EX-10.2






Exhibit 10.2



The confidential portions of this exhibit have been filed separately with the Securities and
Exchange Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of
the Securities Exchange Act of 1934, as amended. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY
***.




EXECUTION COPY




 




 




 




SUPPLY AGREEMENT




between




Noven Pharmaceuticals, Inc.




and




P&G Pharmaceuticals, Inc.




and




P&G Pharmaceuticals, S.A.R.L.




 




 




 




 









 





	 	 	 	 	 	 	 
	Article 1.

	 	Definitions

	 	 	1	 
	 
	 	 	 	 	 	 
	Article 2.

	 	Supply of Product

	 	 	10	 
	 
	 	 	 	 	 	 
	2.01

	 	Obligation
	 	 	10	 
	2.02

	 	Exclusivity of Supply
	 	 	11	 
	2.03

	 	Shelf Life
	 	 	11	 
	2.04

	 	Regulatory Compliance
	 	 	12	 
	2.05

	 	Child Labor and Forced Labor
	 	 	12	 
	2.06

	 	Shipment
	 	 	13	 
	2.07

	 	Environmental Standards
	 	 	15	 
	2.08

	 	Documentation
	 	 	15	 
	2.09

	 	Supply Of Materials
	 	 	15	 
	2.10

	 	Supply Assurance/Business Continuity Planning
	 	 	17	 
	2.11

	 	Funding for Purchase of Equipment
	 	 	17	 
	2.12

	 	Notification of Supply Issues
	 	 	19	 
	2.13

	 	Reporting Requirements
	 	 	19	 
	2.14

	 	Labeling and Packaging of Supplied Products
	 	 	19	 
	 
	 	 	 	 	 	 
	Article 3.

	 	Quality Control and Testing

	 	 	19	 
	 
	 	 	 	 	 	 
	3.01

	 	Quality Assurance Agreement
	 	 	19	 
	3.02

	 	Testing and Certificate of Analysis
	 	 	20	 
	3.03

	 	Preservation Samples/Retained Samples
	 	 	20	 
	3.04

	 	Quality Disputes; Acceptance and Return
	 	 	20	 
	3.05

	 	Stability Testing
	 	 	23	 
	3.06

	 	Customer Complaints
	 	 	23	 
	3.07

	 	Inquiries and Requests for Inspection
	 	 	24	 
	3.08

	 	Inspections
	 	 	24	 
	3.09

	 	Validations
	 	 	24	 
	3.10

	 	Cross Contamination Risk
	 	 	24	 
	3.11

	 	Quality Assurance Key Elements
	 	 	24	 
	 
	 	 	 	 	 	 
	Article 4.

	 	Forecasts and Ordering

	 	 	25	 
	 
	 	 	 	 	 	 
	4.01

	 	Forecasting
	 	 	25	 
	4.02

	 	Launch Order
	 	 	27	 
	4.03

	 	Firm Orders
	 	 	27	 
	4.04

	 	Batch Size
	 	 	27	 
	4.05

	 	Annual Installed Capacity
	 	 	29	 
	4.06

	 	Customer Service
	 	 	29	 
	4.07

	 	Shortfalls
	 	 	31	 
	4.08

	 	Failure to Deliver
	 	 	32	 
	4.09

	 	Notice of Delay
	 	 	32	 
	4.10

	 	Technical Assistance
	 	 	32	 
	4.11

	 	Site Level Execution Agreement
	 	 	32	 






ii









 






	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Article 5.

	 	Prices and Payment Terms

	 	 	33	 
	 
	 	 	 	 	 	 
	5.01

	 	Price
	 	 	33	 
	5.02

	 	Invoicing
	 	 	33	 
	5.03

	 	Payment Terms
	 	 	33	 
	5.04

	 	Adjustment Pursuant to Producer Price Index
	 	 	33	 
	5.05

	 	Adjustment for Low Volume
	 	 	34	 
	5.06

	 	Unprofitable Supply Terms
	 	 	35	 
	5.07

	 	Adjustment for Modification of Specifications
	 	 	36	 
	5.08

	 	Transfer Taxes
	 	 	39	 
	5.09

	 	Continuous Improvement
	 	 	40	 
	5.10

	 	Right to Audit
	 	 	40	 
	 
	 	 	 	 	 	 
	Article 6.

	 	Change Management

	 	 	42	 
	 
	 	 	 	 	 	 
	Article 7.

	 	Authorizations

	 	 	43	 
	 
	 	 	 	 	 	 
	Article 8.

	 	Liabilities

	 	 	43	 
	 
	 	 	 	 	 	 
	8.01

	 	Warranties; Disclaimer
	 	 	43	 
	8.02

	 	NOVEN Indemnity
	 	 	44	 
	8.03

	 	P&GP Indemnity
	 	 	44	 
	8.04

	 	Certain Limitations
	 	 	45	 
	8.05

	 	Disclaimer of Incidental Damages
	 	 	46	 
	8.06

	 	Product Recalls
	 	 	46	 
	8.07

	 	Notice and Opportunity to Defend
	 	 	46	 
	 
	 	 	 	 	 	 
	Article 9.

	 	Term and Termination

	 	 	47	 
	 
	 	 	 	 	 	 
	9.01

	 	Term
	 	 	47	 
	9.02

	 	Certain Termination Events
	 	 	47	 
	9.03

	 	Consequences of Termination
	 	 	50	 
	9.04

	 	Survival
	 	 	51	 
	 
	 	 	 	 	 	 
	Article 10.

	 	Confidentiality, Public, Announcements, Intellectual Property

	 	 	51	 
	 
	 	 	 	 	 	 
	10.01

	 	Confidentiality
	 	 	51	 
	10.02

	 	Public Announcements
	 	 	54	 
	10.03

	 	License to Products
	 	 	54	 
	 
	 	 	 	 	 	 
	Article 11.

	 	Alternative Suppliers

	 	 	55	 
	 
	 	 	 	 	 	 
	11.01

	 	Qualification of Alternative Suppliers
	 	 	55	 
	11.02

	 	Reasonable Assistance; Limited License
	 	 	56	 
	11.03

	 	Royalties
	 	 	58	 
	 
	 	 	 	 	 	 
	Article 12.

	 	Steering Committee

	 	 	58	 
	 
	 	 	 	 	 	 
	Article 13.

	 	General Provisions

	 	 	59	 
	 
	 	 	 	 	 	 
	13.01

	 	Force Majeure
	 	 	59	 
	13.02

	 	Notices
	 	 	60	 
	13.03

	 	Governing Law
	 	 	60	 
	13.04

	 	Non-Waiver of Rights
	 	 	60	 
	13.05

	 	Entire Agreement — Modifications
	 	 	61	 
	13.06

	 	Agreement Precedence
	 	 	61	 
	13.07

	 	Assignment
	 	 	61	 
	13.08

	 	Partial Invalidity
	 	 	62	 
	13.09

	 	Contractor Status
	 	 	62	 
	13.10

	 	Disputes
	 	 	63	 
	13.11

	 	Audits
	 	 	64	 
	13.12

	 	Time Periods
	 	 	64	 
	13.13.

	 	Expenses
	 	 	64	 
	13.14

	 	Binding Effect; No Third Party Beneficiaries
	 	 	65	 
	13.15

	 	Interpretation
	 	 	65	 
	13.16

	 	Counterparts
	 	 	65	 






iii









 





SUPPLY AGREEMENT




This Supply Agreement (together with the Schedules hereto, this “Agreement”) is entered into as of
this 14th day of August 2008 (the “Effective Date”), by and between:



SELLER: Noven Pharmaceuticals, Inc., a company organized and existing under the laws of Delaware,
with a place of business at 11960 SW 144th Street, Miami, FL 33186 (hereinafter
“NOVEN”); and



BUYER: Procter & Gamble Pharmaceuticals, Inc., a company organized and existing under the laws of
Ohio, with a place of business at One Procter and Gamble Plaza, Cincinnati, OH 45202 (hereinafter,
“P&GP Inc.”), and Procter & Gamble Pharmaceuticals, S.A.R.L., a company organized and existing
under the laws of Switzerland, with a place of business at 47, Route de Saint-Gorges 1213
Petit-Lancy 1, Switzerland (hereinafter “P&GP SARL” and, together with P&GP Inc., “P&GP”), on
behalf of themselves and their Affiliates.



Background





	0.01	 	P&GP intends to market and sell the Products (as defined herein) for use in human
prescription pharmaceuticals.
	 
	0.02	 	Subject to the terms and conditions hereof, the parties have agreed that NOVEN will
manufacture and supply such Products to P&GP for use and sale. The NOVEN manufacturing site
as of the date of this Agreement designated for manufacture of Products is the NOVEN address
above (11960 SW 144th Street, Miami, FL 33186).
	 
	0.03	 	NOVEN and P&GP are parties to the Development and License Agreement, dated as of June 30,
2008 (the “License Agreement”).






	Article 1. 	 	Definitions






	 	1.01	 	*** Batch” has the meaning set forth in Section 4.04(d).
	 
	 	1.02	 	“Action Plan” has the meaning set forth in Section 4.06(b).
	 
	 	1.03	 	“Additional Charges” has the meaning set forth in Section 4.04(c).




1









 






	 	1.04	 	“Additional Products” has the meaning set forth in the License Agreement.
	 
	 	1.05	 	“Affiliate” means, when used with respect to a Person, any other Person
directly or indirectly controlling, controlled by or under common control with the
subject Person. For purposes of this Agreement, “control” means the direct or
indirect ownership of over 50% of the outstanding voting securities of a Person or
the possession, direct or indirect, of the power to direct or cause the direction
of the management or policies of such Person whether through the ownership of
securities, contract or otherwise.
	 
	 	1.06	 	“Agreement” has the meaning set forth in the Preamble.
	 
	 	1.07	 	“Alternate Supplier” has the meaning set forth in Section 11.01.
	 
	 	1.08	 	“Annual Installed Capacity” has the meaning set forth in Section 4.05.
	 
	 	1.09	 	“Annual MA” has the meaning set forth in the Quality Assurance
Agreement.
	 
	 	1.10	 	“Applicable Law” means, with respect to any Person, any domestic or
foreign, federal, state or local statute, treaty, law, ordinance, rule, regulation,
administrative interpretation, order, writ, injunction, judicial decision, decree
or other requirement of any Governmental Authority applicable to such Person or any
of such Person’s respective properties, assets, officers, directors, employees,
consultants or agents (in connection with such officers’, directors’, employees’,
consultants’ or agents’ activities on behalf of such Person).
	 
	 	1.11	 	“Audited Party” and “Auditing Party” have the meanings set forth in
Section 5.10(a).
	 
	 	1.12	 	“Batch” means, as to each Product, the actual number of complete and
usable units of such Product yielded from a standard size kettle *** of raw
materials as determined by applicable Regulatory Authority validation requirements
and blended for production of such Product, it being understood and agreed that the
actual yield obtained by NOVEN from any such Batch will vary from time to time.
The estimated number of units of the T-Patch expected to be yielded from
each Batch produced thereof, as of the Effective Date, shall be as described
in Schedule 2 hereto, as such schedule may be amended, modified or otherwise
supplemented from time to time in accordance with the terms of this Agreement.




2









 






	 	1.13	 	“Business Continuity Plan” has the meaning set forth in Section 2.10.
	 
	 	1.14	 	“Business Day” means a day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York; Miami, Florida or Cincinnati, Ohio
are authorized or required by law to close.
	 
	 	1.15	 	“cGMP” means (i) the current Good Manufacturing Practices as that term
is defined in 21 C.F.R. Parts 210 and 211, as amended from time to time, and
applicable guidance documents, and (ii) good manufacturing practices as required by
applicable regulations of any Regulatory Authority.
	 
	 	1.16	 	“Complaint Notice” has the meaning set forth in Section 3.04(a).
	 
	 	1.17	 	“Confidential Information” means all secret, confidential or
proprietary data, know-how and related information, including (i) all INDs, NDAs,
Regulatory Applications, Regulatory and Clinical Materials and related filings,
applications and data, the content of any unpublished patent applications,
operating methods and procedures, marketing, manufacturing, distribution and sales
methods and systems, sales figures, pricing policies and price lists and other
business information, (ii) all information disclosed or accessed by the parties
pursuant to the provisions of this Agreement or the other Transaction Documents,
(iii) information learned, observed or otherwise acquired through site visits and
discussions between NOVEN and P&GP at each other’s facilities, including plant
size, crew shifts, number of lines, product shipments, lab procedures, new product
development testing and manufacturing processes and (iv) the terms and conditions
of this Agreement and the other Transaction Documents.
	 
	 	1.18	 	“Damages” means all liabilities, demands, obligations, assessments,
judgments, levies, losses, fines, penalties, damages (including compensatory
damages),
costs and expenses, including reasonable attorneys’, accountants’,
investigators’, and experts’ fees and expenses, reasonably sustained or
incurred in connection with the defense or investigation of any Proceedings
(including any Proceedings to establish insurance coverage).




3









 






	 	1.19	 	“Development Agreement” has the meaning set forth in the License
Agreement.
	 
	 	1.20	 	“Disclosing Party” has the meaning set forth in Section 10.01(a).
	 
	 	1.21	 	“Discretionary Change” has the meaning set forth in Section 5.07(a).
	 
	 	1.22	 	“Effective Date” has the meaning set forth in the Preamble.
	 
	 	1.23	 	“FDA” means the United States Food and Drug Administration and any
successor agency thereto.
	 
	 	1.24	 	“Fixed Order Date” has the meaning set forth in Section 4.01(a).
	 
	 	1.25	 	“Fixed Zone” has the meaning set forth in Section 4.01(c).
	 
	 	1.26	 	“GAAP” means, as of any time of determination, accounting principles
generally accepted in the United States, as in effect at such time.
	 
	 	1.27	 	“Governmental Authority” means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental authority,
instrumentality, court, government or self-regulatory organization (including any
national or international securities exchange), commission, tribunal or
organization or any regulatory, administrative or other agency, or any political or
other subdivision, department or branch of any of the foregoing.
	 
	 	1.28	 	“Grace Period” has the meaning set forth in Section 5.05.
	 
	 	1.29	 	“Gross Margin” means, with respect to any Product and with respect to
any period of determination, (i) the aggregate Purchase Price actually received by
NOVEN for such Product during such period, less (ii) NOVEN’s aggregate,
fully allocated cost of Raw Materials, labor and manufacture of such Product
during such period, as determined in accordance with GAAP.




4









 






	 	1.30	 	“IND” means an Investigational New Drug Application, as defined in 21
C.F.R. § 312.3(b), filed by a Person with the FDA to obtain authorization to
develop, test and perform clinical trials of a product, together with any
amendments, correspondence or supplements thereto and incorporated therein.
	 
	 	1.31	 	“Indemnified Party” has the meaning set forth in Section 8.07.
	 
	 	1.32	 	“Indemnifying Party” has the meaning set forth in Section 8.07.
	 
	 	1.33	 	*** has the meaning set forth in the License Agreement.
	 
	 	1.34	 	“Label Changes” has the meaning set forth in Section 5.07(d).
	 
	 	1.35	 	“License Agreement” has the meaning set forth in the Recitals.
	 
	 	1.36	 	“Manufacturing Audit” has the meaning set forth the Quality Assurance
Agreement.
	 
	 	1.37	 	“Milestone Payments” has the meaning set forth in the License
Agreement.
	 
	 	1.38	 	“Monthly Targets” has the meaning set forth in Section 4.06(b).
	 
	 	1.39	 	“NDA” means a New Drug Application, as defined in 21 C.F.R. § 314,
filed by a Person with the FDA to obtain FDA approval of a new drug or therapy, as
the context indicates, together with any amendments, correspondence or supplements
thereto and incorporated therein.
	 
	 	1.40	 	“Net Outside Sales” has the meaning set forth in the License Agreement.
	 
	 	1.41	 	“NOVEN” has the meaning set forth in the Preamble.
	 
	 	1.42	 	“NOVEN Indemnitees” has the meaning set forth in Section 8.03.
	 
	 	1.43	 	“NOVEN Patents” has the meaning set forth in the License Agreement.
	 
	 	1.44	 	“NOVEN Transfer Taxes” has the meaning set forth in Section 5.08.




5









 






	 	1.45	 	“Other Required Change” has the meaning set forth in Section 5.07(c).
	 
	 	1.46	 	“P&GP” has the meaning set forth in the Preamble.
	 
	 	1.47	 	“P&GP Inc.” has the meaning set forth in the Preamble.
	 
	 	1.48	 	“P&GP SARL” has the meaning set forth in the Preamble.
	 
	 	1.49	 	“P&GP Transfer Taxes” has the meaning set forth in Section 5.08.
	 
	 	1.50	 	“Partial Batch Charges” has the meaning set forth in Section 4.04(c).
	 
	 	1.51	 	“Person” means an individual, a corporation, a general partnership, a
limited partnership, a limited liability company, a limited liability partnership,
an association, a trust or any other entity or organization, including a
Governmental Authority.
	 
	 	1.52	 	“Planning Horizon” has the meaning set forth in Section 4.01(d).
	 
	 	1.53	 	“PPI” has the meaning set forth in Section 5.04.
	 
	 	1.54	 	“Printed Matter” means all printed materials, including labeling and
package inserts, affixed to and/or packaged with any Products delivered to P&GP,
including any labeling or other printed matter required to be affixed to and/or
packaged with any of the Products by any Applicable Law or Regulatory Authority, as
well as any discretionary labeling or other printed matter designated by P&GP to be
affixed to and/or packaged with any of the Products.
	 
	 	1.55	 	“Proceedings” means governmental, judicial, administrative or
adversarial proceedings (public or private), litigation, suits, arbitration,
disputes, claims, causes of action or investigations.
	 
	 	1.56	 	“Product” or “Products” means, collectively, (i) the ***, (ii) the
T-Patch, (iii) any Additional Products that become “Products” for purposes of the
License Agreement, and (iv) samples and placebos of the foregoing. For purposes of
clarity, it is agreed that “Products” shall not include any clinical products
delivered by NOVEN to P&GP pursuant to the Development Agreement or the
License Agreement.




6









 






	 	1.57	 	“Purchase Order” has the meaning set forth in Section 4.03.
	 
	 	1.58	 	“Purchase Price” has the meaning set forth in Section 5.01.
	 
	 	1.59	 	“Quality Assurance Agreement” has the meaning set forth in Section 3.01.
	 
	 	1.60	 	“Quality Assurance Key Elements” or “QAKE” has the meaning set forth in
Section 3.11.
	 
	 	1.61	 	“Raw Materials” means, with respect to any Product, all active
ingredients, starting materials, excipients and other ingredients used in the
manufacture of such Product, as well as all packaging, labeling and other printed
matter included in such Product.
	 
	 	1.62	 	“Receiving Party” has the meaning set forth in Section 10.01(a).
	 
	 	1.63	 	“Required Change” has the meaning set forth in Section 5.07(b).
	 
	 	1.64	 	“Regulatory and Clinical Materials” means all documents, supporting
materials and other materials relating to the Regulatory Applications, any
Regulatory Approval or other matter required to be submitted to any Regulatory
Authority in relation to the Products, including the INDs and NDAs for the Products
and documents, supporting materials and other materials relating to any drug master
file, investigators’ brochures, clinical studies, pre-clinical studies, safety
data, adverse event reports, questionnaires, consultants reports, correspondence
(including correspondence with any Regulatory Authority), batch reports, protocols,
specifications, quality assurance, quality control, customer queries and any
responses thereto, and any compilation or evaluations thereof, and question and
answer scripts.




7









 






	 	1.65	 	“Regulatory Applications” means the applications submitted by P&GP or
its Related Parties to Regulatory Authorities seeking authorization or approval for
the development, manufacture, testing, storage, transport, marketing,
advertisement, promotion, sale, use, distribution or other disposal of the
Products in all or any portion of the Territory, including the INDs and the
NDAs for the Products.
	 
	 	1.66	 	“Regulatory Approval” means, as to each Product, (i) with respect to
the United States, the issuance of an approval letter (as defined in 21 C.F.R. §
314.3(b)) by the FDA pursuant to 21 U.S.C. §355(c) and 21 C.F.R. § 314.105
approving the NDA for such Product and approving the Product for manufacturing,
marketing, sale, distribution and use in the United States, irrespective of any
post-marketing study commitments related to such Product, and (ii) with respect to
any territory outside of the United States, the comparable issuance of approval by
a Regulatory Authority for the manufacturing, marketing, sale, distribution and use
of such Product in such territory.
	 
	 	1.67	 	“Regulatory Authority” means a Governmental Authority that has the
authority over the manufacture, use, storage, import, export, testing, transport,
marketing, sale or distribution of any of the Products in all or any portion of the
Territory, including the FDA and any counterparts to the FDA in territories outside
of the United States.
	 
	 	1.68	 	“Related Parties” means P&GP’s Affiliates and permitted sublicensees.
For purposes of clarification, it is acknowledged and agreed that the term “Related
Parties” does not include distributors.
	 
	 	1.69	 	“Rolling Forecast” has the meaning set forth in Section 4.01(a).
	 
	 	1.70	 	“Royalties” has the meaning set forth in the License Agreement.
	 
	 	1.71	 	“Services” means, with respect to any Product, formulation, stability
testing, manufacture, packaging, printing and application of labeling, testing
prior to shipment (including but not limited to Raw Materials, intermediate/work in
process and finished goods testing) and storage prior to loading of such
Product onto the carrier approved by P&GP for shipment.




8









 






	 	1.72	 	“Site Level Execution Agreement” or “SLEA” has the meaning set forth in
Section 4.11.
	 
	 	1.73	 	“SKU” has the meaning set forth in Section 4.03.
	 
	 	1.74	 	“Specifications” means, with respect to any Product, the written
methods, procedures, specifications, tests and standards pertaining to the
manufacture, storage, labeling, packaging and/or testing of such Product, as such
Specifications may be subsequently amended pursuant to Article 6. Schedule 1
provides the Specifications for T-Patch as of the Effective Date. Specifications
for each other Product, including without limitation for ***, will be agreed upon
by the parties and attached as a Schedule hereto prior to launch of such Product.
	 
	 	1.75	 	“Split Lot Charges” has the meaning set forth in Section 4.04(b).
	 
	 	1.76	 	“Steering Committee” has the meaning set forth in Article 12.
	 
	 	1.77	 	“Target Inventory Levels” has the meaning set forth in Section 2.09(b).
	 
	 	1.78	 	“T-Patch” means the transdermal patch drug delivery system developed by
NOVEN ***, and shall include any minor improvements or modifications to such
product that do not require additional development work (provided that
clinical trials of the T-Patch and clinical work related to the T-Patch performed
by P&GP shall not be considered additional development work for purposes of the
foregoing phrase). For purposes of clarification, the term “T-Patch” shall not
include any product that may constitute an Additional Product under the License
Agreement.
	 
	 	1.79	 	*** means the transdermal patch drug delivery system to be developed by
NOVEN ***. For purpose of clarification, the term *** shall not include any
product that may constitute an Additional Product under the License Agreement.




9









 






	 	1.80	 	“Technology” has the meaning set forth in the License Agreement.
	 
	 	1.81	 	“Term” has the meaning set forth in Section 9.01.
	 
	 	1.82	 	“Territory” has the meaning set forth in the License Agreement.
	 
	 	1.83	 	“Third Party” means any Person other than the parties hereto and their
respective Affiliates and, in the case of P&GP, any Related Party.
	 
	 	1.84	 	“Three-Year Forecast” has the meaning set forth in Section 4.01(e).
	 
	 	1.85	 	“Transaction Documents” means this Agreement, the License Agreement,
any agreements or documents prepared or executed pursuant to the transactions
contemplated by such agreements, any exhibits or attachments to any of the
foregoing and any other written agreement signed by NOVEN and P&GP that is
expressly identified as a Transaction Document, as any of the foregoing may be
amended, supplemented or otherwise modified from time to time.
	 
	 	1.86	 	“Transfer Taxes” means, collectively, all taxes payable with respect to
the manufacture, sale and transportation of the Products hereunder that are imposed
by a Governmental Authority, including, without limitation, any sales, use, excise,
value-added, services, consumption and other taxes and duties incurred by reason of
the manufacture, sale and/or transportation of the Products under this Agreement.
	 
	 	1.87	 	“United States” means the United States of America and its territories
and possessions.






	Article 2.	 	Supply of Product






	 	2.01	 	Obligation. Subject to the terms and conditions hereof, NOVEN shall
sell and supply the Products to P&GP, and P&GP shall purchase and receive
exclusively from NOVEN all of its requirements of each Product. Subject to the
terms and conditions hereof, NOVEN is responsible for providing the Services with
respect to each Product sold and purchased hereunder.




10









 






	 	2.02	 	Exclusivity of Supply.
	 
	 	(a)	 	Subject to the terms and conditions of this Agreement, NOVEN will not
manufacture, sell or otherwise provide any Product in any country with respect to
which P&GP holds an exclusive license under the License Agreement for any party
other than P&GP, or any successor, assignee, delegatee or partner of P&GP approved
by NOVEN in accordance with this Agreement or the License Agreement, during the
Term.
	 
	 	(b)	 	Subject to the terms and conditions hereof, NOVEN will be the exclusive
supplier of the Products.
	 
	 	2.03	 	Shelf Life.
	 
	 	(a)	 	All Product sold hereunder is intended to bear at least *** months of
its approved shelf life at the time of loading of such Product onto the carrier
approved by P&GP for shipment at NOVEN’s manufacturing facility. NOVEN and P&GP
will seek to collaborate during supply chain planning discussions on the timing of
manufacturing schedules and placement of Purchase Orders to meet the shelf life
requirements. Both P&GP and NOVEN recognize that, from time to time, the ***
months shelf life requirement may not be achievable due to manufacturing or quality
variances.
	 
	 	(b)	 	P&GP shall have the right to refuse any shipment of Product that
does not bear at least *** months of its approved shelf life at the time of
loading of such Product onto the carrier approved by P&GP for shipment, provided
that the diminished shelf life is not due to any delay by P&GP. This Section
2.03(b) sets forth NOVEN’s sole and exclusive liability, and P&GP’s sole and
exclusive remedy, with respect to any failure to meet the shelf life
requirements set forth in this Section 2.03 (provided that any Product refused
by P&GP pursuant to this Section 2.03(b) will be considered Product not
delivered to P&GP for purposes of Sections 4.07 and Section 9.02(c), and will be
taken into account in
determining whether any shortage or failure of supply has occurred, in
accordance with the terms of those provisions).




11









 






	 	(c)	 	The shelf life requirements set forth in this Section 2.03 are based
upon an approved shelf life of the Product of *** months. If the approved shelf
life for any Product is extended beyond *** months, the parties will discuss in
good faith a revision of the shelf life requirements under this Section 2.03 with
respect to such Product. If, at initial launch for any Product, the approved shelf
life of such Product is less than *** months, the parties will discuss in good
faith a revision of the shelf life requirements set forth in this Section 2.03, and
NOVEN will use commercially reasonable efforts to assist P&GP in obtaining approval
for a minimum *** month shelf life.
	 
	 	2.04	 	Regulatory Compliance. NOVEN shall ensure that all services,
facilities and equipment used in the manufacture, packaging, labeling, storage and
testing of Product prior to loading the Product onto the carrier approved by P&GP
for shipment at NOVEN’s manufacturing facility comply with all Applicable Laws and
regulations including but not limited to cGMPs.
	 
	 	2.05	 	Child Labor and Forced Labor. NOVEN represents, warrants and
covenants that:
	 
	 	(a)	 	NOVEN does not and will not employ children, prison labor, indentured
labor or bonded labor or use corporal punishment or other forms of mental and
physical coercion as a form of discipline; and
	 
	 	(b)	 	to NOVEN’S knowledge, no suppliers or subcontractors engaged by NOVEN
in connection with the performance of Services hereunder employ children, prison
labor, indentured labor or bonded labor or use corporal punishment or other forms
of mental and physical coercion as a form of discipline, and in the event NOVEN
learns that any such supplier or subcontractor has engaged in any of the
foregoing, it shall use commercially reasonable efforts to require such
supplier or subcontractor to cease such activities.




12









 












	 	 	In the absence of any national or local law setting the minimum age, P&GP and NOVEN
agree to define “child” as less than 15 years of age. If national or local law sets the
minimum age below 15 years of age, but is in accordance with exceptions under
International Labor Organization Convention 138, the lower age will apply.






	 	2.06	 	Shipment.
	 
	 	(a)	 	Except as set forth in Section 2.06(c) below, all Product sold to P&GP
hereunder shall be loaded by NOVEN onto P&GP’s designated carrier for shipment at
NOVEN’s manufacturing facility. NOVEN shall arrange for P&GP’s designated carrier
to receive each shipment of Product at NOVEN’s manufacturing facility for delivery
to P&GP’s designees and/or distribution centers.
	 
	 	(b)	 	P&GP will provide to NOVEN all information necessary for export and
customs clearance of Product to be shipped to foreign countries. NOVEN shall be
responsible for completing any DEA forms and for physical preparation of Product
for shipment to P&GP’s designees and designated distribution centers. With respect
to any shipment of Product outside of the United States, NOVEN shall be the
exporter of record and will prepare export paperwork for shipment to a customs
broker within the United States designated by P&GP in writing to NOVEN.
	 
	 	(c)	 	Shipment of Product shall be F.C.A. (Incoterms 2000) NOVEN’s
manufacturing facility for all export shipments and Ex-Works (Incoterms 2000)
NOVEN’s manufacturing facility for all U.S. shipments. Notwithstanding any
provision of this Agreement, risk of loss and damage to any and all Product
manufactured hereunder shall pass to P&GP upon loading of such Product onto the
carrier approved by P&GP for shipment at NOVEN’s manufacturing facility. NOVEN




13









 






	 	 	 	shall have no liability under this Agreement for any failure of any carrier to
deliver Product on or before the applicable Fixed Order Date so long as NOVEN
has loaded the Product onto such carrier no later than five (5) Business Days
prior to such Fixed Order Date, unless NOVEN is at fault for any delays in
delivery by such carrier (for example due to improper packing), in which case
the period of the delay caused by NOVEN shall be counted for purposes of
determining whether NOVEN has satisfied the requirements set forth in Section
4.06(a)(i). P&GP shall ensure that the storage conditions of each Product
during transportation are maintained in accordance with its Specifications.
All transportation costs associated with shipping Product from NOVEN’s
manufacturing facility shall be borne entirely by P&GP. NOVEN shall arrange
for P&GP’s designated carrier to receive each shipment of Product at NOVEN’s
manufacturing facility for delivery to P&GP’s distribution centers or other
shipping locations and P&GP shall arrange, directly with the carrier, the
timing and method of delivery to its distribution centers and other shipping
locations. P&GP will provide to NOVEN a list of preferred carriers and NOVEN
shall use said carriers unless P&GP’s designated carrier is not available, in
which case NOVEN will select an alternate carrier. In such case, NOVEN must
receive P&GP’s approval (not to be unreasonably withheld or delayed) prior to
the use of any carrier other than those designated by P&GP as preferred
carriers in accordance with this Section 2.06(c), and such approval by P&GP
shall pertain only to the approved shipment unless otherwise indicated by
P&GP. Additional shipping costs resulting from NOVEN’s expedited deliveries
or use of alternate carriers in order to comply with NOVEN’s obligations to
expedite delivery, that are due to the fault of NOVEN, will be at NOVEN’s
expense. Any costs associated with any other expedited deliveries, or any
other use of an alternate carrier requested or approved by P&GP, will be at
P&GP’s expense.




14









 






	 	2.07	 	Environmental Standards. NOVEN agrees to comply with all environmental
laws, ordinances, codes, rules, regulations and permits applicable to the
performance of Services hereunder.
	 
	 	2.08	 	Documentation. NOVEN shall maintain and provide to P&GP copies of
documentation relevant to the manufacture, packaging, labeling, storage and testing
of Product subject to and in accordance with the terms and conditions of the
Quality Assurance Agreement.
	 
	 	2.09	 	Supply Of Materials.
	 
	 	(a)	 	NOVEN will exercise commercially reasonable efforts to obtain all Raw
Materials necessary to fulfill its obligations to supply Product to P&GP hereunder.
	 
	 	(b)	 	NOVEN shall exercise commercially reasonable efforts to develop,
qualify (in accordance with the Quality Assurance Agreement) and audit adequate
sources to maintain a target inventory safety stock of Raw Materials necessary to
manufacture Product, the minimum and maximum levels of which shall be set forth in
the SLEA (the “Target Inventory Levels”). P&GP shall be liable for any Raw
Materials maintained pursuant to this Agreement within the Target Inventory Levels
set forth in the SLEA, and, upon request of NOVEN, will reimburse NOVEN for NOVEN’s
reasonable out-of-pocket costs of any such Raw Materials not incorporated into
Product purchased by P&GP, subject to Section 5.07, Article 6 and Section 9.03(c),
to the extent applicable.
	 
	 	(c)	 	NOVEN shall exercise commercially reasonable efforts to identify
alternative vendors for Raw Materials; provided, that P&GP hereby
acknowledges and agrees that certain suppliers of Raw Materials to NOVEN are or may
be single-source vendors and that Raw Materials supplied to NOVEN may not be
reasonably available for purchase by NOVEN from any other vendor on terms and
conditions that meet NOVEN’s alternative raw materials acceptance




15









 






	 	 	 	process. The parties shall cooperate through the Steering Committee to
prepare a summary plan outlining alternative sources of Raw Materials,
including contingency suppliers, and shall cooperate to update such summary
plan annually or more frequently as necessary to reflect any material changes
thereto. The parties shall work together through the Steering Committee to
determine whether qualification of additional vendors of Raw Materials is
appropriate, to estimate the amount of time required to qualify additional
vendors of Raw Materials and to effect any such qualifications to the extent
deemed appropriate by the Steering Committee; provided that all
suppliers of Raw Materials shall meet NOVEN’s and P&GP’s alternative raw
materials acceptance process. All costs of qualification of additional
vendors of Raw Materials requested by either P&GP or NOVEN shall be paid by
the party making the request; provided that to the extent such
qualification is required as the result of a Force Majeure event, the costs of
qualification shall be shared by both parties.
	 
	 	(d)	 	NOVEN is responsible to inspect, analyze or otherwise ensure that all
Raw Materials meet NOVEN’s specifications and standards for such Raw Materials and
meet Applicable Laws and regulations including but not limited to cGMPs, in
accordance with the Quality Assurance Agreement; provided, however,
that P&GP shall be solely responsible for the design and content (including without
limitation artwork and text) of all Printed Matter used in the manufacture of the
Product, as further described in the Quality Assurance Agreement.
	 
	 	(e)	 	In order to assist NOVEN in fulfilling its obligations under this
Agreement, and at NOVEN’s request, P&GP may arrange for supply of one or more Raw
Materials to NOVEN on terms reasonably acceptable to NOVEN. In such event, P&GP
and NOVEN shall cooperate to agree on pricing and responsibilities for logistics
procedures, losses and risks associated with such Raw Materials.




16









 






	 	2.10	 	Supply Assurance / Business Continuity Planning. NOVEN shall prepare,
within ninety (90) calendar days after submission of the first Regulatory
Application of a Product for marketing authorization in any country within the
Territory, a business continuity plan (“Business Continuity Plan”), the purpose of
which shall be to assess and reduce supply interruption risks associated with
supply of Product sold hereunder. Such a plan will include an analysis of risks
including but not limited to: failure or delay of land, water or air
transportation; governmental action; strikes or other labor disputes; accident,
fire, explosion, flood, storm or other acts of God; shortage of Raw Materials,
labor, fuel, power, inventory or machinery; technical failures, delay or failure to
perform by any supplier; or any other relevant factor as determined by NOVEN in its
sole discretion. The Business Continuity Plan will include commercially reasonable
action steps to reduce the likelihood or severity of risks considered unacceptable.
P&GP shall have the right to provide input into the Business Continuity Plan. The
Steering Committee will mutually agree on the approved Business Continuity Plan to
protect supply of Product. NOVEN will be responsible for any costs and expenses
associated with implementation of the Business Continuity Plan as proposed by
NOVEN, and P&GP shall reimburse NOVEN for its costs and expenses associated with
implementing any revisions to the Business Continuity Plan proposed by P&GP.
	 
	 	2.11	 	Funding for Purchase of Equipment. In order that NOVEN may perform
its obligations herein, NOVEN may request that P&GP consider providing, and P&GP
may agree to provide to NOVEN, funding for the purchase and installation of unique
equipment/production parts and for specialized facility modifications necessary to
carry out the Services for the Products. In the event that NOVEN requests and P&GP
agrees to provide such funding, the following provisions shall apply:




17









 






	 	(a)	 	P&GP shall provide such funding to NOVEN as costs are incurred,
approved by P&GP and invoiced by NOVEN with supporting documentation. Such funding
provided by P&GP shall be in an amount sufficient to cover any sales or transaction
tax applicable to the purchase of the applicable equipment. P&GP shall also pay, or
reimburse to NOVEN, the cost of installation of any equipment funded by P&GP
hereunder.
	 
	 	(b)	 	Any equipment purchased using funds provided to NOVEN by P&GP under
this Section 2.11 will be for use by NOVEN exclusively in the performance of
Services for P&GP; provided that if another opportunity arises to utilize
such equipment for another customer, NOVEN may request P&GP’s approval to so use
such equipment, which shall be at P&GP’s sole discretion.
	 
	 	(c)	 	All equipment purchased with such funds will be the property of NOVEN.
NOVEN will acquire and retain title to such equipment and will be responsible for
its maintenance and/or replacement in the event of loss or destruction. NOVEN will
use commercially reasonable efforts to maintain adequate insurance to cover the
replacement of equipment in the event of loss or destruction. In addition, P&GP
will have the option, commencing upon the later of the expiration or termination of
this Agreement or any extension(s) thereof, if any, and continuing for three (3)
months thereafter, to purchase at fair market value any or all equipment purchased
with funds provided to NOVEN by P&GP under this Section 2.11. Such fair market
value will be determined at the time such option is exercised based on the cost of
such equipment as invoiced from NOVEN to P&GP less the amount of funding provided
by P&GP under this Section 2.11 with respect to such equipment. If P&GP exercises
this option, the costs of removal, restoration, if any, and transportation of the
equipment will be borne by P&GP. It is understood that NOVEN will not be required
to refund installation costs should the asset be removed by P&GP or released by
P&GP under this Section 2.11(c).




18









 






	 	(d)	 	NOVEN will keep any and all equipment purchased with such funds free
and clear of all liens, claims, security interests, pledges, charges, mortgages,
deeds of trust, options, or other encumbrances of any kind including but not
limited to such liens arising out of or relating to provincial construction lien
legislation in Canada, U.S. state mechanic’s liens statutes, or similar statutes.
	 
	 	2.12	 	Notification of Supply Issues. NOVEN will notify P&GP promptly of any
capacity or schedule changes, conflicts or risks reasonably likely to affect its
ability to supply Product forecasted and ordered by P&GP hereunder pursuant to a
forecast and Purchase Order submitted in accordance with the provisions of Section
4.01 and Section 4.03. NOVEN shall use commercially reasonable efforts to resolve
such issues promptly and to allocate limited materials and resources, including
equipment and labor capacity, on a pro-rated basis among its various products and
customers.
	 
	 	2.13	 	Reporting Requirements. NOVEN shall provide to P&GP such information
and reports as may be reasonably requested by P&GP and agreed to by NOVEN, in a
format and on a frequency to be agreed upon by the parties.
	 
	 	2.14	 	Labeling and Packaging of Supplied Products. P&GP shall, at its own
cost and expense, supply NOVEN with the electronic and/or mechanical design of all
text, artwork, specification number, and other information to be used for all
Printed Matter. P&GP shall supply such materials, data and information to NOVEN on
a timely basis so as not to cause any delay in NOVEN’s manufacturing process.






	 	 	Article 3. Quality Control and Testing






	 	3.01	 	Quality Assurance Agreement. Simultaneously with, or as soon as
practicable after, the execution of this Agreement, the parties shall enter into a
Quality Assurance Agreement (the “Quality Assurance Agreement”) covering the
details of items such as, but not limited to, quality control procedures, testing,
quality




19









 






	 	 	 	assurance, product and material release, change control, notifications,
deviations and similar activities. Such Quality Assurance Agreement may be
amended from time to time as provided therein or as otherwise agreed to in
writing by the parties without formal amendment to this Agreement.
	 
	 	3.02	 	Testing and Certificate of Analysis. Before releasing any Batch of
Product hereunder, NOVEN shall test Product and check the compliance of such Batch
with the Specifications. Such compliance check shall be performed by NOVEN’s
Quality Assurance Control department and shall be certified by the head of such
department (or his/her designee). Copies of the certificate of analysis and cGMP
conformity certification, along with any other pertinent manufacturing or testing
documentation, shall be sent to P&GP in accordance with the terms and conditions of
the Quality Assurance Agreement.
	 
	 	3.03	 	Preservation Samples / Retained Samples. NOVEN shall retain samples of
Raw Materials and Product supplied hereunder in accordance with the terms and
conditions of the Quality Assurance Agreement.
	 
	 	3.04	 	Quality Disputes; Acceptance and Return.
	 
	 	(a)	 	Any claim by P&GP that any Product at the time it was loaded onto the
carrier approved by P&GP for shipment did not meet the warranties and
representations set forth in Section 8.01(a) must be made in writing to NOVEN
within thirty (30) days of delivery (for Product released in the United States) or
within sixty (60) days of delivery (for Product released outside the United
States). Notwithstanding the foregoing, with respect to any latent defect (i.e.,
any failure of a Product to meet the applicable requirements set forth in the
Specifications which is not determinable by testing upon physical arrival of the
Product at P&GP’s distribution center in accordance with standard quality control
procedures, and which is not otherwise apparent), P&GP must notify NOVEN of a claim
that the Product does not meet the applicable requirements set forth in the
Specifications within thirty (30) days from the date that the problem




20









 






	 	 	 	becomes discoverable. The notice provided by P&GP with respect to a claim
under either of the first two (2) sentences of this Section 3.04(a) shall be
referred to herein as a “Complaint Notice”. Failure to provide a Complaint
Notice to NOVEN within the applicable period set forth in this Section 3.04(a)
shall constitute acceptance of such Product by P&GP, and NOVEN shall have no
liability for defects or deviations for which it has not received notice
within such period. Any such Complaint Notice shall be issued in good faith
and state in reasonable detail (sufficient to enable NOVEN to identify the
nature of the problem for tests or studies to be conducted by or on its behalf
or to dispute the same) the reason why P&GP believes the Product may not be
acceptable to P&GP. P&GP shall, as soon as reasonably practicable, and in any
case within fifteen (15) days of the delivery by P&GP of any such possible
Complaint Notice, provide samples of the Product being rejected, if available,
and copies of written reports relating to tests, studies or investigations
performed to that date by or on behalf of P&GP on the Batch of the Product
being rejected. NOVEN shall use commercially reasonable efforts to notify
P&GP of NOVEN’s agreement or disagreement with P&GP’s Complaint Notice as
promptly as practicable, but in any event within ten (10) days after the later
of (i) receipt by NOVEN of the Complaint Notice or (ii) receipt by NOVEN of
samples of the rejected Product from P&GP. NOVEN shall test a sample from the
same Batch as the contested Product, and shall provide to P&GP a copy of the
results of such test. If P&GP does not agree with the outcome of such
testing, representative samples of the Batch of the Product in question shall
be submitted to an independent third party laboratory mutually agreed upon by
the parties. The results of such third party testing shall be accepted by
NOVEN and P&GP as final and binding. The cost of such third party testing
shall be borne by the party whose position is not substantiated by the
testing. P&GP will have final decision authority on determining whether any
Product can be used for sale and distribution.




21









 






	 	(b)	 	Any Product that is properly rejected in accordance with subsection (a)
above for failure to meet the warranties and representations set forth in Section
8.01(a) shall be returned to NOVEN (or, at NOVEN’s election, destroyed by P&GP with
evidence of such destruction provided by P&GP to NOVEN) at NOVEN’s expense,
including costs of return shipment, shipment to destruction location, and/or
destruction, as applicable. NOVEN shall credit P&GP the Purchase Price, plus any
Additional Charges paid by P&GP for such Product or, if P&GP has not yet paid for
such Product, P&GP will be relieved of any payment obligations with respect
thereto. NOVEN shall also credit P&GP for the amount of reasonable shipping and
reasonable out-of-pocket charges actually incurred by P&GP in association with the
delivery and incoming quality inspection of such defective Product to P&GP.
Consistent with NOVEN’s responsibility to remedy noncompliance as described in this
subsection (b), in the event any Product is properly rejected pursuant to Section
3.04(a) above, P&GP may exercise one of the following remedies:






	 	(i)	 	submit a new Purchase Order for Product with a
mutually agreed to Fixed Order Date, and NOVEN shall use commercially
reasonable efforts to expedite manufacture and delivery of the replacement
Product ordered by P&GP;
	 
	 	(ii)	 	the parties will mutually work together to determine
if the rejected Product can be remediated by modifying an existing
Purchase Order, considering the availability of Product in the appropriate
stage of the manufacturing process; or
	 
	 	(iii)	 	replace the rejected Product through a future
delivery not in the Fixed Zone.
	 
	 	 	 	P&GP will not incur any Additional Charges with respect to the replacement
Product unless such Additional Charges were previously paid and refunded with
respect to the rejected Product, or were invoiced but not yet paid at the time
such Product was rejected and the Purchase Price therefor refunded. P&GP
will, in good faith, work with NOVEN to minimize the additional costs NOVEN
will
incur to supply replacement Product while not jeopardizing P&GP’s trade
commitments.




22









 












	 	(c)	 	Notwithstanding the foregoing provisions of this Section 3.04, NOVEN
shall have no liability or obligation to P&GP under this Section 3.04 if it is
determined that any defect in any Product is attributable to the failure by any
Person (including P&GP) to properly store, transport or care for any unit of such
Product after such Product left NOVEN’s possession or is otherwise due to the fault
of P&GP.
	 
	 	(d)	 	If NOVEN supplies Product which fails to comply with the
representations and warranties as set forth in Section 8.01(a), NOVEN shall
perform, at its own cost and expense, an investigation into the reasons for such
failure in accordance with the terms and conditions of the Quality Assurance
Agreement.
	 
	 	(e)	 	P&GP’s rights and remedies set forth in this Section 3.04, together
with NOVEN’s indemnification obligations under Section 8.02, shall constitute
P&GP’s exclusive remedy with respect to any failure of Product supplied hereunder
to comply with the representations and warranties set forth in Section 8.01(a)
(unless such failure results in a supply failure under Section 9.02(c), in which
case Section 9.02(c) shall apply).
	 
	 	3.05	 	Stability Testing. NOVEN shall conduct, at its own cost and expense,
stability programs in accordance with the terms and conditions of the Quality
Assurance Agreement. NOVEN and P&GP agree to cooperate in good faith to seek an
extension of expiration dating for the Products as stability data are generated on
commercial batches.
	 
	 	3.06	 	Customer Complaints. NOVEN and P&GP shall be responsible for reporting
and investigating customer complaints related to the Products in accordance with
the terms and conditions of the Quality Assurance Agreement.




23









 






	 	3.07	 	Inquiries and Requests for Inspection. NOVEN and P&GP shall be
responsible for responding to inquiries and any requests for inspections by
Regulatory Authorities and other Third Parties in accordance with the terms and
conditions of the Quality Assurance Agreement.
	 
	 	3.08	 	Inspections. NOVEN shall develop and execute periodic self-inspection
as set forth in the Quality Assurance Agreement.
	 
	 	3.09	 	Validations. NOVEN shall implement validation procedures in accordance
with the terms and conditions of the Quality Assurance Agreement.
	 
	 	3.10	 	Cross Contamination Risk. NOVEN hereby declares that in its facilities
where the Products are manufactured, tested or stored, NOVEN is not and has not
manufactured, packaged, tested or stored biological preparations containing living
organisms, cephalosporins, cytotoxics or highly active materials, penicillin or
other products that could reasonably be expected to constitute hazardous
contaminants. In the event that NOVEN intends, during the course of this
Agreement, to begin such activity, NOVEN shall promptly notify P&GP in writing of
its intention to do so in order to allow P&GP to consider any potential questions
of cross-contamination or regulatory requirements. In the event P&GP, after
reasonable consultation with NOVEN, identifies a potential problem of
cross-contamination or regulatory requirements that would prohibit the activity,
NOVEN agrees not to manufacture, formulate or package products in the facility that
present cross-contamination problems for the Product(s).
	 
	 	3.11	 	Quality Assurance Key Elements. NOVEN represents and warrants that
NOVEN’s quality control systems are designed to meet the quality standards
described in Exhibit A hereto (referred to as “Quality Assurance Key Elements
Assessment” or “QAKE”), to the extent such standards are applicable to the Services
performed by NOVEN hereunder. In connection with its Annual MA conducted under the
Quality Assurance Agreement, with respect to compliance with QAKE, P&GP may audit
NOVEN’s manufacturing facility, in a manner




24









 






	 	 	 	not to unreasonably interfere with NOVEN’s operation at the manufacturing
facility. P&GP will provide to NOVEN such results from the QAKE audit in the
form of a score. If the score is less than ***, NOVEN shall develop and
implement a detailed action plan to improve NOVEN’s quality standards. In the
event NOVEN fails to implement such action plan or subsequent audit results
have a score of less than ***, P&GP shall be entitled to a review of all batch
documentation and/or on site monitoring of process conditions prior to the
shipment of Product to P&GP, subject to the parties reaching mutual agreement
with respect to the payment of costs and expenses associated with such
monitoring. It is acknowledged that nothing in this Section 3.11 shall limit
NOVEN’s representations and warranties set forth in Section 8.01(a), including
NOVEN’s representations and warranties regarding compliance with cGMP.






	 	 	Article 4. Forecasts and Ordering






	 	4.01	 	Forecasting.
	 
	 	(a)	 	Rolling Forecasts. P&GP shall provide to NOVEN, within three
(3) months after submission of the first Regulatory Application of a Product for
marketing authorization in any country within the Territory, and shall provide to
NOVEN on a monthly basis thereafter, on or before the tenth (10th) day of each
calendar month, a written, rolling twelve (12)-month forecast (broken down by
calendar month of delivery, with the requested date of delivery to P&GP’s
distribution center (“Fixed Order Date”) for each such month, pouch language
combinations and SKU) of P&GP’s estimated requirements of each Product (each, a
“Rolling Forecast”). The aggregate quantity of Product forecasted with respect to
any calendar month pursuant to this Section 4.01 shall not exceed one-twelfth
(1/12) of NOVEN’s Annual Installed Capacity, with the exception of quantities
forecasted with respect to the launch order under Section 4.02. NOVEN shall be
entitled to reject any Rolling Forecast that is not submitted on or before the
tenth (10th) day of any calendar month. NOVEN, upon receipt of P&GP’s
monthly
Rolling Forecast, shall, within fourteen (14) calendar days, notify P&GP if
NOVEN expects to be unable to deliver P&GP’s forecasted Product requirements.
P&GP shall use commercially reasonable efforts to ensure that its Rolling
Forecasts are as accurate as possible.




25









 






	 	(b)	 	Fixed Orders. P&GP shall give NOVEN a Purchase Order for each
SKU of Product at least *** days prior to the Fixed Order Date for such Product
identified within the Rolling Forecast.
	 
	 	(c)	 	Fixed Zone. *** prior to each Fixed Order Date is the “Fixed
Zone”. P&GP shall purchase one hundred percent (100%) of the Product forecasted
with respect to each Fixed Zone period (adjusted for changes mutually agreed). ***
of each Fixed Zone (counting backwards from the Fixed Order Date) are unchangeable.
During *** of each Fixed Zone (counting backwards from the Fixed Order Date),
changes to language groups, packaging configurations within language group, and
changes to scheduled Batches are allowed, with mutual agreement by NOVEN and P&GP.
***.
	 
	 	(d)	 	Planning Horizon. *** prior to each Fixed Order Date shall be
referred to herein as the “Planning Horizon”. Within the Planning Horizon, no
limitations shall apply to additions, deletions or changes to the Rolling Forecast,
except that the quantity of Product forecasted for *** prior to a Fixed Order Date
cannot increase by more than twenty percent (20%) when rolled into the next Fixed
Zone.
	 
	 	(e)	 	Three-Year Forecast. Within three (3) months after submission
of the first Regulatory Application of a Product for marketing authorization in any
country within the Territory, and on an annual basis thereafter, P&GP shall provide
to NOVEN a written, three (3)-year long range forecast (broken down by month of
delivery, pouch language combination and SKUs in Year 1 and annual number of
patches for Years 2 and 3) of P&GP’s estimated requirements of each Product (each,
a “Three-Year Forecast”). NOVEN and P&GP will utilize each Three-
Year Forecast to discuss the potential for any Product shortfalls and mutually
agree to any supply risk mitigation plans via the Steering Committee.




26









 






	 	4.02	 	Launch Order. The parties will consult with each other to seek to
provide P&GP with sufficient quantities of each Product for the initial commercial
launch of such Product.
	 
	 	4.03	 	Purchase Orders. Each purchase order for requirements of Product
(“Purchase Order”) placed by P&GP shall be submitted in writing by P&GP and shall
specify, at a minimum:
	 
	 	 	 	- the P&GP legal entity placing the Purchase Order,
	 
	 	 	 	- the unique material code for each carton of Product (“SKU”),
	 
	 	 	 	- the quantity of SKU of Product ordered,
	 
	 	 	 	- the Fixed Order Date, and
	 
	 	 	 	- the applicable country to which the Product will ultimately be delivered.
	 
	 	 	 	NOVEN shall have the right to invoice P&GP for Product forecasted for delivery
within the Fixed Zone if NOVEN does not receive a Purchase Order for such
Product by the Fixed Order Date.
	 
	 	4.04	 	Batch Size. P&GP shall have the right to order Product as follows:
	 
	 	(a)	 	P&GP shall have the right to order the full targeted yield of one or
more whole Batches of a single Product, each unit of which shall be packaged in
single specified pouch/language combinations and SKU. The targeted yield of a
Batch of T-Patch is set forth on Schedule 2. The parties will discuss and
determine implications of any adjustment of targeted yield (e.g. validation, change
control) that may be necessary to reflect increases or decreases in anticipated
yield.
	 
	 	(b)	 	P&GP shall have the right to order a single Batch of a Product split
into multiple Purchase Orders having distinct pouches and/or cartons. In the event
P&GP shall desire to so split a Batch, P&GP shall pay to NOVEN the applicable
charges set forth under the heading “Split Lot Costs” on Schedule 2 attached
hereto (the “Split Lot Charges”).




27









 






	 	(c)	 	P&GP shall have the right to submit a single or multiple Purchase
Order(s) requesting less than the full yield of a Batch of a Product. In the event
P&GP shall desire to order less than the full yield of a Batch of Product, P&GP
shall pay to NOVEN the applicable charges set forth under the heading “Full Batch
Order with Partial Batch Processing” on Schedule 2 attached hereto (the “Partial
Batch Charges” and, together with the Split Lot Charges, the “Additional Charges”).
It is acknowledged and agreed that a single Purchase Order may be subject to Split
Lot Charges as well as Partial Lot Charges.
	 
	 	(d)	 	P&GP shall have the right to request NOVEN to validate a *** batch of
Product (a “***”). In the event that P&GP desires that NOVEN establish the
capability to produce a ***, P&GP shall submit to NOVEN a written request for
validation of the mixing process for ***. Within thirty (30) days after receipt of
such written notice from P&GP, NOVEN will provide P&GP with a written estimate of
the cost to perform validation of the mixing process for ***. If P&GP provides
NOVEN with written approval of the estimated validation cost, then NOVEN shall
carry out such validation at P&GP’s sole cost and expense. After successful
completion of such validation, NOVEN shall provide P&GP with written notice
thereof, and P&GP shall thereafter have the right to submit Purchase Orders for
***. In the event P&GP exercises its right to request ***, P&GP shall pay NOVEN a
per-patch purchase price to be agreed by the parties and to be set forth in
Schedule 2 attached hereto. Schedule 2 sets forth a non-binding estimate of such
per-patch purchase price.
	 
	 	(e)	 	All Additional Charges shall be invoiced to P&GP in arrears on a
quarterly basis.




28









 






	 	4.05	 	Annual Installed Capacity. The parties acknowledge and agree that
NOVEN’s ability to supply P&GP’s requirements of Product shall be limited by
NOVEN’s
maximum installed capacity for production of each Product per twelve (12)
month period, as such capacity shall exist from time to time (the “Annual
Installed Capacity”). NOVEN shall commit the Annual Installed Capacity to
fulfillment of Purchase Orders placed by P&GP under this Agreement;
provided that NOVEN’s obligations with respect to committed Annual
Installed Capacity shall not commence until ninety (90) days after submission
of the first Regulatory Application of a Product for marketing authorization
in any country within the Territory. The initial Annual Installed Capacity
for all Products in the aggregate shall be *** units of Product. Commencing
ninety (90) days after submission of the first Regulatory Application of a
Product for marketing authorization in any country within the Territory, in
the event NOVEN shall at any time have an opportunity to utilize any portion
of the Annual Installed Capacity for any purpose other than the manufacture of
Product for supply to P&GP hereunder, NOVEN may request P&GP to release a
portion of the Annual Installed Capacity and P&GP shall not unreasonably
withhold or delay its approval of such request.
	 
	 	4.06	 	Customer Service
	 
	 	(a)	 	NOVEN shall exercise commercially reasonable efforts to develop and
maintain systems, staffing, and procedures to meet the following standards of
customer service:






	 	(i)	 	*** of shipments of the Product in each calendar
month will be loaded onto the carrier approved by P&GP for shipment at
NOVEN’s manufacturing facility on or before the date that is five (5)
Business Days prior to the applicable Fixed Order Date, plus or minus five
(5) days; and
	 
	 	(ii)	 	The Purchase Order quantity of Product loaded onto
the carrier approved by P&GP for shipment at NOVEN’s manufacturing
facility during each calendar month shall equal between *** and *** of the
number of units ordered in the applicable Purchase Order fulfilled during
such month.





29









 






	 	(b)	 	The parties shall cooperate to track NOVEN’s actual monthly performance
versus the above targets (the “Monthly Targets”) and shall review these results
during periodic meetings of the Steering Committee. Commencing *** days after
Product launch, if NOVEN shall fail to meet either of the Monthly Targets for ***,
and the cause of NOVEN’s below-target performance is within the control of NOVEN,
then the parties will cooperate to develop a plan (an “Action Plan”) to enable
NOVEN to meet or exceed the relevant performance target. The parties will consider
whether NOVEN could benefit from technical assistance from P&GP. This Section
4.06(b) sets forth NOVEN’s sole and exclusive liability, and P&GP’s sole and
exclusive remedy, with respect to (A) any late supply or delivery of Product
(unless (x) the shelf life of such Product does not meet the requirements set forth
in Section 2.03, in which case Section 2.03 shall apply or (y) quality Product is
not received as set forth in Section 3.04, in which case Section 3.04 shall apply,
or (z) such failure results in a supply failure under Section 9.02(c), in which
case Section 9.02 (c) shall apply), and/or (B) any delivery of an excessive or
insufficient quantity of Product (unless (x) the quantity delivered is less than
*** of the quantity ordered, in which case Section 4.07 shall apply, or (y) quality
Product is not received as set forth in Section 3.04, in which case Section 3.04
shall apply, or (z) such failure results in a supply failure under Section 9.02(c),
in which case Section 9.02(c) shall apply).




30









 






	 	4.07	 	Shortfalls. In the event NOVEN shall supply less than *** of the units
ordered by P&GP pursuant to any Purchase Order, NOVEN shall notify P&GP in writing
of the amount of such shortfall as soon as reasonably practicable on discovery of
such shortfall, and P&GP shall, within thirty (30) days after the earlier of (i)
receipt of such notification or (ii) receipt of the applicable delivery of such
Product, exercise one of the following remedies:
	 
	 	(a)	 	accept such delivery in full satisfaction of the Purchase Order (as to
quantity only and not in waiver of P&GP’s opportunity to reject such Product
pursuant to Section 3.04);
	 
	 	(b)	 	issue a new Purchase Order for Product with a mutually agreed to Fixed
Order Date, and NOVEN shall use commercially reasonable efforts to expedite
manufacture and delivery of the units of Product ordered pursuant to such
order; provided, that in either case P&GP shall pay NOVEN the Purchase
Price for the units of Product actually supplied and such Additional Charges
that would have applied to the original Purchase Order had such Product
actually shipped;
	 
	 	(c)	 	the parties will mutually work together to determine if the shortfall can
be remediated by modifying an existing Purchase Order, considering the
availability of Product in the appropriate stage of the manufacturing process;
or
	 
	 	(d)	 	replace the shortfall with a projected future delivery not in the Fixed
Zone.
	 
	 	 	 	P&GP will not incur any Additional Charges with respect to any quantities of
Product provided in remediation of a shortfall unless such Additional Charges
were previously paid and refunded with respect to the rejected Product. P&GP
will, in good faith, work with NOVEN to minimize the additional costs NOVEN
will incur in addressing a shortfall while not jeopardizing P&GP’s trade
commitments. P&GP’s failure to exercise one of the remedies under this
Section 4.07 within such thirty (30)-day period shall be deemed an acceptance
of such units in satisfaction of the applicable Purchase Order pursuant to
subsection (a) above. This Section 4.07 sets forth NOVEN’s sole and exclusive
liability, and P&GP’s sole and exclusive remedy, with respect to any delivery
of an insufficient quantity of Product (unless (x) such failure constitutes a
failure to meet the Monthly Targets pursuant to Section 4.06(a)(ii), in which
case Section 4.06(b) shall apply, or (y) quality Product is not received as
set forth in Section 3.04, in which case Section 3.04 shall apply, or (z) such
failure results in a supply failure under Section 9.02(c), in which case
Section 9.02(c) shall apply).




31









 






	 	4.08	 	Failure to Deliver. Subject to the limited remedies set forth in
Section 4.06 and Section 4.07, in the event NOVEN fails to deliver Product ordered
by P&GP due to actions or inaction on the part of NOVEN, NOVEN shall take all
commercially reasonable steps, including but not limited to, working extra hours,
shifts or days, to fulfill NOVEN’s obligation hereunder. All costs for such
additional efforts will be NOVEN’s.
	 
	 	4.09	 	Notice of Delay. Whenever NOVEN becomes aware of any event or
circumstance that impacts, or threatens to impact, the timely performance of
NOVEN’s obligations under this Agreement or any Purchase Order(s), NOVEN shall
promptly notify P&GP in writing of all relevant information with respect to such
event or circumstance, and shall use commercially reasonable efforts to deliver
such notice within five (5) days. No such notification from NOVEN to P&GP shall
release NOVEN from any liability under this Agreement otherwise resulting from the
delay.
	 
	 	4.10	 	Technical Assistance. If NOVEN delivers less than *** of quantity
shipped versus quantity ordered due to technical manufacturing issues, the parties
may agree to have P&GP provide technical expertise and assistance until the
issue(s) are resolved.
	 
	 	4.11	 	Site Level Execution Agreement. As soon as practicable after execution
of this Agreement and before the first country Regulatory Approval, the parties
shall enter into a written Site Level Execution Agreement (“SLEA”) providing
additional detail regarding items such as, but not limited to, production planning,
supply chain measures, forecasting, ordering, customer service, inventory record
accuracy, quality assurance, compliance measures, cGMP, Raw Material Target
Inventory Levels and Product loss targets, shipping guidelines, problem solving
procedures, and similar activities. SLEAs may be amended from time to time as
agreed to in writing by the parties without formal amendment to this Agreement.




32









 












	 	 	Article 5. Prices and Payment Terms






	 	5.01	 	Price. In consideration for the supply of Products by NOVEN hereunder,
P&GP shall pay NOVEN the per-unit purchase price (the “Purchase Price”), for each
unit of Product supplied hereunder. P&GP shall also pay NOVEN the applicable
Additional Charges and any other charges set forth in Schedule 2. The Purchase
Price for commercial supply of the T-Patch is set forth in Schedule 2 hereto. The
Purchase Price shall be in addition to, and independent of, Royalties, Milestone
Payments and other amounts payable by P&GP to NOVEN under this Agreement and/or the
License Agreement.
	 
	 	5.02	 	Invoicing. On each Purchase Price invoice submitted hereunder, NOVEN
will include the number of the applicable Purchase Order, the quantity shipped, the
Purchase Price, payment remit to, and the legal entity indicated as the ordering
entity on such Purchase Order. P&GP may withhold payment of NOVEN’s invoice until
the provisions of this paragraph have been fulfilled. With respect to each invoice
for Additional Charges or other amounts payable to NOVEN hereunder, NOVEN shall
include sufficient information to enable P&GP to identify such Additional Charges
and other amounts.
	 
	 	5.03	 	Payment Terms. P&GP shall pay each complete and correct invoice
received from NOVEN within forty-five (45) days from the date of receipt by P&GP of
such invoice. Payments shall be in U.S. Dollars and shall be paid to NOVEN’s
account specified in writing to P&GP from time to time hereunder. Overdue invoices
shall bear interest at the rate of 1.5% per month until the entire invoice amount
is paid.
	 
	 	5.04	 	Adjustment Pursuant to Producer Price Index. On June 1 of each calendar
year during the Term, the Purchase Price of each Product shall be
decreased/increased by an amount equal to the decrease/increase in the PPI over the
immediately-preceding twelve (12) month period. The decrease/increase shall be
determined by multiplying the respective Purchase Price for each Product by a
fraction, the numerator of which shall be the average value of the




33









 






	 	 	 	PPI for the twelve (12) month period ending in May of the then-current
calendar year, and the denominator of which shall be the average value of the
PPI for the twelve (12) month period ending in May of the
immediately-preceding calendar year. As the PPI figures for February, March,
April and May of the then-current calendar year are preliminary as of June 1
of each calendar year, the Purchase Price may be further adjusted pursuant to
this Section 5.04 by either party when actual PPI figures are posted. For
purposes of this Section 5.04, “PPI” shall mean the producer price index
industry data figure (Pharmaceutical Preparations Manufacturing,
PCU325412325412), as published by the United States Department of Labor,
Bureau of Labor Statistics of the U.S. Department of Labor (web address:
www.bls.gov). Schedule 2 attached hereto provides additional detail regarding
calculation of the PPI adjustment.
	 
	 	5.05	 	Adjustment for Low Volume. In the event that, at any time after
expiration of the Grace Period, (a) P&GP’s Net Outside Sales with respect to the
Products fall below *** over a twelve (12)-month period and (b) the then-current
Purchase Price with respect to the Products for *** units of Product does not
result in a *** Gross Margin to NOVEN, then NOVEN shall have the right to identify
and invoice to P&GP, and P&GP shall pay, a surcharge in such an amount as is
necessary to bring NOVEN’s Gross Margin for the Products for such twelve (12)-month
period to ***. As used herein, “Grace Period” shall mean the period beginning on
the T-Patch launch and ending on the earlier of (i) two (2) years after the initial
launch of the T-Patch in the first country in which the T-Patch is launched, or
(ii) one (1) year from the initial launch of the T-Patch in the second country in
which the T-Patch is launched. Within thirty (30) days after any surcharge is
invoiced to P&GP pursuant to this Section 5.05, P&GP shall have the right to notify
NOVEN of its intent to audit NOVEN to verify NOVEN’s cost and Gross Margin
calculations, and the parties shall schedule such audit on a mutually agreeable
date. Such audit shall be in addition to the periodic audits
conducted pursuant to Section 5.10, but shall otherwise be subject to, and
conducted in accordance with, the provisions of Section 5.10.




34









 






	 	5.06	 	Unprofitable Supply Terms. If, at any time after expiration of the
Grace Period, NOVEN’s aggregate Gross Margin with respect to all Products over a
twelve (12)-month period falls below ***, NOVEN will notify P&GP in writing. NOVEN
and P&GP will then engage in a business discussion to understand the reasons for
NOVEN’s Gross Margin for the aggregate of all Products falling below ***, including
a review of NOVEN’s cost of goods for the aggregate of all Products, P&GP’s net
prices of all Products and the profitability of all Products, in order to negotiate
a mutually acceptable solution. In the event that the parties, after discussions
and acting in good faith, cannot agree to an acceptable solution to bring NOVEN’s
Gross Margin for the aggregate of all Products to ***, NOVEN will have the right to
terminate this Agreement upon (i) twelve (12) months written notice to P&GP (if
P&GP has qualified an Alternate Supplier) or (ii) thirty-six (36) months written
notice to P&GP (if P&GP has not qualified an Alternate Supplier). During the notice
period prior to the effectiveness of such termination, NOVEN shall have the right
to assess against P&GP, and P&GP shall pay and deliver to NOVEN, a surcharge in
such amount as is necessary to bring NOVEN’s Gross Margin for the aggregate of all
Products to ***. Notwithstanding the foregoing, to the extent that NOVEN’s failure
to achieve a *** Gross Margin is attributable to (x) NOVEN’s failure to manufacture
the Products in accordance with the shelf life and quality requirements of Section
2.03 and Section 3.04, respectively, which failure in each case is due to the fault
of NOVEN, including Noven’s suppliers, or (y) NOVEN’s manufacture of failed
Batches, the surcharge to be assessed against P&GP during the notice period prior
to the effectiveness of such termination to bring NOVEN’s Gross Margin to *** shall
be reduced accordingly. Within thirty (30) days after any surcharge is invoiced to
P&GP pursuant to this Section 5.06, P&GP shall have the right to notify NOVEN of
its
intent to audit NOVEN to verify NOVEN’s cost and Gross Margin calculations,
and the parties shall schedule such audit on a mutually agreeable date. Such
audit shall be in addition to the periodic audits conducted pursuant to
Section 5.10, but shall otherwise be subject to, and conducted in accordance
with, the provisions of Section 5.10.




35









 






	 	5.07	 	Adjustment for Modification of Specifications.
	 
	 	(a)	 	In the event any change in the Specifications or the manufacturing
process of any Product that is not necessary to comply with the requirements of any
Applicable Law or Regulatory Authority (a “Discretionary Change”) is implemented by
either party in accordance with the Quality Assurance Agreement and Article 6
hereof, the parties shall, to the extent commercially reasonable under the
circumstances, cooperate in making such changes. The party initiating such
change(s) shall bear all reasonable costs of both parties associated with and
resulting from any such change(s) in accordance with Article 6. In addition:






	 	(i)	 	in the event any such Discretionary Change initiated
by P&GP shall result in increased costs to NOVEN to perform the Services
with respect to such Product, the Purchase Price for such Product shall be
increased by an amount equal to ***;
	 
	 	(ii)	 	in the event any such Discretionary Change shall
result in decreased costs to NOVEN to perform the Services with respect to
such Product, and if (and only if) such Discretionary Change was initiated
by P&GP, the Purchase Price for such Product shall be decreased by an
amount equal to ***.
	 
	 	(iii)	 	in the event of a Discretionary Change initiated by
P&GP, P&GP shall pay NOVEN for NOVEN inventory with respect to such
Product, including (x) NOVEN’s reasonable out-of-pocket costs of Raw
Materials (to the extent within Target Inventory Levels), (y) the Purchase
Price of any finished goods
rendered obsolete or rejected as a result of the change, and (z) NOVEN’s
costs of any works in progress, at prices to be determined consistent with
the principles reflected on Schedule 2; and




36









 






	 	(iv)	 	in the event of a Discretionary Change initiated by
NOVEN, NOVEN shall, unless otherwise agreed, bear the costs of making
and/or implementing such Discretionary Change and the costs of works in
progress, Raw Materials, and finished goods rendered obsolete or rejected
as a result of such Discretionary Change, including reasonable costs of
P&GP incurred as a result of such Discretionary Change initiated by NOVEN.






	 	(b)	 	In the event any change in the Specifications or the manufacturing
process of any Product that is necessary to comply with the requirements of any
Applicable Law or Regulatory Authority (“Required Change”) is implemented in
accordance with the Quality Assurance Agreement and Article 6 hereof, then, subject
to Section 5.07(d) (regarding Label Changes):






	 	(i)	 	in the event such Required Change shall result in
decreased or increased costs to NOVEN to perform the Services with respect
to such Product, then the Purchase Price for such Product shall be
decreased or increased, as the case may be, by an amount equal to ***;***;
and
	 
	 	(ii)	 	***
	 
	 	(iii)	 	P&GP shall pay NOVEN for *** of any inventory of
NOVEN with respect to such Product, including (x) NOVEN’s reasonable
out-of-pocket costs of Raw Materials (to the extent within Target
Inventory Levels), (y) the Purchase Price of any finished goods rendered
obsolete or rejected as a result of the change, and (z) NOVEN’s costs of
any works in progress, at prices to be determined consistent with the
principles reflected on Schedule 2.




37









 












	 	(c)	 	For changes which (i) are not the result of a Discretionary Change, a
Required Change, or a Label Change and (ii) are required to bring NOVEN’s
facilities
and/or processes into compliance with the requirements of any Applicable Law
or Regulatory Authority (“Other Required Change”), the parties shall cooperate
in making such changes promptly and NOVEN shall, unless otherwise agreed, bear
the costs of making and/or implementing such changes and the costs of works in
progress, Raw Materials, and finished goods rendered obsolete or rejected as a
result of such Other Required Change.
	 
	 	(d)	 	With respect to any changes to any Printed Matter of any Product
(“Label Changes”) initiated by either party, NOVEN and P&GP shall cooperate in
making such Label Changes promptly and, unless otherwise agreed in writing by the
parties:






	 	(i)	 	in the event any such Label Change is either (x)
initiated by P&GP in its discretion, or (y) required by Applicable Law or
Regulatory Authority, then:






	 	(A)	 	if such Label Change shall result in increased
costs to NOVEN to perform the Services with respect to such Product,
then the Purchase Price for such Product shall be increased by an
amount equal to ***;
	 
	 	(B)	 	P&GP shall be responsible for and shall
reimburse NOVEN for the costs of implementing such Label Change,
including costs in connection with labeling, packaging and preprinting
of backing or pouch materials due to such Label Change; and
	 
	 	(C)	 	P&GP shall pay NOVEN for NOVEN inventory with
respect to such Product, including (x) NOVEN’s reasonable out-of-pocket
costs of Raw Materials (to the extent within Target Inventory Levels),
(y) the Purchase Price of any finished goods rendered obsolete or
rejected as a result of the change, and (z) NOVEN’s costs of any works
in progress, at prices to be determined consistent with the principles
reflected on Schedule 2; and




38









 












	 	(ii)	 	in the event such Label Change is a discretionary
change initiated by NOVEN, NOVEN shall, unless otherwise agreed, bear the
costs of making and/or
implementing such Label Change and the costs of works in progress, Raw
Materials, and finished goods rendered obsolete or rejected as a result of
such Label Change.






	 	(e)	 	For purposes of clarification, NOVEN’s right to receive payments with a
*** under the applicable provisions of this Section 5.07 is intended to protect
NOVEN’s Gross Margin with respect to the additional costs incurred by NOVEN under
the applicable provisions of this Section 5.07, but shall not be construed to
entitle NOVEN to a surcharge to provide NOVEN with an overall *** with respect to
the Products if such *** is not otherwise achieved.
	 
	 	5.08	 	Transfer Taxes. NOVEN shall be responsible for and pay all Transfer
Taxes, in each case the taxable incident of which occurs prior to NOVEN’s loading
of the Products onto the applicable carrier for shipment at NOVEN’s manufacturing
facility (collectively, “NOVEN Transfer Taxes”). For the avoidance of doubt,
NOVEN Transfer Taxes shall not include any import/export duties, levies or charges
or customs-related expenses. NOVEN shall be responsible for and pay any personal
property taxes on property it owns or leases, franchise and privilege taxes on its
business, and taxes based on its net income or gross receipts. P&GP shall be
responsible for and pay all Transfer Taxes, in each case the taxable incident of
which occurs upon or after NOVEN’s loading of the Products onto the applicable
carrier for shipment at NOVEN’s manufacturing facility, and P&GP shall be
responsible for and pay all Transfer Taxes, including without limitation sales and
value-added taxes and duties, that arise out of or are payable as a result of the
sale of Products to P&GP under this Agreement (collectively, “P&GP Transfer
Taxes”). NOVEN’s invoices shall separately state the amount of any P&GP Transfer
Taxes that NOVEN is charging P&GP (in addition to the Purchase Price and any
Additional Charges), to the extent applicable. NOVEN shall provide and make
available to P&GP any resale certificates or other exemption certificates requested
by P&GP in




39









 






	 	 	 	connection with P&GP Transfer Taxes, to the extent such certificates are
available to NOVEN. P&GP shall provide and make available to NOVEN any
applicable resale or tax exemption certificates requested by NOVEN to
substantiate non-taxability for sales tax purposes.
	 
	 	5.09	 	Continuous Improvement. NOVEN and P&GP agree to identify and implement
a continuous improvement/cost reduction plan for package materials (pouch, cartons,
etc.) within thirty (30) days of the end of each calendar year; provided
that (a) the decision to pursue any cost reduction projects and any determination
of cost reduction goals in relation to NOVEN’s business activities shall be within
the sole discretion of NOVEN; and (b) NOVEN shall be under no obligation to provide
access to P&GP to any of NOVEN’s records, data or systems in connection with this
Section 5.09.
	 
	 	5.10	 	Right to Audit.
	 
	 	(a)	 	NOVEN shall keep complete and accurate records in sufficient detail to
permit P&GP to confirm the accuracy of calculations of any adjustments to the
Purchase Price hereunder. P&GP shall keep, and shall cause its Related Parties,
successors, assigns, delegates and/or partners to keep, complete and accurate
records in sufficient detail to permit NOVEN to confirm the costs and expenses
incurred by P&GP in connection with a Product recall hereunder. Such records shall
be maintained in accordance with Applicable Law and in any event for at least a
three (3) year period following the end of the calendar quarter to which they
pertain. Not more than once in any fiscal year and upon reasonable advance notice
to the other party (the “Audited Party”), at its own expense (subject to Section
5.10(c)), each party (the “Auditing Party”) shall be entitled to nominate an
internationally recognized independent certified public accounting firm reasonably
acceptable to the Audited Party to have access at reasonable times during normal
business hours (subject to signing a confidentiality agreement, if applicable) to
examine the Audited Party’s (or its Related Party’s,




40









 






	 	 	 	Affiliate’s, successor’s, assign’s, delegate’s or partner’s, as the case may
be) records as they relate to relevant Products for the purpose of verifying
the correctness of any adjustments to the Purchase Price hereunder (where P&GP
is the Auditing Party) or verifying the amount of the costs and expenses
associated with a Product recall (where NOVEN is the Auditing Party);
provided, however, that if such audit reveals that the Audited
Party’s miscalculation or misstatement resulted in an overpayment by the
Auditing Party of *** or more, then such audit shall not count against the one
audit to which the Auditing Party is entitled per fiscal year. Moreover, if
an accounting firm is used in such audit, the accounting firm shall not
disclose to the Auditing Party or to any Third Party any financial or other
information relating to the business of the Audited Party except that which is
necessary to inform the Auditing Party of the accuracy or inaccuracy of the
Audited Party’s calculation. The Auditing Party shall not audit the same
records twice. The Auditing Party shall only be entitled to audit books and
records of the Audited Party from the three (3) calendar years prior to the
calendar year in which the audit request is made.
	 
	 	(b)	 	In the event the Auditing Party shall dispute the correctness of the
Audited Party’s calculation or statement, the Auditing Party shall, within
forty-five (45) calendar days of receipt of any such calculation or payment,
provide written notice to the Audited Party of such objection, setting forth in
writing and in reasonable detail the reasons therefor; provided that the
failure to give notice of an objection within such forty-five (45) calendar day
period shall not result in the waiver or loss of the Auditing Party’s right to
dispute the correctness of the Audited Party’s calculation or statement unless, and
only to the extent that, the Audited Party is actually prejudiced by such failure.
NOVEN and P&GP shall endeavor in good faith to resolve any disputed matters within
forty-five (45) calendar days after the Audited Party’s receipt of the Auditing
Party’s notice of objections. If NOVEN and P&GP are unable to resolve the disputed
matters within such forty-five (45) calendar day period, NOVEN and P&GP shall
select




41









 






	 	 	 	a nationally known independent accounting firm (which firm shall not be the
then regular auditors of either party) to resolve the matters in dispute, and
the determination of such firm in respect of the correctness of each matter
remaining in dispute shall be conclusive and binding on NOVEN and P&GP. The
independent accounting firm selected to resolve such disputes shall have
access to the relevant records of the Parties with respect to the matter in
dispute. In connection with the resolution of any dispute under this Section
5.10(b), the Auditing Party shall bear the costs and expenses of the
independent accounting firm selected to resolve such disputes, subject to
Section 5.10(c).
	 	(c)	 	If it is determined that the Audited Party’s miscalculation or
misstatement resulted in an overpayment by the Auditing Party of *** or more, then
the Audited Party shall reimburse the Auditing Party for any and all reasonable,
actual out-of-pocket expenses incurred by the Auditing Party in connection with the
dispute, including any costs and expenses payable to the independent accounting
firm or firms engaged pursuant to Section 5.10(a) and/or Section 5.10(b), and any
other costs and expenses incurred by the Auditing Party in connection with the
audit of the Audited Party’s books and records and any such dispute resolution
process.




Article 6. Change Management. Changes to, the Specifications or the manufacturing process of the
Products may be made only in accordance with the terms and conditions of the Quality Assurance
Agreement. Subject to, and without limiting the provisions of Section 5.07, the party requesting
any such change shall bear the costs thereof, including the costs of making or implementing such
changes and the costs of the scrapping of materials (including but not limited to Raw Materials (to
the extent within Target Inventory Levels), work in process, and finished product) necessitated by
any such change, unless otherwise agreed by the parties in writing. The parties shall cooperate to
implement in a prompt manner any such agreed upon changes to the Specifications or the
manufacturing process of the Products.




42









 








Article 7. Authorizations. During the Term, P&GP shall, at its sole expense, conduct clinical
studies, file requisite paperwork for Regulatory Approvals and maintain Regulatory and Clinical
Materials with respect to the Products both within and outside of the United States. Subject to
the foregoing, during the Term, NOVEN shall obtain and maintain in force all licenses and
authorizations necessary for NOVEN to manufacture and supply Product hereunder. NOVEN shall bear
the full cost and expense of obtaining and maintaining such licenses and authorizations. P&GP
shall provide NOVEN with assistance reasonably necessary for NOVEN to obtain and maintain such
licenses and authorizations.





	Article 8.	 	Liabilities.






	 	8.01	 	Warranties; Disclaimer.
	 
	 	(a)	 	NOVEN hereby represents and warrants to P&GP that Product supplied to
P&GP hereunder shall, on the date of loading of such Product onto the carrier
approved by P&GP for shipment at NOVEN’s manufacturing facility: (i) meet the
applicable requirements set forth in the Specifications; (ii) not be adulterated or
misbranded within the meaning of any applicable food or drug law or regulation or
any applicable equivalent law, rule or regulation; and (iii) comply with approved
Regulatory Approvals and all Applicable Laws (including, but not limited to, cGMP
applicable to the Product and prevailing as of such date governing the manufacture,
packaging (including without limitation labeling), storage (prior to shipment) and
testing (prior to shipment) of Product); provided that NOVEN shall not be
in breach or violation of its representations and warranties under this Section
8.01(a) to the extent that any failure to comply with the foregoing is due to any
act or omission of P&GP (including without limitation any failure of any labeling
provided by P&GP to comply with all Applicable Laws and cGMP). NO OTHER EXPRESS OR
IMPLIED WARRANTY EXISTS, INCLUDING ANY WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE, AND NOVEN EXPRESSLY DISCLAIMS ANY SUCH WARRANTIES.




43









 






	 	(b)	 	P&GP represents and warrants to NOVEN that: (i) P&GP Inc. is a
wholly-owned, direct subsidiary of The Procter & Gamble Company; (ii) P&GP SARL is
a wholly owned, indirect subsidiary of The Procter & Gamble Company; and (iii) ***.
	 
	 	8.02	 	NOVEN Indemnity. NOVEN shall indemnify and hold P&GP and its
Affiliates, and their respective directors, officers, employees and agents,
successors and assigns (the “P&GP Indemnitees”) harmless from and against any and
all Damages that P&GP Indemnitees may incur or suffer arising out of, resulting
from or caused by (a) any failure of the Product manufactured hereunder to meet the
requirements of Section 8.01(a) hereof, (b) any material breach by NOVEN of its
obligations hereunder, or (c) any intentional or negligent act or omission of NOVEN
or any of its directors, officers, employees, agents, successors, assigns,
sublicensees, delegatees or partners; provided that NOVEN shall have no
obligation under this Section 8.02 to the extent such Damages arise out of, result
from or are caused by: (i) any material breach by P&GP of its obligations under
this Agreement, (ii) an intentional or negligent act or omission of any P&GP
Indemnitee, or (iii) any matter for which P&GP has an obligation to indemnify the
NOVEN Indemnitees under this Agreement or the License Agreement.
	 
	 	 	 	NOVEN agrees to maintain at least ten million dollars ($10,000,000.00) of
commercial general liability insurance, as one or more insurance policies, in
support of this indemnity with companies reasonably acceptable to P&GP, which
insurance will carry an endorsement including P&GP and its Affiliates as
additional insureds.
	 
	 	8.03	 	P&GP Indemnity. P&GP shall indemnify and hold NOVEN and its
Affiliates, and their respective directors, officers, employees and agents,
successors and assigns (the “NOVEN Indemnitees”) harmless from and against any and
all Damages arising out of, resulting from or caused by, or claimed to arise out
of,




44









 






	 	 	 	result from or be caused by: (a) the Products, and/or any bodily injury,
illness or death of any person caused or alleged to be caused by the use,
distribution or sale of the Products, including without limitation (i)
liabilities for product liability and returned goods, (ii) liabilities in
respect of product warranty obligations or services and any returned Product
sold, and (iii) liabilities relating to errors and omissions or claims of
design and other defects with respect to any Product sold, including any
clinical and non-clinical trials; (b) any material breach by P&GP of its
obligations under this Agreement; or (c) any intentional or negligent act or
omission of P&GP or any of its directors, officers, employees, agents,
successors, assigns, sublicensees, delegatees or partners; provided,
that P&GP shall have no obligation under this Section 8.03 to the extent such
Damages arise out of, result from or are caused by: (i) any material breach
by NOVEN of its obligations under this Agreement, (ii) an intentional or
negligent act or omission of any NOVEN Indemnitee, or (iii) any matter for
which NOVEN has an obligation to indemnify the P&GP Indemnitees under this
Agreement or the License Agreement.
	 
	 	8.04	 	Certain Limitations. Except for conditions permitting termination of
this Agreement provided in Section 9.02 or as otherwise provided in Section 10.01,
the sole and exclusive remedy with respect to any breach of any representation,
warranty, covenant or agreement contained herein and for the other matters
described in Sections 8.02 and 8.03 (other than (i) with respect to a breach of the
terms of a covenant or agreement as to which P&GP or NOVEN, as the case may be,
also shall be entitled to seek specific performance or other equitable relief and
(ii) with respect to claims for fraud) shall be a claim for Damages (whether by
contract, in tort or otherwise, and whether in law, in equity or both) made
pursuant to this Article 8.




45









 






	 	8.05	 	Disclaimer of Incidental Damages. NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR ANY PUNITIVE, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL
DAMAGES OR LOST PROFITS, EXCEPT TO THE EXTENT ANY SUCH PUNITIVE, INCIDENTAL,
INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES OR LOST PROFITS ARE PAYABLE TO A
THIRD PARTY.
	 
	 	8.06	 	Product Recalls. Product recalls shall be conducted by the parties in
accordance with the terms and conditions of the Quality Assurance Agreement. All
reasonable costs and expenses of any recall of any Product and corrective actions
shall be the responsibility of P&GP; provided that NOVEN shall reimburse
P&GP for its reasonable out-of-pocket costs and expenses of effecting such recall
hereunder to the extent such recall was caused by a matter for which NOVEN is
obligated to indemnify P&GP under Section 8.02. In the event that P&GP’s
reasonable out-of-pocket costs and expenses are reimbursed by NOVEN, NOVEN shall be
entitled to audit such costs and expenses in accordance with Section 5.10.
	 
	 	8.07	 	Notice and Opportunity to Defend. If any Proceeding arises as to which
a right of indemnification provided in Section 8.02 or Section 8.03 applies, the
party seeking indemnification hereunder (the “Indemnified Party”) shall, within
twenty (20) calendar days, notify the other party (the “Indemnifying Party”)
thereof in writing and allow the Indemnifying Party and its insurers the
opportunity to assume liability for any Damages arising out of such Proceeding and
the direction and control of the defense against such Proceeding, at its sole
expense, including the settlement thereof at the sole option of the Indemnifying
Party or its insurers; provided, that the failure to give notice of a claim
for indemnification within such twenty (20)-calendar day period shall not result in
the waiver or loss of any right to bring a claim for indemnification hereunder
unless, and only to the extent that, the Indemnifying Party is actually prejudiced
by such failure. Notwithstanding the foregoing, the Indemnifying Party may not




46









 






	 	 	 	enter into any compromise or settlement without the prior written consent of
the Indemnified Party unless such compromise or settlement includes as an
unconditional term thereof the giving by each plaintiff or claimant to the
Indemnified Party of a release from all liability in respect of such claim and
only if such compromise or settlement does not include any admission of legal
wrongdoing on the part of the Indemnified Party. The Indemnified Party shall
fully cooperate with the Indemnifying Party and its insurers in the
disposition of any such matter and the Indemnified Party will have the right
and option to participate in (but not control) the defense of any Proceeding
as to which the right of indemnity applies, with separate counsel at its
election and cost. If the Indemnifying Party fails or declines to assume the
defense of any such Proceeding within thirty (30) calendar days after notice
thereof, the Indemnified Party may assume the defense thereof for the account
and at the risk of the Indemnifying Party. The Indemnifying Party shall pay
promptly to the Indemnified Party any Damages to which the right of indemnity
applies, as incurred.






	 	 	Article 9. Term and Termination.






	 	9.01	 	Term. This Agreement shall terminate upon the earlier of (i) with respect to each
Product and with respect to each country in the Territory, the termination of the
License Agreement with respect to such Product and/or such country, or (ii) the
termination of this Agreement in its entirety in accordance with Section 9.02 (the
Effective Date until such termination or expiration, the “Term”).
	 
	 	9.02	 	Certain Termination Events.
	 
	 	(a)	 	Bankruptcy. Either NOVEN or P&GP shall have the right to terminate
this Agreement in its entirety upon sixty (60) calendar days written notice to the
other party at any time after the other party (or, with respect to P&GP, a Related
Party) (a) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (b) becomes insolvent or is generally unable to pay its debts as they




47









 






	 	 	 	become due or admits in writing its inability generally to pay its debts as
they become due; (c) makes a general assignment, arrangement or composition
with or for the benefit of its creditors; (d) institutes or has instituted
against it by a Third Party a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditor’s rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (i) results in
a judgment of insolvency or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or liquidation or (ii) is not
dismissed, discharged, stayed or restrained in each case within thirty (30)
calendar days of the institution or presentation thereon; (e) has a resolution
passed for its winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (f) seeks or becomes
subject to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for it or
for all or substantially all its assets; (g) has a secured party take
possession of all or substantially all of its assets or has a distress,
execution, attachment, sequestration or other legal process levied, enforced
or sued on or against all or substantially all its assets and such secured
party maintains possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within thirty (30) calendar days
thereafter; or (h) causes or is subject to any event with respect to it which,
under the applicable law of any jurisdiction, has an analogous effect to any
of the events specified in clauses (a) to (g) (inclusive).
	 
	 	(b)	 	Material Breach. In the event that either party commits a material
breach of any of the provisions of this Agreement and such breach either is not
curable or is not cured within sixty (60) days after notice of the breach by the
non-breaching party (or, if the breach is not capable of cure within sixty (60)
days, the breaching party has not commenced a cure within sixty (60) days after
such




48









 






	 	 	 	notice and has not cured such breach as soon thereafter as possible, but in no
case longer than ninety (90) days after such notice), then the non-breaching
party may terminate this Agreement in its entirety with immediate effect upon
written notice to the breaching party; provided that notwithstanding
the foregoing, P&GP shall not have any right to terminate this Agreement
pursuant to this Section 9.02(b) for any breach by NOVEN that is related to
the quality of Products manufactured or supplied by NOVEN hereunder, the
quantity of Product supplied, the timeliness of such Products being loaded
onto the applicable carrier or delivered to P&GP, or similar matters. Without
limiting the generality of the foregoing sentence, P&GP shall not be entitled
to terminate this Agreement under this Section 9.02(b) for any breach by NOVEN
of any of Sections 2.03, 3.04, 4.06, 4.07, 4.08, or 9.02(c).
	 
	 	(c)	 	Failure to Supply. In the event that at any time during the Term NOVEN
shall, during any period of *** consecutive months with respect to which P&GP has
submitted Purchase Orders, fail to supply at least *** of the aggregate number of
units of Product ordered pursuant to Purchase Orders properly submitted by P&GP
during such period pursuant to Section 4.03, or, during any period of ***
consecutive months with respect to which P&GP has submitted Purchase Orders, supply
*** of Product ordered pursuant to Purchase Orders properly submitted by P&GP
during such period (in each case other than (x) by reason of a circumstance
contemplated by Section 13.01, (y) by reason of the fault of P&GP, or (z) in
connection with units of Product accepted by P&GP pursuant to Section 4.07), then
P&GP shall have the right to: (i) subject to Sections 11.02 and 11.03, have an
Alternate Supplier manufacture on its behalf that portion of its requirements of
the Product that NOVEN is not able to supply; (ii) terminate this Agreement in its
entirety (in which case P&GP may at its option elect remedies under Section 11.02);
or (iii) withdraw any Purchase Orders submitted pursuant to Section 4.03.




49









 






	 	(d)	 	Unprofitable Supply Terms. NOVEN may terminate this Agreement pursuant
to the provisions of Section 5.06.
	 
	 	(e)	 	Adverse Health or Safety. Either NOVEN or P&GP may terminate this
Agreement with immediate effect with respect to any Product in a country if such
Product is permanently and completely withdrawn from the market in such country for
serious adverse health or safety reasons.
	 
	 	(f)	 	Force Majeure. Either party may terminate this Agreement in its
entirety with immediate effect if an event of force majeure contemplated in Section
13.01 as to the other party shall exist and shall continue to prevent performance
by the other party for a period of ninety (90) consecutive days.
	 
	 	9.03	 	Consequences of Termination.
	 
	 	(a)	 	Effect of Termination. Upon termination of this Agreement with respect
to any country and/or with respect to any Product, this Agreement and all rights
and obligations hereunder shall each forthwith become void and of no further force
or effect with respect to such country and/or such Product, as the case may be (and
in the event of any termination of this Agreement in its entirety, this Agreement
and all rights and obligations of the parties hereunder shall each forthwith become
void and of no further force or effect in their entirety), except in each case as
otherwise provided in this Section 9.03.
	 
	 	(b)	 	Obligation to Pay. The termination or expiration of this Agreement
shall not relieve either party of any liability for any monies due to the other at
or following the time of such termination or expiration, nor shall it relieve
either party of the post-termination obligations imposed by this Agreement.
	 
	 	(c)	 	P&GP’s Property. In the event that P&GP terminates this Agreement
pursuant to any of Sections 9.02(a), 9.02(b), or 9.02(c), NOVEN will make available
for P&GP’s removal any such Raw Materials (at NOVEN’s actual cost), Product (at the
then prevailing Purchase Price for each such Product), equipment funded by




50









 






	 	 	 	P&GP and repurchased by P&GP pursuant to Section 2.11, and any of P&GP’s
property then under NOVEN’s control in connection with the Services under the
Agreement. NOVEN further agrees that it shall use commercially reasonable
efforts, after receipt of notice of any termination by P&GP under any of
Sections 9.02(a), 9.02(b), or 9.02(c), not to encumber such materials, Product
or other property, such as through security liens or pledges, in any way.
	 
	 	9.04	 	Survival. Notwithstanding anything herein to the contrary, the
provisions of Article 8, Section 9.03, Article 10, Section 13.03 and Section 13.10
hereof shall survive any expiration or termination of this Agreement.






	 	 	Article 10. Confidentiality, Public Announcements, Intellectual Property.






	 	10.01	 	Confidentiality.
	 
	 	(a)	 	Pursuant to the terms of this Agreement, each party (in such capacity,
the “Disclosing Party”), has disclosed and will be disclosing to the other party
and/or its Affiliates, Related Parties, successors, assigns, delegates, partners,
or representatives (in such capacity, the “Receiving Party”), certain Confidential
Information of the Disclosing Party. The Receiving Party shall make no use of such
Confidential Information except in the exercise of its rights and the performance
of its obligations set forth in this Agreement. The Receiving Party shall use at
least the same efforts to keep secret, and prevent the disclosure to Third Parties
of, Confidential Information of the Disclosing Party as it would use with respect
to its own Confidential Information. Confidential Information disclosed by the
Disclosing Party shall remain the sole and absolute property of the Disclosing
Party, subject to the rights granted herein. The above restrictions on the use and
disclosure of Confidential Information shall not apply to any information which (i)
is already known to the Receiving Party at the time of disclosure by the Disclosing
Party, as demonstrated by competent proof, (ii) is or becomes generally available
to the public other than through any act or omission of the Receiving Party in
breach of this Agreement, (iii) is acquired by




51









 






	 	 	 	the Receiving Party from a Third Party who is not, directly or indirectly,
under an obligation of confidentiality to the Disclosing Party with respect to
same, or (iv) is developed independently by the Receiving Party without use,
direct or indirect, of information that is required to be held confidential
hereunder.
	 	(b)	 	In the event the Receiving Party is required (i) by Applicable Law to
disclose Confidential Information of the Disclosing Party to any Regulatory
Authorities to obtain Regulatory Approval for the Products or to comply with the
requirement of any Regulatory Authority, (ii) to disclose Confidential Information
of the Disclosing Party to respond to an inquiry of a Regulatory Authority or
Governmental Authority concerning the Products, or (iii) to disclose Confidential
Information of the Disclosing Party in a judicial, administrative or arbitration
proceeding to enforce such party’s rights under this Agreement, it may do so only
if it (A) provides the Disclosing Party with as much advance written notice as
possible of the required disclosure, (B) cooperates with the Disclosing Party in
any attempt to prevent or limit the disclosure, and (C) limits disclosure, if any,
to the specific purpose at issue.
	 
	 	(c)	 	Notwithstanding the provisions of this Section 10.01:






	 	(i)	 	P&GP shall be permitted to disclose to its
distributors, wholesalers, customers and other Third Parties having a
reasonable need to know such information such Confidential Information
relating to the Products as P&GP shall reasonably determine to be
necessary or useful in order to effectively develop, market and distribute
the Products;
	 
	 	(ii)	 	NOVEN shall be permitted to disclose such
Confidential Information relating to the Products as NOVEN shall
reasonably determine to be necessary or useful in order to effectively
perform its obligations under this Agreement;
	 
	 	(iii)	 	each of NOVEN and P&GP shall be permitted to
disclose to a Regulatory Authority such Confidential Information relating
to the Products as it shall




52









 






	 	 	 	reasonably determine (but only after consulting with the other party to the
extent practicable) to be necessary to comply with the provisions of
Applicable Law; and
	 
	 	(iv)	 	nothing in this Section 10.01 shall be interpreted to
limit the ability of either NOVEN or P&GP to disclose its own Confidential
Information to the other party or any other Person on such terms and
subject to such conditions as it deems advisable or appropriate;






	 	 	 	provided, however, that in each such case any Third Party
recipients of any Confidential Information (other than a Regulatory Authority
or other Governmental Authority) undertake substantially the same
confidentiality obligation as the parties hereunder with respect to such
Confidential Information.






	 	(d)	 	Each of NOVEN and P&GP acknowledge and agree that the terms and
conditions of this Agreement shall be considered Confidential Information of each
party and shall be treated accordingly. Notwithstanding the foregoing, (i) P&GP
acknowledges and agrees that NOVEN may be required to disclose some or all of the
information included in this Agreement in order to comply with its obligations
under the applicable securities laws, and hereby consents to such disclosure to the
extent deemed advisable or appropriate by counsel to NOVEN; provided that
P&GP is informed of the information to be disclosed and given an adequate time to
comment; and (ii) NOVEN acknowledges and agrees that P&GP may disclose the terms
and conditions of this Agreement to (A) third party sublicensees and co-promotion
partners to permit P&GP to exercise its rights to fulfill its obligations under
Sections 3.04 and 3.05 of the License Agreement and (B) Alternate Suppliers to
permit P&GP to exercise its rights under Article 11; provided,
however, that (x) such disclosure shall be pursuant to, and subject to the
terms and conditions of, non-disclosure or similar protective agreements in form
and substance reasonably acceptable to NOVEN, which agreements shall contain
covenants, agreements, restrictions and




53









 






	 	 	 	limitations at least as restrictive as those set forth in this Agreement, (y)
such disclosure may be made only to sublicensees and co-partners permitted
under Sections 3.04 and 3.05 of the License Agreement and Alternate Suppliers
as permitted under Article 11, as the case may be, and (z) P&GP shall provide
written notice of any such disclosure to NOVEN.
	 
	 	(e)	 	Each party specifically recognizes that any breach by it or its
Affiliates, Related Parties, successors, assigns, delegates, partners or
representatives of this Section 10.01 may cause irreparable injury to the other
party and that actual damages may be difficult to ascertain, and in any event, may
be inadequate. Accordingly (and without limiting the availability of legal or
equitable, including injunctive, remedies under any other provisions of this
Agreement), each party agrees that in the event of any such breach, the other party
shall be entitled to seek, by way of private litigation in the first instance,
injunctive relief and such other legal and equitable remedies as may be available.
	 
	 	(f)	 	The obligations of confidentiality and nonuse set forth in this Section
10.01 shall survive the termination of this Agreement for a period of five (5)
years.
	 
	 	10.02	 	Public Announcements. In addition, except as may be required by
Applicable Law, no party shall originate any publicity, press or news release or
other public announcement, written or oral, whether to the public press or
otherwise, relating to this Agreement, the other Transaction Documents or to the
existence of an arrangement between the parties, without the prior written consent
of the other party, which consent shall not be unreasonably withheld or delayed.
	 
	 	10.03	 	License to Products. P&GP hereby grants to NOVEN a non-exclusive,
non-sublicenseable, royalty free license, effective during the Term, under all
patents, unpatented technology, and other intellectual property rights owned,
controlled or licensed by P&GP relating to the Products to the extent (but only to
the extent) necessary for NOVEN to realize its rights and fulfill its obligations
under this Agreement.










54









 







	Article 11.	 	Alternate Suppliers.






	 	11.01	 	Qualification of Alternate Suppliers. P&GP may, during the Term, take
steps to qualify one or more Third Party suppliers of Product (each, an “Alternate
Supplier”), which Alternate Suppliers shall be subject to prior written approval of
NOVEN (such approval not to be unreasonably withheld or delayed); provided
that NOVEN and P&GP shall agree to a mutually acceptable plan for qualification of
such Alternate Supplier, which shall include, but not be limited to, any reasonable
costs to be incurred by NOVEN in connection with such qualification. All
reasonable costs and expenses, including reasonable out-of-pocket expenses incurred
by NOVEN, associated with qualifying an Alternate Supplier in accordance with the
plan therefor agreed upon by the parties and approved by P&GP in writing shall be
paid by P&GP or reimbursed to NOVEN, it being understood that NOVEN shall have no
obligation to take any action with respect to the qualification of an Alternate
Supplier unless and until NOVEN receives written approval from P&GP of any such
out-of-pocket expenses. Upon the written request of P&GP, and at P&GP’s expense,
NOVEN agrees to provide reasonable assistance *** to Alternate Suppliers sought to
be qualified by P&GP pursuant to this Section 11.01 and access to such of NOVEN’s
Confidential Information and Technology as may be reasonably necessary for the
Alternate Supplier to manufacture Product for sale to P&GP; provided, that
such Alternate Supplier shall be bound by obligations of confidentiality in favor
of NOVEN consistent with those set forth in this Agreement and the License
Agreement. Notwithstanding the foregoing, nothing in this Section 11.01 shall
relieve P&GP of its obligation to purchase all of its requirements of Product from
NOVEN and P&GP shall only have the right to acquire Product from an Alternate
Supplier as provided in Section 11.02.




55









 






	 	11.02	 	Reasonable Assistance; Limited License. In the event of a termination
of this Agreement by P&GP pursuant to any of Sections 9.02(a), 9.02(b), 9.02(c) or
9.02(f), or by NOVEN pursuant to Section 9.02(d):
	 
	 	(a)	 	if P&GP has not already qualified an Alternate Supplier under Section
11.01, then, upon request of P&GP and at P&GP’s expense, NOVEN shall provide
reasonable assistance to an Alternate Supplier identified by P&GP and approved by
NOVEN (such approval not to be unreasonably withheld or delayed) and access to such
of NOVEN’s Confidential Information and Technology as may be reasonably necessary
for such Alternate Supplier to manufacture Product for sale to P&GP;
provided, that such Alternate Supplier shall be bound by obligations of
confidentiality in favor of NOVEN consistent with those set forth in this Agreement
and the License Agreement; and provided further, that all
reasonable costs and expenses, including reasonable out-of-pocket expenses incurred
by NOVEN, associated with qualifying such Alternate Supplier in accordance with the
plan therefor agreed upon by the parties and approved in writing by P&GP shall be
paid by P&GP or reimbursed to NOVEN to the extent applicable, it being understood
that NOVEN shall have no obligation to take any action with respect to the
qualification of an Alternate Supplier unless and until NOVEN receives written
approval from P&GP of any such out-of-pocket expenses;
	 
	 	(b)	 	subject to Section 11.03, the license granted to P&GP in the License
Agreement shall be deemed to include the right of P&GP to have Product made on its
behalf by the Alternate Supplier approved by NOVEN under Section 11.01 or
11.02(a), as applicable, for the term of the License Agreement;
	 
	 	(c)	 	subject to Section 11.03, to the extent, but only to the extent,
that such Alternate Supplier requires a license to any manufacturing know-how of
NOVEN in order for such Alternate Supplier to manufacture the applicable
Product(s) for P&GP, NOVEN agrees to grant such a license on a limited basis to
the extent (but only




56









 






	 	 	 	to the extent) reasonably necessary for such manufacture, which license shall
be restricted solely to use in the manufacture of Product for P&GP as
contemplated in this Agreement; and
	 
	 	(d)	 	NOVEN will use commercially reasonable efforts to continue to supply
Product to P&GP pursuant to the terms and conditions of this Agreement, subject to
any force majeure event or inability of NOVEN to supply Product to P&GP, until an
Alternate Supplier is qualified but in no event more than *** after termination;
provided that P&GP shall pay to NOVEN a surcharge in such amount, if any,
as is necessary to bring NOVEN’s Gross Margin for the Product to at least ***
during such period. Notwithstanding the foregoing, in the circumstance of a
termination of this Agreement by NOVEN pursuant to Section 9.02(d) only, the
provisions of Section 5.06 shall govern the terms of NOVEN’s continued supply of
Product and P&GP’s payment of such surcharge.
	 
	 	(e)	 	Except as expressly provided in this Section 11.02, neither P&GP nor
any Alternate Supplier shall have any license under the NOVEN Patents, NOVEN’s
rights in any Joint Developments (as defined in the License Agreement) or the
Technology to make or have the Product made by any manufacturer or supplier other
than NOVEN.
	 
	 	(f)	 	The Alternate Supplier qualified by P&GP pursuant to Section 11.01
shall have the right to manufacture up to three (3) batches of Product as
necessary to validate its manufacturing process, and up to three (3) batches of
Product each year thereafter, as necessary to maintain validation of such
Alternate Supplier’s manufacturing process. These batches will be considered
saleable Product. To the extent any such batches produced by an Alternate
Supplier are indicated on any Rolling Forecast or Three-Year Forecast submitted by
P&GP hereunder, P&GP will designate such batches as batches to be produced by the
Alternate Supplier on such Rolling Forecast or Three-Year Forecast, and such
amounts
will not be deemed as Product forecasted to be ordered from NOVEN hereunder.




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	 	11.03	 	Royalties. Notwithstanding the provisions of Section 11.02, the
effectiveness of the license granted to P&GP under the License Agreement and of any
license granted by NOVEN to any Alternate Supplier in accordance with Section
11.02, shall be at all times conditioned upon P&GP’s payment of Royalties,
Milestone Payments and other amounts payable to NOVEN with respect to the sales of
any Product supplied to P&GP by any Alternate Supplier and sold by P&GP (or any
Affiliate, successor, assignee, sublicensee, delegatee or partner of P&GP) in
accordance with the terms and conditions of the License Agreement, as well as
P&GP’s payment obligations under this Agreement, and all such licenses shall
terminate in the event P&GP shall breach its obligations thereunder or hereunder
(subject to any applicable cure periods).




Article 12. Steering Committee. To facilitate the manufacture of Product hereunder, NOVEN and P&GP
shall each, within thirty (30) days of the Effective Date, nominate representatives from their
respective employees, full time consultants or Affiliates to a Steering Committee (the “Steering
Committee”) to serve in an advisory capacity with respect to their respective obligations under
this Agreement to (a) review manufacturing operations for the purpose of considering, proposing and
developing improvements to the ordering and manufacturing process and to the way the parties
communicate and interact, (b) consider strategic planning and facilitate manufacturing operations,
(c) provide ongoing advisory services with respect to manufacturing services hereunder, and (d)
attempt to resolve amicably any disputes arising between NOVEN and P&GP with respect to day-to-day
operations. The Steering Committee is intended to provide a mechanism to foster a better working
relationship between the parties. Except as otherwise expressly provided herein, the Steering
Committee shall not have any authority or responsibility hereunder or require any matter to be
brought (and no party shall be required to bring any matter) before the Steering Committee prior to
pursuing any available remedy. Furthermore, no action of the Steering Committee shall conflict or
be inconsistent with the terms of this Agreement absent an amendment to this Agreement agreed to by
the


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parties in writing. NOVEN and P&GP shall appoint as members of the Steering Committee a reasonable
number of suitably qualified and experienced representatives of each of NOVEN and P&GP and shall
each designate one member appointed by it to be the principal contact in relation to the day to day
management of and administration of this Agreement. Each of NOVEN and P&GP shall appoint no more
than four persons to the Steering Committee. The Steering Committee shall meet at regular
intervals on such dates and at such locations as may be agreed upon by NOVEN and P&GP, in person or
by video or telephone conference. In particular, the Steering Committee shall strive to meet at
least once per quarter, but in any event shall meet no less than twice per year during the Term
unless otherwise agreed by NOVEN and P&GP. The Steering Committee may also meet upon fifteen (15)
days’ written request by either NOVEN or P&GP, should circumstances necessitate such a meeting, and
if requested by either party, an expanded Steering Committee will meet to discuss forecasting
assumptions and other information regarding market conditions and expected demand for the Product.







	Article 13.	 	General Provisions.






	 	13.01	 	Force Majeure. Neither NOVEN nor P&GP shall be deemed to be in breach
hereof on account of any delay or failure in supply or other performance (except
the payment of money) caused in whole or in part by, or otherwise materially
related to, the occurrence of any contingency beyond the performing party’s
control, including but not limited to: war or hostility; failure or delay of land,
water or air transportation; governmental action; strikes or other labor disputes;
accident, fire, explosion, flood, storm or other acts of God; unavailability or
shortage of Raw Materials; or, in general, any other cause where NOVEN or P&GP has
exercised reasonable care in the prevention thereof; provided that the
party so affected shall give immediate notice thereof to the other party and shall
render the delayed performance in the manner as practicable as possible after such
event of force majeure has ceased or otherwise abated sufficiently in order to
permit it to do so without incurring any material additional expense which it would
not have had in the absence of such event of force majeure.




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	 	13.02	 	Notices. All notices, requests, reports, demands and other
communications made or given under the terms of this Agreement or in connection
herewith shall be in writing and shall be delivered personally or sent by facsimile
transmission, air courier or registered or certified mail, return receipt
requested, and shall be addressed to the appropriate party at the addresses set
forth in Schedule 3 hereto or to such other address or place as such party may from
time to time designate in writing. Any notice, request, demand or other
communication given or made pursuant to this Section 13.02 shall be deemed to have
been delivered (a) when delivered, if delivered personally, (b) when sent (with
written confirmation received), if sent by facsimile transmission on a Business
Day, (c) on the first Business Day after dispatch (with written confirmation
received), if sent by facsimile transmission on a calendar day other than a
Business Day, (d) on the second Business Day after dispatch, if sent by air
courier, and (e) on the fifth Business Day after mailing, if sent by mail.
	 
	 	13.03	 	Governing Law. This Agreement and any claims, disputes or causes of
action relating to or arising out of this Agreement shall be governed by and
interpreted for any and all purposes in accordance with the laws of New York,
without giving effect to the conflicts of law principles thereof.
	 
	 	13.04	 	Non-Waiver of Rights. The failure by either party at any time to
enforce any of the provisions of this Agreement shall not be construed as a waiver
of such provisions or any other provisions hereof. The exercise by either party of
any of its rights herein or at law or in equity shall not preclude or prejudice
such party from exercising any other rights provided herein or at law or in equity.
No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.




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	 	13.05	 	Entire Agreement — Modifications. This Agreement, together with the
License Agreement, supersedes all prior agreements, oral or written, between the
parties hereto and contains the entire and only agreement between the parties
and their respective Affiliates regarding the subject matter hereof (except as
otherwise expressly provided herein), and any representation, terms or
conditions relating thereto or in connection therewith, oral or in writing,
not incorporated herein will not be binding upon either party. No
modification of this Agreement or any of the provisions hereof will be binding
unless made in writing with express reference to this Agreement, signed by
both parties. All of the Schedules, and any amendments thereto made pursuant
to this Section 13.05, are a part of this Agreement and are hereby
incorporated herein.
	 
	 	13.06	 	Agreement Precedence. In the event of any conflict between this
Agreement and any Schedule, Purchase Order, SLEA or Quality Assurance Agreement,
this Agreement will take precedence, unless such other document specifically refers
to this Agreement and indicates that such other document will take precedence over
this Agreement.
	 
	 	13.07	 	Assignment. Except with respect to any sublicensee approved by NOVEN
under the License Agreement (and in such instance, only to the extent of such
sublicensee’s approved sublicense), P&GP shall not have the right to assign this
Agreement or delegate any of its rights, interests, duties or obligations hereunder
without the prior written consent of NOVEN, which consent may be granted or
withheld in NOVEN’s sole discretion. In the event NOVEN shall consent to any such
assignment or delegation, (a) the assignee or delegatee shall confirm in writing to
and for the benefit of NOVEN that it will comply with the covenants and agreements
of P&GP hereunder, and (b) no such assignment or delegation pursuant to this
Section 13.07 shall relieve P&GP of any of its obligations or liabilities under
this Agreement. NOVEN shall not have the right to assign or delegate to any third
party its obligations under this Agreement without the express prior written
consent of P&GP. Notwithstanding the foregoing, (i) either party may assign this
Agreement to any of its Affiliates without the prior written consent of the other
party; provided, that no such assignment of this




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	 	 	 	Agreement shall relieve the assignor of any of its obligations or liabilities
under this Agreement, (ii) either party may assign this Agreement without the
other party’s prior written consent in connection with the transfer or sale of
all or substantially all of its assets or business or its merger or
consolidation with another Person upon written notice to the other party, and
(iii) P&GP may assign this Agreement without Noven’s prior written consent in
connection with a transaction in which P&GP is spun off as an independent
publicly traded company, provided that such assignment shall be to such
company. Any attempted assignment in violation of this Section 13.07 shall be
void.
	 
	 	13.08	 	Partial Invalidity. Should any one or more provisions of this
Agreement be invalid or unenforceable in any jurisdiction, such provision(s) shall
be ineffective to the extent of such invalidity or unenforceability in such
jurisdiction, and the parties shall substitute for the invalid provision(s) a valid
provision(s) which achieves as much as possible the purport, sense and economic
purpose of the invalid provision(s), without rendering invalid or unenforceable any
such provision(s) in any other jurisdiction, and without affecting the validity or
enforceability of the remaining provisions of this Agreement.
	 
	 	13.09	 	Contractor Status. NOVEN is an independent contractor and nothing
herein contained and no course of dealing between the parties will create or be
deemed to create an agency, partnership, joint venture or any other relationship,
fiduciary or otherwise between the parties hereto. Neither party is granted any
right or authority to assume or to create an obligation or responsibility, express
or implied, on behalf of or in the name of the other party or bind the other party
in any manner whatsoever, and neither party shall hold itself out as having such
authority. All personnel of NOVEN shall be solely employees of NOVEN and shall not
represent themselves as employees of P&GP. All personnel of P&GP
shall be solely employees of P&GP and shall not represent themselves as
employees of NOVEN.




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	 	13.10	 	Disputes. In the event of any controversy or claim arising out of,
relating to or in connection with any provision of this Agreement, or the rights or
obligations of the parties hereunder, the parties shall try to settle their
differences amicably among themselves. Either party may initiate such informal
dispute resolution by sending written notice of the dispute to the other party, and
within ten (10) calendar days after such notice, appropriate representatives of the
parties shall meet for attempted resolution by good faith negotiations. If such
representatives are unable to resolve promptly such disputed matter, it shall be
referred to the presidents of NOVEN and P&GP, or their respective designees, for
discussion and resolution. If such personnel are unable to resolve such dispute
within thirty (30) calendar days of initiating such negotiations, the parties agree
first to try in good faith to settle the dispute by mediation in Washington, D.C.
under the Commercial Mediation Rules of the American Arbitration Association. If
following any such mediation the parties still have not been able to resolve any
such dispute, the parties agree to submit the dispute to final and binding
arbitration before a single arbitrator in Washington, D.C. under the Commercial
Arbitration Rules of the American Arbitration Association. The parties agree that
a judgment may be entered on the arbitrator’s award in any court of competent
jurisdiction. The arbitrator in reviewing any claim under this Agreement shall
have the exclusive authority to determine any issues as to the arbitrability of any
such claim or related disputes under this Agreement. In reaching a decision, the
arbitrator shall interpret, apply and be bound by this Agreement and by Applicable
Law. The arbitrator shall have no authority to add to, detract from or modify this
Agreement or any Applicable Law in any respect. The arbitrator may not grant any
remedy or relief that a court of competent jurisdiction could not grant, nor any
relief or remedy greater than that sought by the parties, nor any punitive,
incidental or consequential damages,




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	 	 	 	except to the extent any such punitive, incidental or consequential damages
are payable to a third party. Any up-front costs of the arbitrator shall be
borne equally by the parties; provided, however, that the
non-prevailing party in any such arbitration shall pay, and to the extent
applicable reimburse the prevailing party for, the costs and expenses of the
arbitrator, including costs and expenses payable to the American Arbitration
Association and to the arbitrator; and provided further, that
in the event each party prevails as to certain claims in connection with any
such arbitration, the fees of the arbitrator shall be paid and/or reimbursed
in accordance with the decision of the arbitrator. Each party shall bear its
own costs incurred in connection with attorneys’ fees and related expenses.
Notwithstanding the foregoing provisions of this Section 13.10, nothing in
this Agreement shall limit or in any way restrict the ability of any party to
seek injunctive or other equitable relief in a court or other judicial body.
	 
	 	13.11	 	Audits.
	 
	 	(b)	 	It is agreed that P&GP may arrange, through NOVEN’s management, routine
observational visits by technical or corporate quality assurance personnel to
NOVEN’s manufacturing facility. In connection with such visits, P&GP’s and/or its
Affiliate’s representatives will be escorted at all times by NOVEN personnel.
	 
	 	(c)	 	Manufacturing Audits will be conducted in accordance with the Quality
Assurance Agreement.
	 
	 	13.12	 	Time Periods. Any notice or other time period hereunder that ends on
a day other than a Business Day, counting forward or backward, as the case may be,
shall automatically be extended to the next Business Day. Unless indicated as
Business Days, references in this Agreement to days shall mean calendar days.
	 
	 	13.13	 	Expenses. Except as expressly set forth herein, each party hereto
shall bear all fees and expenses incurred by such party in connection with,
relating to or arising out of the execution, delivery and performance of this
Agreement and the
performance of its obligations hereunder, including attorneys’, accountants’
and other professional fees and expenses.




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	 	13.14	 	Binding Effect; No Third Party Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their successors
and permitted assigns. Nothing in this Agreement, express or implied, is intended
to confer on any Person other than the parties hereto, and their respective
indemnitees, successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
	 
	 	13.15	 	Interpretation. The article and section headings contained in this
Agreement are for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement. As used in this Agreement, any reference to the
masculine, feminine or neuter gender shall include all genders, the plural shall
include the singular, and singular shall include the plural. Unless the context
otherwise requires, the term “party” when used herein means a party hereto.
References herein to a party or other Person include their respective successors
and assigns. Unless the context otherwise requires, references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement. Unless the context
otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar
meaning when used in this Agreement refer to this Agreement in its entirety and not
to any particular Article, Section or provision hereof. With regard to each and
every term and condition of this Agreement, the parties understand and agree that
the same have or has been mutually negotiated, prepared and drafted, and that if at
any time the parties desire or are required to interpret or construe any such term
or condition or any agreement or instrument subject thereto, no consideration shall
be given to the issue of which party actually prepared, drafted or requested any
term or condition of this Agreement.
	 
	 	13.16	 	Counterparts. This Agreement shall become binding when any one or
more counterparts hereof, individually or taken together, shall bear the signatures
of
each of the parties hereto. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against the party
whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument. Each party may execute this
Agreement on a facsimile of the Agreement. In addition, facsimile signatures
of authorized signatories of either party shall be valid and binding and
delivery of a facsimile signature by either party shall constitute due
execution and delivery of this Agreement.




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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth
above.




	 	 	 	 	 	 	 
	NOVEN PHARMACEUTICALS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	(NOVEN)	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Richard P. Gilbert	 	 	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Vice President — Operations	 	 	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	August 14, 2008	 	 	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	P&G PHARMACEUTICALS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	(P&GP INC.)	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Woody Keown
	 	Form	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Director, Purchasing
	 	Finance	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	August 14, 2008
	 	Execution	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	P&G PHARMACEUTICALS, S.A.R.L	 	 	 	 
	 
	 	 	 	 	 	 
	(P&GP SARL)	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ P. Slater
	 	Form	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Purchasing Director
	 	Finance	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	August 13, 2008
	 	Execution	 	 
	 

	 	 
	 	 	 	 






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