At Paddock Laboratories, we are challenged with the dynamics of ever evolving market trends and strategic evaluation of our long-term business goals. Consistency in our business ethics is something that will remain our number one value and priority through our continuous efforts. Outstanding customer service and high business standards make Paddock Laboratories, LLC. the "easy-to-do-business-with company". Here at Paddock, we take pride in the culture that we"ve cultivated. Our fair, friendly, and professional atmosphere encourages employees to succeed. As Paddock strives to become a performance-driven leader in our industry, employees must exhibit business behaviors and ethics that surpass the competition.

These Standards of Business Conduct and Ethics will serve as our reference and guide on our path to consistency. Embracing the standards and behaviors outlined in this manual will help us forge ahead and become an even more successful organization. I encourage you to read and embrace the standards outlined in this manual. If you have any questions or encounter any situation you feel should be further investigated, immediately contact your supervisor, Human Resources, or the V.P. of Compliance. We live and work in complicated times. In the end, our ethics and values will lead us to success and prosperity.

Thank you for your commitment to this important issue.

Michael J. Graves
President

The people of Paddock Laboratories, LLC. are dedicated to providing affordable, specialty pharmaceuticals to meet the ever-changing needs of our customers through commitment to innovation, excellence, integrity, and teamwork.

Throughout the more than 30 years of Paddock history, Paddock has continuously attempted to implement the highest ethical standards in its business practice, creating an inviolable foundation for building a respected social reputation of the Company. Today, Paddock reaffirms that observance of ethical business conduct wherever the Company does business must be the guiding principle for its employees throughout the world. This, together with all Company policies of general application (including these business conduct policies), applies to all employees of the Company.

It is the policy of the Company to prevent the occurrence of unethical or unlawful behavior, to halt any such behavior that may occur as soon as reasonably possible after its discovery and to discipline those who engage in such behavior, as well as individuals who fail to exercise appropriate supervision and oversight and thereby allow such behavior by their subordinates to go undetected.

Failure to comply with the standards contained in this Business Conduct Policy can have severe consequences for both the individuals involved and the Company. In addition to potentially damaging Paddock"s good name, trade and consumer relations and its business opportunities, conduct that violates the Business Conduct Policy may also violate Federal, state, and local laws. These violations can subject the individuals involved to prosecution, imprisonment and fines. The Company may also be subject to prosecution, fines and other penalties for the improper conduct of its employees. Also, violation of these policies could subject an employee to discipline up to and including termination of employment.

It is impossible to write a detailed code of conduct to fit every situation one might face in each of the countries in which the Company does business, but the subjects discussed herein exemplify the Company"s policies and should serve as guidelines for general business conduct.

Any type of harassment, including but not limited to, physical harassment, sexual harassment, harassment based on gender, sexual orientation, marital status, family obligations, race, national or social origin, religious or political belief, culture, age, physical ability, and any other harassment unacceptable for any social and business community, is contrary to Paddock"s core values.

Paddock has the continuing responsibility of developing and maintaining appropriate measures for the protection of the dignity of its employees. Paddock is committed to following applicable labor and employment laws.

One of Paddock"s highest ethical principles is to not tolerate any type of discrimination whether it is by gender, race, origin, religious or political belief, culture, age, physical ability, or any other characteristic. This commitment pertains to the entire personnel system: recruitment, hiring, promotions, training, discipline, layoffs, separation, compensation, benefits, and any other privileges, terms, and conditions of employment. This applies to all employees: full-time, part-time, and temporary.

Paddock promotes diversity at all levels of its organization, thus enhancing its creative potential.

Paddock"s career development policy ensures equal opportunity for every employee in his/her professional development. Recruitment is to be based solely on a person"s education, experience, knowledge, ad skills in relation to the company"s specific needs.

Paddock complies with Federal and state disability statutes and provides reasonable accommodations for qualified disabled employees and applicants for employment in accordance with these laws.

Behavior that is contrary to the above principles may result in undertaking appropriate corrective action and/or disciplinary action up to and including termination of employment, unless prohibited by applicable law.

If any employee has any information regarding violation of the above principles, he/she should report the incident and circumstance to his/her immediate manager, Director of Human Resources, who will arrange for it to be investigated impartially, confidentially, and promptly.

Paddock conducts pre-employment alcohol and drug testing and reserves the right to require any employee who is believed to be intoxicated or under the influence of a drug to submit to testing. Refusal to do so may result in disciplinary action up to and including termination of employment. No person may work, or report to work under the influence of alcohol or illegal drugs. Employees requiring assistance with a drug or alcohol program are encouraged to contact Human Resources.

All workers providing services to Paddock on Paddock"s premises, may not use, sell, or transfer alcohol or illegal drugs while working, or while operating equipment, Paddock or otherwise, while on Paddock property.

Unless otherwise agreed in writing and subject to any applicable national law, each Paddock employee is employed by the Company on an at-will basis. This means that employment is not guaranteed for any specific duration of time and the Company retains the right to terminate an individual"s employment with or without cause. No oral representations made by any Paddock officer or employee with respect to continued employment can alter this relationship.

The policies summarized herein are intended as guidelines only. All employees should be aware that these policies may be amended at any time without prior notice, and that depending upon the circumstances of a given situation, the Company"s actions may vary from the provisions contained herein. As such, the contents of this Business Conduct Policy do not constitute the terms of a contract of employment and do not affect in any manner the at-will status of all employees.

Paddock is committed to providing a work environment that strives to protect employee health and safety while complying with all regulatory requirements regarding health and safety.

At the same time, health and safety are important aspects of job performance. Employees have a responsibility to learn safety procedures applicable to their jobs and follow them. Policies and procedures exist with respect to our manufacturing facilities and employees who work in these environments are expected to attend training and to know and follow these policies and procedures.

It is Paddock"s policy to manage its business in ways that are sensitive to the environment. The Company will comply with all regulatory requirements regarding the protection of the environment.

Any Paddock employee who observes unsafe conduct that may violate health or safety requirements must report such conduct to their supervisor or manager, or to the EHS leader, the Director of Human Resources, or the V.P. of Compliance.

In business, every Paddock employee"s primary responsibility is to the Company. All employees must avoid creating or entering situations that conflict with that obligation. A conflict of interest may arise when an employee takes actions or as interests that compromise his or her loyalty to the Company or otherwise make it difficult to perform his or her duties and responsibilities to the Company objectively and effectively. Even the appearance of a conflict of interest can have a detrimental effect on both the Company and the employee.

To avoid a conflict of interest or the appearance of a conflict of interest,

• Employees must not hire or use family members or close personal friends as Paddock"s contractors, suppliers, or employees.
• Employees must not directly or indirectly, supervise or report to persons with whom you have a family or a close personal relationship.
• Employees must not use Company assets, including the Company"s time, name, information, equipment, or facilities, for unauthorized personal use without the written permission of management.
• Employees must not misuse information obtained in the course of employment with Paddock.
• Employees must not own, either directly or indirectly, a significant financial interest in any business that competes with or intends to compete with Paddock.
• Purchase orders placed must be or the exclusive benefit of the Company.
• Whenever practicable, competitive bidding should be used in the procurement of materials, supplies, equipment, and services.

Employees and members of an employee"s family must neither solicit not accept from suppliers, customers, or others dealing with the Company, money, gifts, honoraria, loans, fees, services, or entertainment of significant value.

When is it acceptable to give or receive such gifts? That is covered by the same principles of honesty and integrity that govern all actions of Paddock employees. A modest gift may be acceptable if the giver or receiver can answer "yes" to such questions as:

• Is it legal?
• Is it obvious and clearly of an advertising nature?
• Is this type of gift customary or reasonable given the situation and marketplace in which it"s being given?
• Is it reasonable in cost, quantity, and frequency?
• The gift given or received is not used to influence a business decision?
• Would the gift avoid creating an improper obligation, or the appearance of improper influence, to the giver or receiver?
• Would public scrutiny of this gift be unlikely to cause embarrassment to me or the Company?
• Cash is never an acceptable gift. Recommend a charity donation instead of accepting cash.
• Where a customer or potential customer notifies Paddock of a policy or preference to prohibit or limit gifts to the customer, Paddock will respect the customer"s policy or preference.

Paddock believes voting to be a right and a duty. Paddock encourages its employees to vote and be active in the political process. Employees must be aware; however, that state and Federal laws restrict use of corporate funds for local, state, and Federal elections. This is a complex and highly regulated area.

No employee shall dedicate regular working time to political purposes.

No employee shall use Company property, equipment, or facilities for any partisan political use.

No employee is authorized to make any direct or indirect political contributions of any kind on the Federal level in the name of the Company, or to use Company funds for this purpose.

On the state, county, and local levels, and in countries other than the United States where allowed by law, political contributions may be authorized on behalf of the Company only after the V.P. of Compliance, or Chief Financial Officer certify in writing that the Company complies with applicable law and the contribution is approved by the President and CEO.

Paddock places a high value on, and therefore goes to great lengths to protect, its property. This includes not only physical property, such as plant equipment and inventory, securities, cash, office equipment and supplies, and information systems, but its intellectual property as well. Intellectual property is proprietary information or data that belongs to the company, such as software, patents, trade secrets, formulas, marketing plans, and strategies and other business information and know-how.

All employees have the legal and ethical obligation to protect such company information, even after they leave Paddock employment. This means sharing it only with properly authorized people inside or outside of the Company.

All Paddock employees are required to sign a Proprietary Information Agreement and Covenant Not to Compete. Under these agreements, employees are prohibited from using private company information for personal benefit or the benefit of people outside of the Company.

Employees should take every practicable step to preserve the Company"s confidential information. For example, employees should not discuss material information in lobbies, hallways, airplanes, taxicabs, restaurants, or anyplace where they can be overheard.

Under no circumstances are employees to provide confidential Company documents to any third party, without express consent of the CEO. This includes confidential Company documents relating to employees, customers, competitors, or suppliers of the Company.

The loyalty, integrity, and sound judgment of Paddock employees both on and off the job are essential to the protection of such information.

If you have confidential information about an employee, a former employee, or any other entity with which you were previously affiliated, you are expected to abide by this policy and your obligation to keep such information confidential.

Treating information ethically also means Paddock will respect the information or intellectual property of others and will not knowingly infringe upon it or gather and use such information illegally.

Paddock products will be sold solely on the basis of price, quality, and services. The Company"s advertising should always be truthful and all claims must be factually supported. Employees should not engage in deceptive or questionable advertising strategies. The company"s labels and advertisements should not be marketed in ways which would easily confuse them with those of our competitors.

These Standards require all employees to record information accurately and honestly, whether it is time reporting, financial statements, expense reports, research test results, production and quality data, and any other Company information. These principles apply when complying with internal recordkeeping policies, as well as the numerous local, state, and federal laws governing Paddock"s recordkeeping and reporting.

All employees are obligated to protect Paddock"s assets and may not use them for personal reasons without express written permission from the President and CEO. This includes but is not limited to the use of office supplies and equipment and company buildings.

The objective of antitrust laws is to protect and foster competition.

• Under Antitrust laws certain specific activities have been clearly identified as violations such as:
  • Agreeing with competitors to fix prices
  • Fixing production levels or quotas
  • Boycotting third parties
  • Allocating territories in which to sell products
  • Allocating customers to whom products are sold
  • Matters related to competitive bids
• It is Paddock"s policy that no employee discusses such matters with competitors or participates in, or attends any meeting where such matters are discussed by competitors.
• Violation of Antitrust laws can result in heavy civil fines and criminal penalties at both the corporate and individual levels, including treble damaged actions by any injured private party.

Under the Federal Trade Commission Act, "unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are declared unlawful."

The prohibition broadly covers misrepresentations of all sorts that are made in connection with sales, whether orally or in writing, and a number of other types of unfair acts or practices. The range of practices prohibited covers anything the Commission finds to be deceptive, unfair or unethical and includes such activities as:

• false or misleading advertising
• the use of lotteries in the sale of products
• bribery of employees, competitors or customers
• unfair disparagement of competitor"s products
• stealing trade secrets or customer lists

This is not an exhaustive list, but is merely intended to indicate the broad reach of the statute.

Paddock strives to build long-term relationships with its suppliers, and award business based on their ability to meet Paddock"s requirements, the vendor"s reputations for service, integrity and compliance, and their high standards for quality, price, delivery, safety, and value.

Employees involved in importing or exporting materials, technology, or personal information need to be knowledgeable, and adhere to the policies and guidelines affecting imports and exports.

If someone outside the Company, such as the news media, asks you questions, either directly or through another, do no attempt to answer. Obtain the name of the person making the inquiry and immediately notify the V.P. of Compliance. All inquiries will be dealt with appropriately and consistently, and with the full agreement of the President and CEO.

Full disclosure to physicians is required. As a manufacturer of drug products, Paddock has long followed the policy of keeping the medical profession fully informed of the uses, safety, contraindications and side effects of its products, and where appropriate, of operations requirements and characteristics. This policy has been implemented by the use of package inserts, and the dissemination of educational or promotional materials.

Compliance, first and foremost, is the individual responsibility of every employee. Every employee of the Company has the personal responsibility to know and understand these Standards of Business Conduct and Ethics and other policies of the Company relevant to his or her job or position. The Company fosters an environment in which integrity issues and concerns may be raised and discussed with supervisors, Human Resources, or the V.P. of Compliance without the fear of retribution.

It is the policy of Paddock to encourage and support open communications at all levels of the business, and permit an environment for all employees to voice any concerns about business conduct, ethical standards, or quality of work to senior personnel of the Company. Employees are encouraged to first attempt to resolve questions, concerns, and other issues through their immediate supervisor. Most issues can be resolved within the department when there is openness, accessibility, and discussion. Management is responsible for supporting this policy and maintaining an "open door" for all their direct report employees, as well as any employee who may reach out to them. If the employee feels uncomfortable discussing any issue with his or her immediate supervisor, the issue should be brought to the attention of the V.P. of Compliance or the Director of Human Resources.

Paddock will not retaliate against any employee who in good faith makes a report of a violation of these Standards of Business Conduct and Ethics that he or she believed to be a valid concern. The Company will act appropriately to discipline any employee who threatens or commits any reprisal towards an employee who makes such a report.

These Standards of Business Conduct and Ethics are intended to be consistent with Paddock"s corporate policies. Those corporate policies may provide greater detail than is provided by these Standards, or in some instances, the Policy Manual may provide additional policies not covered by these Standards. As stated previously regarding these Standards, employees should be aware that any violations of the Policy Manual may result in disciplinary action, up to and including termination.

It is expected that all employees, guided by the foregoing, will generally be able to make sound judgments as to ethical business conduct. Where is any doubt as to the proper course of action, the matter should be referred to the V.P. of Compliance or Director of H.R. All employees are responsible for knowing and abiding by the policies and procedures of the Company that apply to their jobs and to all employees generally.