Document:

EX-10.1

Exhibit 10.1

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

EXECUTION COPY

 

 

 

 

DEVELOPMENT AND LICENSE AGREEMENT

 

Dated as of June 30, 2008

By and Between

 

NOVEN PHARMACEUTICALS, INC.,

 

and

 

PROCTER & GAMBLE PHARMACEUTICALS, INC.

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I	 	DEFINITIONS
	 	 	1	 
	 	 	 
	 	 	 	 
	Section 1.01.
	 	Definitions 
	 	 	1	 
	Section 1.02.
	 	Other Definitions 
	 	 	8	 
	 	 	 
	 	 	 	 
	ARTICLE II	 	DEVELOPMENT
	 	 	9	 
	 	 	 
	 	 	 	 
	Section 2.01.
	 	Development Agreement 
	 	 	9	 
	Section 2.02.
	 	Development Plan and Target Specifications 
	 	 	9	 
	Section 2.03.
	 	Consideration Related to Development of *** 
	 	 	9	 
	Section 2.04.
	 	Feasibility Study for ***
	 	 	10	 
	Section 2.05.
	 	Clinical Supply of T-Patch
	 	 	10	 
	Section 2.06.
	 	Quality and Clinical Development
	 	 	10	 
	Section 2.07.
	 	Monthly Reports 
	 	 	10	 
	Section 2.08.
	 	Joint Developments 
	 	 	11	 
	 	 	 
	 	 	 	 
	ARTICLE III	 	LICENSE
	 	 	11	 
	 	 	 
	 	 	 	 
	Section 3.01.
	 	License Grant 
	 	 	11	 
	Section 3.02.
	 	Limitations on License Granted Under Section 3.01 
	 	 	11	 
	Section 3.03.
	 	Quality Control 
	 	 	12	 
	Section 3.04.
	 	Sublicense 
	 	 	12	 
	Section 3.05.
	 	Co-Promotion Partner
	 	 	13	 
	 	 	 
	 	 	 	 
	ARTICLE IV	 	INTELLECTUAL PROPERTY MATTERS
	 	 	13	 
	 	 	 
	 	 	 	 
	Section 4.01.
	 	Infringement or Other Actions Regarding the Technology 
	 	 	13	 
	Section 4.02.
	 	Infringement of Third Party Rights 
	 	 	18	 
	Section 4.03.
	 	Maintenance of Noven Patents 
	 	 	20	 
	Section 4.04.
	 	Other Intellectual Property Rights 
	 	 	20	 
	Section 4.05.
	 	Ownership
of Clinical Data
	 	 	21	 
	 	 	 
	 	 	 	 
	ARTICLE V	 	ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
	 	 	21	 
	 	 	 
	 	 	 	 
	Section 5.01.
	 	Additional Products 
	 	 	21	 
	Section 5.02.
	 	Regulatory Matters 
	 	 	23	 
	Section 5.03.
	 	Noncompetition 
	 	 	23	 
	Section 5.04.
	 	Manufacturing and Supply Agreement 
	 	 	24	 
	 	 	 
	 	 	 	 
	ARTICLE VI	 	ROYALTIES AND MILESTONE PAYMENTS
	 	 	25	 
	 	 	 
	 	 	 	 
	Section 6.01.
	 	Royalties Based Upon Quarterly Net Outside Sales 
	 	 	25	 
	Section 6.02.
	 	Additional Products 
	 	 	25	 
	Section 6.03.
	 	Expiration of Patents 
	 	 	25	 
	Section 6.04.
	 	Milestone Payments 
	 	 	25	 
	Section 6.05.
	 	Determination of Net Outside Sales 
	 	 	26	 
	Section 6.06.
	 	Generation of Net Outside Sales 
	 	 	28	 
	 	 	 
	 	 	 	 
	ARTICLE VII	 	CONFIDENTIALITY
	 	 	29	 
	 	 	 
	 	 	 	 
	Section 7.01.
	 	Confidentiality
	 	 	29	 
	Section 7.02.
	 	Publications 
	 	 	31	 
	Section 7.03.
	 	Press Releases
	 	 	31	 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 
	 	 	 	 
	ARTICLE VIII	 	REPRESENTATIONS AND WARRANTIES
	 	 	32	 
	 	 	 
	 	 	 	 
	Section 8.01.
	 	Representations and Warranties of Noven 
	 	 	32	 
	Section 8.02.
	 	Representations and Warranties of P&GP 
	 	 	33	 
	Section 8.03.
	 	Knowledge 
	 	 	35	 
	 	 	 
	 	 	 	 
	ARTICLE IX	 	INDEMNIFICATION
	 	 	35	 
	 	 	 
	 	 	 	 
	Section 9.01.
	 	Indemnification 
	 	 	35	 
	Section 9.02.
	 	Certain Limitations 
	 	 	37	 
	 	 	 
	 	 	 	 
	ARTICLE X	 	TERM AND TERMINATION
	 	 	38	 
	 	 	 
	 	 	 	 
	Section 10.01.
	 	Term
	 	 	38	 
	Section 10.02.
	 	Certain Termination Events
	 	 	38	 
	Section 10.03.
	 	Effect of Termination 
	 	 	40	 
	 	 	 
	 	 	 	 
	ARTICLE XI	 	MISCELLANEOUS
	 	 	41	 
	 	 	 
	 	 	 	 
	Section 11.01.
	 	Notices 
	 	 	41	 
	Section 11.02.
	 	Disputes 
	 	 	42	 
	Section 11.03.
	 	Independent Contractors 
	 	 	43	 
	Section 11.04.
	 	Assignment 
	 	 	43	 
	Section 11.05.
	 	Binding Effect; Benefit 
	 	 	43	 
	Section 11.06.
	 	Amendments 
	 	 	43	 
	Section 11.07.
	 	No Waiver 
	 	 	43	 
	Section 11.08.
	 	Counterparts 
	 	 	44	 
	Section 11.09.
	 	Interpretation 
	 	 	44	 
	Section 11.10.
	 	Governing Law 
	 	 	44	 
	Section 11.11.
	 	Unenforceability 
	 	 	44	 
	Section 11.12.
	 	Entire Agreement 
	 	 	45	 
	Section 11.13.
	 	Expenses 
	 	 	46	 
	Section 11.14.
	 	Force Majeure 
	 	 	46	 

ii

 

LIST OF EXHIBITS

	 	 	 
	Exhibit A

	 	Noven Patents
	Exhibit B

	 	Monthly Reports
	Exhibit C

	 	Specifications for T-Patch
	Exhibit D

	 	Pricing Structure for T-Patch

iii

 

DEVELOPMENT AND LICENSE AGREEMENT

     This DEVELOPMENT AND LICENSE AGREEMENT (together with any Exhibits and Schedules hereto, this
“Agreement”) is entered into as of this 30th day of June 2008 (the
“Effective Date”), by and between NOVEN PHARMACEUTICALS, INC., a Delaware corporation
(“Noven”), and PROCTER & GAMBLE PHARMACEUTICALS, INC., an Ohio corporation
(“P&GP”).

W I T N E S S E T H:

     WHEREAS, Noven and P&GP are parties to a letter agreement dated April 28, 2003 (as amended
from time to time, the “Development Agreement”), pursuant to which Noven and P&GP agreed to
develop the T-Patch and the ***;

     WHEREAS, Noven and P&GP will enter into one or more Manufacturing and Supply Agreements
(collectively, the “Manufacturing and Supply Agreement”) pursuant to which Noven will
manufacture and supply to P&GP all of P&GP’s requirements of the Products for sale within the
Territory; and

     WHEREAS, Noven desires to license to P&GP the Technology on the terms and conditions set forth
in this Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties
contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01. Definitions. As used herein, the following capitalized terms have the
following meanings:

     “Affiliate” means, when used with respect to a Person, any other Person directly or
indirectly controlling, controlled by or under common control with the subject Person. For
purposes of this Agreement, “control” means the direct or indirect ownership of over 50% of the
outstanding voting securities of a Person or the possession, direct or indirect, of the power to
direct or cause the direction of the management or policies of such Person whether through the
ownership of securities, contract or otherwise.

     “Annual Net Outside Sales” means, with respect to any calendar quarter and with
respect to any Product, the aggregate amount of Net Outside Sales of such Product during the
12-month period ending on the last calendar day of such calendar quarter.

 

 

     “Applicable Law” means, with respect to any Person, any domestic or foreign, federal,
state or local statute, treaty, law, ordinance, rule, regulation, administrative interpretation,
order, writ, injunction, judicial decision, decree or other requirement of any Governmental
Authority applicable to such Person or any of such Person’s respective properties, assets,
officers, directors, employees, consultants or agents (in connection with such officers’,
directors’, employees’, consultants’ or agents’ activities on behalf of such Person).

     “Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York, Miami, Florida or Cincinnati, Ohio are authorized or
required by law to close.

     “Code of Federal Regulations,” or “C.F.R.” means the codification of the
general and permanent rules published in the Federal Register by the Executive department and
agencies of the United States federal government. Title 21 of the C.F.R. contains the regulations
promulgated by the FDA pursuant to the FDC Act.

     “Competing Product” means a product in the Field marketed by a Third Party.
Notwithstanding the foregoing, *** is not a Competing Product.

     “Commercially Reasonable Efforts” means, with respect to the development and
commercialization of any product, efforts and resources commonly used in the research-based
pharmaceutical industry for a pharmaceutical compound or product at a similar stage of research,
development or commercialization, and having similar market potential, as such product.
Commercially Reasonable Efforts shall be determined by taking into account all relevant factors,
including the characteristics of the compound or product, the technical risk and stage of research,
development, or commercialization of the compound or product, the cost-effectiveness of efforts or
resources applied towards such compound or product while optimizing corporate long term
profitability, the existence of alternative compounds or products that may be developed by a party,
the competitiveness of alternative Third Party compounds or products, the proprietary position of
the compound or product, the regulatory and business environment, the likelihood of product
reimbursement, and the potential for product liability exposure. Commercially Reasonable Efforts
shall be determined on a compound, product, indication, and market basis, and it is anticipated
that the level of efforts and resources will change over time reflecting changes in the status of
the compound, product, indication, or the market involved.

     “Confidential Information” means all secret, confidential or proprietary data,
know-how and related information, including (i) all INDs, NDAs, Regulatory Applications, Regulatory
and Clinical Materials and related filings, applications and data, the content of any unpublished
patent applications, operating methods and procedures, marketing, manufacturing, distribution and
sales methods and systems, sales figures, pricing policies and price lists and other business
information, (ii) all information disclosed or accessed by the parties pursuant to the provisions
of the Confidentiality Agreement, this Agreement or the other Transaction Documents, (iii)
information learned, observed or otherwise acquired through site visits and discussions between
Noven and P&GP at each other’s facilities, including plant size, crew shifts, number of lines,
product shipments, lab procedures, new product development testing and manufacturing
processes and (iv) the terms and conditions of this Agreement and the other Transaction
Documents.

-2-

 

     “Confidentiality Agreement” means the Confidentiality Agreement dated as of December
12, 2002, between Noven and P&GP.

     “Contemplated Transactions” means the transactions contemplated by the Transaction
Documents.

     “Damages” means all liabilities, demands, obligations, assessments, judgments, levies,
losses, fines, penalties, damages (including compensatory damages), costs and expenses, including
reasonable attorneys’, accountants’, investigators’, and experts’ fees and expenses, reasonably
sustained or incurred in connection with the defense or investigation of any Proceedings (including
any Proceedings to establish insurance coverage).

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

     “FDC Act” means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §
301 et seq., as amended, and the regulations promulgated thereunder, as amended
from time to time.

     “Field” means (i) transdermal patches that contain testosterone (or androgen
derivatives of testosterone or androgens that convert to testosterone in the body) as the single
active ingredient, and (ii) transdermal patches that contain ***.

     “GAAP” means, as of any time of determination, accounting principles generally
accepted in the United States, as in effect at such time.

     “GCP” means (i) the Good Clinical Practices as that term is defined in 21 C.F.R. Parts
50, 54, 56, and 312 as amended from time to time, and applicable guidance documents, and (ii) good
clinical practices as required by applicable regulations of any Regulatory Authority.

     “GLP” means (i) the Good Laboratory Practices as that term is defined in 21 C.F.R.
Part 58, as amended from time to time, and applicable guidance documents, and (ii) good laboratory
practices as required by applicable regulations of any Regulatory Authority.

     “GMP” means (i) the current Good Manufacturing Practices as that term is defined in 21
C.F.R. Parts 210 and 211, as amended from time to time, and applicable guidance documents, and (ii)
good manufacturing practices as required by applicable regulations of any Regulatory Authority.

     “Governmental Authority” means any foreign, domestic, federal, territorial, state or
local governmental authority, quasi-governmental authority, instrumentality, court, government or
self-regulatory organization (including any national or international securities exchange),
commission, tribunal or organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.

-3-

 

     “IND” means an Investigational New Drug Application, as defined in 21 C.F.R. §
312.3(b), filed by a Person with the FDA to obtain authorization to develop, test and perform
clinical trials of a product, together with any amendments, correspondence or supplements thereto
and incorporated therein.

     “Intellectual Property” means (i) all patents, copyrights, technology, know-how, trade
secrets, inventions (including inventions conceived prior to the Effective Date but not documented
as of the Effective Date), proprietary data, research and development data and computer software
programs, (ii) all trademarks, trade names, service marks and service names, (iii) all
registrations, applications, recordings and common-law rights relating thereto, all rights to sue
at law or in equity for any infringement or other impairment thereto, including the right to
receive all proceeds and damages therefrom, and all rights to obtain renewals, continuations,
divisions or other extensions of legal protections pertaining thereto, and (iv) all other United
States, state and foreign intellectual property.

     ***.

     “Launch” means the initial commercial sale by P&GP or any Related Party of any of the
Products.

     “Lien” means, with respect to any asset, any mortgage, lien, claim, pledge, charge,
security interest or other encumbrance of any kind in respect of such asset.

     “NDA” means a New Drug Application, as defined in 21 C.F.R. § 314, filed by a Person
with the FDA to obtain FDA approval of a new drug or therapy, as the context indicates, together
with any amendments, correspondence or supplements thereto and incorporated therein.

     “Net Outside Sales” means, for any period of determination and for any Product, the
gross invoice price of such Product sold by P&GP (or any Related Parties, successors, assignees,
delegatees or partners of P&GP) to the first Third Party after deducting, if not previously
deducted, from the amount invoiced or received, the following, provided such deductions shall be
incurred reasonably for the benefit of such Product:

          (a) trade and quantity discounts including early pay cash discounts, to the extent actually
allowed;

          (b) amounts actually repaid or credited by reasons of defects, recalls, returns, rebates and
allowances of goods or because of retroactive or temporary price reductions (that are not reflected
in the invoice price) specifically identifiable to the Product;

          (c) rebates and administrative fees actually paid to medical healthcare organizations in line
with approved contract terms;

-4-

 

          (d) rebates actually paid resulting from government (or agency thereof) mandated rebate
programs or chargeback programs;

          (e) rebates or service fees actually paid to wholesalers for inventory management programs or
distribution management agreements;

          (f) discounts actually allowed pursuant to indigent patient programs and patient discount
programs to include coupons and vouchers to the extent included in Net Outside Sales;

          (g) sales or excise taxes, custom duties, and other governmental charges, to the extent
separately stated on the applicable invoice; and

          (h) amounts repaid or credited for uncollectible amounts on previously sold Product;

all as determined in accordance with P&GP’s usual and customary accounting methods, which shall be
in accordance with GAAP, reasonably and consistently applied.

     “Noven Patents” means all patents and patent applications listed in Exhibit A,
and any reissues, confirmations, renewals, extensions, counterparts, divisions, continuations,
continuations-in-part or patents-of-addition of the patents or patent applications listed in
Exhibit A, but only to the extent covering the Products in the Field in the Territory;
provided, that the term “Noven Patents” shall not include any of Noven’s future
patents (except to the extent such patents are issued in respect of a patent application described
in Exhibit A) or patent applications unless (i) such patents cover the T-Patch and/or the
***, in which case Exhibit A will be updated to include such patents, or (ii) Noven and
P&GP reach agreement pursuant to Section 5.01, in which case the provisions of Section 5.01 shall
apply.

     *** means the transdermal patch drug delivery system to be developed by Noven ***. For
purposes of clarification, the *** shall constitute an Additional Product under Section 5.01.

     “Paragraph IV Certification” means the filing of a certification by a Person under 21
U.S.C. § 355(b)(2)(A)(iv) or 21 U.S.C. § 355(j)(2)(A)(vii)(IV), as amended from time to time, but
only to the extent such filing implicates the Noven Patents.

     “Permitted Liens” means any of the following: (i) statutory Liens or landlords’,
carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s, or other like Liens arising in
the ordinary course of business with respect to amounts not yet overdue for a period of 60 calendar
days or amounts being contested in good faith by appropriate Proceedings; (ii) rights and licenses
granted to others in any Intellectual Property as of the Effective Date; (iii) Liens that have not
had, and could not reasonably be expected to have, a material adverse effect on Noven; and (iv)
Liens disclosed in this Agreement or in the other Transaction Documents.

-5-

 

     “Person” means an individual, a corporation, a general partnership, a limited
partnership, a limited liability company, a limited liability partnership, an association, a trust
or any other entity or organization, including a Governmental Authority.

     “Proceedings” means governmental, judicial, administrative or adversarial proceedings
(public or private), litigation, suits, arbitration, disputes, claims, causes of action or
investigations.

     “Products” means, collectively and subject to the provisions of Section 5.01, (i) the
*** and (ii) the T-Patch. For the avoidance of doubt, “Products” does not include ***.

     “Quarterly Net Outside Sales” means, with respect to any calendar quarter, the
aggregate amount of Net Outside Sales of Products during the three-month period ending on the last
day of such calendar quarter. Calendar quarters are the three-month periods ending on March 31,
June 30, September 30 and December 31.

     “Regulatory and Clinical Materials” means all documents, supporting materials and
other materials relating to the Regulatory Applications, any Regulatory Approval or other matter
required to be submitted to any Regulatory Authority in relation to the Products, including the
INDs and the NDAs for the Products and documents, supporting materials and other materials relating
to any drug master file, investigators’ brochures, clinical studies, pre-clinical studies, safety
data, adverse event reports, questionnaires, consultants reports, correspondence (including
correspondence with any Regulatory Authority), batch reports, protocols, specifications, quality
assurance, quality control, customer queries and any responses thereto, and any compilation or
evaluations thereof, and question and answer scripts.

     “Regulatory Applications” means the applications submitted by P&GP or its Related
Parties to Regulatory Authorities seeking authorization or approval for the development,
manufacture, testing, storage, transport, marketing, advertisement, promotion, sale, use,
distribution or other disposal of the Products in all or any portion of the Territory, including
the INDs and the NDAs for the Products.

     “Regulatory Approval” means, as to each Product, (i) with respect to the United
States, the issuance of an approval letter (as defined in 21 C.F.R. § 314.3(b)) by the FDA pursuant
to 21 U.S.C. § 355(c) and 21 C.F.R. § 314.105 approving the NDA for such Product and approving the
Product for manufacturing, marketing, sale, distribution and use in the United States, irrespective
of any postmarketing study commitments related to such Product, and (ii) with respect to any
territory outside of the United States, the comparable issuance of approval by a Regulatory
Authority for the manufacturing, marketing, sale, distribution and use of such Product in such
territory.

     “Regulatory Authority” means a Governmental Authority that has the authority over the
manufacture, use, storage, import, export, clinical testing, transport, marketing, sale or
distribution of any of the Products in all or any portion of the Territory, including the FDA and
any counterparts to the FDA in territories outside of the United States.

-6-

 

     “Related Parties” means P&GP’s Affiliates and Permitted Sublicensees. For purposes of
clarification, it is acknowledged and agreed that the term “Related Parties” does not
include distributors.

     “Securities Laws” means the United States Securities Act of 1933, as amended, the
United States Securities Exchange Act of 1934, as amended, and any other similar law or regulation
of a Governmental Authority, or any successor to any such laws or regulations, together with any
rules, regulations or listing standards or agreements of any national or international securities
exchange.

     “Technology” means any and all data, information, technology, know-how, processes,
methods, skills, trade secrets, developments, discoveries and inventions (which are not the subject
of patents or patent applications), in each case owned or controlled by Noven, to the extent but
only to the extent covering the Products. Notwithstanding the foregoing, Technology shall not
include data, information, technology, know-how, processes, methods, skills, trade secrets,
developments, discoveries or inventions, in each case covering the manufacture of the Products or
specifications, processes or procedures for the manufacture of the Product, except to the extent
required to obtain Regulatory Approval for the Products.

     “Territory” means worldwide.

     “T-Patch” means the transdermal patch drug delivery system developed by Noven ***, and
shall include any minor improvements or modifications to such product that do not require
additional development work (provided that clinical trials of the T-Patch and clinical work related
to the T-Patch performed by P&GP shall not be considered additional development work for purposes
of the foregoing phrase). For purposes of clarification, the term “T-Patch” shall not
include any product that may constitute an Additional Product under Section 5.01.

     *** means the transdermal patch drug delivery system to be developed by Noven ***. For
purposes of clarification, the term *** shall not include any product that may constitute an
Additional Product under Section 5.01.

     “Third Party” means any Person other than the parties hereto and their respective
Affiliates and, in the case of P&GP, any Related Party.

     “Transaction Documents” means this Agreement, the Manufacturing and Supply Agreement,
any agreements or documents prepared or executed pursuant to the transactions contemplated by such
agreements, any exhibits or attachments to any of the foregoing and any other written agreement
signed by Noven and P&GP that is expressly identified as a Transaction Document, as any of the
foregoing may be amended, supplemented or otherwise modified from time to time.

     “United States” means the United States of America and its territories and
possessions.

     *** means *** and its parent corporation, ***, together with their respective Affiliates.

-7-

 

     Section 1.02. Other Definitions. Each of the following terms is defined in the
section of this Agreement referenced opposite such term.

	 	 	 	 	 
	Term	 	Section
	 
	Acquired Business 
	 	5.03(c)
	Additional Product 
	 	5.01(b)
	Agreement 
	 	Preamble
	Award 
	 	4.01(f)
	Competing Business 
	 	5.03(a)
	Contribution Margin 
	 	4.01(f)(iv)
	Development Agreement 
	 	Recitals
	Disclosing Party 
	 	7.01
	Dollar Purchase Rate 
	 	6.05(c)
	Effective Date 
	 	Preamble
	Feasibility Study 
	 	2.04
	First Sales Threshold 
	 	6.01(a)
	Indemnified Party 
	 	9.01(c)
	Indemnifying Party 
	 	9.01(c)
	Joint Development 
	 	2.08
	Manufacturing and Supply Agreement 
	 	Recitals
	Milestone Payments 
	 	6.04
	Milestones 
	 	6.04
	Noven 
	 	Preamble
	Noven Additional Product 
	 	5.01(a)
	Noven Compensatory Damages 
	 	4.01(f)(iii)
	Noven Indemnitees 
	 	9.01(a)
	Other Damages 
	 	4.01(f)(v)
	P&GP 
	 	Preamble
	P&GP Additional Product 
	 	5.01(b)
	P&GP Compensatory Damages 
	 	4.01(f)(iv)
	P&GP Indemnitees 
	 	9.01(b)
	Patent Expiration 
	 	6.03
	Permitted Sublicensee 
	 	3.04(a)
	Project 
	 	2.01
	Receiving Party 
	 	7.01
	Royalties 
	 	6.01
	Royalty Rate 
	 	6.01
	Second Sales Threshold 
	 	6.01(b)
	Settlement 
	 	4.01(b)
	Third Party Infringement Suit 
	 	4.02
	Third Sales Threshold 
	 	6.01(c)
	***
	 	8.02(i)
	***
	 	8.02(i)
	***
	 	8.02(i)

-8-

 

ARTICLE II

DEVELOPMENT

     Section 2.01. Development Agreement. Noven and P&GP are parties to the Development
Agreement, pursuant to which Noven and P&GP agreed to develop the T-Patch and the ***. It is
acknowledged and agreed that as of the Effective Date, the development of the T-Patch pursuant to
the Development Agreement has been completed in full, and all obligations of the parties under the
Development Agreement with respect to development of the T-Patch have been fulfilled. The
Development Agreement is hereby superseded and replaced in its entirety by this Agreement, and from
and after the Effective Date the terms pursuant to which Noven and P&GP shall develop the *** (the
“Project”) shall be as set forth in this Agreement.

     Section 2.02. Development Plan for ***. The parties shall use good faith efforts to
agree to a development plan for the development of the *** upon delivery by P&GP of written notice
to Noven of P&GP’s desire to commence development of the ***. The parties shall negotiate in good
faith to develop target specifications for the development of the *** in connection with the
development of the development plan for the ***. Each of Noven and P&GP shall perform the
development activities contemplated herein in accordance with the applicable development plan and
target specifications.

     Section 2.03. Consideration Related to Development of ***. In consideration of the
work performed by Noven in connection with the Project from and after the Effective Date, P&GP
shall pay and deliver to Noven the following one-time payments in immediately available funds
within 45 calendar days after the achievement of the specified development milestones with respect
to the ***:

     (a) *** upon Noven’s manufacture, testing, release and shipment of pilot plant batches (not to
exceed a total of 20 kg) of clinical supplies of the *** for bioavailability and for stability
studies that meet target quantities and mutually agreed-upon release specifications;

     (b) *** upon Noven’s manufacture, testing, release and shipment of three *** batches (in
addition to the batches contemplated in clause (i)) of the *** that meet target quantities and
mutually agreed-upon release specifications for International Conference on Harmonization stability
studies, a ***, human cumulative irritation and sensitization studies and ***/wear studies
involving the ***; and

     (c) *** upon the earlier of (A) successful completion by P&GP of a *** trial involving the
***, which shall be defined as showing *** and the ***, based on pre-agreed measures, or (B) the
filing of an NDA for the ***.

It is acknowledged and agreed that the payments contemplated in Sections 2.03(a) and 2.03(b) are
not contingent upon the success of the events described in Section 2.03(c) or the success of the
Project in any respect.

-9-

 

     Section 2.04. Feasibility Study for ***. Noven shall use Commercially Reasonable
Efforts to conduct, within six months of the execution of the Manufacturing and Supply Agreement,
an in vitro skin flux study to demonstrate the feasibility of the *** (the “Feasibility
Study”). Upon completion of the Feasibility Study, if the parties determine that it is
feasible to proceed with the development of the ***, the parties shall cooperate in good faith to
agree upon the target product profile of the ***, including dosage strength and patch size, taking
into account the results of such Feasibility Study. A payment of *** from P&GP to Noven in
consideration for Noven’s performance of such Feasibility Study shall be due by P&GP on the
Effective Date and shall be payable by P&GP in immediately available funds within three Business
Days of the Effective Date. Such *** payment to be made by P&GP is not contingent upon the success
of the Feasibility Study in any respect, and no portion of such payment shall be reimbursable to
P&GP in any manner or credited against any other payments contemplated by this Agreement, whether
or not the Feasibility Study is successful.

     Section 2.05. Clinical Supply of T-Patch. Noven shall provide clinical supplies of
the T-Patch for use by P&GP in any clinical studies with respect to the T-Patch that P&GP wishes to
conduct. Such clinical supplies shall be supplied pursuant to, and in accordance with the terms
and conditions of, the Manufacturing and Supply Agreement; provided that the price for such
clinical supplies shall be *** of the T-Patch if stability testing is required, and if stability
testing is not required, the parties will discuss a lower price for such clinical supplies to
reflect a reduction of the cost of stability testing.

     Section 2.06. Quality and Clinical Development. Each of Noven and P&GP shall conduct
all tests, studies and other development and manufacturing activities in connection with the
Project in a good scientific manner and in compliance in all material respects with all
requirements of Applicable Laws, codes, rules, regulations and permits, including GMP, GLP and GCP.
Each of Noven and P&GP shall comply in all material respects (including obtaining all necessary
licenses, consents and permits) with the requirements of all Applicable Laws of any Governmental
Authority in procurement, handling and disposal of the compounds and products to be studied in
connection with the Project.

     Section 2.07. Monthly Reports. Noven shall provide written monthly reports to P&GP
summarizing the results of Noven’s work completed to date in connection with the Project, together
with interim and final reports as outlined in Exhibit B. Each such report shall provide
information concerning studies performed by Noven, the methodologies employed and the results
obtained, raw material specifications and product specifications. All reports that Noven provides
in hard copy will also be provided in electronic format. Noven shall disclose to P&GP, upon
request by P&GP, information with respect to materials, components, composition or construction of
the transdermal system developed and investigated or tested by Noven, for the sole purpose of
P&GP’s performance of toxicology assessments or product development assessments or for purposes of
regulatory review. All data and information supplied by Noven to P&GP in connection with any
development plan or the Project shall constitute Confidential Information of Noven for purposes of
Section 7.01.

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     Section 2.08. Joint Developments. If Noven and P&GP shall, either directly or
indirectly through their respective Affiliates, successors, assigns, sublicensees, delegatees,
partners, employees, agents or consultants, jointly make or conceive any inventions or discoveries
in the course of any development work performed pursuant to this Agreement to which, under United
States patent law, both parties would be deemed inventors (a “Joint Development”), each of
Noven and P&GP shall have joint ownership of any Intellectual Property associated with each such
Joint Development and any patent applications, patents or similar registrations obtained thereon.
Without limiting the generality of the foregoing, it is acknowledged and agreed that in no event
shall the T-Patch or any Noven Patent be considered for any purpose a Joint Development hereunder.
Subject to the terms of this Agreement, each of Noven and P&GP shall have full rights of ownership
and use of each such Joint Development.

ARTICLE III

LICENSE

     Section 3.01. License Grant. Except as otherwise provided herein and subject to the
terms and conditions of this Agreement, with effect from the Effective Date, Noven hereby grants to
P&GP an exclusive license in the Territory, and, subject to the restrictions and limitations of
Section 3.04, the right to grant sublicenses, to rights under:

          (a) the Noven Patents and Technology; and

          (b) Noven’s rights in any Joint Developments in the Field;

in each case to develop, use, make, have made, sell or otherwise dispose of the Products in the
Field; provided, however, that notwithstanding the foregoing, P&GP shall not have
the right (x) to make or have made the Products other than as expressly contemplated by or provided
in the Manufacturing and Supply Agreement, or (y) to modify in any way the structure or composition
of the Products, without the prior written consent of Noven, such consent not to be unreasonably
withheld.

     Section 3.02. Limitations on License Granted Under Section 3.01.

          (a) Noven’s Rights. Noven shall retain all rights not expressly granted to P&GP under
this Agreement, including all rights outside of the Field with respect in each case to the Noven
Patents, the Technology and Noven’s rights in any Joint Developments. In addition to the
foregoing, and notwithstanding Section 3.01, nothing in this Agreement shall limit in any way
Noven’s rights:

          (i) to make or have made the Products under the terms and conditions of the
Manufacturing and Supply Agreement;

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     (ii) to develop, use, make or have made the Products, or to authorize another Person to
develop, use, make or have made the Products, for the purpose of conducting research of
improved transdermal drug delivery products in the Field;

     (iii) to develop, use, make, have made, promote, sell or otherwise dispose of
transdermal drug delivery products that either (A) ***; or (B) ***;

     (iv) to develop, use, make, have made, promote, sell or otherwise dispose of transdermal
drug delivery products indicated only for use by men (provided that Noven will not run
studies of such products in women, and will not in any way market such products for use by
women or encourage the use of such products by women) that either (A) ***, or (B) ***; or

     (v) subject to Section 5.01 and Section 5.03, to develop, use, make, have made, promote,
sell or otherwise dispose of any product other than the Products or ***, whether on its own,
together with another Person or through a license or other grant of rights to another Person.

          (b) Applicable Law. P&GP shall not be entitled to exercise the rights granted to it
under Section 3.01 unless such rights are exercised in accordance with all Applicable Laws.

     Section 3.03. Quality Control. P&GP and its Related Parties shall only develop, use,
make, have made, market, promote, sell, distribute or otherwise dispose of the Products and all
materials used in connection with the Products, including any labeling, packaging and advertising,
in accordance with all Applicable Laws. Noven shall be similarly obligated to act in accordance
with all Applicable Laws in the performance of its obligations under this Agreement and its use of
Product as permitted in Section 3.02.

     Section 3.04. Sublicense.

          (a) P&GP shall have the right to sublicense the rights granted by Noven under Section 3.01 in
any territory throughout the world if, and only if, P&GP obtains Noven’s prior written consent,
which consent shall not be unreasonably withheld or delayed (any such sublicensee approved by
Noven, a “Permitted Sublicensee”).

          (b) In the event Noven shall consent to any sublicense by P&GP pursuant to Section 3.04(a),
(i) the applicable Permitted Sublicensee shall be obligated in writing to the covenants and
agreements (to the extent applicable to such Permitted Sublicensee) of, and the restrictions and
limitations imposed upon, P&GP hereunder, including the representations and warranties set forth in
Sections 8.02(a), (b), (c), (d), (f), (g), (h) and (j) of this Agreement, (ii) no such sublicense
shall relieve P&GP of any of its obligations or liabilities under this Agreement, and (iii) P&GP
shall be responsible for, and liable to Noven in respect of, any action or inaction taken by any
such Permitted Sublicensee to the same extent that P&GP would have been responsible or liable to
Noven had P&GP taken or failed to take such action, and P&GP shall be responsible for the payment
of Royalties based upon any and all sales of Products by such

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sublicensee in accordance with Article VI. Noven shall be an express third party beneficiary
to any agreement between P&GP and each Permitted Sublicensee that sublicenses any of the rights or
licenses granted to P&GP hereunder. No Permitted Sublicensee shall have any right to further
sublicense, assign or otherwise transfer any rights granted to such Permitted Sublicensee
hereunder, and upon the termination of this Agreement for any reason, all sublicenses granted
hereunder shall terminate and all rights granted under this Agreement to any Permitted Sublicensee
shall revert immediately to Noven.

     Section 3.05. Co-Promotion Partner. Subject to and without limiting the provisions of
Section 3.04, P&GP shall have the right to enroll one or more co-promotion partners in the
Territory upon written notice to Noven. P&GP shall (i) ensure that its co-promotion partner(s)
comply with the covenants and agreements of P&GP hereunder, and (ii) promptly upon entering into a
co-promotion arrangement with a co-promotion partner for the marketing or sale of any of the
Products, notify Noven in writing that it has entered into a co-promotion arrangement and identify
the co-promotion partner, the term of the arrangement and the Products and territories covered by
such arrangement. No enrollment of a co-promotion partner shall relieve P&GP of any of its
obligations or liabilities under this Agreement, and P&GP shall be responsible for, and liable to
Noven in respect of, any action or inaction taken by any of its co-promotion partners to the same
extent that P&GP would have been responsible or liable to Noven had P&GP taken or failed to take
such action. To the extent any sales of Products shall be attributed or allocated to any such
co-promotion partner, P&GP shall be responsible for the payment of Royalties based upon such sales
in accordance with Article VI, and will ensure that Noven has the audit rights set forth in Section
6.05(e) with respect to its co-promotion partners. Except as otherwise provided in the
Manufacturing and Supply Agreement, Noven shall have no obligation to supply the Products to any
co-promotion partner of P&GP pursuant to this Section 3.05. Notwithstanding the provisions of this
Section 3.05, no such co-promotion partner shall have any rights to or under any of the licenses
granted to P&GP pursuant to this Article III, whether as a sublicensee or otherwise, unless such
co-promotion partner shall also have been approved as a Permitted Sublicensee in accordance with
Section 3.04(a). Should P&GP consider a co-promotion partner, P&G shall reasonably consider
enrolling Noven as a co-promotion partner. In connection with such consideration, if requested by
P&GP, Noven shall provide a reasonable demonstration of its capabilities as a co-promotion partner.

ARTICLE IV

INTELLECTUAL PROPERTY MATTERS

     Section 4.01. Infringement or Other Actions Regarding the Technology.

          (a) If, at any time on or after the Effective Date, either party shall become aware of any
infringement or threatened infringement of the Technology, or any unfair competition by any Third
Party, in connection with a Competing Product, then the party having such knowledge shall give
prompt notice thereof to the other party, which notice shall include the identity of the Third
Party and any evidence that the notifying party has relating to such matters.

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          (b) Following any notification under Section 4.01(a), Noven shall have the right but not the
obligation (and P&GP shall not have the right) to take such action as Noven deems necessary or
appropriate to protect and enforce the Noven Patents in the Territory against the Competing
Products, including initiating an appropriate Proceeding or threatening to initiate an appropriate
Proceeding to prevent or eliminate the infringement of the Noven Patents with regard to the
Competing Products and defending any counterclaims arising out of such Proceeding, and P&GP agrees
to provide Noven with all reasonable assistance and information required by Noven in connection
with such Proceeding or threatened Proceeding, all at Noven’s cost and expense. In connection with
the foregoing, P&GP may retain its own independent counsel to participate with Noven in any such
Proceeding or threatened Proceeding; provided, that the costs and expenses of such counsel
shall be paid by P&GP. No settlement, agreement, consent judgment or other voluntary final
disposition (“Settlement”) of a Proceeding or threatened Proceeding under this Section
4.01(b) may be entered into, in whole or in part, by Noven without the consent of P&GP, which
consent shall not be unreasonably withheld or delayed.

          (c) In the event that Noven shall not take any action under Section 4.01(b) within 60 calendar
days after the notice contemplated by Section 4.01(a) is given, or if Noven shall provide written
notice to P&GP prior to the expiration of such 60-calendar day period that it will not take any
action under Section 4.01(b), then P&GP shall have the right but not the obligation (and Noven
shall not have the right) to take such action as P&GP deems necessary or appropriate to protect and
enforce the Noven Patents in the Territory against the Competing Products, including initiating an
appropriate Proceeding or threatening to initiate an appropriate Proceeding to prevent or eliminate
the infringement of the Noven Patents with regard to the Competing Products and defending any
counterclaim arising out of such Proceeding, and Noven agrees to provide P&GP with all reasonable
assistance and information required by P&GP in connection with such Proceeding or threatened
Proceeding, all at P&GP’s cost and expense. In connection with the foregoing, Noven may retain its
own independent counsel to participate with P&GP in any such Proceeding or threatened Proceeding;
provided, that the costs and expenses of such counsel shall be paid by Noven. In
connection with any action taken by P&GP under this Section 4.01(c), P&GP shall give due
consideration to Noven’s views with respect to the necessity or desirability of taking such action.
In deciding whether to initiate any Proceeding to prevent or eliminate infringement of the Noven
Patents, P&GP shall give careful consideration to how the Proceeding may impact any related
Proceedings involving the Noven Patents or affect the full scope, including the unlicensed scope,
of the Noven Patents, to what extent the allegedly infringing article reads on the claims of any
Noven Patent, the identity of the alleged infringers and the extent of the alleged infringement.
No Settlement of a Proceeding or threatened Proceeding under this Section 4.01(c) may be entered
into, in whole or in part, by P&GP without the consent of Noven. In the event that Noven elects
not to consent to any such Settlement, Noven shall assume the prosecution of the claims and the
defense of the Noven Patents from P&GP and, to the extent it is determined that Noven’s withholding
of its consent to the Settlement was unreasonable, Noven shall indemnify P&GP for any further
liability, claims or Proceedings related thereto or arising therefrom to the extent any damages,
liabilities, costs and
expenses of P&GP are in excess of any amounts P&GP otherwise would have been responsible for
under the terms and conditions of the proposed Settlement.

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          (d) In the event that Noven declines to take action under Section 4.01(b) and P&GP fails to
take action under 4.01(c) within 30 calendar days after the earlier of (i) P&GP’s receipt of
written notice from Noven that Noven will not take any action under Section 4.01(b) or (ii) the
expiration of the 60-calendar day period contemplated in Section 4.01(c), or if P&GP shall provide
written notice to Noven prior to the expiration of such 30-calendar day period that it will not
take any action under Section 4.01(c), then Noven shall once again have the right (and P&GP shall
not have the right) to take action and seek cooperation from P&GP under the terms and conditions
set forth in Section 4.01(b) notwithstanding its prior election not to take any such action.

          (e) Without limiting the provisions of Sections 4.01(b), 4.01(c) and 4.01(d), in the event
that Noven or P&GP becomes aware of a Paragraph IV Certification, it shall promptly notify the
other party. Following any notification of a Paragraph IV Certification under this Section
4.01(e), Noven shall have the right to take any action it deems necessary or appropriate to protect
and enforce the Noven Patents or any rights of Noven therein; provided, that in the event
Noven fails to notify P&GP in writing of its intention to commence a Proceeding against the Person
filing the Paragraph IV Certification within five Business Days of the notice of such Paragraph IV
Certification delivered under this Section 4.01(e), P&GP may request that Noven take such steps as
may be necessary and reasonable to protect and enforce the rights granted to P&GP under this
Agreement. Notwithstanding the provisions of Sections 4.01(b) and 4.01(c), in the event Noven
takes action upon P&GP’s request, P&GP shall pay for or reimburse Noven for any costs and expenses
incurred or borne by Noven in connection therewith.

          (f) All amounts awarded as damages, profits or otherwise (an “Award”) in connection
with any action specified in Section 4.01(b) or 4.01(d) taken by Noven shall be paid to and be
allocated between Noven and P&GP in accordance with this Section 4.01(f).

     (i) First, all reasonable, actual out-of-pocket costs and expenses incurred by Noven
shall be deducted from the aggregate amount of the Award (without regard to whether such
Award shall be payable to Noven, P&GP or both) and retained by Noven or paid to Noven by
P&GP, as the case may be, prior to any other payment or allocation of such Award in
accordance with this Section 4.01(f).

     (ii) Next, after satisfaction of Noven’s costs and expenses in accordance with Section
4.01(f)(i), all reasonable, actual out-of-pocket costs and expenses incurred by P&GP in
connection with retaining its own independent counsel to participate with Noven in any action
specified in Section 4.01(b) or 4.01(d) taken by Noven shall be retained by P&GP or paid to
P&GP by Noven, as the case may be.

     (iii) Next, after satisfaction of Noven’s costs and expenses in accordance with Section
4.01(f)(i) and P&GP’s costs and expenses in accordance with Section 4.01(f)(ii), to the
extent any portion of the Award is compensatory in nature to
Noven (“Noven Compensatory Damages”), such portion shall be retained by Noven or
paid to Noven by P&GP, as the case may be, and shall become the sole property of Noven.

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     (iv) Next, after the allocations contemplated by Sections 4.01(f)(i), 4.01(f)(ii) and
4.01(f)(iii), to the extent any portion of the Award is compensatory in nature to P&GP
(“P&GP Compensatory Damages”), such portion shall be retained by P&GP or paid to P&GP
by Noven, as the case may be, and shall become the sole property of P&GP; provided,
that in the event Noven has not already been compensated for lost royalties and lost profit
margin on the sale of Product through the payment of Noven Compensatory Damages, Noven shall
be entitled to deduct and retain from such P&GP Compensatory Damages, or P&GP shall pay to
Noven, as the case may be, an amount equal to 6% multiplied by the Net Outside Sales
associated with such P&GP Compensatory Damages, which Net Outside Sales shall be determined
as follows: (A) if the amount of lost revenues upon which the P&GP Compensatory Damages are
based shall be determined or agreed, whether by judgment, settlement or other resolution of
the applicable action, then such lost revenues amount shall constitute Net Outside Sales for
purposes of this Section 4.01(f)(iv); and (B) if the amount of lost revenues upon which the
P&GP Compensatory Damages are based shall not be determined or agreed in connection with the
action, then an amount determined by dividing (1) the amount of the P&GP Compensatory Damages
by (2) P&GP’s Contribution Margin on the sale of Products for the 12-month period ending as
of the end of the calendar quarter preceding the commencement of the action giving rise to
the Award, shall constitute Net Outside Sales for purposes of this Section 4.01(f)(iv). For
purposes of this Article IV, the term “Contribution Margin” shall mean, for any
12-month period, a percentage computed as (x) (I) the Net Outside Sales of the Products by
P&GP (and any Related Parties, successors, assignees, delegatees or partners of P&GP) during
such period, minus (II) cost of goods sold, fully allocated overhead and direct marketing and
selling expenses incurred by P&GP in connection the Products during such period, divided by
(y) the Net Outside Sales of the Products by P&GP (and any Related Parties, successors,
assignees, delegatees or partners of P&GP) during such period.

     (v) Next, after the allocations contemplated by Sections 4.01(f)(i), 4.01(f)(ii),
4.01(f)(iii) and 4.01(f)(iv), to the extent any portion of the Award constitutes damages
other than Noven Compensatory Damages and P&GP Compensatory Damages, including punitive and
exemplary damages (“Other Damages”), such Other Damages shall be shared equally
between Noven and P&GP.

          (g) All Awards in connection with any actions specified in Section 4.01(c) taken by P&GP but
assumed by Noven in accordance with the last sentence of Section 4.01(c) shall be paid to and be
allocated between Noven and P&GP in accordance with the provisions of Section 4.01(f), except that
(i) all reasonable, actual out-of-pocket expenses incurred by P&GP in connection with such action
prior to the assumption thereof by Noven shall also be deducted from the aggregate amount of the
Award and retained by P&GP or paid to P&GP by Noven, as the case may be, together with the payment
of Noven’s costs and expenses in accordance with Section 4.01(f)(i), and (ii) no such allocation
shall relieve Noven of any obligation under Section
4.01(c) to indemnify P&GP for any further liability, claims or Proceedings related to an
action assumed by Noven in accordance with and subject to the terms of Section 4.01(c).

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          (h) Subject to Section 4.01(g), all Awards in connection with any action specified in Section
4.01(c) taken by P&GP shall be paid to and be allocated between Noven and P&GP in accordance with
this Section 4.01(h).

     (i) First, all reasonable, actual out-of-pocket costs and expenses incurred by P&GP
shall be deducted from the aggregate amount of the Award (without regard to whether such
Award shall be payable to P&GP, Noven or both) and retained by P&GP or paid to P&GP by Noven,
as the case may be, prior to any other payment or allocation of such Award in accordance with
this Section 4.01(h).

     (ii) Next, after satisfaction of P&GP’s costs and expenses in accordance with Section
4.01(h)(i), all reasonable, actual out-of-pocket costs and expenses incurred by Noven in
connection with retaining its own independent counsel to participate with P&GP in any action
specified in Section 4.01(c) taken by P&GP shall be retained by Noven or paid to Noven by
P&GP, as the case may be.

     (iii) Next, after satisfaction of P&GP’s costs and expenses in accordance with Section
4.01(h)(i) and Noven’s costs and expenses in accordance with Section 4.01(h)(ii), to the
extent any portion of the Award constitutes P&GP Compensatory Damages, such portion shall be
retained by P&GP or paid to P&GP by Noven, as the case may be, and shall become the sole
property of P&GP; provided, that Noven shall be entitled to deduct and retain from
such P&GP Compensatory Damages, or P&GP shall pay to Noven, as the case may be, ***.

     (iv) Next, after the allocations contemplated by Sections 4.01(h)(i), 4.01(h)(ii) and
4.01(h)(iii), to the extent any portion of the Award constitutes Noven Compensatory Damages,
such portion shall be retained by Noven or paid to Noven by P&GP, as the case may be, and
shall become the sole property of Noven.

     (v) Next, after the allocations contemplated by Sections 4.01(h)(i), 4.01(h)(ii),
4.01(h)(iii) and 4.01(h)(iv), to the extent any portion of the Award constitutes Other
Damages, such Other Damages shall be shared equally between Noven and P&GP.

          (i) Notwithstanding the provisions of this Section 4.01, Noven shall have the right, and P&GP
shall not have the right, to take such actions as it deems appropriate to protect, enforce and
defend the Technology in any circumstance not specifically contemplated by the provisions of
Section 4.01(b), 4.01(c), 4.01(d), 4.01(e) or 4.02. In addition to and without limiting the
provisions of Section 4.01(a), the parties agree to notify each other promptly upon becoming aware
of (i) any infringement or threatened infringement of the Technology or any unfair competition by
any third party in connection with any product other than a Competing Product, and (ii) any
Proceeding or threat of any Proceeding by a third party alleging that any of the Technology
(including any claims asserted in the Noven Patents) are invalid or unenforceable

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or otherwise seeking to limit the scope, construction or interpretation of any of the
Technology. P&GP agrees to cooperate with Noven in any reasonable manner in any action taken by
Noven to protect, enforce or defend the Technology under this Section 4.01(i) at the expense of
Noven, if and to the extent reasonably requested by Noven. All amounts awarded as damages, profits
or otherwise in connection with any action contemplated in this Section 4.01(i) taken by Noven
shall be paid to and become the sole property of Noven; provided, that, subject to the
prior payment of Noven’s reasonable, actual out-of-pocket expenses incurred in connection with such
action, in the event any amounts awarded as damages, profits or otherwise in connection with any
action contemplated in this Section 4.01(i) constitutes P&GP Compensatory Damages, such P&GP
Compensatory Damages shall be paid to P&GP, and, in the event Noven has not already been
compensated for lost royalties and lost profit margin on the sale of Product through the payment of
Noven Compensatory Damages, P&GP shall pay an amount based upon the amount of such P&GP
Compensatory Damages, calculated in accordance with the provisions of Section 4.01(f)(iv).

     Section 4.02. Infringement of Third Party Rights.

          (a) If the manufacture, use, sale or offer for sale of any Product results in any Proceeding
by a Third Party alleging patent infringement against P&GP or Noven (a “Third Party
Infringement Suit”), P&GP or Noven, as the case may be, shall promptly notify the other party
in writing of such Proceeding. P&GP shall have the first right, but not the obligation, to defend
any such Third Party Infringement Suit, at its own expense, using counsel reasonably acceptable to
Noven. P&GP may settle any such Proceeding under such terms as P&GP deems advisable;
provided, however, that no Settlement of any such Proceeding may be entered into,
in whole or in part, by P&GP without the prior written consent of Noven; and provided
further, that if such Proceeding does not implicate any of the Technology (including the
Noven Patents), Noven’s consent shall not be unreasonably withheld or delayed. In the event that
Noven elects not to consent to any such Settlement, Noven shall assume the defense of the claims
and the Noven Patents from P&GP and, to the extent it is determined that Noven’s withholding of its
consent to the Settlement was unreasonable, Noven shall indemnify P&GP for any further liability,
claims or Proceedings related thereto or arising therefrom to the extent any damages, liabilities,
costs and expenses of P&GP are in excess of any amounts P&GP otherwise would have been responsible
for under the terms and conditions of the proposed Settlement. P&GP shall keep Noven reasonably
informed of all significant developments in connection with any such Third Party Infringement Suit
and Noven shall cooperate fully at P&GP’s expense in the defense of the Proceeding. If P&GP
chooses not to defend a Third Party Infringement Suit that implicates the Technology, Noven shall
have the right, but not the obligation, to defend the Third Party Infringement Suit, at its own
expense, using counsel reasonably acceptable to P&GP. Noven may settle any such Proceeding under
such terms that Noven deems advisable; provided, however, that no Settlement of any
such Proceeding may be entered into, in whole or in part, by Noven without the consent of P&GP,
which consent shall not be unreasonably withheld or delayed. Noven shall keep P&GP reasonably
informed of all significant developments in connection with any such Third Party Infringement Suit
and P&GP shall cooperate fully at its own expense in the defense of the Third Party Infringement
Suit.

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          (b) If either P&GP or Noven believes that a license to a Third Party patent is necessary to
develop or commercialize the Technology in any country or jurisdiction in the Territory, regardless
of whether a Proceeding has been commenced by the Third Party against P&GP or Noven, then the party
having such belief shall advise the other party in writing. Thereafter, P&GP and Noven shall
attempt to agree to a mutually acceptable arrangement under which a license to the third party
patent may be obtained. If the parties cannot reach agreement on the issue of what constitutes a
mutually acceptable arrangement because either P&GP or Noven does not concur in the belief that the
license of the third party patent is necessary, the parties shall submit the issue to a mutually
acceptable, independent patent counsel who is familiar with and experienced in the pharmaceutical
industry in such country or jurisdiction, who will determine whether such third party patent
license is necessary for the development or commercialization of the Technology in such country or
jurisdiction. In the event the parties are unable to agree on a mutually acceptable, independent
patent counsel to resolve the dispute, the dispute shall be resolved in accordance with the dispute
resolution provisions of Section 11.02.

          (c) If the independent patent counsel selected in accordance with Section 4.02(b) or the
arbitrator selected in accordance with Section 11.02 determines that the third party patent license
is necessary and that the reason the license is necessary is because the third party patent is
directed to a transdermal patch with claims that overlap rights that Noven claims in and to the
Technology, then (i) Noven shall pay the costs and expenses of the independent patent counsel or
the arbitrator, as the case may be, and (ii) P&GP and Noven shall negotiate in good faith a
mutually acceptable arrangement under which the third party patent license will be obtained.
Thereafter, in the event such a third party patent license is obtained, the royalties payable
thereunder shall be borne by P&GP and *** of such royalties shall be deducted from the amount of
Royalties that otherwise would have been payable to Noven for the quarter in which the royalties
payable to such third party are incurred; provided, however, that (x) the payment
of such royalties to the third party shall not affect the methodology of how the Royalties payable
to Noven are calculated, (y) any costs, expenses or royalties associated with obtaining any or all
rights under the third party patent shall be excluded from the calculation of Net Outside Sales of
the Products, and (z) under no circumstances shall the deduction of *** of such royalties cause a
reduction of more *** in the total amount of Royalties due to Noven for the relevant quarter.
Notwithstanding the foregoing, in the event the third party patent at issue was owned by or
licensed to or for the benefit of *** as of the date of this Agreement, (I) Noven shall have no
obligation to pay the costs and expenses of the independent patent counsel or the arbitrator, as
the case may be, (II) the payment of any royalties to *** or any successor or assignee of *** in
respect of the patent shall not affect the methodology of how the Royalties payable to Noven are
calculated, (III) any costs, expenses or royalties associated with obtaining any or all rights
under the patent shall be excluded from the calculation of Net Outside Sales of the Products, and
(IV) there shall be no reduction in the amount of Royalties payable to Noven hereunder as a result
of any costs, expenses or royalties associated with obtaining any or all rights under the patent.

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          (d) If the independent patent counsel selected in accordance with Section 4.02(b) or the
arbitrator selected in accordance with Section 11.02 determines that the third party patent license
is not necessary or that the license is necessary but the reason the license is
necessary is not attributable to any overlap of the rights Noven claims in and to the
Technology and claims under the third party patent, then (i) P&GP shall pay the costs and expenses
of the independent patent counsel or the arbitrator, as the case may be, (ii) any costs, expenses
or royalties associated with obtaining any or all rights under the third party patent shall be
borne by P&GP, (iii) any costs, expenses or royalties associated with obtaining any or all rights
under the third party patent shall be excluded from the calculation of Net Outside Sales of the
Products, and (iv) there shall not be any reduction in the amount of any Royalties or other amounts
payable to Noven hereunder.

     Section 4.03. Maintenance of Noven Patents. Noven shall pay all necessary maintenance
and related expenses to maintain the Noven Patents in those jurisdictions within the Territory
where the Noven Patents are currently filed as of the Effective Date. Noven shall, from and after
the Effective Date, upon the request of P&GP, use reasonable commercial efforts to file additional
applications and to take such other reasonable actions necessary to obtain protection of the Noven
Patents. Noven shall pay all necessary maintenance and related expenses to maintain the Noven
Patents in additional jurisdictions within the Territory in which Noven is receiving revenues under
this Agreement and/or the Manufacturing and Supply Agreement, and P&GP shall pay all necessary
maintenance and related expenses to maintain the Noven Patents in any other additional
jurisdictions in which P&GP has requested that the Noven Patents be maintained. In the event Noven
shall fail to pay any necessary maintenance or related expense to maintain the Noven Patents, or to
file additional applications or take such other reasonable actions necessary to obtain protection
of the Noven Patents in accordance with this Section 4.03, P&GP shall have the right to pay any
such expenses, file any such applications and/or take any such actions on Noven’s behalf in order
to secure maintenance and protection of the Noven Patents. Should P&GP take any such actions to
maintain and protect the Noven Patents in a jurisdiction within the Territory with respect to which
Noven is required to pay the necessary maintenance and related expenses under this Section 4.03,
Noven shall promptly reimburse P&GP its reasonable costs related to any such action upon written
request of P&GP; it being understood that if Noven shall fail promptly to reimburse such reasonable
costs upon written request from P&GP, P&GP shall have the right to reduce Royalty payments under
Section 6.01 hereof by such amount.

     Section 4.04. Other Intellectual Property Rights. Each party hereby acknowledges and
agrees that except as otherwise specifically contemplated in this Agreement or the Manufacturing
and Supply Agreement, (i) P&GP is not obtaining any rights in or to use any Intellectual Property
owned, licensed or otherwise used by Noven, and Noven is not obtaining any rights in or to use any
Intellectual Property owned, licensed or otherwise used by P&GP, and (ii) P&GP is not obtaining any
rights in or licenses with respect to the name “Noven” or any derivative thereof and Noven is not
obtaining any rights in or licenses with respect to the name “Procter & Gamble” or any derivative
thereof. P&GP further acknowledges and agrees that P&GP shall not use any trademark, logo or trade
name of Noven or any trademarks, logos or trade names that are confusingly similar thereto or that
are a translation or transliteration thereof into any language or alphabet and Noven further
acknowledges and agrees that Noven shall not use any trademark, logo or trade name of P&GP or any
trademarks, logos or trade names that are confusingly similar
thereto or that are a translation or transliteration thereof into any language or alphabet,
except in connection with Noven’s manufacture and supply of Products to P&GP in accordance with the
Manufacturing and Supply Agreement.

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     Section 4.05. Ownership of Clinical Data. P&GP will own all clinical data developed
in connection with this Agreement.

ARTICLE V

ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

     Section 5.01. Additional Products.

          (a) From and after the Effective Date, if at any time Noven designs or develops any
transdermal patch that (i) is within the Field and (ii) is not the ***, the T-Patch or *** (a
“Noven Additional Product”), then P&GP shall have the exclusive right to commercialize such
Noven Additional Product. Noven and P&GP shall agree to appropriate compensation to be paid to
Noven for the development of such Noven Additional Product, which compensation shall include the
payment of appropriate milestone payments (to be determined by the parties acting in good faith and
based on the additional commercial value of the Noven Additional Product (e.g., where the Noven
Additional Product imparts additional market exclusivity in the United States beyond the *** and/or
the T-Patch, reduces manufacturing costs or increases the sales potential of the Products)) and
Noven and P&GP shall execute an appropriate development and commercialization agreement on terms
and conditions reasonably similar to those of this Agreement, taking into consideration the
contributions from the two parties, which development agreement shall include, among other things,
provisions for the payment of royalties at the same rates and on the same basis as provided in this
Agreement.

          (b) From and after the Effective Date, if at any time P&GP or a Related Party desires to
design or develop (or have designed or developed) a transdermal patch that (i) is within the Field
and (ii) is not the ***, the T-Patch or ***, (a “P&GP Additional Product” and, collectively
with a Noven Additional Product, an “Additional Product”), then P&GP shall notify Noven and
Noven shall have the first right to design and develop such P&GP Additional Product. Noven and
P&GP shall negotiate appropriate compensation to be paid to Noven for the design and development of
such P&GP Additional Product, which compensation shall include the payment of appropriate milestone
payments (to be determined by the parties acting in good faith and based on the additional
commercial value of the P&GP Additional Product (e.g., where the P&GP Additional Product imparts
additional market exclusivity in the United States beyond the *** and/or the T-Patch, reduces
manufacturing costs or increases the sales potential of the Products)) and Noven and P&GP shall
execute an appropriate development and commercialization agreement on terms and conditions
reasonably similar to those of this Agreement, taking into consideration the contributions from the
two parties, which development agreement shall include, among other things, provisions for the
payment of royalties at the same rates and on the same basis as provided in this Agreement. In the
event Noven refuses such development project, or cannot meet a technical challenge required in
respect of such
development project, then P&GP may, subject to the provisions of Section 5.03, enter into a
development arrangement for such product with a Third Party. Further, at P&GP’s request, the
parties shall enter into good faith negotiations to amend the terms and conditions of this
Agreement in the event P&GP wishes to commercialize any P&GP Additional Product developed with a
third party pursuant to the foregoing sentence without being subject to Section 5.03.

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          (c) It is acknowledged and agreed that the *** shall constitute an Additional Product for
purposes of this Agreement. Upon completion of the Feasibility Study, Noven and P&GP shall agree
to appropriate compensation to be paid to Noven for the development of the ***, which compensation
shall include the payment of appropriate milestone payments (to be determined by the parties acting
in good faith and based on the additional commercial value of the ***) and Noven and P&GP shall
execute an appropriate development and commercialization agreement on terms and conditions
reasonably similar to those of this Agreement, taking into consideration the contributions from the
two parties, which development agreement shall include, among other things, provisions for the
payment of royalties at the same rates and on the same basis as provided in this Agreement.

          (d) Any development and commercialization agreement entered into by Noven and P&GP pursuant to
Section 5.01(a), 5.01(b) and/or 5.01(c) shall, other than the milestone payments, have the same
terms and conditions as this Agreement, and this Agreement shall be automatically amended to update
the definition of “Products” as set forth in Section 1.01 to include any Additional Products
developed by Noven under Section 5.01(a), 5.01(b) and/or 5.01(c). Noven shall manufacture for
P&GP, and P&GP shall purchase from Noven, P&GP’s requirements of any such Additional Products on
terms and conditions reasonably similar to the terms and conditions of the Manufacturing and Supply
Agreement to the extent appropriate and for a price to be agreed upon between the parties, if and
only if, with respect to any P&GP Additional Product, P&GP does not enter into a development
arrangement with a Third Party (subject to the provisions of Sections 5.01(b) and 5.03).

          (e) In the event P&GP or a Related Party shall, subject to the provisions of Sections 5.01(b)
and 5.03, design, develop or commercialize any P&GP Additional Products independently or in
collaboration with a Person other than Noven, then unless otherwise agreed by the parties in
writing, neither P&GP nor any of its Related Parties shall have any right to sublicense or
otherwise use in any manner the Noven Patents, the Technology or any of the rights licensed
hereunder in connection with the design, development or commercialization of any such P&GP
Additional Products.

          (f) Without limiting the provisions of this Section 5.01, it is acknowledged and agreed that
Noven shall not have the right to design, develop or commercialize any Additional Products other
than as contemplated in or permitted by Section 3.02(a), this Section 5.01 or Section 5.03.
Without limiting the provisions of this Section 5.01, it is acknowledged and agreed that P&GP and
its Related Parties shall not have the right to design, develop or
commercialize any Additional Product other than as contemplated in or permitted by this
Section 5.01 or Section 5.03.

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     Section 5.02. Regulatory Matters. P&GP and its Related Parties shall be solely
responsible for filing and maintaining the Regulatory Applications and obtaining all Regulatory
Approvals regarding the Products, as well as all ongoing regulatory compliance relating to the
Products. P&GP shall use commercially reasonable efforts, and Noven shall cooperate in good faith
with P&GP, to obtain Regulatory Approval of the Products, including Regulatory Approval for natural
menopausal indications, in the United States and in each country of the Territory in which *** has
been launched for commercial sale, or shall be launched for commercial sale. Upon reasonable
request of P&GP, Noven shall cooperate in good faith with P&GP, at the expense of P&GP, to obtain
Regulatory Approval for the Products in territories outside of the United States. Notwithstanding
anything to the contrary herein, to the extent any regulatory filing or other action taken by P&GP,
including any amendment, supplement or other modification of any of the INDs or NDAs for the
Products, shall increase or modify in any manner any of Noven’s obligations under the Manufacturing
and Supply Agreement or, to the extent any such filing or action shall constitute a change of
specifications or other manufacturing change with respect to the Products, Noven’s obligations with
respect thereto shall be subject to the terms and conditions of the Manufacturing and Supply
Agreement.

     Section 5.03. Noncompetition.

          (a) Subject to the provisions of Sections 5.03(b), 5.03(c), 5.03(d), 5.03(e) and 10.03 hereof,
for a period commencing on the Effective Date, and continuing thereafter during the term of this
Agreement and pursuant to Section 10.03, if longer, neither Noven, P&GP nor any Related Party, nor
any of their respective Affiliates, shall, directly or indirectly, (i) promote or commercialize any
product in the Field, or (ii) engage in, or have any majority equity ownership in, or participate
in the financing, operation or management of, any firm, corporation or business that engages in,
the direct or indirect promotion or commercialization of any product in the Field (the activities
described in clauses (i) and (ii) collectively, the “Competing Business”).

          (b) The provisions of Section 5.03(a) shall not limit (i) the right of the parties to develop,
promote and commercialize the T-Patch and the *** in accordance with the provisions of this
Agreement, or (ii) the right of either party to develop, promote and commercialize any Additional
Product that either (x) Noven designs or develops for commercialization by P&GP as contemplated in
Section 5.01(a) of this Agreement, or (y) Noven designs or develops for P&GP or a Related Party, or
P&GP and Noven design or develop together, as contemplated in Section 5.01(b) of this Agreement.

          (c) The provisions of Section 5.03(a) shall not prohibit the acquisition by Noven, P&GP or a
Related Party, or any of their respective Affiliates, of all or any part of a business or Person
(whether through the acquisition of assets, securities or other ownership interests, the effecting
of a merger, consolidation, share exchange, business combination, reorganization or
recapitalization or other similar transaction) (an “Acquired Business”) that is
engaged in a Competing Business; provided, however, the acquisition by either
Noven, P&GP or a Related Party, or any of their respective Affiliates, of an Acquired Business
shall not relieve Noven, P&GP or its Related Parties, or any of their respective Affiliates
(including the Acquired Business), of the obligations, restrictions and limitations under Section
5.03(a).

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          (d) The prohibitions of Section 5.03(a) shall not apply to:

     (i) the promotion and commercialization of *** by P&GP or any Related Party subject to
and in accordance with the terms and conditions of this Agreement;

     (ii) Affiliates of P&GP, Noven or a Related Party at such time as they are no longer
Affiliates of P&GP, Noven or such Related Party, as applicable; or

     (iii) the acquisition by either Noven, P&GP or a Related Party, or any of their
respective Affiliates, of any interest in any Person, or entering into any collaboration or
affiliation with any Person, where the joint venture, association, partnership,
collaboration, affiliation or other arrangement arising therefrom does not involve the
promotion or commercialization of a product in the Field.

          (e) The prohibitions of Section 5.03(a) shall apply to and bind any Person who shall acquire
(whether through the acquisition of assets, securities or other ownership interests, the effecting
of a merger, consolidation, share exchange, business combination, reorganization or
recapitalization or other similar transaction) a majority of the ownership interests or control of
the management of Noven, P&GP or a Related Party, or any of their respective Affiliates;
provided, however, that if any such acquiring Person participates in a Competing
Business prior to the time of such transaction with Noven, P&GP or a Related Party, or the
applicable Affiliate, as the case may be, Section 5.01(a) shall not restrict the continuation by
such Person of such Competing Business.

     Section 5.04. Manufacturing and Supply Agreement. The parties shall endeavor in good
faith to enter into the Manufacturing and Supply Agreement as soon as practicable after the
Effective Date and in any event prior to 45 days following the Effective Date. The Manufacturing
and Supply Agreement shall incorporate the target specifications for the T-Patch attached hereto as
Exhibit C. In addition, the pricing structure for the supply price of the T-Patch under
the Manufacturing and Supply Agreement shall be based upon the provisions of Exhibit D
attached hereto. The pricing structure for the *** and any Additional Products hereunder,
including the ***, shall be determined by mutual agreement of the parties.

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ARTICLE VI

ROYALTIES AND MILESTONE PAYMENTS

     Section 6.01. Royalties Based Upon Quarterly Net Outside Sales. In consideration for
the licenses granted to P&GP by Noven hereunder, P&GP shall pay royalty payments
(collectively, the “Royalties”) to Noven within 45 calendar days after the end of each
calendar quarter, which Royalties shall be determined as a percentage (the “Royalty Rate”)
of Quarterly Net Outside Sales of the Products by P&GP (and any Related Parties, successors,
assignees, delegatees or partners of P&GP) in the Territory during such calendar quarter. Subject
to Section 6.03, the Royalty Rate applicable to the Products for each calendar quarter during the
term of this Agreement shall be *** of Net Outside Sales of the Products in the United States;
provided that in the event of any termination of the Manufacturing and Supply Agreement
prior to termination of this Agreement, other than a termination by P&GP due to Noven bankruptcy or
Noven’s uncured material breach of the Manufacturing and Supply Agreement (subject to the
termination provisions of the Manufacturing and Supply Agreement), the Royalty Rate applicable to
the Products for each calendar quarter during the term of this Agreement shall be *** of Net
Outside Sales of the Products in the Territory as a whole.

     Section 6.02. Additional Products. In the event that the parties shall agree to the
development of Additional Products pursuant to Section 5.01(a) or 5.01(b), the Royalty Rates set
forth in Section 6.01 shall apply to the sale of such Additional Products, and the Net Outside
Sales allocable to such Additional Products shall be taken into account together with the sales of
all other Products for purposes of determining the Net Outside Sales and the Royalties and
Milestone Payments payable hereunder.

     Section 6.03. Expiration of Patents. Upon the date on which the last of the Noven
Patents in force in the Territory shall (i) expire by its terms, or (ii) be adjudicated invalid or
unenforceable in the Territory by the final judgment of a court of competent jurisdiction, which
judgment shall not be subject to appeal (“Patent Expiration”), each Royalty Rate then in
effect hereunder shall be reduced by *** before such time as a patch product which is a generic
substitute for a Product reaches the market in the United States, and each Royalty Rate then in
effect hereunder shall be reduced by *** as of the time a patch product which is a generic
substitute for a Product reaches the market in the United States. For purposes of clarity, the
reduction in the Royalty Rate is not additive; either a *** or *** reduction will apply.

     Section 6.04. Milestone Payments. P&GP shall pay and deliver to Noven payments
(collectively, the “Milestone Payments”), upon the achievement of certain milestones (the
“Milestones”) as follows:

          (a) P&GP shall pay and deliver to Noven *** in immediately available funds within 45 calendar
days after the last day of the first calendar quarter during which the Annual Net Outside Sales of
the Products in the Territory exceeds ***;

          (b) P&GP shall pay and deliver to Noven *** in immediately available funds within 45 calendar
days after the last day of the first calendar quarter during which the Annual Net Outside Sales of
the Products in the Territory exceeds ***; and

          (c) P&GP shall pay and deliver to Noven *** in immediately available funds within 45 calendar
days after the last day of the first calendar quarter during which the Annual Net Outside Sales of
the Products in the Territory exceeds ***;

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          (d) if, during the fourth year following Launch of a Product in the United States, Net Outside
Sales of the Products in the Territory total at least *** for that year and Net Outside Sales of
the Products in the Territory are not less than *** of Net Outside Sales of the Products in the
Territory in the third year following Launch of a Product in the United States, then P&GP shall pay
and deliver to Noven *** in immediately available funds within 45 calendar days after the last day
of the month in which Net Outside Sales of the Products in the Territory reach ***;

          (e) if, during the sixth year following Launch of a Product in the United States, Net Outside
Sales of the Products in the Territory total at least *** for that year, P&GP shall pay and deliver
to Noven *** in immediately available funds within 45 calendar days after the last day of the month
in which Net Outside Sales of the Products in the Territory reach ***; and

          (f) P&GP shall pay and deliver to Noven *** in immediately available funds within 45 calendar
days after receipt of the first Regulatory Approval of the *** in the United States;

provided, that if more than one Milestone shall be achieved in any single calendar quarter,
each Milestone Payment corresponding to the achievement of such Milestones shall be paid and
delivered to Noven within the appropriate period contemplated in this Section 6.04.

     Section 6.05. Determination of Net Outside Sales.

          (a) Monthly Reports. P&GP shall provide financial reports to Noven on a monthly basis
within 20 Business Days after the last day of each calendar month setting forth the Net Outside
Sales of the Products in the United States for the monthly period ending as of the end of each such
calendar month. Noven and P&GP hereby acknowledge and agree that such reports shall constitute
Confidential Information for purposes of this Agreement and shall be held as confidential by Noven
in accordance with Section 7.01 hereof.

          (b) Quarterly Reports. P&GP shall provide financial reports to Noven on a quarterly
basis within 15 Business Days after the last day of each calendar quarter, setting forth (i) the
amount of Quarterly Net Outside Sales of the Products for the quarterly period ending as of the end
of each such calendar quarter, (ii) a detailed reconciliation of gross sales for such calendar
quarter to Quarterly Net Outside Sales for such calendar quarter, (iii) the Annual Net Outside
Sales of the Products during the 12-month period ending on the last day of such calendar quarter,
and (iv) the conversion rate (determined in accordance with Section 6.05(c)) for the calendar
quarter used to convert any currency other than U.S. dollars into U.S. dollars. Noven and P&GP
hereby acknowledge and agree that such reports shall constitute Confidential Information for
purposes of this Agreement and shall be held as confidential by Noven in accordance with Section
7.01 hereof.

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          (c) Currency Conversion. All payments made under this agreement shall be in U.S.
dollars and all references herein to “$” shall mean U.S. dollars. Where customers are billed
in a currency other than U.S. dollars, for purposes of computing royalty payments on Net
Outside Sales for any calendar quarter, the aggregate of Net Outside Sales billed in such currency
for such quarter shall be converted into U.S. dollars at the commercial rate at which U.S. dollars
could be purchased with such foreign currency (the “Dollar Purchase Rate”) on the last
Business Day of such quarter, based on the Dollar Purchase Rate on such date as quoted by Citibank,
N.A. in New York or other such valid source as agreed by the parties if Citibank, N.A. in New York
no longer exists.

          (d) Tax Withholding. If any withholding taxes are imposed by a governmental authority
upon Royalties paid under this Agreement, and if such taxes are owed by Noven and required by law
or regulation to be withheld by P&GP, P&GP shall withhold such taxes and pay the withheld taxes on
behalf of Noven, and deduct the amount of such withheld taxes from the Royalty payments made to
Noven hereunder; provided that P&GP shall provide to Noven prompt written evidence of
payment of all such withholding tax to the appropriate governmental authority, and with respect to
any Royalties payable in respect of sales outside of the United States, P&GP shall provide prior
notice of any such withholding requirements and shall cooperate with Noven in order to enable Noven
to claim exemptions or reductions from any such withholding tax under any double taxation or
similar agreements in force.

          (e) Maintenance of Records; Audits. P&GP shall keep, and shall cause its Related
Parties, successors, assigns, delegatees and/or partners to keep, complete and accurate records
pertaining to the sale of the Products in sufficient detail to permit Noven to confirm the accuracy
of calculations of the Royalties, the Milestone Payments and any other payments due hereunder.
Such records shall be maintained in accordance with Applicable Law and in any event for at least a
three-year period following the end of the calendar quarter for which they pertain. Not more than
once in any fiscal year and upon reasonable advance notice to P&GP, and at its own expense (subject
to Section 6.05(g)), Noven shall be entitled to nominate an internationally recognized independent
certified public accounting firm reasonably acceptable to P&GP to have access at reasonable times
during normal business hours (subject to signing a confidentiality agreement, if applicable) to
examine P&GP’s (or its Related Party’s, successor’s, assign’s, delegatee’s or partner’s, as the
case may be) records as they relate to relevant Products for the purpose of verifying the
correctness of the Royalties, the Milestone Payments and any other amounts paid to Noven under the
terms of this Agreement; provided, however, that if such audit reveals that P&GP
underreported Quarterly Net Outside Sales or Annual Net Outside Sales by five percent or more, or
if any such understatement resulted in P&GP not paying Noven a Milestone Payment to which Noven was
entitled, then such audit shall not count against the one audit to which Noven is entitled per
fiscal year. Moreover, if an accounting firm is used in such audit, the accounting firm shall not
disclose to Noven or to any third party any financial or other information relating to the business
of P&GP except that which is necessary to inform Noven of the accuracy or inaccuracy of P&GP’s
calculation. Noven shall not audit the same records twice. Noven shall only be entitled to audit
books and records of P&GP from the three calendar years prior to the calendar year prior to which
the audit request is made.

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          (f) Disputes. In the event Noven shall dispute the correctness of P&GP’s calculation
of (i) Quarterly Net Outside Sales for any calendar quarter, (ii) Annual Net Outside Sales of the
Products for any 12-month period, (iii) the computation of any Royalty or Milestone Payment payable
hereunder, or (iv) any other amount payable to Noven hereunder, Noven shall, within 45 calendar
days of receipt of any such calculation or payment, provide written notice to P&GP of such
objection, setting forth in writing and in reasonable detail the reasons therefor; 
provided that the failure to give notice of an objection within such 45-calendar day period
shall not result in the waiver or loss of Noven’s right to dispute the correctness of P&GP’s
calculation unless, and only to the extent that, P&GP is actually prejudiced by such failure.
Noven and P&GP shall endeavor in good faith to resolve any disputed matters within 45 calendar days
after P&GP’s receipt of Noven’s notice of objections. If Noven and P&GP are unable to resolve the
disputed matters within such 45-calendar day period, Noven and P&GP shall select a nationally known
independent accounting firm (which firm shall not be the then regular auditors of either party) to
resolve the matters in dispute, and the determination of such firm in respect of the correctness of
each matter remaining in dispute shall be conclusive and binding on Noven and P&GP. The
independent accounting firm selected to resolve such disputes shall have access to the relevant
records of the parties with respect to the matter in dispute. In connection with the resolution of
any dispute under this Section 6.05(f), Noven shall bear the costs and expenses of the independent
accounting firm selected to resolve such disputes, subject to Section 6.05(g).

          (g) Expenses. If P&GP is determined to have underreported the amount of Quarterly Net
Outside Sales or Annual Net Outside Sales for a period subject to dispute hereunder by five percent
or more, or if any such understatement shall have resulted in P&GP not paying Noven a Milestone
Payment to which Noven was entitled, then P&GP shall reimburse Noven for any and all reasonable,
actual out-of-pocket expenses incurred by Noven in connection with the dispute, including any costs
and expenses payable to the independent accounting firm or firms engaged pursuant to Section
6.05(e) and/or Section 6.05(f), and any other costs and expenses incurred by Noven in connection
with the audit of P&GP’s books and records and any such dispute resolution process.

     Section 6.06. Generation of Net Outside Sales. P&GP and its Related Parties shall
exercise Commercially Reasonable Efforts to maximize the Net Outside Sales of the Products during
the term of this Agreement, and shall at all times market the Products in a manner comparable to
other products of P&GP (or its Related Parties, successors, assignees, delegatees or partners),
with market potential comparable to that of the Products. Without limiting the generality of the
foregoing, (i) with respect to any country in the Territory (including the United States) in which
neither *** nor any Product has been launched for commercial sale as of the Effective Date, P&GP
and its Related Parties shall exercise Commercially Reasonable Efforts to Launch one or more of the
Products in each such country, and (ii) with respect to any country in the Territory in which ***
has been launched for commercial sale as of the Effective Date, or shall be launched for commercial
sale after the Effective Date but prior to the Launch of any of the Products, P&GP and its Related
Parties shall exercise Commercially Reasonable Efforts to convert their promotion and
commercialization efforts from *** to the Products, and exercise Commercially Reasonable Efforts to
transition sales from *** to the Products, as soon as

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practicable after receipt of Regulatory Approval of the first Product in such country;
provided that with respect to this clause (ii), P&GP shall not be required to transition
sales from *** to any Product in any country until such Product shall have received Regulatory
Approval for natural menopausal indications in such country. Notwithstanding the foregoing, in the
event Noven shall have notified P&GP, at any time prior to the Launch of a Product in any country,
that Noven in good faith believes that such Launch in such country poses a risk of infringement of
any Intellectual Property rights of ***, P&GP may Launch such Product in such country
notwithstanding Noven’s notice of potential infringement risk; provided that in such case
P&GP shall indemnify Noven and the Noven Indemnitees from any and all Damages arising out of any
infringement, alleged infringement or other violation of any Intellectual Property rights of ***
related to such Launch, or any or claim, demand, suit, action or proceeding related thereto.

ARTICLE VII

CONFIDENTIALITY

     Section 7.01. Confidentiality.

          (a) Pursuant to the terms of this Agreement, each party (in such capacity, the “Disclosing
Party”), has disclosed and will be disclosing to the other party and/or its Affiliates, Related
Parties, successors, assigns, delegates, partners, or representatives (in such capacity, the
“Receiving Party”), certain Confidential Information of the Disclosing Party. The
Receiving Party shall make no use of such Confidential Information except in the exercise of its
rights and the performance of its obligations set forth in this Agreement. The Receiving Party
shall use at least the same efforts to keep secret, and prevent the disclosure to third parties of,
Confidential Information of the Disclosing Party as it would use with respect to its own
Confidential Information. Confidential Information disclosed by the Disclosing Party shall remain
the sole and absolute property of the Disclosing Party, subject to the rights granted herein. The
above restrictions on the use and disclosure of Confidential Information shall not apply to any
information which (i) is already known to the Receiving Party at the time of disclosure by the
Disclosing Party, as demonstrated by competent proof, (ii) is or becomes generally available to the
public other than through any act or omission of the Receiving Party in breach of this Agreement,
(iii) is acquired by the Receiving Party from a third party who is not, directly or indirectly,
under an obligation of confidentiality to the Disclosing Party with respect to same, or (iv) is
developed independently by the Receiving Party without use, direct or indirect, of information that
is required to be held confidential hereunder.

          (b) In the event the Receiving Party is required (i) by Applicable Law to disclose
Confidential Information of the Disclosing Party to any Regulatory Authorities to obtain Regulatory
Approval for the Products or to comply with the requirement of any Regulatory Authority, (ii) to
disclose Confidential Information of the Disclosing Party to respond to an inquiry of a Regulatory
Authority or Governmental Authority concerning the Products, or (iii) to disclose Confidential
Information of the Disclosing Party in a judicial, administrative or arbitration proceeding to
enforce such party’s rights under this Agreement, it may do so only if it (A) provides the
Disclosing Party with as much advance written notice as possible of the required
disclosure, (B) cooperates with the Disclosing Party in any attempt to prevent or limit the
disclosure, and (C) limits disclosure, if any, to the specific purpose at issue.

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          (c) Notwithstanding the provisions of this Section 7.01:

     (i) P&GP shall be permitted to disclose to its distributors, wholesalers, customers and
other third parties having a reasonable need to know such information such Confidential
Information relating to the Products as P&GP shall reasonably determine to be necessary or
useful in order to effectively develop, market and distribute the Products;

     (ii) Noven shall be permitted to disclose such Confidential Information relating to the
Products as Noven shall reasonably determine to be necessary or useful in order to
effectively perform its obligations under the Manufacturing and Supply Agreement;

     (iii) each of Noven and P&GP shall be permitted to disclose to a Regulatory Authority
such Confidential Information relating to the Products as it shall reasonably determine (but
only after consulting with the other party to the extent practicable) to be necessary to
comply with the provisions of Applicable Law; and

     (iv) nothing in this Section 7.01 shall be interpreted to limit the ability of either
Noven or P&GP to disclose its own Confidential Information to the other party or any other
Person on such terms and subject to such conditions as it deems advisable or appropriate;

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

          (d) Each of Noven and P&GP acknowledge and agree that the terms and conditions of this
Agreement shall be considered Confidential Information of each party and shall be treated
accordingly. Notwithstanding the foregoing, (i) P&GP acknowledges and agrees that Noven may be
required to disclose some or all of the information included in this Agreement in order to comply
with its obligations under the Securities Laws, and hereby consents to such disclosure to the
extent deemed advisable or appropriate by counsel to Noven, provided that P&GP is informed of the
information to be disclosed and given an adequate time to comment, and (ii) Noven acknowledges and
agrees that P&GP may disclose the terms and conditions of this Agreement to third party
sublicensees and co-promotion partners to permit P&GP to exercise its rights to fulfill its
obligations under Sections 3.04 and 3.05 of this Agreement; provided, however, that
(x) such disclosure shall be pursuant to, and subject to the terms and conditions of,
non-disclosure or similar protective agreements in form and substance reasonably acceptable to
Noven, which agreements shall contain covenants, agreements, restrictions and limitations at least
as restrictive as those set forth in this Agreement, (y) such disclosure may be made only to
sublicensees and co-partners permitted under Sections 3.04 and 3.05, as the case may be, and
(z) P&GP shall provide written notice of any such disclosure to Noven.

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          (e) Each party specifically recognizes that any breach by it or its Affiliates, Related
Parties, successors, assigns, delegates, partners or representatives of this Section 7.01 may cause
irreparable injury to the other party and that actual damages may be difficult to ascertain, and in
any event, may be inadequate. Accordingly (and without limiting the availability of legal or
equitable, including injunctive, remedies under any other provisions of this Agreement), each party
agrees that in the event of any such breach, notwithstanding the provisions of Section 11.02 or
Article IX hereof, the other party shall be entitled to seek, by way of private litigation in the
first instance, injunctive relief and such other legal and equitable remedies as may be available.

          (f) The obligations of confidentiality and nonuse set forth in this Section 7.01 shall survive
the termination of this Agreement for a period of five years.

     Section 7.02. Publications. It is understood that the parties may wish to publish or
otherwise disclose information generated in connection with the Project to a third party for
publication in a reputable scientific forum (for example, as an abstract, poster presentation,
lecture, article, book, or any other means of dissemination to the public). No such disclosure
shall be made by either Noven or P&GP to a third party (a) without the prior written consent of the
other, which consent shall not be unreasonably withheld or delayed, and (b) unless and until a
patent application has been filed adequately describing and claiming any invention believed to be
patentable embodied in such disclosure. In the event that either Noven or P&GP shall desire to
make any such disclosure to a third party, such party shall submit a complete written draft of the
disclosure to the other at least 45 calendar days prior to submission for publication of such
draft, or an abstract of a proposed oral disclosure at least 45 calendar days prior to submission
of such abstract or the oral disclosure, whichever is earlier. In the event that patent filings
are necessary, public disclosure shall be delayed until said patent filings have been made. The
other party shall have the right (i) to propose modifications to the publication for patent
reasons, (ii) to request a delay in publication or presentation in order to protect patentable
information, or (iii) to request that the information be maintained as a trade secret and, in such
case the other party shall not make such publication.

     Section 7.03. Press Releases. In addition, except as may be required by Applicable
Law, no party shall originate any publicity, press or news release or other public announcement,
written or oral, whether to the public press or otherwise, relating to this Agreement, the other
Transaction Documents or to the existence of an arrangement between the parties, without the prior
written consent of the other party, which consent shall not be unreasonably withheld or delayed.
In the event disclosure of this Agreement, or any of the terms and conditions of this Agreement is
required by Applicable Law, the party required to so disclose such information shall, to the extent
possible, provide to the other party for its prior approval (such approval not to be unreasonably
withheld or delayed) a written copy of such public announcement. When
practicable, the party required to disclose such information will provide a copy to the other
party at least five Business Days prior to disclosure.

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ARTICLE VIII

REPRESENTATIONS AND WARRANTIES

     Section 8.01. Representations and Warranties of Noven. Noven represents and warrants
to P&GP as of the Effective Date that:

          (a) Organization. Noven is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Noven is qualified to do business in each
jurisdiction where the character of its business (after giving effect to the Contemplated
Transactions) makes such qualifications necessary to carry on its business.

          (b) Power, Authority and Enforceability. Noven has full corporate power and authority
to enter into and perform this Agreement and to consummate the Contemplated Transactions. This
Agreement has been or shall be duly executed and delivered by duly authorized signatories of Noven.
This Agreement constitutes a valid and binding obligation of Noven, enforceable against Noven in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors’ rights generally.

          (c) No Violation. Neither the execution and delivery of this Agreement nor the
consummation by Noven of the transactions contemplated hereby, will (i) conflict with or result in
a breach of any of the terms, conditions or provisions of Noven’s certificate of incorporation or
other governing or charter document, or of any statute or administrative regulation, or, to the
best of its knowledge, of any order, writ, injunction, judgment or decree of any court or
governmental authority or of any arbitration award or any agreement binding upon Noven or its
assets, or (ii) to the best of its knowledge, contravene or conflict with, or constitute a
violation of, any provisions of any Applicable Law binding upon Noven.

          (d) No Default. Noven is not a party to any unexpired, undischarged or unsatisfied
written or oral contract, agreement, indenture, mortgage, debenture, note or other instrument under
the terms of which performance by Noven according to the terms of this Agreement will be a default,
or whereby timely performance by Noven according to the terms of this Agreement may be prohibited,
prevented or delayed.

          (e) Litigation. There is no Proceeding pending or, to the knowledge of Noven,
threatened against, Noven or any of its Affiliates before any court, arbitrator, administrative
agency or other tribunal that could reasonably be expected to prevent Noven from executing this
Agreement or consummating the transactions contemplated hereby.

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          (f) Intellectual Property. To the extent set forth in this Agreement, (i) Noven has
the right to grant to P&GP the rights granted herein unencumbered by any Liens (other than
Permitted Liens), (ii) to the knowledge of Noven, Noven has not received any written notice
alleging any infringement by Noven of any intellectual property rights of another Person in respect
of the Products or the Noven Patents, (iii) to the knowledge of Noven, the Noven Patents are valid
and enforceable and Noven has no knowledge of any infringement by a third party of any of the
claims in the Noven Patents, and (iv) the rights granted to P&GP under this Agreement do not
conflict with rights granted by Noven to any other Person.

          (g) Estimates. Noven acknowledges that P&GP makes no representation or warranty as to
the prospects, financial or otherwise, of the sale of the Products, and that any projections,
estimates or forecasts of future results or events provided by or on behalf of P&GP are subject to
uncertainty and to the assumptions used in their preparation.

          (h) Generic Drug Enforcement Act. Neither Noven, its Affiliates nor any of their
respective officers, directors, employees, agents or consultants have been charged with or
convicted under federal law for conduct relating to the development or approval of, or otherwise
relating to the regulation of, any product under the Generic Drug Enforcement Act of 1992 or any
other relevant statute, law or regulation. Neither Noven, its Affiliates nor any of their
respective officers, directors, employees, agents or consultants has been debarred under Section
306(a) or Section 306(b) of the FDC Act, nor convicted of any offense required to be listed under
Section 306(k)(2) of the FDC Act.

          (i) Third Party Agreements. Neither the execution and the delivery of this Agreement
nor the consummation by Noven of the Contemplated Transactions will conflict with or result in a
breach of any third party agreements to which Noven is a party or may otherwise be bound.

     Section 8.02. Representations and Warranties of P&GP. P&GP represents and warrants to
Noven as of the Effective Date that:

          (a) Organization. P&GP is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio. P&GP is qualified to do business in each
jurisdiction where the character of its business (after giving effect to the Contemplated
Transactions) makes such qualifications necessary to carry on its business.

          (b) Power, Authority and Enforceability. P&GP has full corporate power and authority
to enter into and perform this Agreement and to consummate the Contemplated Transactions. This
Agreement has been or shall be executed and delivered by authorized signatories of P&GP. This
Agreement constitutes a valid and binding obligation of P&GP, enforceable against P&GP in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors’ rights generally.

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          (c) No Violation. Neither the execution and delivery of this Agreement nor the
consummation by P&GP of the transactions contemplated hereby, will (i) conflict with or result in a
breach of any of the terms, conditions or provisions of P&GP’s certificate of
incorporation or other governing or charter document, or of any statute or administrative
regulation, or, to the best of its knowledge, of any order, writ, injunction, judgment or decree of
any court or governmental authority or of any arbitration award or any agreement binding upon P&GP
or its assets, or (ii) to the best of its knowledge, contravene or conflict with, or constitute a
violation of, any provisions of any Applicable Law binding upon P&GP.

          (d) No Default. P&GP is not a party to any unexpired, undischarged or unsatisfied
written or oral contract, agreement, indenture, mortgage, debenture, note or other instrument under
the terms of which performance by P&GP according to the terms of this Agreement will be a default,
or whereby timely performance by P&GP according to the terms of this Agreement may be prohibited,
prevented or delayed.

          (e) Estimates. P&GP acknowledges that Noven makes no representation or warranty as to
the prospects, financial or otherwise, of the sale of the Products, and that any projections,
estimates or forecasts of future results or events provided by or on behalf of Noven are subject to
uncertainty and to the assumptions used in their preparation.

          (f) Generic Drug Enforcement Act. Neither P&GP, its Affiliates nor any of their
respective officers, directors, employees, agents or consultants have been charged with or
convicted under federal law for conduct relating to the development or approval of, or otherwise
relating to the regulation of, any product under the Generic Drug Enforcement Act of 1992 or any
other relevant statute, law or regulation. Neither P&GP, its Affiliates nor any of their
respective officers, directors, employees, agents or consultants has been debarred under Section
306(a) or Section 306(b) of the FDC Act, nor convicted of any offense required to be listed under
Section 306(k)(2) of the FDC Act.

          (g) Litigation. There is no Proceeding pending or, to knowledge of P&GP, threatened
against P&GP or any of its Affiliates before any court, arbitrator, administrative agency or other
tribunal which (i) could reasonably be expected to prevent P&GP from executing this Agreement or
consummating the transactions contemplated herein, or (ii) could reasonably be expected to prevent
or interfere with P&GP’s ability to obtain Regulatory Approval of the Products.

          (h) Licenses and Permits. Subject to receipt of Regulatory Approval of the Products,
P&GP has all licenses, franchises, permits and other similar authorizations affecting, or relating
in any way to, the Products required by Applicable Law to be obtained by P&GP to permit P&GP to
market, promote, distribute, use, sell, or otherwise dispose of the Products after the Effective
Date.

          (i) ***. P&GP has entered into an amended and restated development and license
agreement with *** (the ***) in respect of the Intellectual Property owned or otherwise controlled
by ***, and (i) the terms and conditions of this Agreement and the Manufacturing and Supply
Agreement do not conflict with, and will not result in a breach of, any of the terms and conditions
of the ***, (ii) the transactions contemplated by this Agreement and the Manufacturing and Supply
Agreement will not infringe, violate or result in a breach by P&GP or

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Noven of the rights of *** under the ***, (iii) as a result of the ***, P&GP no longer has any
continuing obligation to work with *** or any of its Affiliates to develop products in the Field
and is not currently working with *** on any such development of products in the Field (other than
with respect to the efforts of P&GP to obtain Regulatory Approval of ***), and (iv) as a result of
the ***, following the commercial launch of the first Product, P&GP shall have no further
obligation to *** or any of its Affiliates to market or sell *** or any other product developed, in
whole or in part, by *** or any of its Affiliates. To the knowledge of P&GP, neither *** nor any
of its Affiliates, representatives or related parties has received any written notice alleging any
infringement of any intellectual property rights of another Person in respect of*** or any of the
***. Attached hereto as Schedule 8.02(i) is a true and correct list of the patents and
patent applications covering the *** (together with any reissues, confirmations, renewals,
extensions, counterparts, divisions, continuations, continuations-in-part or patents-of-addition of
such patents or patent applications, the ***). P&GP may, from time to time upon written notice to
Noven, update Schedule 8.02(i) hereto to include additional patents and patent applications
covering the *** as appropriate to reflect such patents and patent applications.

          (j) Third Party Agreements. Neither the execution and the delivery of this Agreement
nor the consummation by P&GP of the Contemplated Transactions will conflict with or result in a
breach of any third party agreements to which P&GP is a party or may otherwise be bound.

     Section 8.03. Knowledge. Where a representation or warranty contained in this Article
VIII is stated to be to a party’s knowledge, this knowledge shall mean to the actual knowledge of
the party’s executive officers and shall be deemed to include a representation that a reasonable
inquiry or investigation of the subject matter thereof has been made of such individuals and shall
thus include matters that a prudent individual could reasonably be expected to discover or
otherwise become aware of during the course of such inquiry or investigation.

ARTICLE IX

INDEMNIFICATION

     Section 9.01. Indemnification. In order to allocate between themselves the
responsibility for claims arising out of this Agreement, and except as otherwise specifically
provided for herein, from and after the Effective Date, the parties shall indemnify each other as
provided in this Section 9.01.

          (a) Indemnification Obligations of P&GP. From and after the Effective Date, P&GP
shall defend, indemnify and hold Noven, its Affiliates, and each of their respective officers,
directors, agents, employees, shareholders, successors and assigns (collectively, “Noven
Indemnitees”), harmless from and against any and all Damages which Noven Indemnitees may incur
or suffer, or with which any of them may be faced arising out of:

     (i) the breach by P&GP or any of its Related Parties of this Agreement including (A) any
material inaccuracy in or any material breach of any representation or
warranty made by P&GP or a Related Party in, or pursuant to, this Agreement, and (B) any
material breach by P&GP or a Related Party of, or material failure by P&GP or a Related Party
to comply with, any of its covenants or obligations pursuant to this Agreement;

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     (ii) any infringement or alleged infringement of the *** arising out of any Noven
Indemnitee’s exercise of its rights or performance of its obligations under this Agreement or
any of the other Transaction Documents;

     (iii) the Products, including any actions or inactions by P&GP or any of its Related
Parties, successors, assignees, delegatees or partners with respect to the Products, and any
bodily injury, illness or death of any person caused or alleged to be caused by the use,
distribution or sale of the Products;

     (iv) the enforcement by Noven Indemnitees of their rights under this Section 9.01(a);

     (v) any negligence or willful misconduct by P&GP or its Related Parties, successors,
assignees, delegatees or partners under this Agreement or by P&GP or its Related Parties,
successors, assignees, delegatees or partners in connection with the Products or the
Technology;

     (vi) P&GP’s or a Related Party’s material violation of any Applicable Law, including any
failure by P&GP or a Related Party to develop, use, make, have made, market, promote, sell,
distribute or otherwise dispose of the Products and all materials used in connection with the
Products, including any labeling, packaging and advertising, in accordance with all
Applicable Laws; and

     (vii) the indemnification matters contemplated in Section 6.06;

provided, however, that, in each such case, P&GP shall not be liable hereunder to
the extent such Damages arise from the negligence or willful misconduct of, or a violation of any
Applicable Law by, any Noven Indemnitees, or from the breach by Noven of the provisions of this
Agreement or the Manufacturing and Supply Agreement.

          (b) Indemnification Obligations of Noven. From and after the Effective Date, Noven
shall defend, indemnify and hold P&GP, its Affiliates, and each of their respective officers,
directors, agents, employees, shareholders, successors and assigns (collectively, “P&GP
Indemnitees”) harmless from and against any and all Damages which P&GP Indemnitees may incur or
suffer, or with which any of them may be faced arising out of:

     (i) the breach by Noven of this Agreement including (A) any material inaccuracy in or
any material breach of any representation or warranty made by Noven in this Agreement, and
(B) any material breach by Noven of, or material failure by Noven to comply with, any of its
covenants or obligations pursuant to this Agreement;

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     (ii) the enforcement by P&GP Indemnitees of their rights under this Section 9.01(b);

     (iii) any negligence or willful misconduct by Noven under this Agreement or by Noven or
its Affiliates in connection with the Products or the Technology; and

     (iv) Noven’s material violation of any Applicable Law;

provided, however, that, in each such case, Noven shall not be liable hereunder to
the extent such Damages arise from the negligence or willful misconduct of, or a violation of any
Applicable Law by, any P&GP Indemnitees, or from the breach by P&GP or a Related Party of any of
the provisions of this Agreement or the Manufacturing and Supply Agreement.

     (c) Procedure. If any Proceeding arises as to which a right of indemnification
provided in this Article IX applies, the Person seeking indemnification (the “Indemnified
Party”), shall within 20 calendar days notify the party obligated under this Article IX to
indemnify the Indemnified Party (the “Indemnifying Party”), thereof in writing and allow
the Indemnifying Party and its insurers the opportunity to assume liability for any Damages arising
out of such Proceeding and the direction and control of the defense against such Proceeding, at its
sole expense, including the settlement thereof at the sole option of the Indemnifying Party or its
insurers; provided, that the failure to give notice of a claim for indemnification within
such 20-calendar day period shall not result in the waiver or loss of any right to bring a claim
for indemnification hereunder unless, and only to the extent that, the Indemnifying Party is
actually prejudiced by such failure. Notwithstanding the foregoing, the Indemnifying Party may not
enter into any compromise or settlement without the prior written consent of the Indemnified Party
unless such compromise or settlement includes as an unconditional term thereof the giving by each
plaintiff or claimant to the Indemnified Party of a release from all liability in respect of such
claim and only if such compromise or settlement does not include any admission of legal wrongdoing
on the part of the Indemnified Party. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its insurers in the disposition of any such matter and the Indemnified Party
will have the right and option to participate in (but not control) the defense of any Proceeding as
to which this Article IX applies, with separate counsel at its election and cost. If the
Indemnifying Party fails or declines to assume the defense of any such Proceeding within 30
calendar days after notice thereof, the Indemnified Party may assume the defense thereof for the
account and at the risk of the Indemnifying Party. The Indemnifying Party shall pay promptly to
the Indemnified Party any Damages to which the indemnity under this Article IX applies, as
incurred.

     Section 9.02. Certain Limitations.

     (a) Except as otherwise provided in Section 7.01(e), the sole and exclusive remedy with
respect to any breach of any representation, warranty, covenant or agreement contained herein and
for the other matters described in Sections 9.01(a) and 9.01(b) (other than (i) with respect to a
breach of the terms of a covenant or agreement as to which P&GP or Noven,

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as the case may be, also shall be entitled to seek specific performance or other equitable
relief and (ii) with respect to claims for fraud) shall be a claim for Damages (whether by
contract, in tort or otherwise, and whether in law, in equity or both) made pursuant to this
Article IX. No party shall be entitled to recover any punitive, incidental or consequential
damages whatsoever under this Article IX, except to the extent any such punitive, incidental or
consequential damages are payable to a third party.

     (b) Notwithstanding anything to the contrary contained herein, although a party may be
entitled to make a claim for indemnification pursuant to more than one section of this Article IX,
a party shall not be entitled to recover indemnification for the same claim under more than one
section of this Article IX.

ARTICLE X

TERM AND TERMINATION

     Section 10.01. Term. Unless terminated earlier as provided herein, this Agreement
shall have a term with respect to each country in the Territory ending at the later of (i) five
years from the date of the first commercial sale of a Product in such country, (ii) expiration of
all data protection or market exclusivity rights relating to the Products granted by or available
under authority of a Regulatory Authority in such country, (iii) expiration of the last to expire
of the Noven Patents that cover or are implicated by the manufacture or sale of the Products in
such country, and (iv) the last commercial sale of a Product, Noven Additional Product or P&GP
Additional Product developed with Noven under this Agreement in such country.

     Section 10.02. Certain Termination Events.

          (a) Noven shall have the right to terminate this Agreement in its entirety upon the
effectiveness of a termination of the Manufacturing and Supply Agreement by Noven for an uncured
material breach by P&GP or a Related Party of the Manufacturing and Supply Agreement, in accordance
with the termination provisions of the Manufacturing and Supply Agreement.

          (b) P&GP shall have the right to terminate this Agreement on a country by country and Product
by Product basis at any time upon 60 calendar days prior written notice to Noven.

          (c) Either Noven or P&GP shall have the right to terminate this Agreement immediately in whole
or in part at any time in the event the other party (or, with respect to P&GP, a Related Party)
shall assign or otherwise delegate this Agreement in a manner not in compliance with Section 11.04.

          (d) Noven shall have the right to terminate this Agreement immediately in whole or in part as
to any sublicensee in the event P&GP or a Related Party shall sublicense any
of its rights under this Agreement in a manner not in compliance with this Agreement,
including Section 3.04 hereof.

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          (e) If at any time during the term of this Agreement, P&GP or a Related Party, directly or
indirectly, takes any action or assists or supports any third party in taking any action
challenging any of Noven’s rights in the Noven Patents, including any action in connection with an
opposition, reexamination, revocation or invalidation proceeding, or requests a declaration of an
interference against or otherwise attacks the validity or enforceability of any Noven Patent, or
contests or disputes Noven’s entitlement to or ownership of the Noven Patents, Noven shall have the
right to terminate this Agreement immediately in its entirety.

          (f) If at any time during the term of this Agreement, Noven, directly or indirectly, takes any
action or assists or supports any third party in taking any action challenging any of P&GP’s rights
in patents relating to *** or any aspects of the Products, including any action in connection with
an opposition, reexamination, revocation or invalidation proceeding, or requests a declaration of
an interference against or otherwise attacks the validity or enforceability of any such patent or
disputes P&GP’s entitlement to or ownership of such patents, P&GP shall have the right to terminate
this Agreement in its entirety.

          (g) Either Noven or P&GP shall have the right to terminate this Agreement in its entirety if
the other (or, with respect to P&GP, a Related Party) commits any material breach of any of the
provisions of this Agreement and (in the case of a breach which is capable of remedy) fails to
remedy the same within 60 calendar days after receipt of written notice giving full particulars of
the breach and requiring it to be so remedied.

          (h) Either Noven or P&GP may terminate this Agreement on a country by country basis with
immediate effect with respect to any Product that is permanently and completely withdrawn from the
market in such country for serious adverse health or safety reasons.

          (i) Either Noven or P&GP shall have the right to terminate this Agreement in its entirety upon
60 calendar days written notice to the other party at any time after the other party (or, with
respect to P&GP, a Related Party) is (a) dissolved (other than pursuant to a consolidation,
amalgamation or merger); (b) becomes insolvent or is generally unable to pay its debts as they
become due or admits in writing its inability generally to pay its debts as they become due; (c)
makes a general assignment, arrangement or composition with or for the benefit of its creditors;
(d) institutes or has instituted against it by a third party a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditor’s rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition instituted or presented against
it, such proceeding or petition (i) results in a judgment of insolvency or bankruptcy or the entry
of an order for relief or the making of an order for its winding-up or liquidation or (ii) is not
dismissed, discharged, stayed or restrained in each case within 30 calendar days of the institution
or presentation thereon; (e) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or merger); (f) seeks or

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becomes subject to the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or for all or substantially all its
assets; (g) has a secured party take possession of all or substantially all of its assets or has a
distress, execution, attachment, sequestration or other legal process levied, enforced or sued on
or against all or substantially all its assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or restrained, in each case within 30 calendar
days thereafter; or (h) causes or is subject to any event with respect to it which, under the
applicable law of any jurisdiction, has an analogous effect to any of the events specified in
clauses (a) to (g) (inclusive). In the event Noven seeks or is involuntarily placed under the
protection of bankruptcy laws, Title XI, United States Code, and the trustee in bankruptcy rejects
this Agreement, P&GP hereby elects, pursuant to Section 365(n) of such bankruptcy laws, solely to
the extent permitted thereunder and unless such election is subsequently revoked in writing by
P&GP, to retain all of its rights and obligations under this Agreement to all licenses granted
hereunder, in lieu of termination by P&GP under this Section 10.02(i). In the event that P&GP
timely revokes such election to maintain its rights to all licenses hereunder, P&GP may elect to
treat this Agreement as terminated in accordance with Section 365(n) of the bankruptcy laws.

          (j) Noven shall have the right to terminate this Agreement in its entirety if, by December 31,
2013, P&GP has not Launched any Product and is not actively pursuing the Launch of any Product as
of such date.

          (k) Either party shall have the right to terminate this Agreement in its entirety upon written
notice to the other if the parties have not entered into the Manufacturing and Supply Agreement
within 45 days following the Effective Date; provided that in order for a party to have the
right to terminate this Agreement pursuant to this Section 10.02(k), such party shall have
endeavored in good faith to enter into the Manufacturing and Supply Agreement in accordance with
Section 5.04; and provided further that upon any termination of this Agreement by
either party in accordance with this Section 10.02(k), Noven shall pay and deliver to P&GP a
penalty in the amount of ***.

     Section 10.03. Effect of Termination. Upon termination of this Agreement with respect
to any country and/or with respect to any Product, this Agreement and all rights and licenses and
sublicenses granted hereunder shall each forthwith become void and of no further force or effect
with respect to such country and/or Product, as the case may be (and in the event of any
termination of this Agreement in its entirety, this Agreement and all rights and licenses and
sublicenses granted hereunder shall each forthwith become void and of no further force or effect in
their entirety); provided that (a) the following provisions shall remain in full force and
effect following any such termination indefinitely: (i) Section 7.01 (Confidentiality), (ii)
Section 7.02 (Publications), (iii) Section 7.03 (Press Releases), (iv) Article IX
(Indemnification), (v) this Section 10.03, (v) Section 11.10 (Governing Law), (vi) Section 11.12
(Entire Agreement) and (vii) Section 11.13 (Expenses), and (b) in the event of a termination of
this Agreement by P&GP pursuant to Section 10.02(b) or by Noven pursuant to any of Sections
10.02(a), 10.02(c), 10.02(d), 10.02(e) or 10.02(g) prior to the expiration of the last to expire of
the Noven Patents, that the provisions of Section 5.03 (Noncompetition) shall remain in full force
and effect, on a
country by country and Product by Product basis, with respect to P&GP and its Related Parties
only, for a period of two years from the effective date of such termination. Subject to Section
9.02(a), the rights and remedies provided in this Article X shall be cumulative and not exclusive
of any rights or remedies provided by Applicable Law. Any termination of this Agreement shall not
affect any cause of action or claim hereunder that arises prior to such termination, which claims
and causes of action shall survive any such termination.

-40-

 

ARTICLE XI

MISCELLANEOUS

     Section 11.01. Notices. All notices, claims, certificates, requests, demands and
other communications hereunder shall be in writing and shall be delivered personally or sent by
facsimile transmission, air courier or registered or certified mail, return receipt requested,
addressed as follows:

     if to Noven:

Noven Pharmaceuticals, Inc.

11960 S.W. 144th Street

Miami, Florida 33186

Attention: CEO & General Counsel

Telecopy: 305-964-3340

     with copies (which shall not constitute notice) to:

Hogan & Hartson LLP

555 Thirteenth Street, NW

Washington, D.C. 20004

Attention: Elizabeth M. Donley

Telecopy: 202-637-5910

     if to P&GP:

Procter & Gamble Pharmaceuticals, Inc.

8700 Mason-Montgomery Road

Mason, Ohio 45040-8006

Attention: President, Procter & Gamble Pharmaceuticals

Telecopy: 513-622-4401

     with copies to:

Procter & Gamble Pharmaceuticals, Inc.

8700 Mason-Montgomery Road

Mason, Ohio 45040-8006

Attention: Associate General Counsel

Telecopy: 513-622-5327

-41-

 

or to such other address as the party to whom notice is to be given may have furnished to the other
party in writing in accordance herewith. Any such communication shall be deemed to have been
delivered (a) when delivered, if delivered personally, (b) when sent (with written confirmation
received), if sent by facsimile transmission on a Business Day, (c) on the first Business Day after
dispatch (with written confirmation received), if sent by facsimile transmission on a calendar day
other than a Business Day, (d) on the second Business Day after dispatch, if sent by air courier,
and (e) on the fifth Business Day after mailing, if sent by mail.

     Section 11.02. Disputes. In the event of any controversy or claim arising out of,
relating to or in connection with any provision of this Agreement, or the rights or obligations of
the parties hereunder, the parties shall try to settle their differences amicably between
themselves. Either party may initiate such informal dispute resolution by sending written notice
of the dispute to the other party, and within 10 calendar days after such notice, appropriate
representatives of the parties shall meet for attempted resolution by good faith negotiations. If
such representatives are unable to resolve promptly such disputed matter, it shall be referred to
the presidents of Noven and P&GP, or their respective designees, for discussion and resolution. If
such personnel are unable to resolve such dispute within 30 calendar days of initiating such
negotiations, the parties agree first to try in good faith to settle the dispute by mediation in
Washington, D.C. under the Commercial Mediation Rules of the American Arbitration Association. If
following any such mediation the parties still have not been able to resolve any such dispute, the
parties agree to submit the dispute to final and binding arbitration before a single arbitrator in
Washington, D.C. under the Commercial Arbitration Rules of the American Arbitration Association.
The parties agree that a judgment may be entered on the arbitrator’s award in any court of
competent jurisdiction. The arbitrator in reviewing any claim under this Agreement shall have the
exclusive authority to determine any issues as to the arbitrability of any such claim or related
disputes under this Agreement. In reaching a decision, the arbitrator shall interpret, apply and
be bound by this Agreement and by Applicable Law. The arbitrator shall have no authority to add
to, detract from or modify this Agreement or any Applicable Law in any respect. The arbitrator may
not grant any remedy or relief that a court of competent jurisdiction could not grant, nor any
relief or remedy greater than that sought by the parties, nor any punitive, incidental or
consequential damages, except to the extent any such punitive, incidental or consequential damages
are payable to a third party. Any up-front costs of the arbitrator shall be borne equally by the
parties; provided, however, that the non-prevailing party in any such arbitration
shall pay, and to the extent applicable reimburse the prevailing party for, the costs and expenses
of the arbitrator, including costs and expenses payable to the American Arbitration Association and
to the arbitrator; and provided further, that in the event each party prevails as
to certain claims in connection with any such arbitration, the fees of the arbitrator shall be paid
and/or reimbursed in accordance with the decision of the arbitrator. Each party shall bear its own
costs incurred in connection with attorneys’ fees and related expenses. Notwithstanding the
foregoing provisions
of this Section 11.02, nothing in this Agreement shall limit or in any way restrict the
ability of either party to seek injunctive or other equitable relief in a court or other judicial
body.

-42-

 

     Section 11.03. Independent Contractors. In making and performing this Agreement, the
parties are acting and shall act as independent contractors. Nothing in this Agreement shall be
deemed to create an agency, joint venture or partnership relationship between the parties hereto.
No party shall have the authority to obligate another party in any respect, and no party shall hold
itself out as having any such authority. All personnel of Noven shall be solely employees of Noven
and shall not represent themselves as employees of P&GP. All personnel of P&GP shall be solely
employees of P&GP and shall not represent themselves as employees of Noven.

     Section 11.04. Assignment. Except as otherwise expressly contemplated in Section
3.04, neither party shall have the right to assign this Agreement or delegate any of its rights,
interests, duties or obligations hereunder without the express prior written consent of the other
party, which consent may be granted or withheld in the other party’s sole discretion. In the event
the other party shall consent to any such assignment or delegation, (i) the assignee or delegatee
shall confirm in writing to and for the benefit of the other party that it will comply with the
covenants and agreements of the assigning party hereunder, and (ii) no such assignment or
delegation pursuant to this Section 11.04 shall relieve the assigning party of any of its
obligations or liabilities prior to such assignment. Notwithstanding the foregoing, (a) at any
time during the term of this Agreement either party may assign this Agreement to any of its
Affiliates without the prior written consent of the other party; provided, that no such
assignment of this Agreement shall relieve the assignor of any of its obligations or liabilities
under this Agreement, (b) either party may assign this Agreement without the other party’s prior
written consent in connection with the transfer or sale of all or substantially all of its assets
or business or its merger or consolidation with another Person upon written notice to the other
party, and (c) P&GP may assign this Agreement without Noven’s prior written consent in connection
with a transaction in which P&GP is spun off as an independent publicly traded company, provided
that such assignment shall be to such company. Any attempted assignment in violation of this
Section 11.04 shall be void.

     Section 11.05. Binding Effect; Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer on any Person other than the parties hereto,
and their respective successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

     Section 11.06. Amendments. This Agreement shall not be modified, amended or
supplemented except pursuant to an instrument in writing executed and delivered on behalf of each
of the parties hereto.

     Section 11.07. No Waiver. The failure in any one or more instances of a party to
insist upon performance of any of the terms, covenants or conditions of this Agreement, to exercise
any right or privilege conferred in this Agreement, or the waiver by said party of any breach of
any of the terms, covenants or conditions of this Agreement, shall not be construed as a subsequent
waiver of any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver had occurred. No
waiver shall be effective unless it is in writing and signed by an authorized representative of the
waiving party.

-43-

 

     Section 11.08. Counterparts. This Agreement shall become binding when any one or more
counterparts hereof, individually or taken together, shall bear the signatures of each of the
parties hereto. This Agreement may be executed in any number of counterparts, each of which shall
be deemed an original as against the party whose signature appears thereon, but all of which taken
together shall constitute but one and the same instrument. Each party may execute this Agreement
on a facsimile of the Agreement. In addition, facsimile signatures of authorized signatories of
either party shall be valid and binding and delivery of a facsimile signature by either party shall
constitute due execution and delivery of this Agreement.

     Section 11.09. Interpretation. The article and section headings contained in this
Agreement are for convenience of reference only and shall not affect the meaning or interpretation
of this Agreement. As used in this Agreement, any reference to the masculine, feminine or neuter
gender shall include all genders, the plural shall include the singular, and singular shall include
the plural. Unless the context otherwise requires, the term “party” when used herein means a party
hereto. References herein to a party or other Person include their respective successors and
assigns. The words “include,” “includes” and “including” when used herein shall be deemed to be
followed by the phrase “without limitation” unless such phrase otherwise appears. Unless the
context otherwise requires, references herein to Articles, Sections, Exhibits and Schedules shall
be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement.
Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of
similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any
particular Article, Section or provision hereof. With regard to each and every term and condition
of this Agreement, the parties understand and agree that the same have or has been mutually
negotiated, prepared and drafted, and that if at any time the parties desire or are required to
interpret or construe any such term or condition or any agreement or instrument subject thereto, no
consideration shall be given to the issue of which party actually prepared, drafted or requested
any term or condition of this Agreement.

     Section 11.10. Governing Law. This Agreement and any claims, disputes or causes of
action relating to or arising out of this Agreement shall be construed in accordance with and
governed by the substantive laws of the State of New York, without giving effect to the conflict of
laws principles thereof.

     Section 11.11. Unenforceability. If any provisions of this Agreement are determined
to be invalid or unenforceable in any jurisdiction, such provisions shall be ineffective to the
extent of such invalidity or unenforceability in such jurisdiction, without rendering invalid or
unenforceable the remaining provisions hereof or affecting the validity or enforceability of any of
such provisions of this Agreement in any other jurisdiction. The parties will use their best
efforts to substitute the invalid or unenforceable provision with a valid and enforceable one which
conforms, as nearly as possible, with the original intent of the parties.

-44-

 

     Section 11.12. Entire Agreement.

          (a) This Agreement, together with the other Transaction Documents, embodies the entire
agreement and understanding between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, commitments, arrangements, negotiations or understandings,
whether oral or written, between the parties hereto and their respective Affiliates with respect
thereto including the Development Agreement and the Confidentiality Agreement. There are no
agreements, covenants or undertakings with respect to the subject matter of this Agreement other
than those expressly set forth or referred to herein and no representations or warranties of any
kind or nature whatsoever, express or implied, are made or shall be deemed to be made herein by the
parties hereto, except those expressly made in this Agreement and the other Transaction Documents.

          (b) THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NO REPRESENTATION, WARRANTY, PROMISE,
INDUCEMENT, UNDERSTANDING, COVENANT OR AGREEMENT HAS BEEN MADE OR RELIED UPON BY EITHER PARTY
HERETO OTHER THAN THOSE EXPRESSLY SET FORTH IN THE TRANSACTION DOCUMENTS. WITHOUT LIMITING THE
GENERALITY OF THE DISCLAIMER SET FORTH IN THE PRECEDING SENTENCE, (I) NEITHER NOVEN NOR ANY OF ITS
AFFILIATES HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATIONS OR WARRANTIES, IN ANY
PRESENTATION OR WRITTEN INFORMATION RELATING TO THE TECHNOLOGY GIVEN OR TO BE GIVEN IN CONNECTION
WITH THE CONTEMPLATED TRANSACTIONS, IN ANY FILING MADE OR TO BE MADE BY OR ON BEHALF OF NOVEN OR
ANY OF ITS AFFILIATES WITH ANY GOVERNMENTAL AUTHORITY OR REGULATORY AUTHORITY, AND NO STATEMENT
MADE IN ANY SUCH PRESENTATION OR WRITTEN MATERIALS, MADE IN ANY SUCH FILING OR CONTAINED IN ANY
SUCH OTHER INFORMATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE, AND
(II) NOVEN EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES, INCLUDING WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE AND WARRANTIES OF MERCHANTABILITY. P&GP ACKNOWLEDGES THAT NOVEN HAS INFORMED IT
THAT NO PERSON HAS BEEN AUTHORIZED BY NOVEN OR ANY OF ITS AFFILIATES TO MAKE ANY REPRESENTATION OR
WARRANTY IN RESPECT OF THE TECHNOLOGY. EACH OF P&GP AND NOVEN ACKNOWLEDGES THAT THE OTHER PARTY
HAS INFORMED IT THAT NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATION OR WARRANTY ON ITS
BEHALF IN CONNECTION WITH THE CONTEMPLATED TRANSACTIONS, UNLESS IN WRITING AND CONTAINED IN THIS
AGREEMENT OR IN ANY OF THE TRANSACTION DOCUMENTS TO WHICH P&GP OR NOVEN IS A PARTY.

-45-

 

     Section 11.13. Expenses. Except as expressly set forth herein, each party hereto
shall bear all fees and expenses incurred by such party in connection with, relating to or arising
out of the execution, delivery and performance of this Agreement and the consummation of the
Contemplated Transactions, including attorneys’, accountants’ and other professional fees and
expenses.

     Section 11.14. Force Majeure. If the performance of this Agreement or any obligation
hereunder (except the payment of money) by either party is prevented or hindered, by reason of any
cause beyond the reasonable control of the affected party, including fire, flood, riot, war,
explosions, acts of God (including hurricanes and tropical storms), acts of a public enemy, acts of
terror, labor disturbances, or any governmental action, the party so affected, upon notice to the
other party, shall be excused from such performance; provided that the party so affected
shall use diligent effort to avoid or remove such cause or causes of non-performance and shall
continue to perform hereunder with the utmost dispatch whenever such cause or causes are removed.

-46-

 

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

	 	 	 	 	 
	 	NOVEN PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Peter C. Brandt
 	 
	 	 	Name:  	Peter C. Brandt 	 
	 	 	Title:  	President, Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	PROCTER & GAMBLE PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Thomas M. Finn
 	 
	 	 	Name:  	Thomas M. Finn 	 
	 	 	Title:  	President, Global Health Care 	 
	 

-47-EX-10.2

Exhibit 10.2

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

EXECUTION COPY

 

 

 

SUPPLY AGREEMENT

between

Noven Pharmaceuticals, Inc.

and

P&G Pharmaceuticals, Inc.

and

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

 

 

 

 

 

	 	 	 	 	 	 	 
	Article 1.

	 	Definitions

	 	 	1	 
	 
	 	 	 	 	 	 
	Article 2.

	 	Supply of Product

	 	 	10	 
	 
	 	 	 	 	 	 
	2.01

	 	Obligation
	 	 	10	 
	2.02

	 	Exclusivity of Supply
	 	 	11	 
	2.03

	 	Shelf Life
	 	 	11	 
	2.04

	 	Regulatory Compliance
	 	 	12	 
	2.05

	 	Child Labor and Forced Labor
	 	 	12	 
	2.06

	 	Shipment
	 	 	13	 
	2.07

	 	Environmental Standards
	 	 	15	 
	2.08

	 	Documentation
	 	 	15	 
	2.09

	 	Supply Of Materials
	 	 	15	 
	2.10

	 	Supply Assurance/Business Continuity Planning
	 	 	17	 
	2.11

	 	Funding for Purchase of Equipment
	 	 	17	 
	2.12

	 	Notification of Supply Issues
	 	 	19	 
	2.13

	 	Reporting Requirements
	 	 	19	 
	2.14

	 	Labeling and Packaging of Supplied Products
	 	 	19	 
	 
	 	 	 	 	 	 
	Article 3.

	 	Quality Control and Testing

	 	 	19	 
	 
	 	 	 	 	 	 
	3.01

	 	Quality Assurance Agreement
	 	 	19	 
	3.02

	 	Testing and Certificate of Analysis
	 	 	20	 
	3.03

	 	Preservation Samples/Retained Samples
	 	 	20	 
	3.04

	 	Quality Disputes; Acceptance and Return
	 	 	20	 
	3.05

	 	Stability Testing
	 	 	23	 
	3.06

	 	Customer Complaints
	 	 	23	 
	3.07

	 	Inquiries and Requests for Inspection
	 	 	24	 
	3.08

	 	Inspections
	 	 	24	 
	3.09

	 	Validations
	 	 	24	 
	3.10

	 	Cross Contamination Risk
	 	 	24	 
	3.11

	 	Quality Assurance Key Elements
	 	 	24	 
	 
	 	 	 	 	 	 
	Article 4.

	 	Forecasts and Ordering

	 	 	25	 
	 
	 	 	 	 	 	 
	4.01

	 	Forecasting
	 	 	25	 
	4.02

	 	Launch Order
	 	 	27	 
	4.03

	 	Firm Orders
	 	 	27	 
	4.04

	 	Batch Size
	 	 	27	 
	4.05

	 	Annual Installed Capacity
	 	 	29	 
	4.06

	 	Customer Service
	 	 	29	 
	4.07

	 	Shortfalls
	 	 	31	 
	4.08

	 	Failure to Deliver
	 	 	32	 
	4.09

	 	Notice of Delay
	 	 	32	 
	4.10

	 	Technical Assistance
	 	 	32	 
	4.11

	 	Site Level Execution Agreement
	 	 	32	 

ii

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Article 5.

	 	Prices and Payment Terms

	 	 	33	 
	 
	 	 	 	 	 	 
	5.01

	 	Price
	 	 	33	 
	5.02

	 	Invoicing
	 	 	33	 
	5.03

	 	Payment Terms
	 	 	33	 
	5.04

	 	Adjustment Pursuant to Producer Price Index
	 	 	33	 
	5.05

	 	Adjustment for Low Volume
	 	 	34	 
	5.06

	 	Unprofitable Supply Terms
	 	 	35	 
	5.07

	 	Adjustment for Modification of Specifications
	 	 	36	 
	5.08

	 	Transfer Taxes
	 	 	39	 
	5.09

	 	Continuous Improvement
	 	 	40	 
	5.10

	 	Right to Audit
	 	 	40	 
	 
	 	 	 	 	 	 
	Article 6.

	 	Change Management

	 	 	42	 
	 
	 	 	 	 	 	 
	Article 7.

	 	Authorizations

	 	 	43	 
	 
	 	 	 	 	 	 
	Article 8.

	 	Liabilities

	 	 	43	 
	 
	 	 	 	 	 	 
	8.01

	 	Warranties; Disclaimer
	 	 	43	 
	8.02

	 	NOVEN Indemnity
	 	 	44	 
	8.03

	 	P&GP Indemnity
	 	 	44	 
	8.04

	 	Certain Limitations
	 	 	45	 
	8.05

	 	Disclaimer of Incidental Damages
	 	 	46	 
	8.06

	 	Product Recalls
	 	 	46	 
	8.07

	 	Notice and Opportunity to Defend
	 	 	46	 
	 
	 	 	 	 	 	 
	Article 9.

	 	Term and Termination

	 	 	47	 
	 
	 	 	 	 	 	 
	9.01

	 	Term
	 	 	47	 
	9.02

	 	Certain Termination Events
	 	 	47	 
	9.03

	 	Consequences of Termination
	 	 	50	 
	9.04

	 	Survival
	 	 	51	 
	 
	 	 	 	 	 	 
	Article 10.

	 	Confidentiality, Public, Announcements, Intellectual Property

	 	 	51	 
	 
	 	 	 	 	 	 
	10.01

	 	Confidentiality
	 	 	51	 
	10.02

	 	Public Announcements
	 	 	54	 
	10.03

	 	License to Products
	 	 	54	 
	 
	 	 	 	 	 	 
	Article 11.

	 	Alternative Suppliers

	 	 	55	 
	 
	 	 	 	 	 	 
	11.01

	 	Qualification of Alternative Suppliers
	 	 	55	 
	11.02

	 	Reasonable Assistance; Limited License
	 	 	56	 
	11.03

	 	Royalties
	 	 	58	 
	 
	 	 	 	 	 	 
	Article 12.

	 	Steering Committee

	 	 	58	 
	 
	 	 	 	 	 	 
	Article 13.

	 	General Provisions

	 	 	59	 
	 
	 	 	 	 	 	 
	13.01

	 	Force Majeure
	 	 	59	 
	13.02

	 	Notices
	 	 	60	 
	13.03

	 	Governing Law
	 	 	60	 
	13.04

	 	Non-Waiver of Rights
	 	 	60	 
	13.05

	 	Entire Agreement — Modifications
	 	 	61	 
	13.06

	 	Agreement Precedence
	 	 	61	 
	13.07

	 	Assignment
	 	 	61	 
	13.08

	 	Partial Invalidity
	 	 	62	 
	13.09

	 	Contractor Status
	 	 	62	 
	13.10

	 	Disputes
	 	 	63	 
	13.11

	 	Audits
	 	 	64	 
	13.12

	 	Time Periods
	 	 	64	 
	13.13.

	 	Expenses
	 	 	64	 
	13.14

	 	Binding Effect; No Third Party Beneficiaries
	 	 	65	 
	13.15

	 	Interpretation
	 	 	65	 
	13.16

	 	Counterparts
	 	 	65	 

iii

 

SUPPLY AGREEMENT

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

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

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

Background

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

	Article 1. 	 	Definitions

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

1

 

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

2

 

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

3

 

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

4

 

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

5

 

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

6

 

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

7

 

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

8

 

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

9

 

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

	Article 2.	 	Supply of Product

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

10

 

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

11

 

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

12

 

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

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

13

 

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

14

 

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

15

 

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

16

 

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

17

 

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

18

 

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

	 	 	Article 3. Quality Control and Testing

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

19

 

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

20

 

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

21

 

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

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

22

 

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

23

 

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

24

 

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

	 	 	Article 4. Forecasts and Ordering

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

25

 

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

26

 

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

27

 

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

28

 

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

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

29

 

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

30

 

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

31

 

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

32

 

	 	 	Article 5. Prices and Payment Terms

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

33

 

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

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

35

 

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

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

36

 

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

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

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

37

 

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

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

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

38

 

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

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

39

 

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

40

 

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

41

 

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

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

42

 

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

	Article 8.	 	Liabilities.

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

43

 

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

44

 

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

45

 

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

46

 

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

	 	 	Article 9. Term and Termination.

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

47

 

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

48

 

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

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

50

 

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

	 	 	Article 10. Confidentiality, Public Announcements, Intellectual Property.

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

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

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

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

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

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

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

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	Article 11.	 	Alternate Suppliers.

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

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

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

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

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

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

	Article 13.	 	General Provisions.

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

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

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

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

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

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

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

65

 

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

	 	 	 	 	 	 	 
	NOVEN PHARMACEUTICALS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	(NOVEN)	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Richard P. Gilbert	 	 	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Vice President — Operations	 	 	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	August 14, 2008	 	 	 	 
	 

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

	 	/s/ Woody Keown
	 	Form	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Director, Purchasing
	 	Finance	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	August 14, 2008
	 	Execution	 	 
	 

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

	 	/s/ P. Slater
	 	Form	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Purchasing Director
	 	Finance	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	August 13, 2008
	 	Execution	 	 
	 

	 	 
	 	 	 	 

66

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