Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended. Confidential Portions are marked: [***] SECOND AMENDMENT TO GENERIC WHOLESALE SERVICE AGREEMENT BY AND BETWEEN ANIP ACQUISITION COMPANY d/b/a AM PHARMACEUTICALS INC AND CARDINAL HEALTH*

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

GENERIC WHOLESALE SERVICE AGREEMENT

This Agreement is made as of May 1, 2006 (the “Effective Date”), between Cardinal Health (“Cardinal”)* and ANI Pharmaceuticals, Inc (“Supplier”).  Supplier and Cardinal hereby agree as follows:

1.                                      General Terms and Conditions.  Supplier hereby appoints Cardinal as a non-exclusive, authorized distributor of all generic pharmaceutical products manufactured and/or marketed by Supplier (collectively, the “Products”), and Cardinal hereby accepts that appointment on the terms and subject to the conditions described in this Agreement, as further described on Exhibit A.

2.                                      Rebates, Discounts and Service Fees.  Supplier will pay Cardinal rebates, discounts and Service Fees as described on Exhibit B and Exhibit C.  Cardinal will invoice Supplier monthly for the amount of all Service Fees earned by Cardinal, with exception of off-invoice discounts already applied by Supplier, Supplier will cause Cardinal to receive payment in full on all such invoices no later than 30 days following the date of Cardinal’s invoice.  Supplier and Cardinal will work together in good faith to resolve any discrepancies related to the nature or amount of a rebate, discount or Service Fee invoice that are raised within 60 days of the date of the applicable invoice.

3.                                      Term and Termination.  The initial term of this Agreement will begin on the Effective Date and will continue until the two-year anniversary of the Commencement Date (the “Initial Term”).  At the expiration of the Initial Term, this Agreement will renew automatically for successive one-year periods upon the same terms and conditions, unless or until either party provides written notice of non-renewal to the other party at least 90 days prior to the end of the then-current term.  Notwithstanding the foregoing, either party may effect an early termination of this Agreement upon the default of a material provision of this Agreement by the other party and that party’s failure to cure such default within 20 days following written notice from the nondefaulting party.  Any reference in this Agreement to the “term of this Agreement” will include the Initial Term and any renewal periods.

4.                                      Miscellaneous.

a.                                      Relationship of the Parties.  The relationship among the parties is and will be that of independent contractors.  This Agreement does not establish or create a partnership or joint venture among the parties.

b.                                      Notices.  Any notice or other communication required to be given to any party under this Agreement will be in writing and will be deemed given when delivered to the other party at its address set forth below, by Federal Express.  Airborne, or any other similar express delivery service.  Any party may change its address for notices under this Agreement by giving the other party written notice of such change.

c.                                       Governing Law.  All questions concerning the validity or meaning of this Agreement or relating to the rights and obligations of the parties with respect to performance under this Agreement will be construed and resolved under the laws of the State of Ohio.  The parties designate the United States District Court for the Southern District of Ohio as the court of proper jurisdiction and venue for any actions or proceedings relating to this Agreement; irrevocably consent to such designation, jurisdiction, and venue, and waive any objections or defenses relating to jurisdiction or venue with respect to any actions or proceedings initiated in such court.

7131 Ambassador Road, Suite 150, Woodlawn, MD 21244

Phone ###-###-#### • Toll-Free ###-###-#### • Fax ###-###-####

3600 25th Avenue, Gulfport, MS 39501 • Phone ###-###-#### • Fax ###-###-####

210 Main Street West, Baudette, MN 56623 • Phone ###-###-#### • Fax ###-###-####

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

d.                                      Severability.  The intention of the parties is to comply fully with all laws and public policies, and this Agreement will be construed consistently with all laws and public policies to the extent possible.  If and to the extent that any court of competent jurisdiction determines that it is impossible to construe any provision of this Agreement consistently with any law or public policy and consequently holds that provision to be invalid, such holding will in no way affect the validity of the other provisions of this Agreement, which will remain in full force and effect.

e.                                       Complete Agreement; Amendment.  All of the schedules attached hereto are incorporated herein by reference.  This Agreement contains the entire agreement between the parties and supersedes all prior or contemporaneous discussions, negotiations, representations, warranties, or agreements relating to the subject matter of this Agreement, including without limitation any previous wholesale distribution agreement entered into between Supplier and any of the individual companies comprising Cardinal.  No changes to this Agreement will be made or be binding on either party unless made in writing and signed by each party.

f.                                        No Waiver.  The failure of either party to enforce any provision of this Agreement will not be considered a waiver of any future right to enforce such provision.

g.                                       Assignment.  Neither party will have the right to assign this Agreement to any third party without the prior written consent of the other party; provided, however, that Cardinal will be permitted to assign this Agreement to any subsidiary or affiliate of Cardinal Health, Inc.  Any generic pharmaceutical product Supplier acquires after the Effective Date that is already subject to a pre-existing agreement with Cardinal will be excluded from this Agreement and will continue to be subject to the terms of the pre-existing agreement whether the acquired product is sold under the original label and NDC number or Supplier’s label and NDC number, unless the parties agree otherwise in writing.  In addition, any of Supplier’s generic pharmaceutical products that are subject to this Agreement will continue to be subject to and sold under the terms of this Agreement exclusively, whether such Product is sold under Supplier’s original label and NDC number or a different manufacturer’s label and NDC number.

h.                                      Signature Authority.  Each signatory to this Agreement represents and warrants to the other that he or she has signature authority and is empowered on behalf of his or her respective party or execute this Agreement.

*The term “Cardinal Health” or “Cardinal” will include the following affiliated operating companies; Cardinal Health 110, Inc.; Cardinal Health 106, Inc.; Cardinal Health 103, Inc.; Cardinal Health 100, Inc.;

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

Cardinal Health 104, LP.; Cardinal Health 107, Inc.; Cardinal Health 3, Inc. and any other subsidiary of Cardinal Health, Inc., an Ohio corporation (“CHI”), as may be designated by CHI.

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

EXHIBIT A
GENERAL TERMS AND CONDITIONS

1.                                      Invoice Price Outlines.  If at any time during the term of this Agreement, the Invoice Price for any Product is reduced, then Supplier will issue a credit to Cardinal in an amount equal to the difference between (a) the value for Cardinal’s then-current inventory of that Product as of the later of (i) the date Cardinal acquired that Product or (ii) the date of Supplier’s last effective price change for the Product for which Cardinal received a Moor stock adjustment, and (h) the value of Cardinal’s then-current inventory of that Product, determined using the reduced Invoice Price for all such inventory (the “Floor Stock Adjustment”), for purposes of this section, “Cardinal’s then-current inventory” will include all Products held by Cardinal’s distribution centers, all Products that are consigned by Cardinal and all Product “in transit” to or from such distribution centers or customer stoics on the effective date of such Invoice Price decrease.  Cardinal will notify Supplier of the amount of any credit due pursuant to this section, along with supporting documentation, and will apply a debit memo at the time such notice is given to Supplier.  Except as otherwise provided in this Agreement, Supplier will give Cardinal written notice at least twenty-four hours prior to the effective date of an increase or decrease in the Invoice Price for any Product.  Throughout this Agreement, term “Invoice Price” means the Cardinal’s wholesale acquisition cost from Supplier without reduction for cash or off-invoice discounts or other rebates.  Supplier will accept purchase orders at the Invoice Price in effect on the day the order is submitted by Cardinal.

2.                                      Terms of Sale and Shipment.  As an authorized distributor, Cardinal may purchase such quantities of the Products as Cardinal deems necessary to fill its customers’ orders from time to time and Supplier agrees to sell the Products to Cardinal.  Unless otherwise agreed by both parties, all orders for the Products will be invoiced by Supplier on the date shipped.  Cardinal will have no obligation to accept automatic shipments of any Product or maintain any particular level of inventory of any Product.  Supplier will sell each Product to Cardinal at a price no higher than the Invoice Price for such Product in effect on the date of Cardinal’s order and deliver the Products to those distribution centers specified in Cardinal’s order or such other locations as may be agreed upon by the parties in the case of drop shipment orders, in either such case, freight prepaid.  Title and risk of loss to the Products will remain with Supplier until shipment is received at the destination specified by Cardinal.

3.                                      Service Level.  Suppliers service level to Cardinal (as a percentage) will be no less than its service level to any other customer.  Supplier will ship Products with not less than fourteen (14) months’ shelf life remaining, unless the Product is manufactured with a less shelf life, in which case such Product will he shipped per Supplier’s (or the manufacturer’s) guidelines.  Supplier will ship purchase orders within its routine average lead times, which will be 10 days or less from the date Cardinal’s purchase order is placed (“Routine Average Lead Times”).  Supplier will provide Cardinal with accurate backorder information weekly.  If Supplier cannot ship the Products within its Routine Average Lead Times, Supplier will provide Cardinal with shipping schedules describing when Supplier will ship each purchase order, which will be within [***] of the date of Cardinal’s order (each, a “Shipping Schedule”).  Supplier will ship Products ordered by Cardinal pursuant to such Shipping Schedules, at the price as of the date of Cardinal’s purchase order or the then-current price, whichever is lower.  If Supplier fails to ship Cardinal’s orders in accordance with each Shipping Schedule and within [***] of the date of Cardinal’s order.  Supplier will pay Cardinal a service level credit equal to the Adjusted Service Level Shortfall multiplied by [***] (the “Service Level Credit”).  The Adjusted Service Level Shortfall will be calculated monthly as follows:

(i)                                     Service Level Shortfall = (Total Orders at Invoice Price) (Total Receipts at Invoice Price)

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

(ii)                                  Adjusted Service Level Shortfall = (Service Level Shortfall) (Service Level Adjustments)

(iii)                               Service Level Adjustments = free good orders at Invoice Price, Products discontinued by Supplier for all of Supplier’s customers, and Products that are not shipped due to an Event of Force Majeure.

[***]

An “Event of Force Majeure” means a natural disaster, riots, tires, war, embargoes, or failure of power or gas necessary in production that directly impacts Supplier’s ability to manufacture and/or ship a particular Product.

Notwithstanding the foregoing, Supplier remains obligated to ship Cardinal’s orders pursuant to a revised Shipping Schedule to he mutually determined by the parties.  Cardinal may replace a Product in the primary position on its Preferred Programs if a Product is listed on a backorder report and/or Supplier has not satisfied Cardinal’s orders for such Product.

Whether or not Supplier has satisfied the Service Level, for any Product that Supplier is unable to supply to Cardinal, Cardinal will be entitled to an amount equal to the difference between the price at which Cardinal’s customers purchase Products from a secondary generic supplier through Cardinal as a result of Supplier’s failure to supply the Products and the contract price Supplier would have charged Cardinal’s customers for such Product if Supplier had been able to supply such Product (the “Reprocurement Amount”), Cardinal may take any action it deems appropriate to provide its customers with an alternative product.  Cardinal will use reasonable efforts to minimize the price at which its customers purchase Products from a secondary generic supplier.  The Reprocurement Amount will not apply if the Product is on the Preferred Source B or Generic Alliance B programs.

4.                                      Price Protection (Contract Price Increases).  If Supplier increases the contract price of any Preferred Product then Supplier will issue to Cardinal a [***].  The credit will be paid within [***] of the date of Cardinal’s invoice.  In order for Cardinal to [***], Supplier will give Cardinal [***] of the effective date of the increase.

5.                                      Price Protection (Contract Price Decreases).  With respect to generic Products that have not been previously manufactured or marketed (i.e., new launches).  Supplier will price protect Cardinal’s customers for thirty days following the addition of each Product to the Preferred Programs.  Supplier will pay Cardinal the difference between the contract price of such Preferred Product and the then-current market price, multiplied by the number of units of such Preferred Product sold by Cardinal to its customers.  With respect to customers that hold Cardinal’s inventory on consignment, if the contract price for a Product decreases at any time, Supplier will issue to Cardinal a credit memo equal lo the difference between the higher contract price and the decreased contract price, multiplied by the number of units of Preferred Product sold by Cardinal to its customers and is not yet dispensed by the customer to the patient as of the date of the decrease.

6.                                      Non-Compete.  Supplier agrees that it will not, either directly or indirectly (including through an affiliate) solicit, attempt to induce, cause or facilitate any of Cardinal’s customers to terminate or change its relationship with Cardinal with respect to purchasing generic products, or otherwise interfere with any relationship between Cardinal and any of Cardinal’s customers.  This provision applies during the period in which the respective customer purchases generics through any of Cardinal’s GenericSOURCE programs and for 6 months thereafter.  Supplier agrees that the duration and scope of this provision are reasonable.

7.                                      Pricing Agencies; Medicaid formularies.  Supplier recognizes the importance of timely updates to First Data Bank and similar pricing agencies  (“Pricing Agencies”)  and agrees that it will provide all information necessary to ensure that all Products are: reimbursable by Third parties and Senior Pharmaceutical Assistance Programs (“SPAPs”).  Products manufactured and/or distributed by Supplier, will be kept up-to-date with Pricing Agencies on a regular basis.  Supplier will register all Products with the Centers for Medicare and Medicaid Services (“CMS”) and

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

file supplementary applications as required by certain states so that all Products may be reimbursed under all Medicaid programs and SPAPs.  Supplier will lake all steps necessary to maintain consistent pharmacy reimbursement coverage of all Products on all state Medicaid formularies and SPAPs.  If at any time a Product is the sole Product eligible for reimbursement under a Medicaid formulary and such Product is not in the primary position on the Preferred Programs.  Supplier will provide Cardinal with competitive contract pricing for Cardinal’s customers in the applicable state

8.                                      New Product Introductions.  Supplier will provide Cardinal with all documentation requested by Cardinal to set up a new Product in its system, including but not limited to, HDMA forms, material data safely sheets, and package, inserts.

9.                                      Debit Balance; Setoff Right.  Supplier will provide Cardinal with financial statements upon execution of this Agreement and at least annually upon Cardinal’s request.  In the event that Supplier is in a debit position with Cardinal, Cardinal reserves the right to request payment by alternative means (including, but not limited to, inventory and/or cash payments).  Supplier will then cause Cardinal to receive payment in full no later than 30 days following such a written request.  Cardinal returns the right to withhold payments, set off amounts owed to Supplier against amounts owed to Cardinal, request a chargeback advance, and/or cease its purchase relationship with Supplier if Cardinal does not receive payment for amounts owed to it under this Agreement or based upon credit or other considerations deemed relevant by Cardinal, With respect to Cardinal’s right of set off.  Cardinal and its affiliates, parent or related entities, collectively or individually, may exercise a right of set off against any and all amounts clue Supplier, without in any way limiting its rights under law or in equity.  For purposes of this section.  Cardinal, its affiliates, parent or related entities will be deemed to be a single creditor.

10.                               Returned Goods and Recalls.  [***]

11.                               Contract Administration and Chargeback Procedures.  Cardinal may administer contracts between Supplier and customers of Cardinal pursuant to which Supplier and such customers have established prices at which the customer may purchase certain Products, Cardinal’s Standard Chargeback Policy (The “Chargeback Policy”) will govern the administration of all contracts.

12.                               Confidential Information.  In connection with the ongoing relationship between Supplier and Cardinal, each party may gain access to proprietary information of the other which may be considered confidential by the party providing such information, and each party will use the same care to prevent disclosure, publication, or dissemination to any Third party of the other party’s confidential information as is used to protect its own confidential information, but not less reasonable care However, information generated, compiled or stored by Cardinal reflecting the purchase and resale of Products to its customers does not constitute the confidential information of Supplier, and Cardinal will be entitled to utilize all such information in any manner deemed appropriate by it  Supplier understands and agrees that Cardinal may, in its sole discretion, elect to sell warehouse withdrawals, sales, and other data to IMS/DDD and/or other Third parties without contribution to Supplier.

13.                               Warranty and Indemnification.  Supplier hereby warrants that the Products are and will be manufactured and delivered to Cardinal in conformity with the Federal Food, Drug and Cosmetic Act, as amended, and all other applicable laws, rules, and regulations.  Supplier will defend, indemnify, and hold harmless Cardinal and its affiliates, customers, directors, officers, employees and representatives from and against any and all claims, losses, damages, costs, and expenses (including without limitation reasonable attorneys’ fees) arising directly or indirectly out of: (a) the fraud, misrepresentation, intentional misconduct, omission or negligence of Supplier; (b) the manufacture, marketing, testing, shipping, sale, possession or use of the Products (excluding any claim, liability, loss, damage, cost or expense shown to be solely attributable to Cardinal’s negligence in handling such Products): (c) “class of trade” pricing, if any, maintained by Supplier from and after the effective date of this

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

Agreement, including without limitation those arising out of Cardinal’s administration of Supplier Contracts:  and  (d)  any intellectual properly infringement actions (including patent, trademark, service mark, copyright trade dress, trade secret and other proprietary rights) brought by a third party in connection with Cardinal’s distribution of Products hereunder.  The warranty and indemnification provisions of this section will survive any termination or expiration of this Agreement.

14.                               Insurance.  During the term of this Agreement and thereafter as may be necessary to cover claims associated with Products purchased by Cardinal (whether before, during or after such term), Supplier will obtain, pay for, and keep in full force and effect Product—Completed Operations Liability insurance with a per occurrence limit of not less than [***], with one or more insurance carriers with an AM Best Rating of at least A-, VII or its equivalent.  In the event that these insurance policies are written on a claims-made basis, then the policy(ies) will be maintained during the entire period of this Agreement and for a period of not less than five (5) years following the termination or expiration of this Agreement.  Supplier will deliver to Cardinal certificates evidencing the existence and continuation of such insurance at the execution of this Agreement and upon Supplier’s periodic renewal of such policy with the following language:  “Cardinal Health, Inc. and its subsidiaries and affiliates are named as additional insureds and the insurance evidenced by this certificate will be considered primary and non-contributing to any Cardinal Health insurance.”  Such insurance will include a provision for at least thirty (30) days prior written notice to Cardinal in the event of cancellation or material reduction of coverage.

15.                               Compliance with Laws.  Each party will comply with all federal, state and local laws and regulations applicable to its operations, including but not limited to, those dealing with employment opportunity and affirmative action including Executive Order 11246 (Equal Opportunity), 38 U.S.C. § 4212(a) (Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era), 29 U.S.C. § 793 (Affirmative Action for Workers with Disabilities), and 42 U.S.C. §1320a-7b (Anti- Kickback Statute) and any amendment and applicable regulations pertaining thereto.  In addition, Supplier will comply with all terms of 48 C.F.R. § 52.244-6 (Subcontracts for Commercial Items and Commercial Components) (including the requirement of including this provision in subcontracts awarded under this contract), 15 U.S.C. § 637 (d) (2) and (3) (Utilization of Small Business Concerns), and such provision is hereby incorporated into this Agreement as if fully set forth herein.  In accordance with the provisions of 48 C.F.R. § 52.209-6.  Supplier represents, warrants and certifies that neither it nor its principals was or is debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care-programs (as that term is defined in 42 U.S.C. 1320(a)-7b(f)) or convicted of a criminal offense related to the provision of health care items or services, but has not yet been debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care programs.  In the event that Supplier, or any of its principals, is debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care programs or convicted of a criminal offense related to the provision of health care items or services.  Supplier will notify Cardinal immediately.  In addition, Supplier represents and warrants that it complies with all federal, state, local and other applicable laws, regulations, conventions or treaties prohibiting any form of child labor or other exploitation of children in the manufacturing and delivery of Supplier’s products or services,

16.                               Audit and Inspection.  During the term of this Agreement, upon reasonable prior notice and during normal business hours either party will be entitled to audit and inspect those relevant records which are maintained by the other party in direct connection with its performance under this Agreement subject to the terms and conditions contained in the Chargeback Policy.

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

EXHIBIT B
SERVICE PEES, CASH DISCOUNT AND INITIAL STOCKING BILLBACKS

1. Services.  In consideration for the Service Fees, Cardinal will provide the following services (collectively, the “Services”):

a.                                      Storage, handling and distribution of generic produces manufactured and/or marketed by Supplier (collectively, the “Products”)

b.                                      Sophisticated ordering technology

c.                                       Daily consolidated deliveries 10 providers

d.                                      Emergency shipments 10 customers 24/7/365

e.                                       Consolidated accounts receivable management

f.                                        Contract and Chargeback administration

g.                                       Returns processing

h.                                      Customer Service support to customers

i.                                          Licensed, environmentally controlled, PDMA compliant, secure facilities

j.                                         Pedigree handling where required by law

k.                                      Other miscellaneous wholesaling and distribution services

Cardinal will not be required to provide any particular level of promotional or marketing activities with respect to or on behalf of any Product and will not be prohibited from providing the Services or any other customized promotional or marketing services with respect to any other products or on behalf of other suppliers,

2.                                      Service Fees.  In consideration for the Services, Supplier will pay Cardinal service fees as follows (the “Service fees’”):

a.                                      Base Service Fee.

Cardinal will be entitled to a Service fee of [***] % on its Net Purchases of Products under this Agreement, [***]

b.                                      Preferred Product Service Fee

Supplier agrees to provide Cardinal an additional .Service Fee equal to [***] for a total of [***] of the Net Purchases of Exclusive Preferred Products on Preferred Programs purchased by Cardinal under this Agreement.

Supplier agrees to provide Cardinal an additional Service Fee equal to [***] for a total of [***] of the Net Purchases of Multi-source Preferred Products on Preferred Programs purchased by Cardinal under this Agreement.

c.                                       Stand-Alone or Pass-Through Rebates

Each Cardinal customer that participates in any of Cardinal’s Alliance programs (each, an “Alliance Customer”) will continue to receive all incentives as negotiated on a stand-alone basis with Supplier prior to such customer’s participation in the applicable Alliance program, and upon Cardinal awarding Supplier a position on a Preferred Program.  Cardinal will specify to Supplier whether the rebate for Alliance Customers will be paid to Cardinal and passed through to the Alliance Customer, or paid directly to the Alliance Customer.  Cardinal will invoice Supplier monthly for the Pass-Through Rebates to be paid to Cardinal, and Supplier will pay such invoice

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

within 30 days following the date of Cardinal’s invoice.  All Alliance Customers added to the Alliance programs after the effective date of this Agreement will be entitled to receive stand alone performance incentives.  These incentives apply only to purchases of Preferred Products by Cardinal customers through an Alliance program.  These incentives are in addition to any and all incentives and rebates paid to Cardinal.

d.                                      Existing Inventory.  The Service Fees will be applied to on-hand inventory that Cardinal purchased from Supplier prior to the Effective Date, for example, if Cardinal has 60 days of inventory on-hand on the Effective Date, Supplier will pay a Base Service Fee and a Volume Service Fee with respect to such inventory, to compensate Cardinal for the Services it provided.

(i)                                     The term “Net Purchases” means the Invoice Price for a Product without reduction for Cash Discounts, Service Fees or other discounts or rebates multiplied by the total purchases of Product by Cardinal from Supplier less Floor Stock Adjustments, chargebacks and returns.  Only Product received by Cardinal will be included in the calculation of Net Purchases.

(ii)                                  The term “Preferred Programs” means any and all generic sourcing programs developed by Cardinal to promote generic products, and other similar programs developed by Cardinal from time to time.

(iv)                              The term “Preferred Product” means any Product included in a Preferred Program.

3.                                      Cash Discount.  Cardinal will be entitled to a cash discount equal to [***] for all invoices paid within [***] of Cardinal’s receipt of same (the “Cash Discount”).  The Cash Discount will be calculated based on Invoice Price.  Cardinal will still be entitled to the Cash Discount if Supplier is in a debit balance.  If, during the Initial Term.  Cardinal’s inventory exceeds 40 days of demand and payment is clue to Supplier within 30 days or less, Cardinal may extend its payment terms.

4.                                      Initial Stocking Billback.  Cardinal will be entitled to a minimum [***] on the initial purchase of (a) any Preferred Product added to any Preferred Product program, (b) any Product into a Cardinal distribution center that did not previously stock such Product, (c) any Product into a new Cardinal distribution center, and (d) additional Product to service a new Alliance Customer (each, an “Initial -Stocking Billback”).  Each Initial Stocking Billback will be calculated based on the applicable promotional allowance percentage (i.e., [***]) multiplied by the [***] for the applicable Product.  The Initial Stocking Billback will be based on Product ordered by Cardinal in its initial purchase order (one order per DC).

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Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended.  Confidential Portions are marked: [***]

EXHIBIT C

This Exhibit C is to be considered part of the GWSA between Cardinal and ANI Pharmaceuticals.

Cardinal will receive from ANI Pharmaceuticals [***].

Cardinal will not return any product(s) except for [***].  Cardinal must notify ANI Pharmaceuticals and ANI Pharmaceuticals will issue Return authorization instructions.

The Parties agree that if an overstock situation develops because, [***] the parties will cooperate to move the Product to other customers or return to ANI Pharmaceuticals for credit.  In such case, ANI Pharmaceuticals will issue a credit equal to the then-current Wholesale Acquisition Cost (WAC) less the Return Goods Allowance.

Cardinal will [***].

Supplier will [***] Cardinal for [***].

Both Parties agree to review the Return Goods and Recalls policy on the 1st anniversary, or as close to thereof, of the signed Agreement.

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