Date.

ARTICLE III

CONSIDERATION

      Section 3.01 Purchase Price.

     Subject to the provisions of 3.02 below, the purchase price payable by Cornerstone to Vintage for the Purchased Assets shall be the total sum of Eight Million Dollars ($8,000,000.00) (the “Purchase Price”).

      Section 3.02 Payment of Purchase Price.

     Cornerstone shall pay Vintage the Purchase Price as follows:

          (i) Cornerstone shall pay Vintage $5,000,000.00 (U.S.) at the Closing in immediately available funds by wire transfer into a bank account designated by Vintage (the “Closing Payment”), (ii) $1,500,000.00 (U.S.) shall be payable by Cornerstone to Vintage on or before January 15, 2005, and (iii) $1,500,000 (U.S.) shall be payable by Cornerstone to Vintage on or before July 15, 2005 (subsections (ii) and (iii) collectively, the “Deferred Purchase Price”), also payable in immediately available funds by wire transfer into a bank account designated by Vintage. At the Closing, Cornerstone shall execute and deliver to Vintage an executed promissory note evidencing its obligation to pay Vintage the Deferred Purchase Price, which promissory note shall be substantially in the form and content attached hereto as Exhibit D (the “Secured Promissory Note”). The Secured Promissory Note shall be guaranteed by Cornerstone Pharmaceuticals Holdings, Ltd. as provided in the Guaranty Agreement attached hereto as Exhibit E. In addition, Cornerstone’s obligations under the Secured Promissory Note shall be secured by a first priority security lien on the Purchased Assets in favor of Vintage.

      Section 3.03 Royalty Payments.

     (a) Cornerstone shall accrue and owe a royalty to Vintage equal to [***] percent ([***]%) of Net Sales of Product(s) in each Calendar Quarter by Cornerstone or its Affiliate[s] (collectively referred to as the “ Royalty Payment ”).

     (b) Cornerstone shall pay to Vintage the Royalty Payment attributable to Net Sales of Product(s) made during a Calendar Quarter within sixty (60) days of the end of such Calendar Quarter. For purposes of this Agreement, a Net Sale of Product(s) will be deemed to have been made as of the recorded sale date according to GAAP. Within sixty (60) days of the end of such Calendar Quarter, Cornerstone shall provide Vintage with a written report detailing the Net Sales of Product(s) made during the previous Calendar Quarter (each, a “ Royalty Statement ”). Cornerstone will pay Royalty Payments (i) in immediately available funds by wire transfer into a bank account designated by Vintage or (ii) by check no later than two (2) business days prior to

[***] Confidential portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission.

the due date for such Royalty Payment. In the event that the actual Net Sale of Product(s) cannot be determined by the date a Royalty Payment is due (for example because final rebate or chargeback numbers have not been confirmed), Cornerstone shall in good faith estimate such Net Sale, with any true up (either by credit or additional payment, as applicable) based on the actual Net Sale amount being made in the Royalty Payment immediately following such determination. The quarterly report described above shall detail any such true up described in the preceding sentence.

      Section 3.04 Audit.

     (a) Cornerstone shall maintain appropriate books of account and records, in accordance with GAAP, which shall include inventory records, and shall make accurate entries concerning all transactions relevant to this Agreement.

     (b) Vintage shall have the right for two (2) years after any Royalty Payment (or, in the event of a dispute involving in any way those books of account and records with respect to a Royalty Payment, for two (2) years after the dispute is resolved), on reasonable notice to Cornerstone, to inspect and examine Cornerstone’s books of account and records and other documents (including, without limitation, vouchers, records, purchase orders, sales orders and re-orders) relating to the Net Sales of Products to the extent necessary to verify the accuracy of the Royalty Payments made under this Agreement.

     (c) Cornerstone shall keep the books of account and records referenced in Section 3.03(a) available during the period of Vintage’s inspection rights set forth in Section 3.03(b).

     (d) If, upon inspection of the books of account and records of Cornerstone, Vintage discovers that it did not receive the correct Royalty Payment, Vintage shall notify Cornerstone in writing of such discovery. In the event Cornerstone disagrees with such discovery, the Parties shall negotiate in good faith to resolve such dispute. Within thirty (30) days of receipt of Vintage’s notice or, in the case of dispute, within thirty (30) days of resolution of such dispute, Cornerstone shall pay to Vintage the difference between what was paid and what should have been paid. If the difference of the underpayment exceeds five per cent (5%) of the Royalty Payment owed, then Cornerstone shall bear Vintage’s reasonable costs in connection with such inspection, including all reasonable legal and auditors fees. If Vintage’s inspection of the books of account and records reveals that Cornerstone overpaid a Royalty Payment, Vintage shall pay to Cornerstone such overpayment within thirty (30) days of the discovery of such overpayment.

      Section 3.05 Authorized Generic.

     (a) The parties agree Vintage (or one of its affiliates) has the exclusive right to manufacture and market an authorized generic version of the Product(s) from time to time after a competing product with identical active ingredients and concentrations has been approved by FDA and has been commercially offered and/or marketed by a competing company. Vintage (or its affiliate) may market an authorized generic sooner if mutually agreed upon in writing. If and when Vintage manufactures and markets an authorized generic version of the Product(s),

Vintage and Cornerstone agree to divide the net profits derived from such marketing efforts [***]% due Vintage and [***]% due Cornerstone (the “ Profit Split ”). Net profits shall be defined as the number of pieces invoiced (and shipped), multiplied by the net dollar amount for which each piece was sold, which shall equal gross dollars, from which shall be deducted: cash discounts, contractual rebates, CMS rebates, returns, chargebacks, and the Product Price (as defined in the Manufacturing Agreement).

     (b) Cornerstone shall have the right for two (2) years after any payment from the Profit Split resulting from the genericization of products (or, in the event of a dispute involving in any way those books of account and records with respect to a Profit Split, for two (2) years after the dispute is resolved), on reasonable notice to Vintage, to inspect and examine the appropriate Vintage affiliate’s books of account and records and other documents (including, without limitation, vouchers, records, purchase orders, sales orders and re-orders) relating to the Net Profit Payments to the extent necessary to verify the accuracy of the Profit Split made under this Agreement.

ARTICLE IV
CLOSING

      Section 4.01 Time and Place.

     The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on the third (3 ^rd ) business day after the satisfaction of the conditions set forth in Section 4.02 hereof, (the “Closing Date”) but no later than July 20, 2004.

      Section 4.02 Conditions Precedent.

     (a)  Conditions Precedent to Cornerstone’s Obligations. All obligations of Cornerstone to close the transactions contemplated under this Agreement are subject to the fulfillment or satisfaction of each of the following conditions precedent:

     (i) Representations and Warranties True as of the Closing Date . The representations and warranties of Vintage contained in this Agreement, the Manufacturing Agreement and in any schedule, certificate or document delivered by Vintage to Cornerstone pursuant to the provisions hereof or thereof will have been true on the date hereof and will be true on the Closing Date with the same effect as though such representations and warranties were made as of the Closing Date.

     (ii) Compliance with this Agreement . Vintage will have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or by the Closing Date.

     (iii) Manufacturing Agreement . The Parties will have entered into the Manufacturing Agreement.

[***] Confidential portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission.

     (b)  Conditions Precedent to Vintage’s Obligations . All obligations of Vintage to close the transactions contemplated under this Agreement are subject to the fulfillment or satisfaction of each of the following conditions precedent:

     (i) Representations and Warranties True as of the Closing Date . The representations and warranties of Cornerstone contained in this Agreement, the Manufacturing Agreement, and in any schedule, certificate or document delivered by Cornerstone to Vintage pursuant to the provisions hereof will have been true on the date hereof and will be true on the Closing Date with the same effect as though such representations and warranties were made as of the Closing Date.

     (ii) Compliance with this Agreement . Cornerstone will have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or by the Closing Date.

     (iii) Manufacturing Agreement . The Parties will have entered into the Manufacturing Agreement.

      Section 4.03 Closing Date.

     Each Party hereby agrees to use commercially reasonable efforts to consummate the transactions contemplated herein as soon as practicable but in no event later than July 15, 2004. Termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such termination or any breach of any term of this Agreement prior to such termination. The rights and obligations of the Parties under Sections 7.05 and this 4.03 and Articles V, VI and VIII of this Agreement shall survive the expiration or termination of this Agreement.

      Section 4.04 Deliveries at Closing.

     (a)  Closing Deliveries by Vintage . At or as part of the Closing, Vintage shall deliver or cause to be delivered to Cornerstone:

     (i) To the extent not previously delivered to Cornerstone, physical possession (or implement arrangements satisfactory to Cornerstone of transfer and delivery of physical possession) of all tangible personal property included in the Purchased Assets;

     (ii) The Manufacturing Agreement duly executed by an authorized representative of Vintage;

     (iii) a Bill of Sale and Assignment duly executed by an authorized representative of Vintage with respect to the Purchased Assets in existence as of the Closing;

     (iv) a certificate executed by an officer of Vintage, certifying in such detail as Cornerstone may reasonably request that the conditions specified in Sections 4.02(b)(i) and (ii), above, have been fulfilled; and

     (v) such other documents, instruments and certificates as Cornerstone and Vintage may mutually agree upon.

     (b)  Closing Deliveries by Cornerstone . At the Closing, Cornerstone shall deliver or cause to be delivered to Vintage:

     (i) the Closing Payment;

     (ii) the Secured Promissory Note and Security Agreement, duly executed by an authorized representative of Cornerstone;

     (iii) the Guaranty Agreement duly executed by an authorized representative of Cornerstone Pharmaceutical Holdings, Ltd.;

     (iv) the Loan Documents (as defined in the Secured Promissory Note) duly executed by an authorized representative of Cornerstone;

     (v) the Manufacturing Agreement duly executed by an authorized representative of Cornerstone;

     (vi) a certificate executed by an officer of Cornerstone, certifying in such detail as Vintage may reasonably request that the conditions specified in Sections 4.02(a)(i) and (v), above, have been fulfilled;

     (vii) such UCC filings as may be necessary for Vintage to hold a valid, first priority security interest in and to the Purchased Assets as collateral for Cornerstone’s obligation to pay the Deferred Purchase Price; and

     (viii) such other documents, instruments and certificates as Cornerstone and Vintage may mutually agree upon.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF VINTAGE

     Vintage represents and warrants to Cornerstone, as follows:

      Section 5.01 Organization.

     Vintage is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its organization and has all requisite power and authority to own the Purchased Assets. Vintage is duly qualified to conduct its business and is in good standing in each jurisdiction where the nature of such business requires such qualification, except

for any jurisdiction where failure to so qualify would not have a material adverse effect or materially impair or delay Vintage’s ability to perform its obligations hereunder.

      Section 5.02 Authority of Vintage.

     Vintage has all necessary power and authority to enter into this Agreement and to carry out the transactions contemplated hereby. Vintage has taken all action required by Law, its certificate of organization, operating agreement or otherwise to be taken by it to authorize the execution and delivery of this Agreement by Vintage and the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Vintage and, when duly authorized, executed and delivered by Cornerstone, will constitute a legal, valid and binding obligation of Vintage enforceable against it in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting enforcement of creditors’ rights generally.

      Section 5.03 Consents and Approvals.

     Except for Vintage’s Transfer Letter to the FDA, no consents, waivers, approvals, Orders or authorizations of, or registrations, declarations or filings with, any Governmental or Regulatory Authority, or by any customer, supplier or other third party, are required by or with respect to Vintage in connection with the execution and delivery of this Agreement by Vintage or the performance of its obligations hereunder, except for such consents, waivers, approvals, Orders or authorizations the failure to obtain which, and such registrations, declarations or filings the failure to make which, would not have a material adverse effect or materially impair or delay Vintage’s ability to perform its obligations hereunder.

      Section 5.04 Non-Contravention.

     The execution and delivery by Vintage of this Agreement does not, and the performance by it of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate of organization, operating agreement, or other organizational documents of Vintage; or (b) conflict with or result in a violation or breach of any term or provision of any Law applicable to Vintage, the Product(s) or the Purchased Assets.

      Section 5.05 Material Contracts.

     Except as set forth on Schedule 5.05, Vintage is not a party to any Contracts that relate to (i) the manufacture, marketing, sale or distribution of the Product(s); (ii) the sale, licensing out, or assignment of the Purchased Assets; or (iii) sales of Product(s) to any Governmental or Regulatory Authority.

      Section 5.06 Intellectual Property Rights.

     Neither the Product(s) Intellectual Property, the use of Product(s) Intellectual Property nor the Product(s), infringe or misappropriate the intellectual property rights of any third party, and Vintage has not received any written notice from any Person of any claims of infringement or misappropriation with respect thereto. In addition, all Trademarks included in the Produces) Intellectual Property, if any, are the subject of current registrations. There are no third-party rights in Vintage’s current registrations relating to the Product(s) Trademarks. There is not any prior use, infringement, piracy or counterfeiting of such Product(s) Trademarks, any superior rights by any third party in such Product(s) Trademarks, or any adverse claims pertaining to such Product(s) Trademarks.

      Section 5.07 Litigation.

     There are no Actions or Proceedings pending, threatened or reasonably anticipated against Vintage that relate to (a) the Purchased Assets; (b) this Agreement; (c) the transactions contemplated by this Agreement; or (d) the Product(s). Vintage is not subject to any Order that could reasonably be expected to materially impair or delay the ability of Vintage to perform its obligations hereunder.

      Section 5.08 Compliance with Law.

     Vintage has been in compliance with all applicable Laws with respect to the Product(s), and Vintage has not received any written notice alleging any violation of such Laws with respect to the Product(s).

      Section 5.09 Purchased Assets.

     Vintage is the sole and exclusive legal, and equitable owner of the Purchased Assets and has good and marketable title to the Purchased Assets free and clear of any Encumbrances. Vintage has the legal right and ability to transfer the Purchased Assets to Cornerstone, and, upon the Closing, shall transfer to good and marketable title to the Purchased Assets free and clear of any Encumbrances.

      Section 5.10 Regulatory Matters.

     The Product(s) ANDA(S) contains no material error or omission. Vintage has made available to Cornerstone complete and correct copies of the Product(s) ANDA(S). Except as set forth in Schedule 5.10, Vintage has not received or been subject to: (i) any FDA Form 483s relating to the Product(s); (ii) any FDA Notices of Adverse Findings relating to the Product(s); or (iii) any warning letters or other written correspondence from the FDA or any other Governmental or Regulatory Authority concerning the Product(s). Furthermore, Vintage represents that its manufacturing facilities used to manufacture the Product(s) will be considered in substantial compliance with FDA GMP’s at time of Closing. Vintage will manage and maintain the ANDA(S) up until the transfer letter is sent to the FDA. Following the actual

transfer of the ANDA(S), Cornerstone and Vintage may agree to have the ANDA(S) managed and maintained by Vintage at such terms and price as mutually agreed to by the parties.

      Section 5.11 Brokers.

     Vintage has not retained any broker in connection with the transactions contemplated hereunder.

      Section 5.12 No Non-Competition Agreements or Preferential Obligations.

     The Purchased Assets are not subject to any non-competition agreements with, or other agreements granting preferential rights to purchase or license the Purchased Assets to, any third Persons.

      Section 5.13 Exclusive Representations and Warranties.

     EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND THE MANUFACTURING AGREEMENT, VINTAGE MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND VINTAGE SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND WARRANTY OF NON-INFRINGEMENT.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF CORNERSTONE

     Cornerstone represents and warrants to Vintage as follows:

      Section 6.01 Corporate Organization.

     Cornerstone is a corporation duly organized, validly existing and in good standing, under the laws of the jurisdiction of its incorporation and has all requisite power and authority to own its assets and carry on its business as currently conducted by it. Cornerstone is duly qualified to conduct its business and is in good standing in each jurisdiction where the nature of the business conducted by it requires such qualification, except where failure to so qualify could not reasonably be expected, individually or in the aggregate, to have a material adverse effect on or materially impair or delay Cornerstone’s ability to perform its obligations hereunder.

      Section 6.02 Authority of Cornerstone.

     Cornerstone has all necessary power and authority to enter into this Agreement and to carry out the transactions contemplated hereby. Cornerstone has taken all action required by Law, its by-laws, or otherwise to be taken by it to authorize the execution and delivery of this Agreement by Cornerstone and the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Cornerstone and, when duly

authorized, executed and delivered by Vintage, will constitute a legal, valid and binding obligation of Cornerstone enforceable against it in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting enforcement of creditors’ rights generally.

      Section 6.03 Consents and Approvals.

     Except for Cornerstone’s Transfer Letter to the FDA, no consents, waivers, approvals, Orders or authorizations of, or registrations, declarations or filings with, any Governmental or Regulatory Authority are required by Cornerstone in connection with the execution and delivery of this Agreement by Cornerstone or the performance of its obligations hereunder.

      Section 6.04 Non-Contravention.

     The execution and delivery by Cornerstone of this Agreement does not, and the performance by it of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate of organization, operating agreement or other organizational documents of Cornerstone; (b) conflict with or result in a violation or breach of any terra or provision of any Law applicable to Cornerstone; or (c) conflict with or result in a breach or default (or an event which, with notice or lapse of time or both, would constitute a breach or default) under, or result in the termination or cancellation of, or accelerate the performance required by, or result in the creation or imposition of any security interest, lien or any other Encumbrance upon any Contract to which Cornerstone is a party or by which Cornerstone or any of its assets is bound.

      Section 6.05 Litigation.

     There are no Actions or Proceedings pending or, to the knowledge of Cornerstone threatened or reasonably anticipated against Cornerstone which if adversely determined would delay the ability of Cornerstone to perform its obligations hereunder.

      Section 6.06 Brokers.

     Cornerstone has not retained any broker in connection with the transactions contemplated hereunder.

      Section 6.07 Exclusive Representations and Warranties.

     EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND THE MANUFACTURING AGREEMENT, CORNERSTONE MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND CORNERSTONE SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR. PURPOSE AND WARRANTY OF NON-INFRINGEMENT.

ARTICLE VII
COVENANTS OF THE PARTIES

      Section 7.01 Cooperation.

     Each Party shall reasonably cooperate with the other in preparing and filing all notices, applications, submissions, reports and other instruments and documents that are necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement, including Vintage’s reasonable cooperation in the efforts of Cornerstone to obtain any consents and approvals of any Governmental or Regulatory Authority required for Cornerstone to be able to sell the Product(s).

      Section 7.02 Bulk Sales.

     Cornerstone and Vintage waive compliance with all bulk sales Law applicable to the transactions contemplated by this Agreement.

      Section 7.03 Regulatory Matters.

     From and after the transfer by Vintage to Cornerstone of the Product(s) ANDA(S) pursuant to the terms hereof, Cornerstone, at its cost, shall be solely responsible for (i) taking all actions, paying all fees (except to the extent such fee accrued prior to the Closing Date) and conducting all communication with the appropriate Governmental or Regulatory Authority in respect of the Product(s) ANDA(S) and the Product(s), including preparing and filing all reports (including adverse drug experience reports) with the appropriate Governmental or Regulatory Authority; (ii) taking all actions and conducting all communication with third parties in respect of Product(s) sold pursuant to the Product(s) ANDA(S), including responding to all complaints and medical inquiries in respect thereof, including complaints related to tampering or contamination; (iii) investigating all complaints and adverse drag experiences in respect of Product(s) sold pursuant to the Product(s) ANDA(S); and (iv) filing all annual reports, field alerts, and any and all other reports as may be required from time to time by the FDA. Without limiting the foregoing, prior to the Closing Date, Vintage shall regularly consult with Cornerstone about all regulatory matters and decisions related to the Product(s) and the Product(s) ANDA(S).

     Vintage will manufacture the Product(s) according to the approved formulations and specifications in accordance with the terms of the Manufacturing Agreement. Any changes to the formulations and/or specifications submitted and/or approved by FDA will be communicated by Cornerstone to Vintage in writing. Furthermore, Cornerstone will not request any supplemental changes to the approved ANDAs without first cons