EX-10.2



 






     Pursuant to 17 CFR 240.24b-2, confidential information (indicated by [*])
has been omitted and has been filed separately with the Securities and Exchange
Commission pursuant to a Confidential Treatment Application filed with the
Commission.



Exhibit 10.2



PRODUCT DEVELOPMENT AND LICENSE AGREEMENT




BY AND BETWEEN




SHIRE LLC




AND




DURAMED PHARMACEUTICALS, INC.




DATED AS OF AUGUST 14, 2006




 









 








PRODUCT DEVELOPMENT AND LICENSE AGREEMENT




     This PRODUCT DEVELOPMENT AND LICENSE AGREEMENT (the “Agreement”) is dated as of August 14,
2006 by and among SHIRE LLC, a Kentucky limited liability company having a principal place of
business at 9200 Brookfield Court, Florence, Kentucky 41042 (together with its Affiliates,
“Shire”), SHIRE plc, a British public limited company having a principal place of business at
Hampshire International Business Park, Chineham, Basingstoke, England RG24 8EP, solely for purposes
of the provisions of Section 15.10 of this Agreement, and DURAMED PHARMACEUTICALS, INC., a Delaware
corporation having a place of business at 400 Chestnut Ridge Road, Woodcliff Lake, NJ 07677
(“Duramed”). Shire and Duramed are sometimes referred to herein individually as a “Party” and
together as the “Parties”.



RECITALS




     WHEREAS, Duramed is a pharmaceutical company focused on developing novel pharmaceuticals that
are safer and improved versions of widely-prescribed pharmaceutical products, including cervical
ring-based female healthcare products;



     WHEREAS, Shire is a worldwide, specialty pharmaceutical company engaged in the development,
manufacturing and marketing of pharmaceutical products;



     WHEREAS, Duramed has made a considerable investment in developing certain cervical and vaginal
ring technology;



     WHEREAS, Duramed has been conducting research and development on certain pharmaceutical
products that use such ring technology with certain pharmaceutical compounds; and



     WHEREAS, pursuant to the terms and conditions of this Agreement, the Parties desire to
cooperate on the continued research and development of such pharmaceutical products, and research
and development on other pharmaceutical products that use such ring technology with pharmaceutical
compounds, with the results of such cooperation to be commercialized by Shire in the Shire
Territory and by Duramed in the Duramed Territory.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto hereby agree as follows:



ARTICLE 1



DEFINITIONS




     The following terms shall have the following meanings as used in this Agreement:



     1.1 “Act” means the United States Federal Food, Drug and Cosmetics Act, as amended from time
to time, and the rules, regulations and guidelines promulgated thereunder.



 









 





     1.2 “Affiliate” means a Person that controls, is controlled by or is under common control with
a Party. For the purposes of this definition, the word “control” (including, with correlative
meaning, the terms “controlled by” or “under common control with”) means the actual power, either
directly or indirectly through one or more intermediaries, to direct the management and policies of
such Person, whether by the ownership of more than fifty percent (50%) of the voting stock of such
Person (it being understood that the direct or indirect ownership of a lesser percentage of such
stock shall not necessarily preclude the existence of control), or by contract or otherwise.



     1.3 “Business Day” means any day other than (a) Saturday or Sunday or (b) any other U.S.
Federal holiday.



     1.4 “cGCP” means the current Good Clinical Practice standards for the design, conduct,
performance, monitoring, auditing, recording, analyses, and reporting of clinical trials, including
the requirements in 21 C.F.R. Parts 11, 50, 54, 56, 312, and 314, that provide assurance that the
data and reported results are credible and accurate, and that the rights, integrity, and
confidentiality of trial subjects are protected.



     1.5 “cGLP” means current Good Laboratory Practices (i) as promulgated under the Act at 21
C.F.R. Part 58, as the same may be amended or re-enacted from time to time and (ii) as required by
Law in countries other than the United States where non-clinical laboratory studies are conducted.



     1.6 “cGMP” means all applicable standards relating to manufacturing practices for fine
chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished
pharmaceutical products, including (a) the principles detailed in the U.S. Current Good
Manufacturing Practices, 21 C.F.R. Parts 210 and 211 and The Rules Governing Medicinal Products in
the European Community, Volume IV Good Manufacturing Practice for Medicinal Products as each may be
amended from time to time, (b) the principles detailed in the ICH Q7A guidelines, (c) Laws
promulgated by any Governmental Authority in any country having jurisdiction over Manufacturing or
(d) guidance documents promulgated by any Governmental Authority in any country having jurisdiction
over Manufacturing (including but not limited to advisory opinions, compliance policy guides and
guidelines).



     1.7 “Clinical Trial Costs” means the [*] incurred by a Party or its Affiliates that is
specifically attributable or reasonably allocable to the conduct of clinical trials, and which is
payable (a) in the case of such clinical trials conducted by a clinical research organization
(“CRO”) or other Third Party on behalf of a Party or its Affiliates, as an out-of-pocket expense to
such a CRO, or (b) in the case of such clinical trials conducted by a Party or its Affiliates, at
such Party’s or its Affiliate’s actual cost including internal costs and direct expenses.



     1.8 “Collaboration Intellectual Property” means any Inventions, Improvements, Patents,
Know-How, or other intellectual property (whether patentable or not) (i) conceived, developed or
reduced to practice by either Party or its Affiliates, alone or jointly with each other or a Third
Party, during the Reimbursement Period in connection with any Development Plan or the Development
of Collaboration Products hereunder, or (ii) existing as of the date of this



2









 







Agreement and Controlled by Duramed and its Affiliates and related to Collaboration Products
or the Development, use or Commercialization of a Collaboration Product.



     1.9 “Collaboration Patents” means any and all Patents included in the Collaboration
Intellectual Property.



     1.10 “Collaboration Product” means:




	 	(a)	 	(i) a pharmaceutical product formulated as a cervical or
vaginal ring product that contains or comprises any Compound(s) initially
identified on Exhibit A hereto, (ii) any [*], and (iii) any and all
Improvements to the foregoing, in each case made during the Reimbursement
Period and for which Shire has reimbursed Development Expenses during the
Reimbursement Period; and
	 
	 	(b)	 	the levonorgestrel/ethinyl estradiol tablets 0-15 mg/0.03 mg
and ethinyl estradiol tablets 0.01 mg extended-cycle oral contraceptive product
of Duramed approved by the FDA on May 25, 2006 under New Drug Application
number [*] (“Seasonique”).





     1.11 “Commercialization” means any and all activities directed to the commercial
Manufacturing, marketing, offering for sale and selling of a pharmaceutical product. In addition,
“Commercialize” means to engage in any of the foregoing activities.



     1.12 “Compound” means any of the compounds set forth on Exhibit A.



     1.13 “Control” means with respect to any intellectual property right or other intangible
property, that a Party or one of its Affiliates owns or has a license or sublicense to such item or
right, and has the ability to grant access, license or sublicense in or to such right without
violating the terms of any agreement or other arrangement with any Third Party.



     1.14 “Development” means all activities relating to the research, development of, and
obtaining Regulatory Approval for, a pharmaceutical product, including all test method development,
stability testing, toxicology, formulation, process development, cGMP audits (excluding any audits
for commercial Manufacture), cGLP audits, cGCP audits, validation, quality assurance/quality
control development, preclinical and clinical testing and studies, regulatory affairs and outside
counsel regulatory legal services relating to any of the foregoing, and any activities relating to
the Manufacture of pharmaceutical products other than commercial quantities thereof.



     1.15 “Development Expenses” means the expenses incurred by Duramed or its Affiliates from and
after the Effective Date in carrying out a Development Plan and specifically attributable or
reasonably allocable to the Development of a Collaboration Product, including [*] incurred in
connection with (i) a Global Development Plan pursuant to Section 3.2.2(c), and/or (ii) seeking
Regulatory Approval of a Collaboration Product in [*]. Development Expenses shall include, but are
not limited to expenses arising from: [*] for the [*] a Governmental Authority to obtain Regulatory
Approval of a Collaboration Product in the United States; and [*] and[*] Collaboration Products[*].
Development Expenses shall exclude (i) [*], (ii) [*] incurred in



3









 







connection with seeking Regulatory Approval outside [*] other than in connection with a Global
Development Plan pursuant to 3.2.2(c), (iii) [*], and (iv) [*].



     1.16 “Diligent Efforts” means, with respect to a Party, the efforts and resources that would
be used by such Party consistent with prevailing pharmaceutical industry standards for a company of
similar size and scope to such Party with respect to a product or potential product at a similar
stage in its development or product life and of similar market potential taking into account
safety, efficacy and the competitiveness of alternative products in the market or under
development.



     1.17 “Drug Approval Application” means an application for Regulatory Approval required before
commercial sale or use of a pharmaceutical product as a drug in a regulatory jurisdiction,
including a new drug application (“NDA”) or supplemental new drug application or any amendments
thereto submitted to the FDA.



     1.18 “Duramed Territory” means the United States, Canada, Albania, Austria, Belarus, Bosnia
and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Liechtenstein, Moldova, Poland,
Romania, Russia, Slovakia, Slovenia, Switzerland, Ukraine, Kazakhstan, Macedonia, Lithuania,
Latvia, Azerbaijan, Armenia and Georgia, and their respective territories and possessions;
provided, however, that in the event that Pliva, dd does not become an Affiliate of Duramed within
twelve (12) months of the Effective Date, the Duramed Territory shall thereafter mean only the
United States and Canada.



     1.19 “Effective Date” means the effective date as set forth in that certain Settlement
Agreement, dated as of August 14, 2006, by and between the Parties (the “Settlement Agreement”).



     1.20 “EMEA” means the European Medicines Agency or any successor agency thereto.



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



     1.22 “First Commercial Sale” means, with respect to a pharmaceutical product and on a
country-by-country basis, the first commercial sale after receipt of Regulatory Approval of such
product in such country. Sales for clinical studies, compassionate use, named patient programs,
sales under a treatment IND, test marketing, any nonregistrational studies, or any similar instance
where the product is supplied with or without charge shall not constitute a First Commercial Sale.



     1.23 “GAAP” means generally accepted accounting principles in the U.S., consistently applied.



     1.24 “Governmental Authority” means any court, tribunal, arbitrator, agency, legislative body,
commission, official or other instrumentality of (a) any government of any country, (b) a federal,
state, province, county, city or other political subdivision thereof or (c) any supranational body,
including without limitation the FDA and the EMEA.



4









 





     1.25 “Improvement” means any enhancement or modification of (a) a Collaboration Product’s or
Ring Product’s dosage, dosage form or indication, (b) the cervical or vaginal ring, for Ring
Products and Collaboration Products based on a cervical or vaginal ring, (c) a [*] that is not a
cervical or vaginal ring product, or (d) the process or method for the Manufacture of a
Collaboration Product or Ring Product, in each case whether or not patentable, that is developed by
or for, invented or acquired by, or comes under the Control of, Duramed or Shire or their
respective Affiliates during the Term; provided, however, that (x) with respect to a Ring Product,
or a Collaboration Product based on a cervical or vaginal ring, an Improvement shall not include
any modification or improvement not used for a cervical or vaginal ring product, and for
modifications or improvements used for a cervical or vaginal ring products, only to the extent used
for such products, (y) with respect to a [*] that is not a cervical or vaginal ring product, an
Improvement shall not include any other delivery system or formulation involving the same compound;
provided, however, that if Duramed ceases development of such [*] or an NDA for such [*] was not
approved, and Duramed commences development of another delivery system or formulation involving the
same compound for such [*] during the Reimbursement Term, such delivery system or formulation
involving such compound shall be included as an Improvement, and (z) with respect to a
Collaboration Product, Improvements shall not include any active pharmaceutical ingredient other
than the applicable Compound, and with respect to a Ring Product, Improvements shall not include
any compounds other than [*].



     1.26 “IND” means an Investigational New Drug Application filed with FDA or a similar
application filed with an applicable Regulatory Authority outside of the United States such as a
clinical trial application (CTA) or a clinical trial exemption (CTX).



     1.27 “Invention” means any discovery (whether patentable or not) conceived during the Term and
potentially useful for the Manufacture, use, Development or Commercialization of a product.



     1.28 “Know-How” means any non-public information, results and data of any type whatsoever, in
any tangible or intangible form whatsoever, including without limitation, databases, ideas,
discoveries, inventions, improvements, trade secrets, practices, methods, tests, assays,
techniques, specifications, processes, formulations, formulae, knowledge, know-how, skill,
experience, materials, including pharmaceutical, chemical and biological materials, products and
compositions, scientific, technical or test data (including pharmacological, biological, chemical,
biochemical, toxicological and clinical test data), clinical study protocols, analytical and
quality control data, stability data, studies and procedures, drawings, plans, designs, diagrams,
sketches, technology, documentation, and patent-related and other legal information or
descriptions.



     1.29 “Law” or “Laws” means all laws, statutes, rules, codes, regulations, orders, judgments
and/or ordinances of any Governmental Authority.



     1.30 “Losses” means any and all liabilities, damages, fines, penalties, deficiencies, losses
and expenses (including interest, court costs, amounts paid in settlement, reasonable fees of
attorneys, accountants and other experts or other reasonable expenses of litigation or other
proceedings or of any claim, default or assessment); provided, however, that the term “Losses”



5









 







shall not include any special, consequential, indirect, punitive or similar damages, except to
the extent actually paid by a Party pursuant to any Third Party Claim.



     1.31 “Manufacture” means all activities related to the manufacturing of a pharmaceutical
product, or any ingredient thereof, for Development or for commercial sale, packaging, in-process
and finished product testing, release of product or any component or ingredient thereof, quality
assurance activities related to manufacturing and release of product, ongoing stability tests and
regulatory activities related to any of the foregoing.



     1.32 “Patent” means (a) patents, re-examinations, reissues, renewals, extensions,
supplementary protection certificates and term restorations, any confirmation patent or
registration patent or patent of addition based on any such patent, (b) pending applications for
patents, including without limitation continuations, continuations-in-part, divisional, provisional
and substitute applications, and inventors’ certificates, (c) all foreign counterparts of any of
the foregoing, and (d) all priority applications of any of the foregoing.



     1.33 “Patent Expenses” means the fees and expenses of outside counsel and payments to Third
Parties incurred after the Effective Date in connection with the preparation, filing, prosecution
and maintenance of the Collaboration Patents, including the costs of patent interference and
opposition proceedings, net of any reimbursement of such expenses by Third Parties.



     1.34 “Person” means any natural person, corporation, firm, business trust, joint venture,
association, organization, company, partnership or other business entity, or any government, or any
agency or political subdivisions thereof.



     1.35 “Regulatory Approval” means all approvals (including, without limitation, where
applicable, pricing and reimbursement approval and schedule classifications), product and/or
establishment licenses, registrations or authorizations of any regional, federal, state or local
regulatory agency, department, bureau or other governmental entity, necessary for the manufacture,
use, storage, import, export, transport, offer for sale, or sale of a pharmaceutical product in a
regulatory jurisdiction.



     1.36 “Ring Intellectual Property” means (i) Collaboration Intellectual Property and (ii) any
Patents and Know-How (whether patentable or not) existing as of the date of this Agreement and
Controlled by Duramed and its Affiliates and related to pharmaceutical products formulated as a
cervical or vaginal ring.



     1.37 “Ring Product” means a cervical or vaginal ring product containing the pharmaceutical
product known as [*], and any Improvements thereto created by Shire pursuant to the license granted
under Section 10.1.



     1.38 “Shire Territory” means all countries in the world, together with their territories and
possessions, other than the countries, territories and possessions that are part of the Duramed
Territory.



     1.39 “Shire Territory Global Development Expenses” means those Development Expenses of Duramed
approved under the Global Development Plan solely with respect to



6









 







obtaining Regulatory Approval of Collaboration Products in the Shire Territory. For the
avoidance of doubt, any other Development Expenses of Duramed approved under the Global Development
Plan, including for obtaining Regulatory Approval of Collaboration Products in the United States
shall not be considered Shire Territory Global Development Expenses.



     1.40 “Supply Agreement” means the supply agreement between Duramed and Shire for the supply of
finished Collaboration Products attached hereto as Exhibit B.



     1.41 “Third Party” means any entity other than Duramed or Shire or their respective
Affiliates.



     1.42 “Valid Claim” means (a) any claim of an issued and unexpired patent within a Patent which
has not been held unenforceable or invalid by a court or other governmental agency of competent
jurisdiction in an unappealed or unappealable decision, and which has not been disclaimed or
admitted to be invalid or unenforceable through reissue or otherwise, or (b) a pending claim in a
pending patent application within a Patent. Notwithstanding subsection (b) above, in the event
that a pending claim in a pending patent application does not issue as a valid and enforceable
claim in an issued patent within seven (7) years after the earliest date from which such patent
application claims priority, such a pending claim shall not be a Valid Claim, unless and until such
pending claim subsequently issues as a claim in an issued patent meeting the criteria set forth in
clause (a) above, in which case such claim shall be reinstated and be deemed to be a Valid Claim as
of the date of issuance of such patent.



     Interpretation. Unless the context of this Agreement otherwise requires, (a) words of one gender
include the other gender; (b) words using the singular or plural number also include the plural or
singular number, respectively; (c) the terms “hereof,” “herein,” “hereby,” and other similar words
refer to this entire Agreement; (d) “including” shall be deemed followed by “without limitation”,
“but not limited to” or words of similar meaning; and (e) the terms “Article” and “Section” refer
to the specified Article and Section of this Agreement. Whenever this Agreement refers to a number
of days, unless otherwise specified, such number shall refer to calendar days.


Additional Definitions. Each of the following definitions is set forth in the Section of this
Agreement indicated below:




	 	 	 
	Agreement

	 	Preamble
	Breaching Party

	 	Section 14.2
	Carryover Expenses

	 	Section 7.2.1
	Ceased Collaboration Product

	 	Section 14.3.1
	Collaboration Manager

	 	Section 2.4
	Collaboration Product INDs

	 	Section 13.3(b)
	Confidential Information

	 	Section 11.1.1
	Development Plan

	 	Section 3.2.1
	Disclosing Party

	 	Section 11.1.1
	Dollars

	 	Section 17.7
	Duramed

	 	Preamble
	Duramed Marks

	 	Section 12.7.3






7









 






	 	 	 
	Global Development Plan

	 	Section 3.2.2(c)
	Indemnification Claim Notice

	 	Section 15.2
	Indemnified Party

	 	Section 15.2
	Indemnifying Party

	 	Section 15.2
	Indemnitee

	 	Section 15.2
	Indemnitees

	 	Section 15.2
	Maximum Annual Reimbursement Amount

	 	Section 7.2.1
	Maximum Quarterly Reimbursement Amount

	 	Section 7.2.1
	Maximum Reimbursement Amount

	 	Section 7.2.1
	Milestone Payments

	 	Section 7.2.1
	NDA

	 	Section 1.17
	Notifying Party

	 	Section 14.2
	Parties

	 	Preamble
	Party

	 	Preamble
	Receiving Party

	 	Section 11.1.1
	Recovery

	 	Section 12.4.2(c)(iv)
	Reimbursement Period

	 	Section 7.2.1
	Reimbursable Expenses

	 	Section 7.2.1
	[*]

	 	Section 3.4
	[*]

	 	Section 3.4
	[*]

	 	Section 3.4
	[*]

	 	Section 3.4
	[*]

	 	Section 3.4
	Representatives

	 	Section 16.1
	Seasonique

	 	Section 1.10
	Settlement Agreement

	 	Section 1.19
	Shire

	 	Preamble
	Shire Marks

	 	Section 12.7.3
	Steering Committee

	 	Section 2.4
	Term

	 	Section 14.1
	Third Party Claim

	 	Section 15.1.1
	$

	 	Section 17.7






ARTICLE 2



PRODUCT DEVELOPMENT




     2.1 General. The general purpose of this Agreement is the Development and Commercialization
of Collaboration Products.



     2.2 Exclusive Development of Certain Ring Products. Duramed acknowledges and agrees that
during the Reimbursement Period, all Development of pharmaceutical products comprising a cervical
or vaginal ring that contains or comprises any of the Compound(s) identified on Exhibit A
hereto by Duramed or its Affiliates, shall be undertaken exclusively with Shire pursuant to the
terms of this Agreement.



8









 





     2.3 Collaboration Managers. Each Party shall appoint a senior representative having a general
understanding of development, regulatory, manufacturing and marketing issues to act as its
Collaboration Manager (a “Collaboration Manager”). Each Collaboration Manager shall be primarily
responsible for facilitating the flow of information and otherwise promoting communications and
collaboration between the Parties and also internally within the respective Parties. Each
Collaboration Manager shall also be responsible for:



          (a) facilitating coordination among the various functions representatives of Duramed or Shire,
as appropriate; and




          (b) providing single-point communication for seeking consensus both internally within the
respective Party’s organization and together regarding strategy, planning, development, regulatory
and manufacturing issues.




     2.4 Steering Committee. As soon as practicable after the Effective Date, the Parties shall
form a Steering Committee (the “Steering Committee”), which shall function in accordance with the
Steering Committee charter attached hereto as Exhibit C. The members of the Steering
Committee shall cooperate in good faith to effectively implement this Agreement and to amicably
resolve any disputes or disagreements related to the implementation hereof.



ARTICLE 3



DEVELOPMENT OF COLLABORATION PRODUCTS




     3.1 Overview. Subject to the terms and conditions of this Agreement, (a) Duramed shall be
responsible for the Development of Collaboration Products for Commercialization in the Duramed
Territory, and (b) Shire shall be responsible for the Development of Collaboration Products for
Commercialization in the Shire Territory.



     3.2 Development Plans.



          3.2.1 Scope. The Development of each Collaboration Product under this Agreement shall be
governed by a development plan (each, a “Development Plan”). Each Development Plan shall be
developed by the responsible Party for review and comment by the Steering Committee, with the
overall objective of achieving the commercial potential of the Collaboration Product. Each
Development Plan shall describe the proposed overall program of Development for the Collaboration
Product for each indication in the Duramed Territory and Shire Territory, as applicable, including
[*] and [*] and [*] Regulatory Approval, as well as [*] Drug Approval Applications and Regulatory
Approvals. Each of Duramed’s Development Plans shall include a budget for Development Expenses,
including separately [*] during the Reimbursement Period.




          3.2.2 Preparation and Review of Development Plans.




               (a) The Development Plan for the Development by Duramed of Collaboration Products for
Commercialization in the Duramed Territory shall be prepared by Duramed and shall be delivered to
the Steering Committee. Duramed shall consider in good faith any comments from the Steering
Committee. The current Development Plans for existing Collaboration Products are attached as
Exhibit D hereto.



9









 





               (b) The Development Plan for the Development by Shire of Collaboration Products for
Commercialization in the Shire Territory shall be prepared by Shire and shall be delivered to the
Steering Committee. Shire shall consider in good faith any comments from the Steering Committee.



               (c) In the event the Steering Committee unanimously agrees that a Collaboration Product (or
any aspect of its Development) should be Developed under a global Development program, the Steering
Committee shall prepare a global Development Plan (each, a “Global Development Plan”). Once a
Global Development Plan is agreed to, [*] under such Global Development Plan. The Development
Expenses incurred in the conduct of Development under a Global Development Plan shall be subject to
reimbursement pursuant to Section 7.2.



          3.2.3 Updates to Development Plans. As early as necessary in [*] beginning with the [*] after
the Effective Date, or otherwise as may be required during any [*], Duramed, Shire or the Steering
Committee, as applicable, shall update and prepare the Development Plan for any Collaboration
Products for the following [*] to take into account completion, commencement or cessation of
Development activities not contemplated by the then-current Development Plan, and submit such
proposed, updated Development Plan to the Steering Committee for its review and comment no later
than [*].




          3.2.4 Diligence. Each Party shall use Diligent Efforts to carry out the Development of each
Collaboration Product for Commercialization. Notwithstanding the foregoing, each Party
acknowledges that the other Party makes no representations and/or warranties that any Development
Plan will be successful or that the activities hereunder will result in any Collaboration Products
suitable for Commercialization.




     3.3 [*] of Collaboration Products. Duramed shall have the right, [*] Development of a
then-existing Collaboration Product. Duramed shall not directly or indirectly, alone or with or
through a Third Party, [*] Development [*] Collaboration Product[*] provided, however, that in the
event [*], Duramed shall have the right [*] Development of such [*]Collaboration Product [*]
hereunder to the [*] Development. If Duramed [*] Collaboration Product [*] Development [*] in the
[*] in respect of which [*], Shire may [*] Development and Commercialization of such Collaboration
Product [*]; provided, however, [*]Development.



     3.4 [*]. In the event that Duramed [*] Development of a [*] Collaboration Product, Duramed
may, [*] such Collaboration Product [*]. Duramed shall deliver to Shire a [*] Development of the
Collaboration Product [*]. Shire shall have [*] in which to [*] Duramed that it [*] for failing
[*] set forth in this Section 3.4. In delivering any [*], Shire shall specify what [*] to complete
its [*] of the [*]. Duramed shall use its reasonable best efforts to provide Shire any [*] within
[*]of receipt of the [*]. Shire may not [*] so long as (i) such [*] is in the [*]; (ii) such [*]
and [*] reasonably demonstrate that such [*] has [*] of at least [*] in [*], provided that any [*]
having the [*] to achieve at least [*] in [*] in the United States, as [*], shall be deemed to
satisfy this requirement; and (iii) Duramed has the [*] in the Shire Territory.



10









 





ARTICLE 4



REGULATORY ACTIVITIES




          4.1 General Obligations. Duramed shall be responsible for, and use Diligent Efforts in,
preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration
Products in the Duramed Territory. Shire shall be responsible for, and use Diligent Efforts in,
preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration
Products in the Shire Territory. In furtherance of the foregoing, Shire shall have sole discretion
with respect to preparing and filing Drug Approval Applications and seeking Regulatory Approvals
for Collaboration Products from the EMEA in all European Union member states, regardless of whether
any countries within the Duramed Territory are members of the European Union, provided that, [*]
seeking Regulatory Approvals for a Collaboration Product [*] of the First Commercial Sale of such
Collaboration Product (and the [*] includes any [*]), Duramed shall [*] Regulatory Approval for
such Collaboration Product [*].




          4.2 Transfer of Data to Shire. Within [*] after the Effective Date, Duramed shall provide to
Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled
as of the Effective Date with respect to the existing Collaboration Products, including any study
reports in draft or final form. Thereafter on [*], Duramed shall provide to Shire copies of all
such data (including any data compiled in support of a Drug Approval Application) as soon as
reasonably practicable after such data becomes available or compiled, including any drafts and
final versions of any study reports. All disclosures under this Section 4.2 shall be delivered in
electronic format. During the Reimbursement Period, on [*], Shire shall provide to Duramed [*]
Inventions and Improvements [*] Shire or its Affiliates, [*], during the previous [*].




          4.3 Transfer of Data to Duramed. On [*], Shire shall provide to Duramed copies of all
substantive or material Manufacturing, pre-clinical and clinical data compiled by or on behalf of
Shire with respect to the Collaboration Products (including any data compiled in support of a Drug
Approval Application) as soon as reasonably practicable after such data becomes available or
compiled, including any drafts and final versions of any study reports. All disclosures under this
Section 4.3 shall be delivered in electronic format. During the Reimbursement Period, on [*],
Shire shall provide to Duramed [*] Inventions and Improvements [*] Shire or its Affiliates [*],
during the previous [*].




          4.4 Right of Reference.




               4.4.1 Duramed shall permit Shire access to and grant Shire the right to reference and use, for
purposes of the Collaboration Products, all data, regulatory filings and regulatory communications
associated with any submissions for Regulatory Approval or other issues associated with any
Collaboration Product, that is or would be relevant to Shire’s Development or Commercialization of
a Collaboration Product in the Shire Territory, or in connection with any Regulatory Approval
process within the European Union, including without limitation with the EMEA. To the extent that
any such data, regulatory filings or regulatory communications are held by a Third Party, then
Duramed shall arrange direct access to the portions of such data, regulatory filings or regulatory
communications that are relevant to the activities of Shire that are contemplated by this
Agreement.



11









 





               4.4.2 Shire shall permit Duramed access to and grant Duramed the right to reference and use,
for purposes of the Collaboration Products, all data, regulatory filings and regulatory
communications associated with any submissions for Regulatory Approval or other issues associated
with any Collaboration Product, that is or would be relevant to Duramed’s Development or
Commercialization of a Collaboration Product in the Duramed Territory. To the extent that any such
data, regulatory filings or regulatory communications are held by a Third Party, then Shire shall
arrange direct access to the portions of such data, regulatory filings or regulatory communications
that are relevant to the activities of Duramed that are contemplated by this Agreement.



          4.5 Meetings.




               4.5.1 In the event that Shire desires Duramed to participate in any meeting, discussion or
substantive telephone conference call with any Governmental Authority relating to any Drug Approval
Application or Regulatory Approval for Collaboration Products in the Shire Territory or such
meetings, discussions or substantive telephone conferences pertaining to member states of the
European Union outside the Shire Territory, Shire shall provide Duramed with reasonable advance
notice of any such meeting, discussion or conference call and Duramed shall participate with Shire.
Shire shall reimburse Duramed for its reasonable out-of-pocket expenses incurred in connection
with such participation, and any such reimbursement shall not be credited against the reimbursement
provided for in Section 7.2.



               4.5.2 In the event that Duramed desires Shire to participate in any meeting, discussion or
substantive telephone conference call with any Governmental Authority relating to any Drug Approval
Application or Regulatory Approval for Collaboration Products in the Duramed Territory other than,
subject to Section 4.1, those member states in the European Union in the Duramed Territory for
which Shire is responsible, Duramed shall provide Shire with reasonable advance notice of any such
meeting, discussion or conference call and Shire shall participate with Duramed. Duramed shall
reimburse Shire for its reasonable out-of-pocket expenses incurred in connection with such
participation.



     4.6 Assistance. Subject to the terms of this ARTICLE 4, each Party agrees to provide the
other with all reasonable assistance and take all actions reasonably requested by the other Party
that are necessary or desirable to enable the other Party to comply with any Law applicable to the
Collaboration Products, including, but not limited to, meeting, reporting and other obligations to
maintain and update any Regulatory Approvals for the Collaboration Products.



     4.7 Compliance with Laws. Each Party and its Affiliates and permitted Third Party contractors
shall perform its responsibilities under this ARTICLE 4 in accordance with all applicable Laws,
including without limitation cGLPs, cGCPs and cGMPs.



ARTICLE 5



COMMERCIALIZATION OF COLLABORATION PRODUCTS




     5.1 Principles of Commercialization. Subject to the terms and conditions of this Agreement,
Duramed shall have the sole right and responsibility with respect to Commercializing Collaboration
Products in the Duramed Territory. Subject to the terms and



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conditions of this Agreement, Shire shall have the sole right and responsibility with respect
to Commercializing Collaboration Products in the Shire Territory.




     5.2 Shire Territory.



               5.2.1 For each Collaboration Product, Shire shall be solely responsible for handling all
returns, recalls, order processing, invoicing and collection, distribution, and inventory and
receivables arising from sales to Third Parties within the Shire Territory. Duramed may not accept
orders from a Third Party for a Collaboration Product or make sales for its own account (except to
Shire) or for Shire’s account in the Shire Territory. If Duramed receives any order for a
Collaboration Product in the Shire Territory, it shall refer such orders to Shire for acceptance or
rejection. Shire shall have the right and responsibility for establishing and modifying the terms
and conditions with respect to the sale of all Collaboration Products in the Shire Territory,
including any terms and conditions relating to or affecting the price at which the Collaboration
Products shall be sold, discounts available to managed care providers, any discount attributable to
payments on receivables, distribution of the Collaboration Products, and credits, price
adjustments, or other discounts and allowances to be granted or refused.



               5.2.2 In the event that Duramed desires to Commercialize a Collaboration Product in any
country of the Shire Territory, Duramed may so notify Shire in writing and the Parties shall meet
in person or by teleconference within [*] thereafter to discuss whether Shire desires to relinquish
its rights to Commercialize such Collaboration Product in such country and, if so, the Parties
shall discuss in good faith commercially reasonable terms to effectuate such transfer of rights.
Nothing in this Section 5.2.2 shall be deemed to limit any other rights of the Parties under this
Agreement.



     5.3 Duramed Territory.



               5.3.1 For each Collaboration Product, Duramed shall be solely responsible for handling all
returns, recalls, order processing, invoicing and collection, distribution, and inventory and
receivables arising from sales to Third Parties within the Duramed Territory. Shire may not accept
orders from a Third Party for a Collaboration Product or make sales for its own account (except to
Duramed) or for Duramed’s account in the Duramed Territory. If Shire receives any order for a
Collaboration Product in the Duramed Territory, it shall refer such orders to Duramed for
acceptance or rejection. Duramed shall have the right and responsibility for establishing and
modifying the terms and conditions with respect to the sale of all Collaboration Products in the
Duramed Territory, including any terms and conditions relating to or affecting the price at which
the Collaboration Products shall be sold, discounts available to managed care providers, any
discount attributable to payments on receivables, distribution of the Collaboration Products, and
credits, price adjustments, or other discounts and allowances to be granted or refused.



               5.3.2 In the event that Shire desires to Commercialize a Collaboration Product in any country
of the Duramed Territory, Shire may so notify Duramed in writing and the Parties shall meet in
person or by teleconference within [*] thereafter to discuss whether Duramed desires to relinquish
its rights to Commercialize such Collaboration Product in such country and, if so, the Parties
shall discuss in good faith commercially reasonable terms to



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effectuate such transfer of rights. Nothing in this Section 5.3.2 shall be deemed to limit
any other rights of the Parties under this Agreement.




          5.4 Shire Regulatory Responsibilities. With respect to the Shire Territory, Shire shall use
Diligent Efforts to obtain and maintain all regulatory filings and Regulatory Approvals in the
Shire Territory for each Collaboration Product Developed pursuant to this Agreement, including all
INDs and Drug Approval Applications. Except as provided in Section 4.1, as between the Parties,
Shire shall be solely responsible for all activities in connection with obtaining and maintaining
Regulatory Approvals required for the Commercialization of Collaboration Product in the Shire
Territory, including all Drug Approval Applications with the EMEA, regardless of whether any
countries within the Duramed Territory are member states of the European Union, including in all
cases communicating and preparing and filing all reports (including adverse drug experience
reports) with the applicable Governmental Authorities.




          5.5 Duramed Regulatory Responsibilities. With respect to the Duramed Territory, and except as
provided in Section 5.4, Duramed shall use Diligent Efforts to obtain and maintain all regulatory
filings and Regulatory Approvals in the Duramed Territory for each Collaboration Product Developed
pursuant to this Agreement, including all INDs and Drug Approval Applications. Except as otherwise
provided herein, as between the Parties, Duramed shall be solely responsible for all activities in
connection with obtaining and maintaining Regulatory Approvals required for the Commercialization
of Collaboration Product in the Duramed Territory, including communicating and preparing and filing
all reports (including adverse drug experience reports) with the applicable Governmental
Authorities.




          5.6 Pharmacovigilance. As soon as reasonably practicable following the Effective Date, the
pharmacovigilance departments of each of Duramed and Shire shall meet and determine the approach to
be taken for the collection, review, assessment, tracking and filing of information related to
adverse events associated with the Collaboration Products, consistent with the provisions of this
Section 5.6. Such approach shall be documented in a separate and appropriate written
pharmacovigilance agreement between Duramed and Shire. Each Party agrees to share relevant
information it receives (either directly or indirectly) with the other Party in a timely manner so
as to allow such other Party to comply with its responsibility to report pharmacovigilance
information under this Section 5.6.




          5.7 Diligence in Commercialization. Duramed shall use Diligent Efforts to Commercialize the
Collaboration Products in the Duramed Territory; provided that Duramed shall have no specific
obligation to Commercialize the Collaboration Products in any particular country or countries.
Shire shall use Diligent Efforts to Commercialize the Collaboration Products in the Shire
Territory; provided that Shire shall have no specific obligation to Commercialize the Collaboration
Products in any particular country or countries..




     5.8 Commercialization Expenses. Duramed shall bear all costs in connection with the
Commercialization of Collaboration Products in the Duramed Territory. Shire shall bear all costs
in connection with the Commercialization of Collaboration Products in the Shire Territory.



     5.9 Compliance with Laws. Each Party or its permitted Third Party contractors shall perform
its responsibilities under this ARTICLE 4 in accordance with all applicable Laws.



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ARTICLE 6



MANUFACTURE AND EXPORTATION OF COLLABORATION PRODUCTS




     6.1 Manufacture and Supply.



          6.1.1 Manufacturing Process. Duramed shall use Diligent Efforts to develop a process for the
Manufacture of Collaboration Products and to scale up such process to a level sufficient to
Manufacture and supply clinical and commercial supplies of Collaboration Products for the Shire
Territory, including the preparation of filings necessary to obtain Regulatory Approval for the
Manufacture of Collaboration Products for sale in the Shire Territory and the selection of any
Third Party(ies) to engage in the Manufacture and supply of Collaboration Products and components
thereof. In the event that Duramed includes the filings referred to in this Section 6.1.1 in Drug
Master Files in the Duramed Territory, Shire may reference such Drug Master Files for countries in
the Shire Territory in which Shire seeks Regulatory Approval of Collaboration Products. Once such
filings are made, no changes to the process for the Manufacture of Collaboration Products for sale
in the Shire Territory shall be made without the written consent of Shire, such consent not to be
unreasonably withheld, unless such changes are required by Law.




          6.1.2 Supply of Collaboration Product. At the completion of each Development Plan, the
Parties shall establish a final finished dosage form for each Collaboration Product. Shire shall
purchase from Duramed, and Duramed shall supply to Shire, Collaboration Product in accordance with
the terms and conditions of the Supply Agreement.




     6.2 Specifications and Terms of Supply. Duramed shall establish the specifications, including
any necessary documentation, certificates of analysis and test results, for the Collaboration
Products to be Manufactured under this ARTICLE 6, in each case subject to the prior written
approval of Shire, such approval not be unreasonably withheld. The Parties shall endeavor to
maintain compatible specifications for Collaboration Products on a worldwide basis, and to minimize
the number of distinct specifications in different countries.



     6.3 Exportation of Collaboration Products by Duramed. Duramed shall not actively sell any
Collaboration Product outside the countries of the Duramed Territory, and shall not sell
Collaboration Product to any Person, inside the Duramed Territory knowing or having reason to
believe that the Collaboration Products are likely to be sold in the Shire Territory. Duramed
shall not market or promote the Collaboration Products in the Shire Territory.



     6.4 Exportation of Collaboration Products by Shire. Shire shall not actively sell any
Collaboration Product outside the countries of the Shire Territory, and shall not sell
Collaboration Product to any Person, inside the Shire Territory knowing or having reason to believe
that the Collaboration Products are likely to be sold in the Duramed Territory. Shire shall not
market or promote the Collaboration Products in the Duramed Territory.



ARTICLE 7



FINANCIAL TERMS




     7.1 Initial Reimbursement for Development Expenses. Shire shall pay to Duramed a one-time fee
equal to $25,000,000 within five (5) Business Days after the Effective Date. It is



15









 




intended that such payment serve as reimbursement to Duramed for Development Expenses that
Duramed has incurred up to the Effective Date. This fee shall be non-creditable and non-refundable
against any future obligations of Shire under this Agreement.




     7.2 Reimbursement of Development Expenses.



          7.2.1 Reimbursement. Subject to the terms and conditions contained herein, Shire shall pay to
Duramed, on a calendar quarterly basis, (i) reimbursements of amounts equal to Development Expenses
that are incurred by Duramed, and (ii) milestone payments for meeting the milestones set forth in
Schedule 7.2.1A and Schedule 7.2.1B (“Milestone Payments”). Shire shall pay such reimbursement to
Duramed for an eight (8) year period commencing on the Effective Date (the “Reimbursement Period”),
up to an aggregate amount of $140,000,000, provided, however, that such aggregate amount shall be
subject to reduction in connection with (a) Milestone Payments paid in respect of Seasonique, as
set forth on Schedule 7.2.1A, and (b) Milestone Payments paid in respect of the Ring Product, as
set forth on Schedule 7.2.1B (all such Milestone Payments, together with the Development Expenses
being referred to collectively as the “Reimbursable Expenses”). Milestone Payments shall be paid
at any time during the Term that the applicable milestone is met. Notwithstanding the foregoing,
and subject to Section 3.2.2(c), in no event shall the aggregate Reimbursable Expenses (including,
for the avoidance of doubt, all Milestone Payments and all Development Expenses) to be paid by
Shire hereunder exceed $140,000,000 (the “Maximum Reimbursement Amount”). In no event shall Shire
be required to pay Reimbursable Expenses in excess of [*] during any calendar year (the “Maximum
Annual Reimbursement Amount”). In addition, any Development Expenses in excess of [*] (the
“Maximum Quarterly Reimbursement Amount”) during any calendar quarter (irrespective of Milestone
Payments), that Duramed incurs shall never become a Reimbursable Expense, and shall not be counted
toward Reimbursable Expenses or the Maximum Reimbursement Amount. For purposes of determining the
Maximum Annual Reimbursement Amount or the Maximum Quarterly Reimbursement Amount, amounts for any
partial years or quarters will be prorated based on the number of days in such partial calendar
year or quarter. Subject to the foregoing, the amount of Reimbursable Expenses in any calendar
year in excess of [*], if any (“Carryover Expenses”), including any unreimbursed Carryover Expenses
from previous years, shall carry over to the first calendar quarter of the immediately following
calendar year during the Reimbursement Period and be reimbursed by Shire as part of the
Reimbursable Expenses for such calendar quarter until all Carryover Expenses have been recovered.
Carryover Expenses shall be subject to, and count toward, the Maximum Reimbursement Amount and the
Maximum Annual Reimbursement Amount, but shall not be subject to, or count toward, the Maximum
Quarterly Reimbursement Amount. In the event the Reimbursement Period expires prior to Duramed
having incurred Reimbursable Expenses equal to the Maximum Reimbursement Amount, Duramed shall have
no right to receive any further payment from Shire. During the Term of this Agreement, no
cessation or suspension by Shire of Development of Collaboration Product for the Shire Territory
shall affect Shire’s reimbursement obligations under this Section 7.2.1. Shire Territory Global
Development Expenses shall be reimbursable hereunder as Development Expenses but shall not be
subject to or count toward the Maximum Reimbursement Amount, the Maximum Annual Reimbursement
Amount or the Maximum Quarterly Reimbursement Amount.




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          7.2.2 Quarterly Forecasting. By February 28, May 31, August 31, and November 30 each year,
Duramed shall provide Shire with a forecast for the current calendar quarter, each calendar quarter
remaining in that calendar year and each quarter of the following calendar year, setting forth
Duramed’s reasonable projected Reimbursable Expense for each Collaboration Product together with
any forecast Carryover Expenses at the end of each of the current calendar year and the following
calendar year. Such forecasts shall be provided by Duramed to Shire in good faith.




          7.2.3 Quarterly Reporting. Within thirty (30) days after the end of each calendar quarter
during the Reimbursement Period, Duramed shall deliver to Shire a reasonably detailed report
setting forth the Reimbursable Expenses for each Collaboration Product that Duramed has incurred
during such calendar quarter. Shire shall pay such amount to Duramed within forty-five (45) days
after the end of each calendar quarter during the Reimbursement Period, or in any event within
fifteen (15) days after Shire’s receipt of the aforementioned report if it is not timely delivered
by Duramed after the end of the applicable calendar quarter.




          7.2.4 No Other Payments. Shire shall have no obligation to pay royalties or any other amounts
to Duramed in connection with the transactions contemplated under this Agreement other than as
expressly set forth in this ARTICLE 7 and as contemplated by the Supply Agreement. Duramed shall
be solely responsible for all Development Expenses (other than Shire Territory Global Expenses)
which are not Reimbursable Expenses, and all Development Expenses which are Reimbursable Expenses
in excess of the Maximum Reimbursement Amount.




          7.2.5 Shire Development Fees. Shire shall be solely responsible for all Development Expenses
it incurs with respect the Collaboration Products in the Shire Territory.




ARTICLE 8



PAYMENT TERMS




     8.1 Payment Method. All amounts due to either Party hereunder shall be paid in United States
Dollars by wire transfer in immediately available funds to an account designated by such Party.
Any payments or portions thereof due hereunder that are not paid by the date such payments are due
under this Agreement shall bear interest [*] at the lower of (a) the [*], on the due date (or, if
the due date is not a business day, on the last business day prior to such due date), or (b) the
[*] on the[*] such [*].



     8.2 Payment Schedules; Reports. The payments due pursuant to Sections 7.1 and 7.2 are due and
payable on the dates described therein. The Parties acknowledge that any expenses or costs
reported under this Agreement may be based upon estimates, which estimates shall be made in
compliance with GAAP consistently applied by such Party in accordance with past practice; provided
that when the actual results become known relative to any estimated amount, any difference between
the actual results and the estimate is reported and the next payment due hereunder related to such
estimated item is appropriately adjusted for such difference. The Parties acknowledge and agree
that any reports and payments relating to any cost, expense, or other financial amount shared
pursuant to this Agreement for the [*] of any [*]



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shall reflect [*] reconciliations and adjustments, if any, applicable to the previous [*]
reported results.



     8.3 Taxes. Duramed shall be responsible for any and all income or other taxes owed by Duramed
and required by applicable Law to be withheld or deducted from any of the payments made by or on
behalf of Shire to Duramed hereunder, and Shire may deduct from any amounts that Shire is required
to pay hereunder an amount equal to such taxes. The Parties shall reasonably cooperate in
connection with the other’s efforts to minimize liability for taxes, to the extent legally
permissible, and shall reasonably support each other in the event of an audit by any taxing
authority. Shire shall not be responsible for payment of any income, franchise, gross receipts or
personal property taxes paid by Duramed on Duramed’s income, capital, assets or gross sales as a
result of this Agreement.



     8.4 Records Retention; Audit.



          8.4.1 Record Retention. Each Party shall maintain complete and accurate books, records and
accounts used for the determination of expenses incurred in connection with the performance of
Development or Commercialization activities (including, in the case of Duramed, the calculation of
Development Expenses), in sufficient detail to confirm the accuracy of any payments required under
this Agreement, which books, records and accounts shall be retained by such Party for [*] after the
end of the period to which such books, records and accounts pertain, or longer as is required by
applicable Law.




          8.4.2 Audit. Shire shall have the right to have an independent certified public accounting
firm of internationally recognized standing, reasonably acceptable to Duramed, to have access
during normal business hours, and upon reasonable prior written notice, to such of the records of
Duramed as may be reasonably necessary to verify the accuracy of reimbursement amounts paid by
Shire under this Agreement for any calendar year ending not more than three (3) years prior to the
date of such request; provided, however, that, Shire shall not have the right to conduct more than
[*] in any [*] and that Shire shall not be permitted to audit the same period of time more than
[*]. The accounting firm shall disclose to Shire only whether the various expenses subject to
reimbursement under this Agreement are correct or incorrect and the specific details concerning any
discrepancies. [*] of such [*], in which case [*]. If Duramed disputes the findings pursuant to
this Section 8.4.2, the Parties shall meet and discuss such dispute. If such dispute is not
resolved within [*], then it shall be subject to ARTICLE 16.




          8.4.3 Payment of Additional Amounts. If, based on the results of any audit, (a) additional
payments are owed by Shire to Duramed under this Agreement, then Shire shall make such additional
payments, or (b) the payments previously made by Shire to Duramed under this Agreement are in
excess of the amounts that were actually required to be made, then Duramed shall return such excess
payments, in each case within [*] after the accounting firm’s written report is delivered to the
Parties. The provisions of Section 8.1 shall apply to such payment.




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ARTICLE 9



DURAMED LICENSE AND TECHNOLOGY TRANSFER




     9.1 Development License Grant. During the Term of the Agreement, Duramed hereby grants to
Shire a nonexclusive, worldwide, fully paid-up license under the Collaboration Intellectual
Property to Develop and use Collaboration Products for the purpose of Commercializing Collaboration
Products in the Shire Territory. Notwithstanding the foregoing nonexclusive license grant, Duramed
shall not undertake clinical trials of a Collaboration Product in any European Union country in the
Shire Territory without first obtaining the prior written consent of Shire.



     9.2 Commercialization License Grant. During the Term of the Agreement, Duramed hereby grants
to Shire an exclusive (even as to Duramed and its Affiliates), worldwide, fully paid-up license
under the Collaboration Intellectual Property to Commercialize Collaboration Products in the Shire
Territory. Following the Reimbursement Period, the license granted under the previous sentence
shall remain exclusive as to the Commercialization of then-existing Collaboration Products but
shall not restrict Duramed from using the Collaboration Intellectual Property for any other
purpose, including to Commercialize improved or alternative variants of such Collaboration
Products, or products that compete with such Collaboration Products.



     9.3 Technology Transfer in Event of Failure to Supply. In the event Duramed ceases
Development or Commercialization of any Collaboration Product and Shire desires to continue such
Development or Commercialization in the Shire Territory, then, pursuant to the Supply Agreement,
Duramed shall, at its option, either supply the applicable Collaboration Product to Shire or
facilitate the transfer of the manufacture of the applicable Collaboration Product to Shire or
Shire’s designee in accordance with Article VIII of the Supply Agreement.



ARTICLE 10



LICENSE RELATING TO RING PRODUCT




     10.1 License Relating to Ring Intellectual Property. Duramed hereby grants to Shire an
exclusive (even as to Duramed and its Affiliates), worldwide, fully paid-up, irrevocable and
perpetual license, with the right to grant sublicenses, under the Ring Intellectual Property,
solely to research, Develop, Manufacture, use, and Commercialize the Ring Product throughout the
world.



          10.2 Ring Technology Transfer. As soon as practicable following the Effective Date, the
Parties shall meet to discuss and identify the Know-How included in the Ring Intellectual Property
that Shire believes is most promising to successfully develop the Ring Product. Duramed shall in
good faith provide all reasonable information requested by Shire to assist Shire in identifying
such Know-How. Upon identifying such Know-How, Duramed shall, and shall cause its Affiliates to
disclose to Shire or an Affiliate designated by Shire, such Know-How to enable Shire to engage in
Development activities related to Ring Product in accordance with the licenses granted in Section
10.1. Notwithstanding the foregoing, Duramed makes no representations and/or warranties that the
Ring Product can be successfully Developed or




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Commercialized or that the Know-How disclosed hereunder will be sufficient for such
Development or Commercialization.




ARTICLE 11



CONFIDENTIALITY




     11.1 Confidential Information.



          11.1.1 Confidential Information. As used in this Agreement, the term “Confidential
Information” means all secret, confidential or proprietary information or data, whether
provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to
this Agreement or generated pursuant to this Agreement by one Party or its Affiliates (the
“Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”),
including but not limited to, information relating to the Disclosing Party’s existing or proposed
research, development efforts, patent applications, business or products, and any other materials
that have not been made available by the Disclosing Party to the general public. Confidential
Information of Duramed shall include all Collaboration Intellectual Property. Confidential
Information shall not include any information or materials that:




               (a) were already known to the Receiving Party (other than under an obligation of
confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving
Party has documentary evidence to that effect;



               (b) were generally available to the public or otherwise part of the public domain at the time
of disclosure thereof to the Receiving Party;



               (c) became generally available to the public or otherwise part of the public domain after
disclosure or development thereof, as the case may be, other than through any act or omission of a
Party in breach of such Party’s confidentiality obligations under this Agreement;



               (d) were disclosed to a Party, other than under an obligation of confidentiality, by a third
party who had no obligation to the Disclosing Party not to disclose such information to others; or



               (e) were independently discovered or developed by or on behalf of the Receiving Party without
the use of the Confidential Information belonging to the other Party, to the extent such Receiving
Party has documentary evidence to that effect.



          11.1.2 Confidentiality Obligations. Each of Duramed and Shire shall keep confidential all
Confidential Information of the other Party with the same degree of care it maintains the
confidentiality of its own Confidential Information but in no event less than a reasonable degree
of care. Neither Party shall use such Confidential Information for any purpose other than in
performance of this Agreement or disclose the same to any other Person other than to such of its
and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants
who are bound to confidentiality restrictions consistent with terms herein and who have a need to
know such Confidential Information to implement the terms of this Agreement or enforce its rights
under this Agreement. Upon termination of this Agreement, the Receiving




20









 







Party shall return or destroy all documents, tapes or other media containing Confidential
Information of the Disclosing Party that remain in the possession of the Receiving Party and its
Affiliates or their directors, managers, employees, independent contractors, agents or consultants,
except that the Receiving Party may keep one copy of the Confidential Information in the legal
department files of the Receiving Party, solely for archival purposes. Such archival copy shall
continue to be subject to the provisions of this ARTICLE 11.




          11.1.3 Permitted Disclosure and Use. Notwithstanding Section 11.1.2, a Party may disclose
Confidential Information belonging to the other Party only to the extent such disclosure is
reasonably necessary to: (a) obtain Regulatory Approval to the extent such disclosure is made to a
Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c)
comply with Laws; or (d) comply with applicable stock exchange regulations. If a Party deems it
necessary to disclose Confidential Information of the other Party pursuant to this Section 11.1.3,
such Party shall give reasonable advance notice of such disclosure to the other Party to permit
such other Party sufficient opportunity to object to such disclosure or to take measures to ensure
confidential treatment of such information. In addition, notwithstanding Section 11.1.2, the
Parties shall cooperate to prepare standardized public responses to anticipated inquiries from the
public, press, stockholders, investors and/or analysts with respect to the activities hereunder.
Despite the foregoing, each Party agrees that the other Party is free to disclose this Agreement in
its entirety to the United States Federal Trade Commission and the United States Department of
Justice, or to any court with jurisdiction over the litigations settled under the Settlement
Agreement between Shire Laboratories Inc. and Barr Laboratories Inc. dated August 14, 2006.




          11.1.4 Unauthorized Disclosure. The Receiving Party acknowledges and agrees that the
Confidential Information of the Disclosing Party constitutes proprietary information and trade
secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside disclosure
of such Confidential Information shall be presumed to cause irreparable injury to the Disclosing
Party.




          11.1.5 Notification. The Receiving Party shall notify the Disclosing Party promptly upon
discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information,
and shall cooperate with the Disclosing Party in any reasonably requested fashion to assist the
Disclosing Party to regain possession of such Confidential Information and to prevent its further
unauthorized use or disclosure. The Receiving Party acknowledges that monetary damages may not be
a sufficient remedy for unauthorized disclosure of Confidential Information and that the Disclosing
Party may be entitled, without waiving other rights or remedies, to such injunctive or equitable
relief as may be deemed proper by a court of competent jurisdiction in the event of such
unauthorized disclosure.




     11.2 Confidentiality of this Agreement. The terms of this Agreement shall be Confidential
Information of each Party and, as such, shall be subject to the provisions of this ARTICLE 11.



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ARTICLE 12



OWNERSHIP OF INTELLECTUAL PROPERTY




     12.1 Ownership. Duramed shall be the exclusive owner of all right, title and interest in and
to all Collaboration Intellectual Property, and Shire hereby assigns to Duramed all right, title
and interest therein. Nothing herein shall be construed as granting Shire any rights in any of the
foregoing except as expressly provided herein. Shire shall, at the request of Duramed, perform any
acts that Duramed may reasonably deem necessary or desirable to evidence or confirm Duramed’s
ownership interest in the Collaboration Intellectual Property, including but not limited to making
further written assignments in a form determined by Duramed.



     12.2 Patent Filings. Duramed shall have the sole right to prepare, file, prosecute and
maintain all Collaboration Intellectual Property throughout the world. In furtherance of the
foregoing, Duramed shall be responsible for the conduct of any interference proceedings related to
any Collaboration Patent. Except as provided below, Duramed shall be responsible for all Patent
Expenses incurred throughout the world. Subject to the following sentence, should Duramed elect
not to prepare and/or file any such Collaboration Patent in the Shire Territory, it shall (a)
provide Shire with written notice as soon as reasonably possible after making such election but in
any event no later than [*] before Shire would be faced with a possible loss of rights, (b) give
Shire the right, at Shire’s discretion and expense, to prepare, file, prosecute or maintain the
Collaboration Patent in Duramed’s name, and (c) offer reasonable assistance in connection with such
preparation, filing, prosecution or maintenance. In the event Duramed determines in its sole
discretion, acting in good faith, to maintain certain Collaboration Intellectual Property as a
trade secret, Duramed shall have no obligation under the previous sentence.



     12.3 Cooperation. The Parties agree to cooperate in the preparation, filing, prosecution and
maintenance of all Patents under this ARTICLE 12, including obtaining and executing necessary
powers of attorney and assignments by the named inventors, providing relevant technical reports to
the filing Party concerning the Invention disclosed in such Patent, obtaining execution of such
other documents which shall be needed in the filing and prosecution of such Patent, and, as
requested, updating each other regarding the status of such Patent, and shall cooperate with the
other Party so far as reasonably necessary with respect to furnishing all information and data in
its possession reasonably necessary to obtain or maintain such Patents.



     12.4 Enforcement and Defense of Patents.



          12.4.1 Infringement of Third Party Patents.




               (a) Third Party Claims; Third Party Royalties. In the event of a Third Party Claim against
Shire, Duramed or their respective Affiliates alleging that the making, using, importing, selling
or offering to sell a Collaboration Product infringes or shall infringe claims in any patents of a
Third Party, the Party first obtaining knowledge of such Third Party Claim shall immediately
provide the other Party notice of such Third Party Claim with the related facts in reasonable
detail. Shire shall have the sole right to control such defense with respect to any Collaboration
Product with an attorney of Shire’s choice if the alleged infringing activity relates solely to the
Shire Territory. In such case, Duramed shall have the right to be



22









 







represented by independent counsel at Duramed’s own expense. Duramed shall have the sole
right to control such defense with respect to any Collaboration Product with an attorney of
Duramed’s choice if the alleged infringing activity relates solely to the Duramed Territory. In
such case, Shire shall have the right to be represented by independent counsel at Shire’s own
expense. If the alleged infringing activity relates to both the Duramed Territory and the Shire
Territory, then the Parties shall have the joint right, but not the obligation, to control such
defense with respect to Collaboration Product with an attorney of their mutual agreement. If the
Parties are unable to agree on such joint defense, then the Parties shall use good faith efforts to
determine the Party to assume control of such defense and choice of counsel. In such case, the
other Party shall have the right to be represented by independent counsel at its own expense. If,
as a result of a judgment in any litigation or settlement with a Third Party, either Party or its
Affiliates is required to pay royalties to any Third Party, such Party shall bear all cost of such
royalties.



               (b) Cooperation. If a Party shall become engaged in or participate in any suit described in
this Section 12.4.1, the other Party shall cooperate, and shall cause its and its Affiliates’
employees to cooperate, with such Party in all reasonable respects in connection therewith,
including giving testimony and producing documents lawfully requested, and using its reasonable and
diligent efforts to make available to the other, at no cost to the other (other than reimbursement
of actually incurred, reasonable out-of-pocket travel and lodging expenses), such employees who may
be helpful with respect to such suit, investigation, claim, interference or other proceeding.



          12.4.2 Prosecution of Infringers.




               (a) Notice. If either Party learns that a Third Party is infringing or allegedly infringing
any Collaboration Intellectual Property, or if any Third Party claims that any Collaboration
Intellectual Property is invalid or unenforceable, it shall promptly notify the other Party thereof
including available evidence of infringement or the claim of invalidity or unenforceability. The
Parties shall cooperate and use reasonable efforts to stop such alleged infringement or to address
such claim without litigation.



               (b) Enforcement and Defense.




               (i) [*] to take the appropriate steps to enforce or defend any Collaboration
Intellectual Property [*], and will have the [*] to take the appropriate steps to
enforce or defend any Collaboration Intellectual Property [*]. [*] may take steps
including the initiation, prosecution and control any suit, proceeding or other
legal action by counsel of its own choice. [*] for the costs of such enforcement or
defense. Notwithstanding the foregoing, [*], to be[*].




               (ii) If, pursuant to Section 12.4.2(b)(i), [*] take the appropriate steps to
enforce or defend any Collaboration Patent [*] of the date one Party has provided
notice to the other Party pursuant to Section 12.4.2(a) of such infringement or
claim, then [*], to bring any such suit, action or proceeding by counsel of its own
choice and [*], to be [*].



23









 





               (c) Cooperation; Damages.




               (i) If one Party brings any suit, action or proceeding under this Section
12.4.2, the other Party agrees to be joined as party plaintiff if necessary to
prosecute the suit, action or proceeding and to give the first Party reasonable
authority to file and prosecute the suit, action or proceeding; provided, however,
that neither Party shall be required to transfer any right, title or interest in or
to any property to the other Party or any other party to confer standing on a Party
hereunder.




               (ii) The Party not pursuing the suit, action or proceeding hereunder shall
provide reasonable assistance to the other Party, including by providing access to
relevant documents and other evidence and making its employees available, subject to
the other Party’s reimbursement of any out-of-pocket expenses incurred by the
non-enforcing or defending Party in providing such assistance.




               (iii) Neither Party shall settle or otherwise compromise any such suit, action
or proceeding in a way that adversely affects the other Party’s intellectual
property rights or its rights or interests with respect to the Collaboration Product
without such Party’s prior written consent.




               (iv) Any settlements, damages or other monetary awards (the “Recovery”)
recovered pursuant to a suit, action or proceeding brought pursuant to Section
12.4.2 shall be allocated first to the costs and expenses of the Party taking such
action, and second, to the costs and expenses (if any) of the other Party, with any
remaining amounts (if any) with respect to a country in the Duramed Territory or the
Shire Territory to be allocated to Duramed or Shire, respectively.



     12.5 Notice of Certification. Duramed and Shire each shall immediately give notice to the
other of any certification filed under the U.S. Drug Price Competition and Patent Term Restoration
Act of 1984 (or its foreign equivalent) claiming that a Collaboration Patent, is invalid or that
infringement of a Collaboration Patent, shall not arise from the manufacture, use, offer for sale,
sale or importation product by a Third Party. Nothing in this Section 12.5 shall prevent or
otherwise limit Duramed’s right to take any and all such actions with regard to the matters
described in this Section 12.5 as required by applicable Law.



     12.6 Patent Term Extensions. Duramed and Shire shall cooperate in good faith in gaining
patent term extensions due to delay(s) in Regulatory Approval wherever applicable to the
Collaboration Patents. However, [*] in determining which Collaboration Patent(s) to [*] compound,
composition, article, product, process, or use. Should [*] that a [*] for a Collaboration Patent
and [*] of such Collaboration Patent, it shall (a) provide [*] as soon as reasonably possible [*]
but in [*], (b) give [*] Collaboration Patent in [*], and (c) offer reasonable assistance in
connection with such extension.



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     12.7 Trademarks and Copyrights.



          12.7.1 Product Trademarks. All Collaboration Products shall be marketed and sold worldwide
under and in connection with trademarks, trade dress, logos and slogans selected in accordance with
this Section 12.7.




          12.7.2 Trademark Selection. Duramed shall have the right and responsibility to select and
register trademarks, trade dress, logos and slogans for each Collaboration Product for use in the
Duramed Territory. Shire shall have the right and responsibility to select and register
trademarks, trade dress, logos and slogans for each Collaboration Product for use in the Shire
Territory; provided, that Shire may determine to use a Duramed Mark (as defined below) in
connection therewith as further set below in Section 12.7.3.




          12.7.3 Ownership of Trademarks. Duramed shall own, throughout the world, any trademarks,
trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for
a Collaboration Product which Duramed owns as of the Effective Date or that is otherwise selected
and/or registered by Duramed for use in connection with Collaboration Products (collectively, the
“Duramed Marks”). Shire shall own, throughout the world, any trademark, trade dress, logo and/or
slogans, and all registrations therefor, selected and/or registered by Shire for use in connection
with Collaboration Products (collectively, the “Shire Marks”). All goodwill attributable to a
Duramed Mark generated by the Commercialization of a Collaboration Product bearing a Duramed Mark
shall inure to the benefit of Duramed. All goodwill attributable to a Shire Mark generated by the
Commercialization of a Collaboration Product bearing a Shire Mark shall inure to the benefit of
Shire. Shire shall not use and/or register any Duramed Marks in the Shire Territory without the
prior consent of Duramed. Duramed shall not use and/or register any Shire Marks in the Duramed
Territory without the prior consent of Shire, provided, however, that if Shire determines to use a
Duramed Mark for the Commercialization of a Collaboration Product in the Shire Territory, Duramed
shall grant to Shire, a non-exclusive, royalty-free license, with the right to grant sublicenses,
to use such Duramed Mark in the Shire Territory, solely in conjunction with the Commercialization
of the Collaboration Products. Shire shall comply with Duramed’s then-current guidelines for
trademark usage, a copy of which shall be provided to Shire from time to time, in connection with
Shire’s use of such Duramed Mark. Duramed shall solely bear all costs of prosecution of
applications to register and to record licenses (if applicable) for, and maintenance of, each
Duramed Mark for each Collaboration Product. Shire shall solely bear all costs of prosecution of
applications to register and to record licenses (if applicable) for, and maintenance of, each Shire
Mark for each Collaboration Product, and any Duramed Marks that Shire elects to use in accordance
with the provisions of this Section 12.7.3 within the Shire Territory. Duramed shall cooperate
with Shire as reasonably requested by Shire in order to register (in Duramed’s name) any Duramed
Marks licensed to Shire under this Section 12.7.3 in the Shire Territory.




     12.8 Enforcements of Trademarks.



               (a) Notice. If either Party learns that a Third Party is infringing or allegedly infringing
any Duramed Marks of Shire Marks, or if any Third Party claims that any Duramed Marks of Shire
Marks is invalid or unenforceable, it will promptly notify the other Party thereof including
available evidence of infringement or the claim of invalidity or



25









 







unenforceability. The Parties will cooperate and use reasonable efforts to stop such alleged
infringement or to address such claim without litigation.



               (b) Enforcement and Defense. Duramed will have the first right (but not the obligation) to
take the appropriate steps to enforce or defend any Duramed Marks throughout the world, and will
have the exclusive right (but not the obligation) to take the appropriate steps to enforce or
defend any Duramed Marks in the Duramed Territory. Duramed may take steps including the
initiation, prosecution and control any suit, proceeding or other legal action by counsel of its
own choice. Duramed will be solely responsible for the costs of such enforcement or defense.
Notwithstanding the foregoing, Shire will have the right, at its own expense, to be represented in
any such action by counsel of its own choice. Shire will have the exclusive right (but not the
obligation) to take the appropriate steps to enforce or defend any Shire Marks in the Shire
Territory.



               (c) If, pursuant to Section 12.8(a), Duramed fails to take the appropriate steps to enforce or
defend any Duramed Marks within the Shire Territory within [*] of the date one Party has provided
notice to the other Party pursuant to Section 12.8(a) of such infringement or claim, then Shire
will have the right (but not the obligation), at its own expense, to bring any such suit, action or
proceeding by counsel of its own choice and Duramed will have the right, at its own expense, to be
represented in any such action by counsel of its own choice.



               (d) Cooperation; Damages.




               (i) If one Party brings any suit, action or proceeding under this Section 12.8,
the other Party agrees to be joined as party plaintiff if necessary to prosecute the
suit, action or proceeding and to give the first Party reasonable authority to file
and prosecute the suit, action or proceeding; provided, however, that neither Party
will be required to transfer any right, title or interest in or to any property to
the other Party or any other party to confer standing on a Party hereunder.




               (ii) The Party not pursuing the suit, action or proceeding hereunder will
provide reasonable assistance to the other Party, including by providing access to
relevant documents and other evidence and making its employees available, subject to
the other Party’s reimbursement of any out-of-pocket expenses incurred by the
non-enforcing or defending Party in providing such assistance.




               (iii) Neither Party will settle or otherwise compromise any such suit, action
or proceeding in a way that adversely affects the other Party’s intellectual
property rights or its rights or interests with respect to the Duramed Marks of
Shire Marks without such Party’s prior written consent.




               (iv) Any Recovery recovered pursuant to a suit, action or proceeding brought
pursuant to this Section 12.8 will be allocated first to the costs and expenses of
the Party taking such action, and second, to the costs and expenses (if any) of the
other Party, with any remaining amounts (if any) with



26









 







respect to a country in the Duramed Territory or the Shire Territory to be
allocated to Duramed or Shire, respectively.



          12.9 Costs of Defense. All of the unrecovered costs, expenses and legal fees (including
internal costs, expenses and legal fees) incurred by the Parties in bringing, maintaining and
prosecuting any action to maintain, protect or defend the Duramed Marks or Shire Marks shall be
borne by the Party bringing, maintaining or prosecuting the relevant action.




ARTICLE 13



REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY




     13.1 Mutual Representations and Warranties. Each of the Parties hereby represents and
warrants to the other Party that, as of the date hereof:



               (a) Such Party has full corporate right, power and authority to enter into this Agreement and
to perform its respective obligations under this Agreement and that it has the right to grant the
rights and licenses granted pursuant to this Agreement.



               (b) This Agreement is a legal and valid obligation binding upon such Party and enforceable in
accordance with its terms. The execution, delivery and performance of the Agreement by such Party
does not conflict with any agreement, instrument or understanding, oral or written, to which it is
a Party or by which it is bound, nor violate any Law of any Governmental Authority having
jurisdiction over it.



               (c) Such Party has not granted any right to any Third Party that would conflict with the
rights granted to the other Party hereunder.



               (d) Such Party has obtained all necessary consents, approvals and authorizations of all
Government Authorities and other Persons required to be obtained by it as of the Effective Date in
connection with the execution, delivery and performance of this Agreement.



          13.2 Mutual Covenants. Each Party hereby covenants to the other Party that, during the Term:




               (a) Such Party shall not grant any right to any Third Party that would conflict with the
rights granted to the other Party hereunder;



               (b) In the course of Development hereunder, such Party shall not use any employee or
consultant that, to such Party’s knowledge, is debarred by the FDA (or any foreign equivalent) or
is the subject of debarment proceedings by the FDA (or any foreign equivalent).



          13.3 Duramed Representations and Warranties. Duramed hereby represents and warrants to Shire
that, as of the date hereof:




               (a) There is no action or proceeding pending or, to Duramed’s knowledge, threatened, with
respect to any existing Collaboration Product and/or the Ring



27









 







Intellectual Property (excluding ordinary course patent prosecution activities before the U.S.
Patent and Trademark Office and equivalent foreign counterparts and Regulatory Authorities). There
are no material unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or
awards (whether rendered by a court, an administrative agency or by an arbitrator) against Duramed
or its Affiliates with respect to existing Collaboration Products and/or the Ring Product.



               (b) Attached hereto as Schedule 13.3(b) is a true, correct and complete list of all
INDs (including the INDs referenced in the preceding sentence) and Drug Approval Applications filed
with a Governmental Authority relating to Collaboration Products (together, the “Collaboration
Product INDs”) and all Collaboration Product INDs are and remain in effect.



               (c) Intellectual Property.




               (i) The Collaboration Intellectual Property includes the Patents set forth in
Schedule 13.3(c). Such schedules contain, where relevant for the Shire Territory,
all application numbers and filing dates, registration numbers and dates and
jurisdiction.




               (ii) Duramed has a good faith belief that the Collaboration Intellectual
Property may be configured into a commercial vaginal or cervical ring product,
either directly or through Development, that does not infringe the intellectual
property rights of any Third Party.




               (iii) Duramed has the right to grant to Shire the licenses set forth in this
Agreement, free of any rights, encumbrances or claims of any Third Party and without
payment by Shire of any royalties, license fees or other amounts to any Third Party.




               (iv) All Patents included in the Ring Intellectual Property are subsisting and,
to Duramed’s knowledge, valid, enforceable and inventorship thereof is properly
identified therein. None of such Patents is currently involved in any interference,
reissue, reexamination, or opposition proceeding, and neither Duramed nor any of its
Affiliates has received any written notice from any person, or has knowledge, of
such actual or threatened proceeding.




               (v) To Duramed’s knowledge, there is no unauthorized infringement by a Third
Party of Patents included in the Ring Intellectual Property.



               (d) Compliance with Law.




               (i) To Duramed’s knowledge, Duramed, its Affiliates and any Third Party to
which Duramed or its Affiliates have subcontracted activities in connection with
Compound and existing Collaboration Products, and the Ring Product have, complied
with all applicable Laws, permits, governmental licenses, registrations, approvals,
concessions, franchises, authorizations, orders,



28









 







injunctions and decrees, including the Act, in the research, Development,
Manufacture and use thereof, and have not received any written notice from any
Governmental Authority claiming that any such activities as conducted by them are
not in such compliance.




               (ii) No Governmental Authority has commenced or, to Duramed’s knowledge,
threatened to initiate any action to reject or withdraw the Collaboration Product
INDs, or commenced or, to Duramed’s knowledge, threatened to initiate any action to
enjoin production of Collaboration Products at any facility, nor has Duramed or any
of its Affiliates or, to the knowledge of Duramed, any of its Contractors, received
any notice to such effect.




               (iii) Duramed has delivered or otherwise made available to Shire copies of all
substantive or material (A) reports of FDA Form 483 inspection observations, (B)
establishment inspection reports, (C) warning letters, and (D) other documents that
assert ongoing lack of compliance in any material respect with any applicable Laws
(including those of the FDA), in each case to the extent received by Duramed or any
of its Affiliates or, to the knowledge of Duramed, any of its contractors from the
FDA relating to a Collaboration Product and/or Compound, or the Ring Product.
Neither Duramed nor any of its Affiliates has received any such reports, letters or
other documents from any other Governmental Authority relating to a Collaboration
Product and/or the Ring Product.




               (iv) To Duramed’s knowledge, in the course of the Development of the
Collaboration Products or the Ring Intellectual Property, Duramed has not used any
employee or consultant that is debarred by the FDA or is the subject of debarment
proceedings by the FDA.



     13.4 Performance by Affiliates/Third Parties. Either Party may retain Affiliates and/or Third
Parties to perform Development and Commercialization activities under this Agreement. Each Party
shall remain responsible for and be guarantor of the performance by its Affiliates and Third
Parties and shall cause its Affiliates and Third Parties to comply with the provisions of this
Agreement in connection with such performance. Each Party hereby expressly waives any requirement
that the other Party exhaust any right, power or remedy, or proceed against an Affiliate or Third
Party, for any obligation or performance hereunder prior to proceeding directly against such Party.
Wherever in this Agreement the Parties delegate responsibility to Affiliates, Third Parties or
local operating entities, the Parties agree that such entities may not make decisions inconsistent
with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way.



     13.5 Disclaimer of Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE 13,
DURAMED AND SHIRE MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN
FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND DURAMED AND SHIRE EACH SPECIFICALLY
DISCLAIMS ANY OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR
IMPLIED,



29









 







INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.



     13.6 Limitation of Liability. EXCEPT FOR ANY BREACHES OF SECTIONS 6.3 AND 6.4, IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION AND ARISING IN ANY WAY OUT OF
THIS AGREEMENT. THE FOREGOING LIMITATIONS SHALL NOT LIMIT EITHER PARTY’S OBLIGATIONS TO THE OTHER
PARTY FOR INDEMNIFICATION OF THIRD PARTY CLAIMS UNDER ARTICLE 15.



ARTICLE 14



TERM AND TERMINATION




     14.1 Term. This Agreement shall commence as of the Effective Date and, unless sooner
terminated as provided herein, shall expire on the later of (i) the last Valid Claim contained in
any Collaboration Patent or (ii) the date when Shire and its Affiliates cease selling the last of
its Collaboration Products, but in any event not before eight (8) years after the Effective Date
(the “Term”).



     14.2 Termination for Material Breach. Either Party (the “Notifying Party”) may terminate this
Agreement on a Collaboration Product-by-Collaboration Product basis at any time in the event the
other Party (the “Breaching Party”) has materially breached this Agreement with respect to such
Collaboration Product and, if the material breach is capable of cure, such material breach
continues uncured for a period of ninety (90) days after written notice thereof by the Notifying
Party; provided, however, in the event that the Breaching Party has in good faith commenced cure
within such ninety (90) day period, but cannot practically complete such cure within such ninety
(90) day period, the Breaching Party shall have an additional ninety (90) day cure period. In the
event a material breach is incapable of cure, without limiting any other rights of the Notifying
Party, including the right to seek injunctive relief, the non-Breaching Party shall not have the
right to terminate this Agreement on a Collaboration Product-by-Collaboration Product basis if (i)
the Breaching Party is providing full cooperation to mitigate the breach, and (ii) the breach was
not caused by willful misconduct by the Breaching Party.



     14.3 Termination of Commercialization by Shire.



          14.3.1 [*]. Shire may elect to cease Development or Commercialization of any Collaboration
Product for the Shire Territory at any time in the Shire Territory (such Collaboration Product, to
the extent of the ceased Development activities, the “Ceased Collaboration Product”). In such
event Shire shall promptly notify Duramed thereof, and offer Duramed the right to repurchase the
Ceased Collaboration Product on terms to be mutually agreed. Without limiting the previous
sentence, if at any time [*] under this Agreement [*] Ceased Collaboration Product [*]
Collaboration Product, [*] that are the subject [*] upon the [*], including the [*], to be [*]. If
[*], or [*] after receipt of [*], whichever occurs first, then [*] on such terms and conditions
that, [*].




30









 








     14.4 Upon Termination. Termination of this Agreement shall not affect the obligation of any
Party to pay the other Party any amounts due hereunder accrued prior to the termination date
hereof. The right to terminate this Agreement shall not prejudice any other right or remedy in
equity or at Law of a Party in respect of any breaches of this Agreement. Upon termination of this
Agreement by Duramed, all worldwide rights to Commercialize the Collaboration Products shall revert
to Duramed. Upon termination by Duramed with the exception of one copy which Shire shall keep for
its internal business purposes, Shire shall promptly transfer any materials, information, books and
records, and data in its possession relating to Development, Commercialization or to Regulatory
Approvals of the Collaboration Products, together with any other books and records of Duramed made
available to Shire in furtherance of the transactions contemplated hereby.



     14.5 Survival. The provisions of Sections 8.4, 12.1, 13.6, 14.4, and 14.5, and Articles X,
XI, XV, XVI and XVII shall survive [*] this Agreement.



ARTICLE 15



INDEMNIFICATION; INSURANCE




     15.1 Indemnification.



          15.1.1 Indemnification by Shire. Shire hereby agrees to hold Duramed, its Affiliates, and
their respective directors, agents and employees harmless from and against any and all Losses
arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings,
investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a Third
Party (each a “Third Party Claim”) resulting directly from (a) any breach by Shire of any of its
representations, warranties, covenants or obligations pursuant to this Agreement, (b) the
negligence or willful misconduct by Shire or its Affiliates or their respective officers,
directors, employees, agents or consultants in performing any obligations under this Agreement, (c)
use, handling, storage, sale or other disposition of Collaboration Products (including, without
limitation, those Third Party Claims that involve death or bodily injury (or allegations thereof)
to any individual or any property other than intellectual property) arising out of activities
conducted by or on behalf of Shire or related to the Shire Territory, or (d) the conduct of
clinical testing of the Collaboration Products by or on behalf of Shire, except for such matters as
Duramed is obligated to indemnify Shire under Section 15.1.2; in each case except to the extent
that such Losses result from the negligence or willful misconduct of Duramed.




          15.1.2 Indemnification by Duramed. Duramed hereby agrees to hold Shire, its Affiliates, and
their respective directors, agents and employees harmless from and against any and all Losses
arising in connection with any and all Third Party Claims resulting directly from (a) any breach by
Duramed of any of its representations, warranties, covenants or obligations pursuant to this
Agreement, (b) the negligence or willful misconduct by Duramed or its Affiliates or their
respective officers, directors, employees, agents or consultants in performing any obligations
under this Agreement, (c) manufacture, use, handling, storage, sale or other disposition of
Collaboration Products (including, without limitation, those Third Party Claims that involve death
or bodily injury (or allegations thereof) to any individual or any property other than intellectual
property) arising out of activities conducted by or on behalf of Duramed or related to the Duramed
Territory, (d) the conduct of clinical testing of the Collaboration Products




31









 







by or on behalf of Duramed, or (e) Duramed’s (or its agent’s, contractor’s or other
designee’s, other than Shire) failure to comply with cGMP, applicable product specifications or
applicable Law in connection with the Manufacture of Collaboration Product supplied to Shire
hereunder; in each case except to the extent that such Losses result from the negligence or willful
misconduct of Shire.




     15.1.3 The rights of indemnification under this Section 15.1 shall be subject to the
provisions of Sections 15.2 through 15.8.



     15.2 Notice of Claim. All indemnification claims in respect of any indemnitee seeking
indemnity under Section 15.1 (collectively, the “Indemnitees” and each an “Indemnitee”) shall be
made solely by the corresponding Party (the “Indemnified Party”). The Indemnified Party shall give
the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim
Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to
base a request for indemnification under Section 15.1, but in no event shall the Indemnifying Party
be liable for any Losses that result from any delay in providing such notice which materially
prejudices the defense of such Third Party Claim. Each Indemnification Claim Notice must contain a
description of the claim and the nature and amount of such Loss (to the extent that the nature and
amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the
Indemnified Party shall furnish promptly to the Indemnifying Party copies of all notices and
documents (including court papers) received by any Indemnitee in connection with the Third Party
Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the
extent any admission or statement made by the Indemnified Party materially prejudices the defense
of such Third Party Claim.



     15.3 Control of Defense. At its option, the Indemnifying Party may assume the defense of any
Third Party Claim subject to indemnification as provided for in Sections 15.1.1 and 15.1.2 by
giving written notice to the Indemnified Party within [*] after the Indemnifying Party’s receipt of
an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the
Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal
counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the
Indemnifying Party shall not be liable to the Indemnified Party or any other Indemnitee for any
legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection
with the analysis, defense or settlement of the Third Party Claim.



     15.4 Right to Participate in Defense. Without limiting Section 15.3, any Indemnitee shall be
entitled to participate in, but not control, the defense of a Third Party Claim for which it has
sought indemnification hereunder and to employ counsel of its choice for such purpose; provided,
however, that such employment shall be at the Indemnitee’s own expense unless (a) the employment
thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the
Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section
15.3 (in which case the Indemnified Party shall control the defense).



     15.5 Settlement. With respect to any Losses relating solely to the payment of money damages
in connection with a Third Party Claim and that shall not result in the Indemnitee’s becoming
subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee
in any manner, and as to which the Indemnifying Party shall have acknowledged in



32









 







writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party shall
have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise
dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, shall
deem appropriate (provided, however that such terms shall include a complete and unconditional
release of the Indemnified Party from all liability with respect thereto), and shall transfer to
the Indemnified Party all amounts which said Indemnified Party shall be liable to pay prior to the
time of the entry of judgment. With respect to all other Losses in connection with Third Party
Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance
with Section 15.3, the Indemnifying Party shall have authority to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior
written consent of the Indemnified Party (which consent shall be at the Indemnified Party’s
reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party
Claim in accordance with Section 15.3 shall not be liable for any settlement or other disposition
of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party.
Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim,
no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any
Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the
defense of the Third Party Claim in accordance with Section 15.3.



     15.6 Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party
Claim, the Indemnified Party shall, and shall cause each other Indemnitee to, cooperate in the
defense or prosecution thereof and shall furnish such records, information and testimony, provide
such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as
may be reasonably requested in connection with such Third Party Claim. Such cooperation shall
include access during normal business hours afforded to the Indemnifying Party to, and reasonable
retention by the Indemnified Party of, records and information that are reasonably relevant to such
Third Party Claim, and making Indemnitees and other employees and agents available on a mutually
convenient basis to provide additional information and explanation of any material provided
hereunder, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses incurred in connection with such cooperation.



     15.7 Expenses of the Indemnified Party. Except as provided above, the reasonable and
verifiable costs and expenses, including fees and disbursements of counsel, incurred by the
Indemnified Party in connection with any Third Party Claim shall be reimbursed on a calendar
quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to
contest the Indemnified Party’s right to indemnification and subject to refund in the event the
Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.



     15.8 Treatment of Certain Losses. Duramed shall be solely responsible for all Losses from
Third Party Claims resulting directly from the use or administration of the Compounds,
Collaboration Products prior to the Effective Date.



     15.9 Insurance. Each Party shall obtain and keep in force, through self insurance or
otherwise, in a form reasonably acceptable to the other Party hereto, insurance in scope and amount
as required by Law applicable to a Party’s activities hereunder and such additional



33









 







amounts as may be reasonably necessary to cover such Party’s indemnity obligations under this
Agreement with scope and coverage as is normal and customary in the biotechnology/pharmaceutical
industry generally for parties similarly situated. It is understood that such insurance shall not
be construed to limit a Party’s liability with respect to its indemnification obligations under
this ARTICLE 15. Each Party shall, except to the extent self insured, provide to the other Party
upon request a certificate evidencing the insurance such Party is required to obtain and keep in
force under this ARTICLE 15.



     15.10 Guaranty. In consideration of [*] under this Agreement, and to induce [*] to enter into
this Agreement, [*] under this Agreement, in accordance with the terms and conditions of this
Agreement, [*] under this Agreement in accordance with its terms.



ARTICLE 16



DISPUTE RESOLUTION




     16.1 Disputes. The Parties hereby agree that all disputes arising under this Agreement shall
be referred to a senior executive of Duramed and a senior executive of Shire (the
“Representatives”). If any such matter has not been resolved within [*] of such referral to the
Representatives either Party may invoke the provisions of Section 16.2 for such dispute. No
dispute resolution procedure set forth in this Agreement shall be construed as an agreement to
arbitrate under any federal or state arbitration Law, including but not limited to the Federal
Arbitration Act, and shall not deprive a court of competent jurisdiction from resolving any dispute
arising under, or related to, this Agreement.



     16.2 Litigation. Any dispute that is not resolved as provided in the preceding Section 16.1,
whether before or after termination of this Agreement, may be submitted by either Party only to any
court of competent jurisdiction. This Agreement shall be governed by, and construed in accordance
with, the Laws of the State of New York. The Parties unconditionally and irrevocably agree and
consent to the exclusive jurisdiction of the courts located in New York, NY and waive any objection
with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby and further agree not to commence any
such action, suit or proceeding except in any such court.



     16.3 Injunctive Relief. Notwithstanding anything to the contrary in this Agreement, either
Party shall have the right to seek temporary injunctive relief in any court of competent
jurisdiction as may be available to such Party under the Laws and rules applicable in such
jurisdiction with respect to any matters arising out of the other Party’s performance of its
obligations under this Agreement.



ARTICLE 17



MISCELLANEOUS




     17.1 Entire Agreement; Amendment. This Agreement, including the exhibits attached hereto and
thereto (each of which is hereby and thereby incorporated herein and therein by reference), sets
forth the complete, final and exclusive agreement and all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties hereto and
supersedes and terminates all prior agreements and understandings between



34









 




the Parties, which shall continue to govern the obligations of the Parties with respect to
information disclosed thereunder with respect to periods prior to the Effective Date. There are no
covenants, promises, agreements, warranties, representations, conditions or understandings, either
oral or written, between the Parties other than as are set forth herein. No subsequent alteration,
amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to
writing and signed by an authorized officer of each Party. For the avoidance of doubt, the
Parties agree that all covenants, promises, agreements, warranties, representations, conditions,
and understandings set forth herein are made and deemed effective as of the Effective Date, and
that the execution of this Agreement shall not constitute a waiver of any right or claim of either
Party as of the Effective Date.




     17.2 Force Majeure. Each Party shall be excused from the performance of its obligations under
this Agreement to the extent that such performance is prevented by force majeure and the
nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse
shall be continued so long as the condition constituting force majeure continues and the
nonperforming Party takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall include conditions beyond the control of the Parties, including
without limitation, an act of God, voluntary or involuntary compliance with any regulation, Law or
order of any government, war, civil commotion, labor strike or lock-out, epidemic, failure or
default of public utilities or common carriers, destruction of production facilities or materials
by fire, earthquake, storm or like catastrophe; provided, however, the payment of invoices due and
owing hereunder shall not be delayed by the payer because of a force majeure affecting the payer,
unless such force majeure specifically precludes the payment process.



     17.3 Notices. All notices or other communications that are required or permitted under this
Agreement shall be in writing and delivered personally, sent by facsimile (and promptly confirmed
by personal delivery or overnight courier as provided in this Agreement), or sent by
internationally-recognized overnight courier to the addresses below. Any such communication shall
be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a
Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided
in this Agreement), and (b) on the second Business Day after dispatch, if sent by
internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing
addresses of the Parties shall be as described below.



	 	 	 	 	 
	 

	 	For Duramed:
	 	Duramed Pharmaceuticals, Inc.
	 

	 	400 Chestnut
	 	Ridge Road
	 

	 	 	 	Woodcliff Lake, NJ 07677
	 

	 	 	 	Phone: 201-930-3300
	 

	 	 	 	Fax: 201-930-3330
	 

	 	 	 	Attention: President
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Barr Pharmaceuticals, Inc.
	 

	 	 	 	400 Chestnut Ridge Road
	 

	 	 	 	Woodcliff Lake, NJ 07677
	 

	 	 	 	Phone: 201-930-3300
	 

	 	 	 	Fax: 888-843-0563






35









 






	 	 	 	 	 
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	 

	 	For Shire:
	 	Shire LLC
	 

	 	 	 	725 Chesterbrook Boulevard
	 

	 	 	 	Wayne, Pennsylvania 19087-5637
	 

	 	 	 	Fax: (484) 595-8163
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Morgan, Lewis & Bockius LLP
	 

	 	 	 	502 Carnegie Center

Princeton, NJ 08540
	 

	 	 	 	Fax: (609) 919-6701
	 

	 	 	 	Attention: Randall B. Sunberg






     17.4 Independent Contractors. In making and performing this Agreement, Shire and Duramed
shall act at all times as independent contractors and nothing contained in this Agreement shall be
construed or implied for any purpose to create an agency, partnership, limited partnership, joint
venture or employer and employee relationship between Shire and Duramed and this Agreement shall
not be construed to suggest otherwise. At no time shall one Party make commitments or incur any
charges or expenses for or in the name of the other Party. Except as otherwise provided in this
Agreement, each Party shall be solely responsible for its own costs and expenses associated with
this Agreement.



     17.5 Non-Solicitation. From and after the Effective Date until the one (1) year anniversary
of the termination or expiration of this Agreement, neither Party shall, and shall cause each of
its Affiliates not to, directly or indirectly, without the other Party’s prior written consent,
solicit the employment of any employee (or former employee bound by a non-competition obligation)
of the other Party or its Affiliates with whom it has come in contact in conducting activities
under this Agreement; provided, however, that the foregoing provisions shall not apply to (a) a
general advertisement or solicitation program that is not specifically targeted at such persons or
(b) the solicitation of any employee after such time as such employee’s employment has been
terminated by the other Party or its Affiliate.



     17.6 Maintenance of Records. Each Party shall keep and maintain all records required by Law
with respect to Collaboration Products and shall make copies of such records available to the other
Party upon reasonable request.



     17.7 United States Dollars. References in this Agreement to “Dollars” or “$” shall mean the
legal tender of the United States.



     17.8 No Strict Construction. This Agreement has been prepared jointly and shall not be
strictly construed against either Party.



     17.9 Assignment. Neither Party shall sell, transfer, assign, delegate, pledge or otherwise
dispose of, whether voluntarily, involuntarily, by operation of Law or otherwise, this Agreement or
any of its rights or obligations under this Agreement without the prior written consent of the
other Party (which consent may be granted, withheld or conditioned at such other



36









 







Party’s sole and absolute discretion); provided, however, that either Party may assign or
transfer this Agreement or any of its rights or obligations under this Agreement without the
consent of the other Party to any Affiliate of such Party, or to any Third Party (a) with which it
merges or consolidates, or to which it transfers all or substantially all of its assets to which
this Agreement pertains or (b) subject to Section 14.3.1, in part, in connection with the sale or
transfer of such Party’s business relating to Commercialization of any Collaboration Product within
a particular country. The assigning Party (unless it is not the surviving entity) shall remain
jointly and severally liable with, and shall guarantee the performance of, the relevant Affiliate
or Third Party assignee under this Agreement, and the relevant Affiliate assignee, Third Party
assignee or surviving entity shall assume in writing all of the assigning Party’s obligations under
this Agreement. Notwithstanding the foregoing, in the event Duramed sells, transfers, assigns,
delegates, pledges, licenses or otherwise disposes of a Collaboration Product(s) to a Third Party
(whether pursuant to a joint venture, collaboration or otherwise), Shire shall have no obligation
to reimburse such Third Party for any development expenses such Third Party may incur with respect
to such Collaboration Product(s); provided, however, that Duramed shall remain entitled to
reimbursement pursuant to Section 7.2 for any remaining Collaboration Products up to the Maximum
Reimbursement Amount. Any purported assignment or transfer in violation of this Section 17.9 shall
be void ab initio and of no force or effect. Notwithstanding anything to the contrary herein, in
the event any assignment by Shire hereunder gives rise to any obligation to withhold any amounts
payable to Duramed, Shire, or its assignee, shall be entitled to deduct from all payments due under
this Agreement the amount of all applicable withholding taxes to the extent Shire, or its assignee,
pays such taxes to the appropriate governmental authority on behalf of Duramed. Shire shall
properly furnish Duramed with copies of tax receipts evidencing the payment of all such taxes,
levies and assessments. Duramed and Shire shall cooperate with each other in obtaining any
exemption from, a refund for, or reduced rate of tax available under any applicable law or tax
treaty. Notwithstanding the foregoing, Shire shall be liable for, and indemnify Duramed against,
any non-U.S. taxes, any value-added or sales taxes, any duties or levies and assessments, howsoever
designated or computed that are required to be paid or withheld by Shire on such payments. Shire
shall so indemnify Duramed within [*] of Shire’s receipt of notification from Duramed (in
accordance with Section 17.3 hereof) that either (i) based upon current facts and circumstances,
Duramed does not have or will not have during the applicable tax year any or sufficient foreign tax
credits available to utilize to offset such tax liability; or (ii) Duramed has applied for a refund
from the taxing authority at issue (such notice to include a copy of such refund application).
Notwithstanding anything in this Agreement to the contrary, in the event that withholding taxes are
paid on behalf of Duramed by Shire, if Duramed uses a foreign tax credit received as a result of
the payment of withholding taxes by Shire and thereby reduces the amount of U.S. income tax that
Duramed otherwise would have paid, or otherwise receives a refund, Duramed shall refund to Shire
the amount of such reduction with respect to such foreign tax credit or such refund.



     17.10 Counterparts. This Agreement may be executed in two counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument.
Signatures provided by facsimile transmission shall be deemed to be original signatures.



37









 





     17.11 Further Actions. Each Party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate in order to carry
out the purposes and intent of this Agreement.



     17.12 Severability. If any one or more of the provisions of this Agreement is held to be
invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is
taken, the provision shall be considered severed from this Agreement and shall not serve to
invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace
any invalid or unenforceable provision with a valid and enforceable one such that the objectives
contemplated by the Parties when entering this Agreement may be realized.



     17.13 Headings. The headings for each article and section in this Agreement have been
inserted for convenience of reference only and are not intended to limit or expand on the meaning
of the language contained in the particular article or section.



     17.14 No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver
as to a particular default or other matter shall not constitute a waiver of such Party’s rights to
the future enforcement of its rights under this Agreement, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.



[Signature Page Follows.]





38









 








     IN WITNESS WHEREOF, the Parties have executed this Collaboration and License Agreement in
duplicate originals by their proper officers as of the date first written above.



	 	 	 	 	 	 	 
	 	 	DURAMED PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Fred Wilkinson	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name Fred Wilkinson	 	 
	 

	 	 	 	Title  	 	 
	 
	 	 	 	 	 	 
	 	 	SHIRE LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Matthew Emmens	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name Matthew Emmens	 	 
	 

	 	 	 	Title  CEO	 	 






	 	 	 	 	 	 	 
	 	 	SHIRE PLC (solely for purposes of Section 15.10)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Matthew Emmens	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name Matthew Emmens	 	 
	 

	 	 	 	Title  CEO	 	 






[Signature Page to Product Development and License Agreement]




 









 








EXHIBIT A

INITIAL COLLABORATION PRODUCTS




Compound




[*]




[*]




[*]




[*]




[*]





 









 








EXHIBIT B




SUPPLY AGREEMENT





 









 





SUPPLY AGREEMENT




BETWEEN




SHIRE LLC




AND




DURAMED LABORATORIES, INC.




DATED AS OF




AUGUST 14, 2006




 









 








SUPPLY AGREEMENT




     This SUPPLY AGREEMENT (this “Agreement”), dated as of August 14, 2006, by and among
Shire LLC, a Kentucky limited liability company having a place of business at 725 Chesterbrook
Boulevard, Wayne, Pennsylvania 19087 (“Shire”), and Duramed Pharmaceuticals, Inc., a
Delaware corporation having a place of business at 400 Chestnut Ridge Road, Woodcliff Lake, NJ
07677 (“Duramed”) (each a “Party” and collectively, the “Parties”).



RECITALS




     WHEREAS, the Parties have entered into that certain Product Development and License Agreement
(the “Product Development Agreement”), dated as of the date hereof, pursuant to which the
Parties are developing Collaboration Products (as defined therein), with such Collaboration
Products to be commercialized by Duramed in certain geographic regions, and by Shire in the rest of
the world (capitalized terms used herein but not defined herein shall have the meanings set forth
in the Product Development Agreement);



     WHEREAS, the Product Development Agreement contemplates the Parties entering into this
Agreement to govern the supply of Collaboration Products by Duramed to Shire; and



     WHEREAS, Duramed desires to manufacture and/or supply the Collaboration Products to Shire upon
the terms and subject to the conditions of this Agreement.



     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:



ARTICLE I




DEFINITIONS




     “Affiliate” means, with respect to a Party, any entity that directly or indirectly
controls, is control led by, or is under common control with, such Party, but only for so long as
such control continues. For purposes of this definition, “control” means the power to direct the
management and affairs of an entity, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise. In the case of a corporation, the direct or indirect
ownership of fifty percent (50%) or more of its outstanding voting shares shall in any case be
deemed to confer control, provided that, the direct or indirect ownership of a lower percentage of
such securities shall not necessarily preclude the existence of control.



     “API Cost” for a Shire Product means the actual cost paid by Duramed on a pass-through
basis for the active pharmaceutical ingredient in such Shire Product. For the avoidance of doubt,
all raw material and manufacturing costs of cervical and vaginal rings in a Shire Product shall not
be included in the API Cost.



     “Changeover Plan” has the meaning set forth in Section 8.2.



 









 





     “Effective Date” means the date on which the Parties have attached mutually agreed
Exhibits to this Agreement for the supply of a particular Collaboration Product in accordance with
Section 2.1.



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



     “Fully Allocated Manufacturing Cost” means the actual cost incurred by Duramed for
Manufacturing Shire Product, calculated in accordance with GAAP and using normal standard cost
accounting and allocation methods and procedures of Duramed consistently applied and maintained,
including, but not limited to, API Cost, all raw material and manufacturing costs of cervical and
vaginal rings, and all costs of active and inactive ingredients therein; provided that, for
purposes of this Agreement, Fully Allocated Manufacturing Cost shall not include overhead
absorption related to significant idle or excess capacity in connection with (i) expansion of an
existing facility; or (ii) the construction or validation of any new manufacturing facility of
Duramed or any of its Affiliates that may be constructed after the date of this Agreement first
written above.



     “Losses” means any and all liabilities, damages, fines, penalties, deficiencies,
losses and expenses (including interest, court costs, amounts paid in settlement, reasonable fees
of attorneys, accountants and other experts or other reasonable expenses of litigation or other
proceedings or of any claim, default or assessment); provided, however, that the term “Losses”
shall not include any special, consequential, indirect, punitive or similar damages, except to the
extent actually paid by a Party pursuant to any Third Party Claim.



     “Manufacturing” shall mean all activities related to the manufacturing of a Shire
Product or any component or ingredient thereof, including packaging, in-process and finished
product testing, release of product or any component or ingredient thereof, quality assurance
activities related to manufacturing and release of product, ongoing stability tests and regulatory
activities related to any of the foregoing.



     “Net Sales Price” shall mean, [*]



     “Packaging Specifications” means the packaging and labeling specifications for Shire
Product set forth on Exhibit B, as amended or supplemented from time-to-time in accordance
with Section 3.13.



     “Product Specifications” means the specifications for Shire Product set forth on
Exhibit A, as amended or supplemented from time-to-time on mutual agreement of the Parties.



     “Purchase Order” has the meaning set forth in Section 3.2.



     “Rolling Forecast” has the meaning set forth in Section 3.1.



     “Shire Product” means a Collaboration Product to be manufactured hereunder as set
forth in Section 2.1.



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



2









 





     “Termination Assistance Services” has the meaning set forth in Section 8.1.



ARTICLE II



SUPPLY OF PRODUCTS




     Section 2.1. Collaboration Products. Pursuant to the terms and conditions of this
Agreement, Shire shall exclusively purchase from Duramed, and Duramed shall supply to Shire,
Shire’s requirements for Collaboration Products, including for Development activities under the
Product Development Agreement, in placebo and active forms. Upon Development of a Collaboration
Product under the Product Development Agreement, the Parties shall attach hereto mutually agreed
Exhibits applicable to the supply of such Collaboration Product. This Agreement, together with
such Exhibits, shall be considered a separate agreement for each Collaboration Product. Duramed
shall have no obligation to supply any Collaboration Product that has not been reduced to final
finished dosage form under the applicable Development Plan, and all Exhibits hereto shall be
consistent with such final finished dosage form.



     Section 2.2. Cooperation on Manufacturing Plan. The Parties acknowledge that Duramed
will require certain minimum lead times and may have various options for manufacturing Shire
Product hereunder, which options may include (i) building a dedicated manufacturing plant, which
plant may or may not include excess capacity, (ii) utilizing excess capacity at existing
manufacturing plants, (iii) expanding capacity at existing manufacturing plants, or (iv)
combinations of the foregoing. Within [*] following the Effective Date (with respect to each
Collaboration Product), the Parties shall meet to develop non-binding forecasts for capacity
planning purposes of Shire’s anticipated needs for each Shire Product for clinical and commercial
purposes over the clinical testing period and (i) the twelve (12) month period following first
commercial launch of each Shire Product; and (ii) the 36 month period following the first
commercial launch of each Shire Product. Thereafter, the Parties shall meet on an as-required
basis, but no less than once each calendar quarter, to update such capacity planning forecast. The
Parties shall also reasonably cooperate to develop non-infringing manufacturing techniques for
Collaboration Products.



     Section 2.3. Initial Forecast and Purchase Order. At least [*] prior to the first
anticipated clinical use or commercial launch for a Shire Product, Shire shall submit to Duramed an
initial forecast (the “Initial Forecast”), which Initial Forecast shall be updated
thereafter in accordance with Section 3.1. Notwithstanding any other provision of this Agreement,
in no event shall Shire submit a Purchase Order for any initial order of a Shire Product [*] prior
to the required delivery date for such initial order.



     Section 2.4. Initial Implementation Meeting. No later than thirty (30) days after the
receipt of an initial Purchase Order, Duramed and Shire shall hold an initial implementation
meeting (at such time and place or by such means as are mutually agreed by the Parties) to develop
specific implementation requirements for the supply of Shire Product to Shire. Thereafter, Duramed
and Shire shall conduct implementation-planning meetings as reasonably required by the Parties in
order to update and discuss (i) the current status of Duramed’s implementation activities, and
(iii) the status of any actual and anticipated problem areas, their impact on the work efforts of
Duramed, and actions being taken and/or needed to be taken by the Parties in order to reduce the
potential impact of such problems.



3









 





ARTICLE III



FORECASTS, ORDERS AND SHIPMENT




     Section 3.1. Forecasted Quantities. [*]



     Section 3.2. Purchase Order Form. Shire shall submit all orders for the purchase of
Shire Products using the form of purchase order attached hereto as Schedule 1 (each a
“Purchase Order”). Each Purchase Order will be delivered to such location as Duramed
designates in writing to Shire from time to time. After Duramed receives a Purchase Order, Duramed
shall acknowledge receipt thereof in writing within five (5) business days, either (i) accepting
the Purchase Order, or (ii) seeking clarification of the Purchase Order, if necessary. Duramed
shall have no obligation to accept any Purchase Order that does not include all information
required on Schedule 1 or that is inconsistent with the terms and conditions of this
Agreement. In the event that an order is rejected, Duramed and Shire will cooperate in good faith
to resolve any supply issues raised by such order. The minimum size of any order placed by Shire
will be a full batch in accordance with Exhibit A hereto.



     Section 3.3. Delivery of Shire Product. Upon acceptance of a Purchase Order, Duramed
shall deliver all Shire Product by the delivery date covered by such Purchase Order in accordance
with the terms of this Agreement and such Purchase Order, including the quantities accepted in each
Purchase Order. At the time of delivery to Shire, all Shire Product manufactured hereunder shall
meet the Product Specification applicable thereto in all material respects, and shall be finished,
packaged, labeled and/or ready for commercial sale by Shire as required in accordance with the
Packaging Specifications.



     Section 3.4. Expedited Delivery. Upon the request of Shire to supply the quantities
of Shire Product under a Purchase Order on an expedited basis, Duramed shall notify Shire of any
expected increased costs that Duramed anticipates it will incur. Subject to prior written approval
by Shire of these increased costs, Duramed shall use reasonable efforts to supply the quantities of
Shire Product on an expedited basis. Duramed shall not have any liability for any failure to meet
any such requested expedited delivery schedule.



     Section 3.5. Excess Purchase Orders. Duramed shall use commercially reasonable
efforts to, but shall not be obligated to supply quantities of any Shire Product in excess of 120%
of the quantities set forth in the most recent forecast for such quarter. If Duramed believes it
will be unable to deliver any additional volume on the date specified by Shire in the applicable
Purchase Order, Duramed shall notify Shire in writing as promptly as practicable, and shall provide
a proposed alternative delivery schedule. Any agreement on the delivery schedule for such
additional volume shall be documented in writing and shall become effective only upon mutual
written agreement of both Parties to the terms and conditions thereof.



     Section 3.6. Cancellation of Orders. Shire may not cancel an order without payment to
Duramed in full for the order. Duramed shall, in good faith, use commercially reasonable efforts
to mitigate the costs of cancellation of any Purchase Order.



     Section 3.7. Conflict. The terms of this Agreement shall prevail over any
conflicting, inconsistent or additional terms set forth in any Purchase Order.



4









 





     Section 3.8. Delivery and Risk of Loss. All Shire Products shipped under this
Agreement will be shipped Ex-Works (Incoterms 2000) Duramed’s manufacturing facility to such
location designated by Shire in the applicable accepted Purchase Order. Shire will pay all
freight, insurance charges, taxes, import and export duties, inspection fees and other charges
applicable to the sale and transport of Shire Products. Risk of loss to Shire Products shall pass
to Shire upon delivery to Shire’s designated carrier. Title to all Shire Products manufactured
hereunder shall pass to Shire on payment by Shire for the applicable Shire Product or pro-rata
portion thereof.



     Section 3.9. Certificate of Analysis. A Certificate of Analysis (“COA”) will
accompany each shipment of Shire Products in the form attached hereto as Schedule 2.



     Section 3.10. Location of Manufacturing. All Shire Products Shire shall be
manufactured in a facility that has been designated as an approved manufacturing facility by the
applicable Regulatory Approval for such Shire Product. Should Duramed desire to change any of the
manufacturing site for a Shire Product, or any component thereof, to a site other than those
designated in the applicable Regulatory Approval, Duramed shall notify Shire in writing and the
Parties shall thereafter meet to discuss the potential consequences of such a change. Duramed
shall not change manufacturing sites for any Shire Product, or any component thereof, except in
accordance with the authorization of the applicable Governmental Authority, and the procedures and
requirements set forth in this Agreement.



     Section 3.11. Shortage of Materials. In the event that the materials and/or resources
required to manufacture and deliver Shire Products to Shire in accordance with this Agreement are,
or are reasonably anticipated to become, in short supply such that Duramed may be unable to provide
Shire with the quantities of Shire Products set forth in a Purchase Order, Duramed shall notify
Shire of such shortage as promptly as practicable. If Duramed so notifies Shire, Duramed and Shire
shall promptly meet to discuss how to address the potential shortage. In the event that Duramed,
at any time, has any information indicating that it may not be able to supply Shire with all Shire
Products in accordance with a confirmed Purchase Order, Duramed shall as soon as practicable
provide Shire a written notice to that effect. To the extent that there is any such shortage,
Duramed shall allocate on a pro-rata basis the supply of Shire Products and similar Duramed
products based on the prior 12 months’ sales for each of Shire and Duramed for such products. Any
failure by Duramed to meet its obligations under this Agreement as a result of a general shortage
of raw materials (i.e., a shortage that not only affects Duramed, but also affects the general
market for such raw materials) shall not be considered a breach of this Agreement provided that
Duramed is meeting its obligations under Article IX. To the extent (other than as a result of a
Force Majeure Event) that Duramed fails to supply at least 80% of the quantities of Shire Product
in the aggregate ordered for a particular calendar quarter for two consecutive calendar quarters,
Shire may request and Duramed shall, at its cost and expense, qualify a second source of supply.
Such second source shall be qualified and ready to manufacture Shire Product within 12 months
following such Shire request. If Duramed fails to qualify and have ready such second source, then
Shire shall have the right to qualify and make ready such second source and Duramed shall promptly
reimburse Shire for costs and expenses incurred by it in so doing. Such second source shall be
used by Duramed to supply Shire Product to Shire under this Agreement at least to the extent
required to maintain the second source as a qualified manufacturer of Shire Product.



5









 





     Section 3.12. Product Specifications. Duramed shall manufacture all Shire Product
so that, at the time of delivery to Shire, the Shire Product conforms, in all material respects, to
the Product Specifications, cGMP and any reasonable requests communicated by Shire to Duramed in
order for Shire to comply with any legal or regulatory obligations applicable to Shire. At the
time of shipment of Shire Products, the Shire Products shall have a minimum remaining shelf life of
not less than that agreed upon by the Parties with respect to the Shire Product at issue as set
forth in Exhibit A. On mutual agreement of the Parties, the Parties may modify the Product
Specifications of the Shire Product by amendment to Exhibit A, unless such changes are required by
any regulatory authority, in which case Shire may unilaterally modify the Product Specifications of
the Shire Product. Upon modification of such Product Specifications, Duramed shall use
commercially reasonable efforts to alter its manufacturing processes to meet such Product
Specifications and shall not be liable for any failure to meet its obligations hereunder while
acting in good faith to meet the new Product Specifications.



     Section 3.13. Packaging Specifications. Duramed shall package the Shire Product in
accordance with the Packaging Specifications. Changes in the Packaging Specifications shall be
subject to the mutual agreement of the Parties on a schedule to be agreed by the Parties, taking
into account the time and cost required for Duramed to implement any necessary manufacturing or
packaging modifications. Shire shall compensate Duramed for the cost of any inventory of old
packaging that cannot be used as a result of any modification by Shire to the Packaging
Specifications, and for any other costs incurred as a result of the implementation of the
modifications to the Packaging Specifications requested by Shire. Shire will be responsible for
ensuring the accuracy of all information contained on all labels for Shire Products and for the
compliance of all such labels with applicable Laws and Regulatory Approvals.



     Section 3.14. Facility Maintenance; Inspection; Reports. Duramed shall, at all times,
maintain and operate all facilities where Shire Products are manufactured, packaged or tested, and
implement required quality control procedures to perform its obligations under this Agreement. Not
more than once every twelve (12) months (or more often in the case of a deficiency), Duramed shall
permit, or cause its contractors to permit, quality assurance representatives of Shire or
designated third parties and representatives of the applicable Government Authority to inspect such
facilities upon reasonable advance notice, during normal business hours and on a confidential
basis. Duramed shall promptly provide, or cause its contractor to provide, Shire with a copy of
any notice from the applicable Government Authority received at the conclusion of an inspection
relating to any Shire Product.



     Section 3.15. Subcontracting. Duramed shall have the right to subcontract manufacture
and supply under this Agreement to any Affiliate of Duramed or to a Third Party, provided
that, (i) Duramed shall procure that such Affiliates and Third Parties comply with the terms
and conditions of this Agreement, (ii) Duramed shall be liable for any non-performance or breach by
such Affiliate or Third Party, and (iii) any subcontracting to a Third Party shall be subject to
Shire’s approval, which approval shall not be unreasonably withheld.



     Section 3.16. Competing Products. Subject to the Product Development Agreement, Shire
recognizes and acknowledges that Duramed and its Affiliates have been, and



6









 







will continue to be, actively involved in the field in which the Shire Products may be sold.
Shire acknowledges that Duramed and its Affiliates currently, or may in the future, market, sell
and distribute products that compete directly with any Shire Product, and may continue to market,
sell and distribute these and other competing products throughout the Term of this Agreement.



ARTICLE IV



REPRESENTATIONS AND WARRANTIES




     Section 4.1. Mutual Representations. Each Party hereby represents and warrants to the
other Party, as of the date hereof, as follows:



     (a) Due Authorization. Such Party is a corporation duly incorporated and in good
standing (where such concept applies) as of the Effective Date, and the execution, delivery and
performance of this Agreement by such Party have been duly authorized by all necessary action on
the part of such Party.



     (b) Due Execution. This Agreement has been duly executed and delivered by such Party
and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party
in accordance with its terms.



     (c) No Conflict. Such Party’s execution, delivery and performance of this Agreement
do not: (i) violate, conflict with or result in the breach of any provision of the charter or
by-laws (or similar organizational documents) of such Party; (ii) conflict with or violate any law,
rule, regulation or governmental order applicable to such Party or any of its assets, properties or
businesses; or (iii) conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of any agreement to which it is a party.



     (d) Duly Licensed. Such Party is duly licensed, authorized or qualified to do
business and is in good standing (where such concept applies) in every jurisdiction in which a
license, authorization or qualification is required for the ownership or leasing of its assets or
the transaction of business of the character transacted by it, except where the failure to be so
licensed, authorized or qualified would not have a material adverse effect on such Party’s ability
to fulfill its obligations hereunder.



ARTICLE V



QUALITY ASSURANCE




     Section 5.1. Duramed Compliance. Duramed shall manufacture, fill, package, handle and
warehouse the Shire Products in conformity with all applicable laws, cGMP requirements and the
Product Specifications. Shire shall maintain all Regulatory Approvals and all permits and
licenses issued by any Governmental Authority that are necessary to permit Duramed to manufacture
and supply the Shire Products. Duramed shall advise Shire of any information of which it becomes
aware arising out of Duramed’s activities hereunder that have adverse regulatory compliance and/or
reporting consequences affecting the Shire Products.



7









 





     Section 5.2. Inspections. Duramed shall advise Shire of any requests by any
Governmental Authority for inspections of the premises used to manufacture Shire Products. In the
event the portion of Duramed’s facilities at which Shire Product are manufactured is inspected by
any Governmental Authority, Duramed shall use commercially reasonable efforts to ensure that Shire
shall have the right to be present during such inspection. To the extent relating directly to a
Shire Product, Duramed shall notify Shire of any alleged violations or deficiencies relating to a
facility at which any Shire Products are manufactured, packaged or stored, and, to the extent
relating directly to a Shire Product, shall disclose to Shire all relevant portions of any notice
of observations or potential violations as well as a copy of its response thereto.



     Section 5.3. Shire Compliance. Shire shall hold, store, handle, ship, deliver,
distribute and/or sell the Shire Products (i) in accordance with applicable cGMP requirements, laws
and Regulatory Approvals; and (ii) in compliance with the Product Specifications. Shire shall
enter into all necessary compliance agreements as may be reasonably required or designated by
Duramed, including but not limited to the quality agreement attached hereto as Exhibit C (the
“Quality Agreement”) and any other agreements to cover quality assurance and adverse
incident reporting, including the safety agreement attached hereto as Exhibit D (the “Safety
Agreement”).



     Section 5.4. Quality Control. Upon delivery of Shire Products to Shire, Shire shall
be solely responsible for compliance with all Laws and Regulatory Approvals with respect to the
Shire Products.



     Section 5.5. Rejection of Delivered Products. Within [*] of receipt of any Shire
Product, Shire shall inspect the Shire Product and advise Duramed of any defect whereby the Shire
Product does not conform to the Product Specifications. Any Shire Product not refused within [*]
shall be deemed accepted subject to Section 5.6 below; provided, however, that such
acceptance or deemed acceptance shall not adversely affect any claim for indemnification provided
in Article XI. If Shire desires to refuse acceptance, Shire shall, within such thirty (30) day
period, inform Duramed of its refusal to accept the defective Shire Product and the reason(s)
therefor. In the event that Shire refuses acceptance, Duramed, upon confirmation of the reasons
for refusal of the Shire Product, will replace the defective Shire Product or refund the purchase
price thereof, at Shire’s option. If Duramed and Shire do not agree on the refusal or rejection of
Shire Product, then any Party may refer the matter for final analysis to a specialized laboratory
of national reputation acceptable to both Parties for the purpose of determining the results. Any
determination by such laboratory shall be final and binding upon the Parties. The cost of any such
review by a laboratory shall be borne by Shire if it is determined that the Shire Product conforms
to the Product Specifications, and by Duramed if determined that it does not.



     Section 5.6. Latent Defects. Shire shall have the right to refuse and reject any
Collaboration Product within [*] from the date Shire becomes aware of a defect in a Shire Product
delivered hereunder, in the case of defects that are not evident upon a reasonable initial
inspection but which subsequently become evident.



     Section 5.7. Non-Conforming Products. Notwithstanding any other provisions of this
Agreement, Shire shall return to Duramed or its designee any Shire Products that do not conform
with the Product Specifications at the time of shipment to Shire, or if Shire and



8









 







Duramed mutually agree, to dispose of such Shire Products as Duramed may direct. Duramed shall
be responsible for the costs associated with the proper disposal of all such Shire Products not in
conformance with the Product Specifications at the time of shipment and shall promptly replace or
credit, at the option of Duramed, such non-conforming Shire Products.



     Section 5.8. Cost of Recall. In the event that any Shire Product is quarantined or
recalled, or is subject to a stop-sale action, whether voluntary or by the action of any
Governmental Authority, or as a result of the revocation or expiration of any Regulatory Approval,
any expenses, including any out-of-pocket administrative costs and reasonable fees of any experts
or attorneys that may be utilized by either Party, government fines or penalties, related to such
recall, quarantine or stop-sale, shall be borne by Shire unless it is determined that the reason
for the quarantine, recall or stop-sale action is the result of the breach by Duramed of its
obligations under this Agreement, and in such case such expenses shall be shared according to the
relative responsibility of each Party. Such determination may be made by the Governmental
Authority involved, or by mutual agreement of the Parties following examination and review of all
records pertinent to the manufacture of the Shire Product subject to such recall.



     Section 5.9. Regulatory Actions. If any regulatory authority in the Shire Territory
takes any action with respect to a Shire Product that requires a response or action by Duramed,
Duramed shall use commercially reasonable efforts, at the expense of Shire, to carry out the
response or action, at all times in consultation with Shire, and promptly thereafter Duramed shall
meet with Shire and agree a suitable plan of action in order to try and rectify and/or address any
problem(s) identified by the Regulatory Authority within a reasonable period of time at the expense
of Shire. Notwithstanding the foregoing, if any of the above expenses result from Duramed’s
breach, negligence or willful misconduct hereunder, then any expenses incurred under this Section
5.9 shall be Duramed’s responsibility.



ARTICLE VI



PRICE AND PAYMENTS




     Section 6.1. Clinical Non-Seasonique Supply Prices. [*]



[*]




     Section 6.2. Commercial Non-Seasonique Supply Prices. [*]



[*]




     Section 6.3. Clinical Seasonique Prices. [*]



[*]




     Section 6.4. Commercial Seasonique Supply Prices. [*]



[*]




     Section 6.5. Unit Price Negotiation. [*].



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     Section 6.6. Records. Duramed shall keep complete and accurate records, consistent
with GAAP, of the Fully Allocated Manufacturing Costs and API Costs.



     Section 6.7. Invoices. Duramed may invoice for Shire Product at any time following
tender thereof to Shire’s carrier. All invoices shall be sent to a single address specified in
writing by Shire. Payment for Shire Product shall be due within [*] after the date of the invoice
by check or electronic funds transmission in United States dollars without any offset or deduction
of any nature whatsoever. All electronic payments shall be made to such account as Duramed shall
have specified in writing to Shire with written confirmation of payment sent by facsimile to such
address as Duramed shall have specified in writing to Shire. If Shire fails to pay any undisputed
invoiced amount when due, a service charge will be imposed by Duramed equal to the [*] per month or
the highest rate permitted by law of the outstanding amount for each month or portion thereof that
such amount is overdue.



     Section 6.8. Taxes. The purchase price of Shire Products as determined in accordance
with Section 6.1 shall be exclusive of any applicable value added tax and any other taxes, duties
and impositions that, if applicable, shall be paid by Shire to Duramed at the same time as the
purchase price for such Shire Product. Shire shall bear the cost of any such taxes, duties or
impositions of any kind, nature or description applicable to the sale and transportation of Shire
Product, and Shire will forthwith pay to Duramed all such amounts upon demand.



     Section 6.9. Separate Sale. Each shipment of Shire Product shall constitute a
separate sale, obligating Shire to pay therefor, whether such shipment is in whole or only partial
fulfillment of any Purchase Order.



     Section 6.10. Deductions. Shire shall not to make any deductions of any kind from any
payments due to Duramed hereunder unless Shire will have received prior written authorization from
Duramed authorizing such deduction.



     Section 6.11. Audit.



     (a) Audit. Shire shall have the right to have an independent certified public
accounting firm of internationally recognized standing, reasonably acceptable to Duramed, to have
access during normal business hours, and upon reasonable prior written notice, to such of the
records of Duramed as may be reasonably necessary to verify the accuracy of amounts paid by Shire
under this Agreement for any calendar year ending not more than three (3) years prior to the date
of such request; provided, however, that, Shire shall not have the right to conduct more than one
such audit in any twelve (12) month period and that Shire shall not be permitted to audit the same
period of time more than once. The accounting firm shall disclose to Shire only whether the
various expenses subject to reimbursement under this Agreement are correct or incorrect and the
specific details concerning any discrepancies. Shire shall bear all costs of such audit, unless
the audit reveals a discrepancy in Shire’s favor of more than five percent (5%), in which case
Duramed shall bear the cost of the audit. If Duramed disputes the findings pursuant to this
Section 6.11, the Parties shall meet and discuss such dispute.



     (b) Payment of Additional Amounts. If, based on the results of any audit, (a)
additional payments are owed by Shire to Duramed under this Agreement, then Shire shall make



10









 







such additional payments, or (b) the payments previously made by Shire to Duramed under this
Agreement are in excess of the amounts that were actually required to be made, then Duramed shall
return such excess payments, in each case within fifteen (15) Business Days after the accounting
firm’s written report is delivered to the Parties.



ARTICLE VII



TERM AND TERMINATION




     Section 7.1. Term. The term of this Agreement shall commence on the Effective Date
and shall continue until terminated in accordance with this Article VII (the “Term”).
Shire may terminate this Agreement as to the supply of particular Shire Product at any time on one
(1) years written notice to Duramed. Subject to Article VIII, Duramed may terminate this Agreement
as to the supply of particular Shire Product at any time on eighteen (18) months written notice to
Shire, provided that Duramed may not terminate this Agreement under this sentence until ten (10)
years following the Effective Date. Termination of this Agreement with respect to one or more
Shire Products shall not relieve the Parties of any obligations with respect to any other Shire
Products, and this Agreement shall remain in effect as to such other Shire Products.



     Section 7.2. Termination of Exclusivity. Notwithstanding the provisions of Section
7.1, the obligations of the Parties under Section 2.1 shall be effective as of the date of
execution of this Agreement and may not be terminated except on mutual agreement of the Parties.
Termination of this Agreement as to the supply of any particular Shire Product under Section 7.1
shall not affect the rights and obligations of the Parties with respect to the other Shire Products
under Section 2.1.



     Section 7.3. Termination for Cause. Either Party may terminate this Agreement as to
the supply of a particular Shire Product at any time in the event that the other Party materially
breaches this Agreement as to such Shire Product and such material breach continues uncured for a
period of ninety (90) days after written notice thereof; provided, however, in the
event that the breaching Party has in good faith commenced cure within such ninety (90) day period,
but cannot practically complete such cure within such ninety (90) day period, the breaching Party
shall have an additional ninety (90) day cure period. In the event a material breach of this
Agreement is incapable of cure or cannot be cured in the time periods set forth in the previous
sentence acting using commercially reasonable efforts, without limiting any other rights of the
non-breaching Party, including the right to seek injunctive relief, the non-breaching Party shall
not have the right to terminate this Agreement if (i) the breaching Party is providing full
cooperation to resolve and/or mitigate the breach, and (ii) the breach was not caused by willful
misconduct by the breaching Party.



     Section 7.4. Survival. The provisions of Sections 5.8 and 7.4, and Articles VIII, X,
XI and XII shall survive termination or expiration of this Agreement. Termination of this
Agreement shall not affect the obligation of any Party to pay the other Party any amounts due
hereunder accrued prior to the termination date hereof. Except in the event of termination by
Duramed under Section 7.3, upon termination of this Agreement Duramed shall deliver to Shire on an
ex-works basis all manufactured and work-in progress quantities of Shire Product in its possession
that have been manufactured in respect of a specific Purchase Order(s) accepted by



11









 







Duramed hereunder subject to payment in advance therefor by Shire. The right to terminate
this Agreement shall not prejudice any other right or remedy in equity or at law of a Party in
respect of any breaches of this Agreement.



ARTICLE VIII



TERMINATION ASSISTANCE SERVICES




     Section 8.1. Termination Assistance Services. If (i) Duramed terminates this
Agreement as to the supply of particular Shire Product under Section 7.1 (and Shire intends to
continue Commercializing the applicable Shire Product), or (ii) Shire terminates this Agreement
under Section 7.3 (and Shire intends to continue Commercializing the applicable Shire Product),
Duramed shall for a period of one (1) year thereafter, upon Shire’s request, provide any
cooperation reasonably requested by Shire that may be required to facilitate the transfer of the
manufacture of the applicable Shire Product to Shire or Shire’s designee (“Termination
Assistance Services”). Shire shall reimburse Duramed for the reasonable costs of Duramed in
providing Termination Assistance Services. The rights of Shire under this Section 8.1 shall be
without prejudice to the Parties’ rights to pursue legal remedies for breach of this Agreement,
either for breaches prior to termination or during the period this Agreement is continued in force
post termination.



     Section 8.2. Development of Changeover Plan. If and to the extent requested by Shire,
whether prior to, upon, or following termination of this Agreement by Shire, Duramed shall use
commercially reasonable efforts to assist Shire in developing a plan that shall specify the tasks
to be performed by the Parties in connection with the Termination Assistance Services and the
schedule for the performance of such tasks (a “Changeover Plan”). The Changeover Plan
shall include descriptions of the services, fees, documentation and access requirements that will
promote an orderly transition of the manufacture of Shire Product to Shire or its designee.



     Section 8.3. Know-How, Infrastructure, and Software. In connection with the
Termination Assistance Services, Duramed shall make available to Shire or its designee, to the
extent owned or controlled by and in the possession of Duramed and reasonably required to
manufacture the applicable Shire Product, (i) copies of all applicable requirements, standards,
policies, reports and report formats, user manuals, technical manuals, system architecture,
processes, operating procedures and other documentation, (ii) copies of flow charts of the
manufacturing procedures and work instructions related to manufacturing the relevant Shire Product,
(iii) a list of all material equipment, including the source of such equipment, utilized in the
production of the applicable Shire Product, (iv) copies of all current specifications, including
packaging, for the relevant Shire Product, (v) copies of all standard operating procedures for the
manufacturing procedures to be made available to Shire, (vi) all necessary environmental conditions
necessary to manufacture the relevant Shire Product and copies of any existing external
environmental impact studies based on the materials or methods employed in the manufacturing method
to be made available to Shire, and (vii) such other documentation as the Parties may agree.



ARTICLE IX



FORCE MAJEURE




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     Section 9.1. Force Majeure. No Party shall be responsible for failure or delay in
performance hereunder due to reasons beyond its reasonable control, including without limitation,
by reason of fire, flood, riot, freight embargoes, acts of God or of the public enemy, war or civil
disturbances, general shortage of raw materials (i.e., a shortage that not only affects Duramed,
but also affects the general market for such raw materials), or any future laws, rules, regulations
or acts of any government affecting a Party that would delay or prohibit performance hereunder (a
“Force Majeure Event”). Upon the occurrence of a Force Majeure Event, the Party whose
performance is so affected shall promptly give notice to the other Party of the occurrence or
circumstance upon which it intends to rely to excuse its performance. During the duration of the
Force Majeure Event, the Party so affected shall use its reasonable commercial efforts to avoid or
remove such Force Majeure Event and shall take reasonable steps to resume its performance under
this Agreement with the least possible delay. Any Force Majeure Event must be beyond the control
and without the fault or negligence of the Party claiming excusable delay, provided that, breaches
by any Party’s subcontractors shall not excuse any delay or failure by that Party.



ARTICLE X



CONFIDENTIALITY




     Section 10.1. Confidential Information. As used in this Agreement, the term
“Confidential Information” means all secret, confidential or proprietary information or
data, whether provided in written, oral, graphic, video, computer, electronic or other form,
provided pursuant to this Agreement or generated pursuant to this Agreement by one Party or its
Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the
“Receiving Party”), including but not limited to, information relating to the Disclosing
Party’s existing or proposed research, development efforts, patent applications, business or
products, and any other materials that have not been made available by the Disclosing Party to the
general public. Confidential Information shall not include any information or materials that:




(a) were already known to the Receiving Party (other than under an obligation of
confidentiality), at the time of disclosure by the Disclosing Party, to the extent
such Receiving Party has documentary evidence to that effect;




(b) were generally available to the public or otherwise part of the public domain at
the time of disclosure thereof to the Receiving Party;




(c) became generally available to the public or otherwise part of the public domain
after disclosure or development thereof, as the case may be, other than through any
act or omission of a Party in breach of such Party’s confidentiality obligations
under this Agreement;




(d) were disclosed to a Party, other than under an obligation of confidentiality, by
a third party who had no obligation to the Disclosing Party not to disclose such
information to others; or




(e) were independently discovered or developed by or on behalf of the Receiving
Party without the use of the Confidential Information belonging to the



13









 







other Party, to the extent such Receiving Party has documentary evidence to that
effect.



     Section 10.2. Confidentiality Obligations. Each of Duramed and Shire shall keep
confidential all Confidential Information of the other Party with the same degree of care it
maintains the confidentiality of its own Confidential Information but in no event less than a
reasonable degree of care. Neither Party shall use such Confidential Information for any purpose
other than in performance of this Agreement or disclose the same to any other Person other than to
such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or
consultants who are bound by confidentiality obligations consistent with those contained herein and
who have a need to know such Confidential Information to implement the terms of this Agreement or
enforce its rights under this Agreement. Upon termination of this Agreement, the Receiving Party
shall return or destroy all documents, tapes or other media containing Confidential Information of
the Disclosing Party that remain in the possession of the Receiving Party and its Affiliates or
their directors, managers, employees, independent contractors, agents or consultants, except that
the Receiving Party may keep one copy of the Confidential Information in the legal department files
of the Receiving Party, solely for archival purposes. Such archival copy shall continue to be
subject to the provisions of this Article X.



     Section 10.3. Permitted Disclosure and Use. Notwithstanding Section 10.2, a Party may
disclose Confidential Information belonging to the other Party only to the extent such disclosure
is reasonably necessary to: (a) obtain Regulatory Approval to the extent such disclosure is made to
a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c)
comply with Laws; or (d) comply with applicable stock exchange regulations. If a Party deems it
necessary to disclose Confidential Information of the other Party pursuant to this Section 10.3,
such Party shall give reasonable advance notice of such disclosure to the other Party to permit
such other Party sufficient opportunity to object to such disclosure or to take measures to ensure
confidential treatment of such information. In addition, notwithstanding Section 10.2, the Parties
shall cooperate to prepare standardized public responses to anticipated inquiries from the public,
press, stockholders, investors and/or analysts with respect to the activities hereunder. Despite
the foregoing, each Party agrees that the other Party is free to disclose this Agreement in its
entirety to the United States Federal Trade Commission and the United States Department of Justice,
or to any court with jurisdiction over the litigations settled under the Settlement Agreement
between Shire Laboratories Inc. and Barr Laboratories Inc. dated August 14, 2006.



     Section 10.4. Unauthorized Disclosure. The Receiving Party acknowledges and agrees
that the Confidential Information of the Disclosing Party constitutes proprietary information and
trade secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside
disclosure of such Confidential Information shall be presumed to cause irreparable injury to the
Disclosing Party.



     Section 10.5. Notification. The Receiving Party shall notify the Disclosing Party
promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s
Confidential Information, and shall cooperate with the Disclosing Party in any reasonably requested
fashion to assist the Disclosing Party to regain possession of such Confidential Information and to
prevent its further unauthorized use or disclosure. The Receiving Party



14









 







acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure
of Confidential Information and that the Disclosing Party may be entitled, without waiving other
rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of
competent jurisdiction in the event of such unauthorized disclosure.



     11.5 Confidentiality of this Agreement. The terms of this Agreement shall be
Confidential Information of each Party and, as such, shall be subject to the provisions of this
Article X.



ARTICLE XI



INDEMNIFICATION




     Section 11.1. Indemnification by Shire. Shire hereby agrees to hold Duramed, its
Affiliates, and their respective directors, agents and employees harmless from and against any and
all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings,
hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions
by a third party (each a “Third Party Claim”) resulting directly from (a) any breach by
Shire of any of its representations, warranties, covenants or obligations pursuant to this
Agreement, (b) the negligence or willful misconduct by Shire or its Affiliates or their respective
officers, directors, employees, agents or consultants in performing any obligations under this
Agreement, (c) the Shire Product, including the use, handling, storage, sale or other disposition
of Shire Product (including, without limitation, those Third Party Claims that involve product
defect, product liability, death or bodily injury (or allegations thereof) to any individual or any
property, or (d) infringement of intellectual property based on the Product Specification,
Packaging Specifications, manufacture, use, sale, offer for sale, importation or other distribution
of Shire Product, except to the extent that such Losses in (a) through (c) result from the
negligence or willful misconduct of Duramed, or the breach of this Agreement by Duramed.



     Section 11.2. Indemnification by Duramed. Duramed hereby agrees to hold Shire, its
Affiliates, and their respective directors, agents and employees harmless from and against any and
all Losses arising in connection with any and all Third Party Claims resulting directly from (a)
any breach by Duramed of any of its representations, warranties, covenants or obligations pursuant
to this Agreement, or (b) the negligence or willful misconduct of Duramed or its Affiliates or
their respective officers, directors, employees, agents or consultants in performing any
obligations under this Agreement, or (c) claims that involve product defect, product liability,
death or bodily injury (or allegations thereof) to any individual or any property to the extent
that such claim results from Duramed’s breach, negligence or willful misconduct hereunder,, except
to the extent that such Losses in (a) through (c) result from the negligence or willful misconduct
of Shire, or the breach of this Agreement by Shire.



     Section 11.3. Notice of Claim. All indemnification claims in respect of any
indemnitee seeking indemnity hereunder (collectively, the “Indemnitees” and each an
“Indemnitee”) shall be made solely by the corresponding Party (the “Indemnified
Party”). The Indemnified Party shall give the indemnifying Party (the “Indemnifying
Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the
discovery of any fact upon which such Indemnified Party intends to base a request for
indemnification hereunder, but in no event shall the Indemnifying Party be liable for any Losses
that result from any delay in providing such notice which materially prejudices the defense of such
Third Party Claim. Each



15









 







Indemnification Claim Notice must contain a description of the claim and the nature and amount
of such Loss (to the extent that the nature and amount of such Loss are known at such time).
Together with the Indemnification Claim Notice, the Indemnified Party shall furnish promptly to the
Indemnifying Party copies of all notices and documents (including court papers) received by any
Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated
to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified
Party materially prejudices the defense of such Third Party Claim.



     Section 11.4. Control of Defense. At its option, the Indemnifying Party may assume
the defense of any Third Party Claim subject to indemnification hereunder by giving written notice
to the Indemnified Party within thirty (30) days after the Indemnifying Party’s receipt of an
Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying
Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it
selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying
Party shall not be liable to the Indemnified Party or any other Indemnitee for any legal expenses
subsequently incurred by such Indemnified Party or other Indemnitee in connection with the
analysis, defense or settlement of the Third Party Claim.



     Section 11.5. Right to Participate in Defense. Without limiting Section 11.4, any
Indemnitee shall be entitled to participate in, but not control, the defense of a Third Party Claim
for which it has sought indemnification hereunder and to employ counsel of its choice for such
purpose; provided, however, that such employment shall be at the Indemnitee’s own expense unless
(a) the employment thereof has been specifically authorized by the Indemnifying Party in writing,
or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance
with Section 11.4 (in which case the Indemnified Party shall control the defense).



     Section 11.6. Settlement. With respect to any Losses relating solely to the payment
of money damages in connection with a Third Party Claim and that shall not result in the
Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the
business of the Indemnitee in any manner, and as to which the Indemnifying Party shall have
acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying
Party shall have the sole right to consent to the entry of any judgment, enter into any settlement
or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable
discretion, shall deem appropriate (provided, however that such terms shall include a complete and
unconditional release of the Indemnified Party from all liability with respect thereto), and shall
transfer to the Indemnified Party all amounts which said Indemnified Party shall be liable to pay
prior to the time of the entry of judgment. With respect to all other Losses in connection with
Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim
in accordance with Section 11.4, the Indemnifying Party shall have authority to consent to the
entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it
obtains the prior written consent of the Indemnified Party (which consent shall be at the
Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of
the Third Party Claim in accordance with Section 11.4 shall not be liable for any settlement or
other disposition of a Loss by an Indemnitee that is reached without the written consent of such
Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute
any Third Party Claim, no Indemnitee shall admit any liability with respect to, or settle,
compromise or discharge, any Third Party Claim without first offering to the



16









 







Indemnifying Party the opportunity to assume the defense of the Third Party Claim in
accordance with Section 11.4.



     Section 11.7. Cooperation. If the Indemnifying Party chooses to defend or prosecute
any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnitee to,
cooperate in the defense or prosecution thereof and shall furnish such records, information and
testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such
cooperation shall include access during normal business hours afforded to the Indemnifying Party
to, and reasonable retention by the Indemnified Party of, records and information that are
reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and
agents available on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder, and the Indemnifying Party shall reimburse the Indemnified
Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.



     Section 11.8. Expenses of the Indemnified Party. Except as provided above, the
reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred
by the Indemnified Party in connection with any Third Party Claim shall be reimbursed on a calendar
quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to
contest the Indemnified Party’s right to indemnification and subject to refund in the event the
Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.



     Section 11.9. Insurance. At all times from the Effective Date until three (3) years
following termination or expiration of this Agreement, each of Shire and Duramed will maintain
product liability insurance (or self insurance), that is reasonable and customary in the U.S.
pharmaceutical industry for companies of comparable size, but in no event less than $10,000,000 per
occurrence and $10,000,000 in the aggregate limit of liability per year. Each of Shire and Duramed
shall provide written proof of such insurance or self insurance to the other Party upon request.



     11.10. Exclusion of Certain Damages. IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY
OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, OR FOR ANY DIRECT OR INDIRECT LOSS OF PROFIT,
LOST BUSINESS OPPORTUNITY, LOSS OF OR DISRUPTION TO PRODUCTION OR GOODWILL, EXCEPT TO THE EXTENT
SUCH DAMAGES: (A) ARE INCLUDED IN A THIRD-PARTY CLAIM FOR WHICH SUCH PARTY IS INDEMNIFIED
HEREUNDER; OR (B) ARE FOR BREACH OF CONFIDENTIALITY OBLIGATIONS.



ARTICLE XII



MISCELLANEOUS




     Section 12.1. Entire Agreement; Amendment. This Agreement, together with the Product
Development Agreement, including the exhibits attached hereto and thereto (each of




17










 




which is hereby and thereby incorporated herein and therein by reference), set forth the
complete, final and exclusive agreement and all the covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto and supersedes and
terminates all prior agreements and understandings between the Parties, which shall continue to
govern the obligations of the Parties with respect to information disclosed thereunder with respect
to periods prior to the Effective Date. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between the Parties other
than as are set forth herein. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized
officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises,
agreements, warranties, representations, conditions, and understandings set forth herein are made
and deemed effective as of the Effective Date, and that the execution of this Agreement shall not
constitute a waiver of any right or claim of either Party as of the Effective Date.




          Section 12.2. Notices. All notices or other communications that are required or
permitted under this Agreement shall be in writing and delivered personally, sent by facsimile (and
promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or
sent by internationally-recognized overnight courier to the addresses below. Any such
communication shall be deemed to have been given (a) when delivered, if personally delivered or
sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or
overnight courier as provided in this Agreement), and (b) on the second Business Day after
dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in
writing, the mailing addresses of the Parties shall be as described below.




	 	 	 
	For Duramed:

	 	Duramed Laboratories, Inc.
	 

	 	400 Chestnut Ridge Road
	 

	 	Woodcliff Lake, NJ 07677
	 

	 	Phone: 201-930-3300
	 

	 	Fax: 201-930-3330
	 

	 	Attention: President
	 
	 	 
	with a copy to:

	 	Barr Pharmaceuticals, Inc.
	 

	 	400 Chestnut Ridge Road
	 

	 	Woodcliff Lake, NJ 07677
	 

	 	Phone: 201-930-3300
	 

	 	Fax: 888-843-0563
	 

	 	Attention: General Counsel
	 
	 	 
	For Shire:

	 	Shire LLC
	 

	 	725 Chesterbrook Boulevard
	 

	 	Wayne, Pennsylvania 19087-5637
	 

	 	Fax: (484) 595-8163
	 

	 	Attention: General Counsel
	 
	 	 
	with a copy to:

	 	Morgan, Lewis & Bockius LLP
	 

	 	502 Carnegie Center






18









 






	 	 	 
	 

	 	Princeton, NJ 08540
	 

	 	Fax: (609) 919-6701
	 

	 	Attention: Randall B. Sunberg






          Section 12.3. Independent Contractors. In making and performing this Agreement, Shire
and Duramed shall act at all times as independent contractors and nothing contained in this
Agreement shall be construed or implied for any purpose to create an agency, partnership, limited
partnership, joint venture or employer and employee relationship between Shire and Duramed and this
Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments
or incur any charges or expenses for or in the name of the other Party. Except as otherwise
provided in this Agreement, each Party shall be solely responsible for its own costs and expenses
associated with this Agreement.




          Section 12.4. Maintenance of Records. Each Party shall keep and maintain all records
required by Law with respect to the Shire Products and shall make copies of such records available
to the other Party upon reasonable request.




          Section 12.5. United States Dollars. References in this Agreement to “Dollars” or “$”
shall mean the legal tender of the United States.




          Section 12.6. No Strict Construction. This Agreement has been prepared jointly and
shall not be strictly construed against either Party.




          Section 12.7. Assignment. Neither Party shall sell, transfer, assign, delegate,
pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of Law or
otherwise, this Agreement or any of its rights or obligations under this Agreement without the
prior written consent of the other Party (which consent may be granted, withheld or conditioned at
such other Party’s sole and absolute discretion); provided, however, that either Party may assign
or transfer this Agreement or any of its rights or obligations under this Agreement without the
consent of the other Party to any Affiliate of such Party, or to any Third Party (a) with which it
merges or consolidates, or to which it transfers all or substantially all of its assets to which
this Agreement pertains or (b) in part, in connection with the sale or transfer of such Party’s
business relating to Commercialization of a Collaboration Product within a particular country. The
assigning Party (unless it is not the surviving entity) shall remain jointly and severally liable
with, and shall guarantee the performance of, the relevant Affiliate or Third Party assignee under
this Agreement, and the relevant Affiliate assignee, Third Party assignee or surviving entity shall
assume in writing all of the assigning Party’s obligations under this Agreement. Any purported
assignment or transfer in violation of this Section 12.7 shall be void ab initio and of no force or
effect. Notwithstanding anything to the contrary herein or in the Product Development Agreement,
in the event any assignment by Shire hereunder gives rise to any obligation to withhold any amounts
payable to Duramed, Shire, or its assignee, shall be entitled to deduct from all payments due under
this Agreement the amount of all applicable withholding taxes to the extent Shire, or its assignee,
pays such taxes to the appropriate governmental authority on behalf of Duramed. Shire shall
properly furnish Duramed with copies of tax receipts evidencing the payment of all such taxes,
levies and assessments. Duramed and Shire shall cooperate with each other in obtaining any
exemption from, a refund for, or reduced rate of tax available under any applicable law or tax
treaty. Notwithstanding the foregoing, Shire shall be liable for, and




19









 







indemnify Duramed against, any non-U.S. taxes, any value-added or sales taxes, any duties or
levies and assessments, howsoever designated or computed that are required to be paid or withheld
by Shire on such payments. Shire shall so indemnify Duramed within forty-five (45) days of Shire’s
receipt of notification from Duramed (in accordance with Section 12.2 hereof) that either (i) based
upon current facts and circumstances, Duramed does not have or will not have during the applicable
tax year any or sufficient foreign tax credits available to utilize to offset such tax liability;
or (ii) Duramed has applied for a refund from the taxing authority at issue (such notice to include
a copy of such refund application). Notwithstanding anything in this Agreement to the contrary, in
the event that withholding taxes are paid on behalf of Duramed by Shire, if Duramed uses a foreign
tax credit received as a result of the payment of withholding taxes by Shire and thereby reduces
the amount of U.S. income tax that Duramed otherwise would have paid, or otherwise receives a
refund, Duramed shall refund to Shire the amount of such reduction with respect to such foreign tax
credit or such refund.




          Section 12.8. Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Signatures provided by facsimile transmission shall be deemed to be original
signatures.




          Section 12.9. Further Actions. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be reasonably necessary or
appropriate in order to carry out the purposes and intent of this Agreement.




          Section 12.10. Severability. If any one or more of the provisions of this Agreement
is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal
can be or is taken, the provision shall be considered severed from this Agreement and shall not
serve to invalidate any remaining provisions hereof. The Parties shall make a good fait effort to
replace any invalid or unenforceable provision with a valid and enforceable one such that the
objectives contemplated by the Parties when entering this Agreement may be realized.




          Section 12.11. Headings. The headings for each article and section in this Agreement
have been inserted for convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular article or section.




          Section 12.12. No Waiver. Any delay in enforcing a Party’s rights under this
Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of
such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as
to an express written and signed waiver as to a particular matter for a particular period of time.




[signature page follows]




20









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their
respective representatives thereunto duly authorized, all as of the date first written above.



	 	 	 	 	 
	SHIRE LLC  
	 
	 	 	 	 
	By:
	 	/s/ Matthew Emmens	 	 
	 
	 	 	 	 
	Name:
	 	Matthew Emmens	 	 
	Title:

	 	CEO
	 	 
	 
	 	 	 	 
	DURAMED PHARMACEUTICALS, INC.
	 
	 	 	 	 
	By:
	 	/s/ Fred Wilkinson	 	 
	 
	 	 	 	 
	Name:

	 	Fred Wilkinson
	 	 
	Title:

	 	President & C.O.O.

	 	 





SHIRE plc, a British public limited company having a principal place of business at Hampshire
International Business Park, Chineham, Basingstoke, England RG24 8EP, hereby guarantees in the
performance of Shire of all obligations of Shire under this Agreement, in accordance with the terms
and conditions of this Agreement, including any applicable notice or cure periods.




	 	 	 
	SHIRE PLC
	 
	 	 
	By:
	 	/s/ Matthew Emmens
	 
	 	 
	Name:
	 	Matthew Emmens
	Title:
	 	CEO





[Signature Page to Shire Products Supply Agreement]




 









 








EXHIBIT A




PRODUCT SPECIFICATIONS



All Shire Product supplied hereunder shall have a remaining expiry period of:





	(a)	 	Not less than [*] months, if the shelf life is [*] months;
	 
	(b)	 	Not less than [*] months, if the shelf life is [*] months; and
	 
	(c)	 	Not less than [*] months, if the shelf life is [*] months.




 









 











EXHIBIT B




PACKAGING SPECIFICATIONS




 









 








EXHIBIT C




STEERING COMMITTEE CHARTER





	A.	 	Purpose and Functions of the Steering Committee.
	 
	 	 	The Steering Committee will (i) enable, coordinate and guide the activities of the Parties
relating to the development of Collaboration Products, (ii) define and implement, on an
ongoing basis, a technology roadmap, and (iii) implement the Agreement and, without limiting
the rights of the Parties under ARTICLE 16, resolve any disputes or disagreements related to
the implementation thereof.
	 
	B.	 	Development Plans. Upon delivery of each Development Plan to the Steering Committee,
each Party shall review the Development Plan and provide written comments and suggestions to
the Steering Committee within [*] after receipt. The Steering Committee may incorporate any
such revisions that it deems appropriate and will provide a recommendation of the Development
Plan to each of the Parties. Notwithstanding the foregoing, Shire shall make all final
decisions with respect to Development Plans affecting the Shire Territory and Duramed shall
make all final decisions with respect to Development Plans in the Duramed Territory.
	 
	C.	 	Reporting. The Steering Committee shall report to the Parties from time to time, but
in no event less often than once each quarter. Such report shall describe all projects
undertaken in performance of each Development Plan. Such report also shall include any other
information reasonably requested by the Parties.
	 
	D.	 	Steering Committee Responsibilities. The Steering Committee shall have the duty
and authority to perform the functions described above and the following additional functions:






	 	(a)	 	General oversight of the activities of the Parties under this
Agreement, including the progress of work under each Development Plan.
	 
	 	(b)	 	Review of quarterly reports before such reports are sent to the
Parties regarding the progress of the Parties’ efforts under each Development
Plan.
	 
	 	(c)	 	Review of the technology budget and quarterly spending in
connection with each Development Plan.






	E.	 	Membership and Procedure.






	 	1.	 	Membership on the Committee.






	 	(a)	 	Members. The Steering Committee members (each a
“Member”) will include the Collaboration Managers, [*].




 









 






	 	(b)	 	Qualifications. The qualifications of any Member shall
be determined in the discretion of the Party that appoints such Member.
	 
	 	(c)	 	Removal and Vacancies. Each Party may, in its sole
discretion, remove any Member appointed by it to the Steering Committee. If
any Member is removed or resigns from the Steering Committee or otherwise
ceases to serve on the Steering Committee for any reason (e.g., by reason of
the separation of such Member from employment by the Party that appointed such
Member, such Member’s death or disability, etc.), the Party that appointed such
Member shall promptly notify the other Party of such Member’s withdrawal from
the Steering Committee. On notice to the other Party, any vacancy on the
Steering Committee shall be filled by the Party that appointed the Member who
resigned from, was removed from, or for any other reason ceased to serve on the
Steering Committee .





     2. Additional Attendees at Steering Committee Meetings. The Steering Committee may
establish rules with respect to the attendance at the Steering Committee meetings of staff and
other invitees. All such rules shall be consistently applied to both Parties.



     3. Voting. Each Member shall be entitled to one (1) vote to be cast by such Member.
No vote may be cast by proxy. Except as expressly provided below, all actions, determinations or
resolutions of the Steering Committee at a meeting shall require the affirmative vote of the
Members present at such meeting at which a quorum (meaning more than half of the total number of
Members) is present; provided that [*] may be [*], and the [*] not be [*] action, decision,
determination or resolution.



     4. Notice; Waiver; Meeting Location. The Steering Committee shall meet at least [*].
Such meetings shall be held upon not less than [*] written notice. Additional meetings of the
Steering Committee shall be held (A) at such other times as may be determined by the Steering
Committee, or (B) at the request of the Collaboration Manager of either Party upon not less than
[*] written notice. The Duramed Collaboration Manager shall determine the location of each meeting
of the Steering Committee taking into account any travel considerations by Members of the Steering
Committee. Notice may be provided in writing, via facsimile, or email to each Member. The
presence of any Member at a meeting shall constitute a waiver of notice of the meeting with respect
to such Member, unless such Member declares at the meeting that such Member objects to the notice
as having been improperly given. The Steering Committee shall cause written minutes to be prepared
of all actions taken by the Steering Committee and shall cause a copy thereof to be delivered to
each Member within [*]. No action may be taken by the Steering Committee without a meeting to
consider the matter unless each Party issues a written waiver of such meeting and unless a consent
or consents in writing, setting forth the action so taken, are signed by the Members of the
Steering Committee having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all the Members of the Steering Committee were
present and voted.



     5. Meetings by Telecommunications. Members of the Steering Committee shall have the
right to participate in all meetings of the Steering Committee in person, by means of a conference
telephone, or by videoconference or similar telecommunications service by means of



 









 







which all persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting. Any reference in
this Exhibit to attendance or participation by a Member at a meeting of the Steering Committee
shall be deemed to refer to attendance in person or attendance by means of a telecommunications
service pursuant to this paragraph.



     6. Compensation of Members of the Steering Committee. The Members of the Steering
Committee, in their capacity as such, shall not receive compensation, except with respect to any
Member as such Member and the Party that appointed such Member shall otherwise mutually agree.
Each Party shall bear the cost and expenses incurred by its appointed Members of the Steering
Committee in connection with the activities of the Steering Committee.



     7. Conflicts. In the event of any conflict between the provisions of this Exhibit and
the provisions of the Collaboration Agreement, the provisions of the Collaboration Agreement shall
control.




 









 








EXHIBIT D




DEVELOPMENT PLANS




(see attached)





 









 








SCHEDULE 7.2.1A




SEASONIQUE MILESTONE PAYMENTS




	 	 	 
	Event	 	Payment
	Filing of Drug Approval Application under EMEA for Seasonique

	 	$[*]
	Regulatory Approval under EMEA for Seasonique

	 	$[*]
	Filing of Drug Approval Application under EMEA for first new
indication for Seasonique

	 	$[*]
	Regulatory Approval under EMEA for first new indication for 

Seasonique

	 	$[*]
	First calendar year in which annual net sales in Shire Territory
for Seasonique exceed $50 million

	 	$[*]
	Second calendar year in which annual net sales in Shire Territory
for Seasonique exceed $100 million

	 	$[*]






 









 






SCHEDULE 7.2.1B




RING PRODUCT MILESTONE PAYMENTS




	 	 	 
	Event	 	Payment
	Successful completion of Phase I clinical trials for Ring Product

	 	$[*]
	Successful completion of Phase I clinical trials for Ring Product

	 	$[*]
	Successful completion of Phase III clinical trials for Ring Product

	 	$[*]
	Filing of Drug Approval Application under EMEA for Ring Product

	 	$[*]
	Regulatory Approval under EMEA for Ring Product

	 	$[*]
	First calendar year in which annual net sales in Shire Territory
for Ring Product exceed $50 million

	 	$[*]
	Second calendar year in which annual net sales in Shire Territory
for Ring Product exceed $100 million

	 	$[*]







 









 








SCHEDULE 13.3(b)




COLLABORATION PRODUCT INDs




[*]

[*]

[*]

[*]

[*]

[*]





 









 








Schedule 13.3(c)




	 	 	 	 	 	 	 	 	 
	Jurisdiction	 	Patent No.	 	Grant Date	 	Application No.	 	Filing Date
	[*]

	 	[*]
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	 	[*]
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	 	[*]
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	[*]

	 	[*]
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	[*]

	 	[*]
	 	[*]
	 	[*]
	 	[*]
	[*]

	 	[*]
	 	[*]
	 	[*]
	 	[*]







 









 








EXHIBIT C



QUALITY AGREEMENT




 









 








EXHIBIT D




SAFETY AGREEMENT




 









 








SCHEDULE 1



FORM OF PURCHASE ORDER




 









 








SCHEDULE 2



FORM OF COA