LICENSING AND DISTRIBUTION AGREEMENT

Exhibit 10.1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*]. A complete version of this exhibit has been filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

LICENSING AND DISTRIBUTION AGREEMENT

by and between

BRADLEY PHARMACEUTICALS, INC.

and

PAR PHARMACEUTICAL, INC.

* * *

DOXYCYCLINE MONOHYDRATE

* * *

DECEMBER 13, 2005

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LICENSING AND DISTRIBUTION AGREEMENT

        This LICENSING AND DISTRIBUTION AGREEMENT (this “ Agreement ”), dated December 13, 2005, by and between BRADLEY PHARMACEUTICALS, INC., a Delaware corporation with an address at 383 Route 46 West, Fairfield, New Jersey (“ Bradley ”), and PAR PHARMACEUTICAL, INC., a Delaware corporation with an address at One Ram Ridge Road, Spring Valley, New York (“ Par ”).

        WHEREAS, Par has developed certain intellectual property, including its rights under the ANDAs (as defined below), necessary or useful to make, use and sell the pharmaceutical product identified on Exhibit A hereto (the “ Product ”);

        WHEREAS, Par and Bioglan Pharma, Inc. (now known as BPI Corp.), a Delaware corporation (“ Bioglan ”), have entered into that certain Distribution Agreement, dated as of December 27, 2000 (the “ Original Agreement ”), relating to the supply and distribution of doxycycline monohydrate tablets and capsules;

        WHEREAS, Par, Bioglan and Quintiles Ireland Limited, a company incorporated in the Republic of Ireland (“ Quintiles ”), have entered into that certain Assignment of Distribution Agreement (the “ Assignment ”), pursuant to which, among other matters, (i) Bioglan assigned all of its right, title and interest in and to the Original Agreement to Quintiles, (ii) Quintiles assumed certain obligations of Bioglan under the Original Agreement, (iii) Par consented to the foregoing assignment and assumption and (iv) the parties amended certain provisions of the Original Agreement, all as set forth therein;

        WHEREAS, Par and Quintiles have entered into that certain Second Amendment to Distribution Agreement and First Amendment to Assignment of Distribution Agreement, dated as of September 11, 2003, pursuant to which Par and Quintiles amended the Assignment and further amended the Original Agreement, as amended, all as set forth therein;

        WHEREAS, Par and Quintiles have entered into that certain Third Amendment to Distribution Agreement, dated as of April 13, 2004, pursuant to which Par and Quintiles further amended the Original Agreement, as amended, all as set forth therein; and

        WHEREAS, pursuant to that certain Consent and Agreement, dated as of July 9, 2004, Quintiles assigned all of its right, title and interest in and to the Original Agreement, as amended, to Bradley (the Original Agreement, as amended by the Assignment, the Second Amendment, the Third Amendment and the Consent and Agreement, and as may hereafter be amended from time to time, is hereinafter referred to as the “ Amended Agreement ”);

        WHEREAS, pursuant to the Amended Agreement, Bradley is having made, selling and distributing the Product under the brand name Adoxa® (the “ Branded Product ”); and

        WHEREAS, Par desires to license from Bradley certain rights licensed to Bradley under the Amended Agreement, and Bradley desires to grant Par such rights, to enable Par and its Affiliates and designee(s) to manufacture and distribute in the Territory a generic (non-branded)

version of the Product in all strengths and dosage forms under the ANDA except 50 mg and 100 mg capsules (the “ Generic Product ”), all upon the terms and conditions set forth herein.

        NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and obligations contained herein, Par and Bradley hereby agree as follows:

       1. DEFINITIONS

        “ Act ” means the Federal Food, Drug, and Cosmetic Act, as amended from time to time, and the rules and regulations promulgated thereunder.

        “ Affiliate ” means, with respect to any Person, any other Person controlled by, controlling or under common control with such Person, where control means more than 50% ownership or voting rights and/or the power to direct management or policy.

        “ Amended Agreement ” has the meaning set forth in the recitals hereto.

        “ ANDA ” means either, and “ ANDAs ” means both, of the abbreviated new drug applications numbers 065055 and 065070 filed by Par and maintained by the ANDA Holder with the FDA for the manufacture and sale of the Product in the Territory, as the same may be supplemented and/or amended from time to time.

        “ ANDA Holder ” means Par, unless and until such time as the applicable ANDA is purchased by Bradley, at which time the ANDA Holder with respect to such ANDA for purposes hereof shall mean Bradley.

        “ Branded Product ” has the meaning set forth in the recitals hereto.

        “ cGMP ” means the current Good Manufacturing Practices regulations of the FDA (as in effect from time to time) contained in 21 C.F.R. pts. 210 and 211.

        “ Commercial Launch ” has the meaning set forth in Section 3.2(b) hereof.

        “ Confidential Information ” means any information that in any way shall relate to a party hereto or an Affiliate thereof, including its products, business, know-how, methods, trade secrets, business and marketing strategies, customer lists and technology, that shall be furnished or disclosed to the other party, on a confidential basis, in connection with this Agreement, and any other information that would be reasonably recognized as confidential or proprietary information; provided , however , that Confidential Information shall not include any information:

        (i) that, at the time of its disclosure, is generally available to the general industry;

        (ii) that, after its disclosure in connection herewith, becomes generally available to the general industry, except as a result of a breach of this Agreement by the recipient of such information;

        (iii) that becomes available to the recipient of such information from a third party that is not legally or contractually prohibited from disclosing such Confidential Information; or

        (iv) that the recipient of which can demonstrate was developed by or for such recipient independently of, and without the use of, the Confidential Information disclosed to the recipient by the disclosing party or its Affiliates in connection herewith.

        “ Cost of Goods ” means Par’s fully-allocated cost of goods of manufacturing, packaging and labeling the Generic Product, including a proportionate share of overhead but excluding marketing expenses, all calculated in accordance with GAAP. The Cost of Goods shall include the price paid by Par to any third-party subcontractor (if any) for manufacturing, packaging and/or labeling of the Generic Product.

        “ Effective Date ” means the date of this Agreement as written above.

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

        “ First Commercial Sale ” means the first sale of the Generic Product under this Agreement by Par or its Affiliate in an arms’ length transaction to an unaffiliated third party, which shall constitute commencement of the Commercial Launch.

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

        “ GAAP ” means U.S. generally accepted accounting principles.

        “ Generic Product ” has the meaning set forth in the recitals hereto.

        “ Gross Margin ” means Net Profit divided by Net Sales, expressed as a percentage (i.e., multiplied by 100).

        “ Ineligible Person ” has the meaning set forth in Section 6.3(a) hereof.

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

        “ Intellectual Property ” has the meaning set forth in the recitals hereto.

        “ Launch Quantities ” has the meaning set forth in Section 4.2 hereof.

        “ Losses ” has the meaning set forth in Section 6.4 hereof.

        “ Net Profit ” means Net Sales less Cost of Goods.

        “ Net Profit Split ” has the meaning set forth in Section 4.3 hereof.

        “ Net Sales ” means the gross revenues invoiced by Par and derived from sales of the Generic Product in the Territory by Par and its Affiliates, less (a) all customary discounts, including cash and volume discounts, chargebacks, allowances, shelf stock adjustments, rebates

(including Medicaid, Medicare and similar rebates), returns, credits, sales rejections and price protection adjustments, and (b) all customary freight, shipping, insurance costs, duties and taxes; all of the foregoing calculated in accordance with GAAP.

        “ Obsolete Inventory ” means inventory of the Generic Product having expiry dating of twelve (12) months or less.

        “ Product ” has the meaning set forth in the recitals hereto.

        “ Person ” means a natural person, corporation, partnership, company or other entity.

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

        “ Specifications ” means the terms, requirements and conditions applicable to the Product and described in the applicable ANDA, as the same may be supplemented and/or amended from time to time, and as required by United States Pharmacopeia.

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

        “ Territory ” means the United States of America, together with its territories, possessions and protectorates.

        “ Trademarks and Copyrights ” shall have the meaning set forth in Section 3.3(c) hereof.

         2. LICENSE GRANT

        2.1 License Grant . Bradley hereby grants to Par and its Affiliates an exclusive, royalty-bearing license of its rights under the Amended Agreement to make, have made, use, import, offer for sale, sell and distribute the Generic Product in the Territory during the Term.

         3. GENERIC PRODUCT DEVELOPMENT, MANUFACTURING AND DISTRIBUTION

        3.1 Change of Tablet and Capsule Imprint . Par shall, subject to FDA approval, change the tablet and capsule imprint of the Generic Product to differentiate the Generic Product from the Branded Product. The tablet and capsule imprint of the Generic Product shall be determined by Par, subject to Bradley’s consent, which shall not be unreasonably withheld, conditioned or delayed.

        3.2 Appointment; Commercial Launch; Supply and Distribution . (a) Bradley hereby appoints Par as its sole and exclusive distributor for the Generic Product in the Territory, and Par hereby accepts such appointment and agrees to act as such sole and exclusive distributor, all upon the terms and conditions set forth herein. During the Term, Bradley shall not market, promote, encourage, exploit, offer to sell, sell or otherwise dispose of any generic (non-branded) doxycycline monohydrate tablet or capsule product that is A/B rated to the Product, except in any dosage form and strength not covered by this Agreement, (i) within the Territory or (ii) outside the

Territory where it knows such product will be distributed within the Territory. During the Term, Par shall not market, promote, encourage, exploit, offer to sell, sell or otherwise dispose of any generic (non-branded) doxycycline monohydrate tablet or capsule product that is A/B rated to the Product, except in any dosage form and strength not covered by this Agreement, (i) within the Territory or (ii) outside the Territory where it knows such product will be distributed within the Territory.

        (b) Par shall have the discretion to launch such combinations of Generic Product strengths and dosage forms as it chooses, subject to Bradley’s prior approval. Par and Bradley shall confer and mutually agree upon the timing of the commercial launch of the Generic Product (the “ Commercial Launch ”), taking into account the actions required to be undertaken by Par and Bradley pursuant to Section 3.1 hereof and current and anticipated market conditions. Manufacturing, sales and marketing of the Generic Product in the Territory will be the sole responsibility of Par, which shall have the sole right and discretion to make all marketing and pricing strategies and decisions.

        (c) Par shall, directly or through its Affiliates and designees, manufacture and maintain in inventory Generic Product to meet its forecasted requirements for the Commercial Launch in the Territory. Par may, in its discretion and at its expense, subcontract to a third party the manufacturing, packaging and/or labeling of the Generic Product, and at Par’s request, the ANDA Holder shall, at its own expense, file a supplement to the ANDA, based upon the information provided by Par, to obtain all FDA and other regulatory approval necessary for the manufacturing, packaging and/or labeling of the Generic Product by such subcontractor.

        (d) Following the First Commercial Sale, Par shall use commercially reasonable efforts to market and promote sales of the Generic Product in the Territory in a manner generally consistent with Par’s marketing and sales of its other similarly-situated generic products in the Territory; provided , that Par shall not advertise the Generic Product in any trade journal without Bradley’s prior consent.

        3.3 Packaging . (a) Par shall package and label the Generic Product for sale in the Territory with packaging and labels conforming with FDA requirements under the applicable ANDA and shall determine the contents of the labels and artwork on all finished labeled units, subject to the prior approval of Bradley, which approval shall not be unreasonably withheld, conditioned or delayed; provided , that Bradley may, in its sole discretion, withhold its approval for Par to market or sell the Generic Product in blister or unit-dose packaging. Par shall be responsible for the cost of the initial inventory of labels for the Generic Product.

        (b) Thereafter, each of Par and Bradley may make changes to the labels, product inserts and other labeling for the Generic Product, subject to the requirements of applicable laws and regulations and the prior approval of the other party hereto, which shall not be unreasonably withheld, conditioned or delayed; provided , that Bradley may, in its sole discretion, withhold its approval to sell the Generic Product in blister or unit-dose packaging. Any such changes shall be promptly submitted by the applicable ANDA Holder (with the cooperation of the other party hereto) to all applicable governmental agencies and other third parties responsible for the reviewing and/or approval of the labels, product inserts and other labeling, if required. Par will not implement packaging or labeling changes until the applicable ANDA Holder obtains any

required FDA approval or makes the required FDA notification, as applicable. The parties shall share equally the actual cost incurred by Par of any such labels, packaging and product inserts rendered obsolete due to a change precipitated by the FDA or other regulatory requirements. Subject to the foregoing, Par shall be responsible for the actual cost incurred by Par of any labels, product inserts and other labeling rendered obsolete due to a change directly precipitated by Par, and Bradley shall be responsible for the actual cost incurred by Par of any labels, product inserts and other labeling rendered obsolete due to a change directly precipitated by Bradley.

        (c) Subject to the foregoing, Par shall be responsible for selecting, maintaining, and enforcing trademarks, logos, slogans, designs, copyrights, emblems, insignias, trade dress and other protectable intellectual property rights (“ Trademarks and Copyrights ”) to be used in connection with the manufacture and sale of the Generic Product. Par shall own the entire right, title and interest in and to such Trademarks and Copyrights. Notwithstanding the foregoing, Par shall not knowingly adopt or use any Trademarks and Copyrights owned by Bradley and used by Bradley in connection with the manufacture and sale of the Branded Product. Bradley shall not use the Trademarks and Copyrights of Par without the prior written authorization of Par.

         4. FINANCIAL TERMS.

        4.1 Cost of Tablet and Capsule Imprint Change . The costs and expenses incurred by Par or its Affiliates in the performance of its obligations set forth in Section 3.1 hereof shall be borne solely by Par, except that Par and Bradley shall each bear one-half of the cost of tooling associated with the manufacture of the Generic Product. Bradley shall promptly pay Par upon Par’s submission of any invoice detailing such costs and expenses.

        4.2 Cost of Obsolete Inventory . Schedule 4.2 hereto sets forth the parties’ forecasted requirements of the Generic Product for the Commercial Launch (the “ Launch Quantities ”). Par shall use commercially reasonable efforts, after completing its obligations under Section 3.1 hereof, to manufacture and maintain in inventory the Launch Quantities in preparation for the Commercial Launch. Par and Bradley from time to time may amend the volume of Launch Quantities set forth on Schedule 4.2 by mutual written agreement. Bradley shall be responsible for Par’s Cost of Goods associated with any portion of the Launch Quantities that constitutes Obsolete Inventory. Bradley shall promptly pay Par upon remittance of an invoice detailing such costs. Such invoicing shall be in accordance with Par’s policy and practice in expensing obsolete inventory. Except as set forth herein, Bradley shall not be responsible for reimbursing Par for the cost of Obsolete Inventory.

        4.3 Net Profit Split . Par shall pay to Bradley an amount equal to 50% of the Net Profit, and Par shall retain an amount equal to 50% of the Net Profit (such allocation of Net Profit being referred to herein the “ Net Profit Split ”). Par shall pay Bradley’s share of the Net Profit Split to Bradley quarterly, within forty-five (45) days after the close each calendar quarter, accompanied by a reasonably-detailed calculation of such Net Profit Split. Par shall keep true and accurate books of account and shall keep and maintain all records and documents necessary for Bradley to ascertain its share of the Net Profit Split due under this Agreement.

        4.4 Late Payments . In the event of a late payment under this Article 4, the payor shall pay to the payee interest calculated on a daily basis on the overdue payment from the

date such payment was due to the date such payment is received by the payee at a rate of 1.0% per calendar month.

        4.5 Change in Circumstances . If, at any time during the Term following the First Commercial Sale, either party’s share of the Net Profit Split is less than (a) five (5%) percent of Net Sales over the course of any two (2) consecutive calendar years (not including any partial calendar year) or (b) $500,000 in any full calendar year; then, upon written notice by either party to the other, the parties shall in good faith attempt to negotiate (i) early termination of the Agreement or (ii) a sublicense to a third party of the distribution and marketing of the Generic Product in the Territory.

         5. CERTAIN UNDERTAKINGS

        5.1 Generic Product Complaints and Adverse Drug Experiences . Par shall be responsible for handling all Generic Product complaints and for notifying Bradley within thirty (30) days of receipt of any such complaint where such notification is required by FDA regulation. Par shall notify Bradley of any report of serious and unexpected adverse drug experience concerning the Generic Product within five (5) business days of its receipt of the report, or earlier if required by applicable law and regulations and so requested by Bradley, and provide Bradley with information as required by applicable law and regulations and so requested by Bradley in order for Bradley to comply with the post-marketing reporting requirements in accordance with 21 C.F.R. § 314.80 and 21 C.F.R. § 314.81.

        5.2 Generic Product Recall . (a) In the event of any recall or seizure of any Generic Product, Bradley shall be responsible for one-half, and Par shall be responsible for one-half, of the aggregate transportation costs, taxes, freight insurance, handling and reasonable and verifiable out-of-pocket costs incurred in respect of such recalled or seized Generic Product (collectively, the “ Recall Expenses ”); provided , that, (i) in the event and to the extent that any recall or seizure of any Generic Product arises out of any improper act or omission by Par, its Affiliates or any third party subcontractor engaged by Par, Par shall be responsible (as between Bradley and Par) for the Recall Expenses associated with such recall or seized Generic Product, and (ii) if, and after such time as, Bradley becomes the ANDA Holder of the applicable ANDA, in the event and to the extent that any recall or seizure of any Generic Product arises out of any improper act or omission by Bradley, its Affiliates or any third party subcontractor engaged by Bradley, Bradley shall be responsible (as between Par and Bradley) for the Recall Expenses associated with such recall or seized Generic Product.

        (b) For purposes of this Section 5.2, “recall” means (i) any action by Par, Bradley or any Affiliate of either to recover title to or possession of any Generic Product sold or shipped (including, but not limited to, market withdrawal) and/or (ii) any decision by Par not to sell or ship Generic Product to third parties that would have been subject to recall if it had been sold or shipped, in each case taken in the good faith belief that such action was appropriate under the circumstances. For purposes of this Section 5.2, "seizure” means any action by any governmental agency to detain or destroy any Generic Product.

        (c) Par shall control all recall activities, and Bradley shall cooperate with Par and provide such assistance as Par reasonably requests with respect thereto. Par and Bradley shall

keep the other fully informed in writing of any notification or other information, whether received directly or indirectly, that could reasonably be expected to (i) affect the safety or effectiveness of the Generic Product, (ii) result in liability issues or otherwise necessitate recall action on the part of either party or (iii) result in recall or seizure of any Generic Product. Par shall be responsible, in its good-faith discretion, for determining whether or not such circumstances necessitate a recall of the Generic Product and shall carry out any recall activities that it deems appropriate with respect thereto; provided , that, if Par determines not to undertake a recall and Bradley reasonably believes that a recall is required under applicable law, then Bradley may undertake and carry out such recall. Par and Bradley shall reasonably cooperate with each other in carrying out any such recall or seizure. The applicable ANDA Holder will be responsible fo