Document:

EX-10.1 Letter Agreement between Shire and Noven

 

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 and Exchange Act of 1934, as amended.
REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.

June 15, 2004

Shire US Inc.

One Riverfront Place

Newport, Kentucky 41071

Attention: Gregory Flexter

     Re: Development of Amphetamine Transdermal Delivery System

Dear Mr. Flexter:

     This shall confirm the agreement of Noven Pharmaceuticals, Inc. (“Noven”) and Shire US Inc.
and/or its affiliate, Shire LLC (Shire US Inc. and Shire LLC collectively referred to as “Shire”)
to work together on a project (the “Project”) to develop an Amphetamine Transdermal Delivery System
(the “Product”). As we have discussed, the terms upon which the parties have agreed to proceed are
as follows:

     1. While subject to change by mutual agreement of the parties, * * *.

     2. As consideration for the work to be performed by Noven hereunder, Shire shall make the
following payments to Noven:

	 	a.	 	$250,000 upon * * *;
	 
	 	b.	 	$250,000 upon * * *;
	 
	 	c.	 	$1,125,000 upon * * *;
	 
	 	d.	 	$1,125,000.00 upon * * *;
	 
	 	e.	 	$1,125,000.00 upon * * *;
	 
	 	f.	 	$1,125,000.00 upon * * *.

     3. Each party shall conduct all tests, studies and other activities described in the Plan in a
good scientific manner and in compliance in all material respects with all requirements of
applicable laws, rules and regulations, including but not limited to cGMP and cGLP.

 

 

     4. Noven shall use reasonable efforts to complete the Plan * * *. Both parties shall use
reasonable efforts to * * *.

     5. Each party agrees to keep the other informed as to (i) the status of the Plan, (ii) all
available information reasonably requested by the other party relating to work completed or to be
performed under the Plan and (iii) the results of pending and completed clinical studies. However,
Noven shall not be required to disclose information which reveals materials, components,
composition or construction of the transdermal system investigated or tested by Noven; provided
that such information is not related to or being used in performance of the Plan.

     6. Within * * *, Noven and Shire shall enter into a definitive license agreement (“Product
License”), which shall include * * * and other customary terms and conditions, wherein Noven grants
Shire a license to exclusively develop the Product with Noven under Noven Intellectual Property
Rights and Noven Arising Intellectual Property. If the parties jointly (through their respective
employees, agents or consultants) make or conceive any inventions or discoveries or other
intellectual property in the course of the work to be performed pursuant to the Project, the
ownership of such inventions or discoveries or other intellectual property and any patent
applications and patents obtained thereon shall be governed by Section 13 below. * * *.

     7. Either party may terminate the Project upon * * * written notice to the other in the event
of a material breach by the other party of any of its obligations hereunder and failure to cure
such breach within the * * * notice period. Shire may terminate the Project at any time without
cause upon * * * written notice to Noven. Upon termination of the Project for any reason, the
rights and obligations of both Parties shall cease immediately and no further payments shall be due
under Section 2 above unless the activity upon which payment is based was (i) completed (with
respect to payments due under Sections 2(a) through 2(e) above) prior to such termination or (ii)
commenced (with respect to payments due under Section 2(f) above) prior to receipt of notice of
termination. Sections 5, 6, 8, 9, 10, 11, 13 and 14 shall survive termination of the Project.
Nothing in this Paragraph 7 shall limit the right of either party to seek to recover its actual
damages resulting from a material breach of this Agreement by the other party.

     8. All disclosures relating to the Project shall be subject to the confidentiality provisions
of the Transaction Agreement by and among Noven, Shire and Shire Pharmaceuticals Group PLC, dated
as of February 26, 2003 (the “Transaction Agreement”); provided that the term “Agreement” as used
in the confidentiality section of the Transaction Agreement shall mean this letter Agreement and
refer to the Confidential Information disclosed pursuant hereto. * * *

     9. It is understood that the Parties may wish to publish or otherwise disclose information
generated under 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). Such disclosures may be made to a third party upon consent by the
other party, such consent not to be unreasonably withheld. No such disclosure shall be made to a
third party until a patent application has been filed adequately describing and claiming any
invention believed to be patentable embodied in such disclosure. A party wishing to make any such
disclosure shall submit a complete written draft of the disclosure to the other party at least *

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* * prior to submission for publication of such draft, or an abstract of a proposed oral
disclosure at least * * * 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.

     10. Shire agrees to defend, indemnify and hold harmless Noven and its officers, directors and
employees from and against any and all liability, damage, loss, cost or expense (including
reasonable attorney’s fees and expenses) arising out of or resulting from any third party claims
made or suits brought against such parties which arise or result from activities conducted by Shire
under the Plan; provided, however, Shire shall not be obligated to defend, indemnify and hold
harmless Noven from or against any liability, damage, loss, cost or expense which results from the
negligence or other wrongdoing of Noven.

     11. Noven agrees to defend, indemnify and hold harmless Shire and its officers, directors and
employees from and against any and all liability, damage, loss, cost or expense (including
reasonable attorney’s fees and expenses) arising out of or resulting from any third party claims
made or suits brought against such parties which arise or result from activities conducted by Noven
under the Plan; provided, however, Noven shall not be obligated to defend, indemnify and hold
harmless Shire from or against any liability, damage, loss, cost or expense which results from the
negligence or other wrongdoing of Shire.

     12. Each party represents that neither it nor any of its employees has been debarred or is
subject to debarment proceedings by the FDA. If any such proceedings are commenced against a party
hereto (or any of its employees) during the term of this Agreement, such party will notify the
other party in writing within five business days of the commencement of such proceedings and will
keep the other party informed, on a regular basis, of the status of such proceedings. Neither
Noven nor Shire will employ any persons or entities that have been debarred, or that are subject to
debarment proceedings, for any aspect of the development, manufacturing or testing of the Product.

     13. (i) Each party will retain and own its respective intellectual property existing prior to
the date of this Agreement (respectively, “Shire Intellectual Property” and “Noven Intellectual
Property”).

          (ii) * * *;

          (iii) Noven will take responsibility for the preparation, filing, prosecution, and maintenance
of any and all patent applications or patents relating to Noven Intellectual Property and Noven
Arising Intellectual Property, together with any and all reissues, modification by means of
certificates of correction or reexamination certificates, extensions and patents of addition,
continuations, divisionals, and continuations-in-parts related to such patents and patent
applications (“Noven Patents”). Shire will take responsibility for the preparation, filing,
prosecution, and maintenance of any and all patent applications or patents relating to Shire
Intellectual Property and Shire Arising Intellectual Property, together with any and all reissues,
modification by means of certificates of correction or reexamination certificates, extensions
and patents of addition, continuations, divisionals, and continuations-in-parts related to such
patents and patent applications (“Shire Patents”).

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          (iv) Noven and Shire shall immediately create a Patent Steering Committee comprised of at
least one, and not more than two, participants from Noven and at least one, and not more than two,
participants from Shire to oversee the Arising Intellectual Property that pertains to the Product.
The Patent Steering Committee shall meet at least three times a year. The Patent Steering
Committee shall agree on patent strategy including claim and patent application structure, third
party issues, and prosecution. In the rare event that the Patent Steering Committee cannot agree
on a material issue of patent strategy, the issue will be submitted to the Chief Executive Officers
or their designees of Noven and Shire to together reach agreement. In the event that no agreement
is reached, Noven shall make the final decision if it pertains to Noven Arising Intellectual
Property and Shire shall make the final decision if it pertains to Shire Arising Intellectual
Property.

     14. Except as otherwise set forth herein, no right or license is granted under this Agreement
by either Party to the other Party except as may be necessary to allow the other party to perform
its obligations under the Plan. For the avoidance of doubt, all materials and inventions,
technologies, trade secrets, know-how, Confidential Information and other intellectual property and
proprietary rights of the other party that are provided to a party by the other party in connection
with the Project or otherwise hereunder shall, as between the parties, remain the property of the
providing party and the receiving party shall not acquire any right, title or interest therein or
thereto.

     15. Neither Shire nor Noven shall be liable for failure of or delay in performing obligations
set forth in this Agreement, and neither shall be deemed in breach of its obligations, if such
failure or delay is due to natural disasters or any causes reasonably beyond the control of Shire
or Noven.

     16. Both Shire and Noven shall comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of any government authority in handling or disposing
of the compounds to be studied hereunder.

     17. The terms of this letter shall not be amended, modified, varied or supplemented except in
writing signed by the duly authorized representatives of the parties.

     18. Each party will provide a project manager, who will be the principal contact for
communication between the parties.

     19. 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. Neither party shall have the
authority to obligate the other party in any respect, and neither party shall hold itself out as
having any such authority.

     20. If any provision of this letter shall be found by any court or administrative body of
competent jurisdiction to be invalid or unenforceable, the invalidity or unenforceability of that
provision shall not affect the other provisions of this letter and all provisions not affected
by the invalidity or unenforceability shall remain in full force and effect.

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     21. No party shall have a right to assign this Agreement or delegate any of its rights,
interests, duties or obligations hereunder without the prior written consent of the other party
(which consent may be granted in such party’s sole discretion); provided, however,
that any party may assign this Agreement to any of its affiliates without the prior written consent
of the other party; and provided, further that no such assignment of this Agreement
shall relieve the assignor of any of its obligations or liabilities under this Agreement.
Notwithstanding the foregoing, any party may assign this Agreement without the other parties’ 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
parties.

     22. Except as required by law or applicable stock exchange rules, neither party shall, without
the prior written consent of the other party, disclose to any other person or entity (including,
without limitation, by issuing a press release or otherwise making any public statement) the fact
that confidential information has been exchanged between Shire and Noven, the fact that this letter
has been executed and delivered, the fact that the Project or discussions or negotiations regarding
the Project are taking place, or any of the terms, conditions or other facts with respect thereto.

     23. This letter, together with the Transaction Agreement, represents the entire agreement
between the parties relating to the Project and the Plan. Neither party shall have obligations to
the other party hereunder other than as expressly set forth in this letter and the Transaction
Agreement.

     24. Any disputes arising hereunder shall be resolved pursuant to the dispute resolution
provisions of the Transaction Agreement.

     25. This letter shall be governed by, and construed in accordance with, the laws of the State
of Delaware, without giving effect to the choice of law provisions thereof.

     If you are in agreement with the foregoing arrangement, please so indicate by signing where
indicated below and return an executed copy to me.

	 	 	 	 	 
	 	Sincerely,

NOVEN PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Robert C. Strauss
 	 
	 	 	Robert C. Strauss 	 
	 	 	President, Chief Executive Officer and Chairman 	 
	 

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	 	Accepted and Agreed

SHIRE US INC.

 	 
	 	By:  	/s/ Gregory Flexter
 	 
	 	 	Gregory Flexter 	 
	 	 	Title:  	EVP and GM, North America
 	 
	 	 	Date:  	6-15-04 	 
	 

-6-EX-10.2 Amendment dated May 3, 2007, to Letter Agr

 

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 and Exchange Act of 1934, as amended.
REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.

May 3, 2007

Shire Pharmaceuticals Ireland Limited

6 Fitzwilliam Square

Dublin 2, Ireland

	 	 	 
	Re:

	 	Letter Agreement dated as of June 15, 2004 by and between Noven
	 

	 	Pharmaceuticals, Inc. (“Noven”) and Shire US Inc. (“Shire US”) relating
	 

	 	to the Development of the Amphetamine Transdermal Delivery System
	 

	 	(the “Agreement”)

Ladies and Gentlemen:

     This letter agreement (the “Amendment”) supplements and amends the Agreement between Noven and
Shire US relating to the development of an amphetamine transdermal delivery system (the “Product”),
such Agreement having been assigned by Shire US to and assumed by its affiliate Shire
Pharmaceuticals Ireland Limited (“Shire Ireland” and, together with Shire US, “Shire”) pursuant to
its terms and that certain Assignment and Assumption Agreement between Shire US and Shire Ireland
dated as of May 25, 2006. This Amendment supersedes and replaces the letter agreement between the
parties dated July 20, 2006.

     This Amendment and the Agreement relate to the transaction agreement dated as of February 26,
2003 by and among Noven, Shire US and Shire Pharmaceuticals Group plc (the “Transaction
Agreement”), such Transaction Agreement having been assigned by Shire US to and assumed by Shire
Ireland pursuant to its terms and that certain Assignment and Assumption Agreement between Shire US
and Shire Ireland dated as of April 7, 2003.

     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, and intending to be legally bound, Noven and Shire Ireland hereby agree as follows:

	1.	 	Capitalized Terms. Capitalized terms used and not defined in this Amendment shall
have the meanings set forth in the Agreement.

	2.	 	Satisfaction of Certain Obligations. Noven acknowledges and agrees that Shire has
paid to Noven an aggregate sum of five hundred thousand dollars ($500,000) as consideration
for work performed by Noven pursuant to and in full and complete satisfaction of Shire’s
payment obligations under Sections 2(a) and 2(b) of the Agreement.

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	3.	 	Amendments to the Plan. Section 2 of the Agreement * * * attached thereto are hereby
amended as follows:

	 	3.1.	 	From the date of this Amendment, Noven agrees that it is solely responsible for
the Plan, the Product and the Project, including, without limitation, and for
illustrative purposes only, * * *, Shire’s obligation * * * under Section 2(c) of the
Agreement, and Shire’s obligation * * * under Section 2(d) of the Agreement * * *.
Noven agrees that it shall proceed with the Project solely of its own accord and that
Shire is released of any and all obligations relating to the Plan, the Product and the
Project under the Agreement. Notwithstanding the foregoing, Noven shall provide to
Shire any and all documents, correspondence, and plans for or communications with FDA,
and Shire shall have the right to review, modify and approve all such documents,
correspondence and communications prior to their use or occurrence and to participate
in all meetings and other communications with FDA, provided that such rights shall
cease to apply if Shire does not exercise its Buy-Back Right in accordance with Section
3.3.
	 
	 	3.2.	 	Noven agrees that it shall be solely responsible for any and all activities
necessary * * * described in Section 2(d) of the Agreement * * *, including any and all
costs for activities that are determined to be necessary * * *.
	 
	 	3.3.	 	Shire shall have the right (the “Buy-Back Right”), in its sole discretion, to a
one-time election to resume its exclusive participation with Noven in the development
of the Product upon giving written notice of such election to Noven * * * of the later
of (a) * * * and (b) * * *. In the event that Shire exercises its Buy-Back Right,
Shire shall pay to Noven, on a date that is * * * of Noven’s receipt of Shire’s notice
of exercise of the Buy-Back Right (the “Payment Date”), the following payments:

	 	3.3.1.	 	two million five hundred thousand dollars ($2,500,000); plus
	 
	 	3.3.2.	 	three million three hundred seventy five dollars ($3,375,000), such amount
representing the aggregate sum of the milestone payments set forth in Sections
2(c)-2(e) of the Agreement.

	 	3.4.	 	In the event that Shire exercises its Buy-Back Right, Shire and Noven agree
that (a) Section 2(f) of the Agreement, including Shire’s payment obligation
thereunder, shall remain unchanged; (b) * * *; and (c) Shire shall assume
responsibility for the obligations relating to the Plan, Product and the Project from
and after the Payment Date as set forth in the Agreement.
	 
	 	3.5.	 	In the event that Shire does not exercise its Buy-Back Right as set forth in
this Amendment Section 3, Shire shall be deemed to have terminated the Agreement
without cause and with notice given pursuant to Section 7 of the Agreement and the
terms of that provision shall apply.

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     4. Amendments relating to the Product License Agreement.

	 	4.1.	 	Section 6 of the Agreement is hereby amended and restated in its entirety as
follows:
	 
	 	 	 	“In the event that Shire exercises its Buy-Back Right, Shire and Noven will
negotiate in good faith a definitive license agreement (“Product License”), which
shall include * * * and other customary terms and conditions, wherein Noven grants
Shire a license to exclusively develop the Product with Noven under Noven
Intellectual Property Rights and Noven Arising Intellectual Property. If the
parties jointly (through their respective employees, agents or consultants) make or
conceive any inventions or discoveries or other intellectual property in the course
of the work to be performed pursuant to the Project, the ownership of such
inventions or discoveries or other intellectual property and any patent applications
and patents obtained thereon shall be governed by Section 13 below. * * *”
	 
	 	4.2.	 	* * *

	 	4.2.1.	 	* * *.
	 
	 	4.2.2.	 	* * *.

	5.	 	No Further Modification. The parties acknowledge and agree that this Amendment
constitutes an amendment to the Agreement in accordance with the terms and conditions hereof
and thereof. Except as specifically amended hereby, the Agreement shall remain in full force
and effect without any further amendments or modifications.
	 
	6.	 	Shire Payment. Within * * * of the date of this Amendment, Shire shall pay to Noven
one million dollars ($1,000,000) to an account specified in advance by Noven.
	 
	7.	 	Miscellaneous.

	 	7.1.	 	This Amendment shall be construed in accordance with and shall be governed by
the substantive laws of the State of Delaware, without giving effect to the conflict of
laws principles thereof.
	 
	 	7.2.	 	This Agreement shall become binding when any one or more counterparts hereof,
individually or in the aggregate, shall bear the signatures of the duly authorized
representatives of each of the parties hereto. This Amendment 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 one
and the same instrument. Facsimile signatures of the authorized signatories of the
parties shall constitute due execution and delivery of this Amendment.

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	 	7.3.	 	The terms of this Amendment shall not be amended, modified, varied or
supplemented except in writing signed by the duly authorized representatives of the
parties.
	 
	 	7.4.	 	No party shall have a right to assign their Agreement or delegate any of its
rights, interests, duties or obligations hereunder without the prior written consent of
the other party (which consent may be granted in such part’s sole discretion);
provided, however, that any party may assign this Agreement to any of its affiliates
without the prior written consent of the other party; and provided, further that no
such assignment of this Agreement shall relieve the assignor of any of its obligations
or liabilities under this Agreement. Notwithstanding the foregoing, any party may
assign this Agreement without the other parties’ 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 parties.
This Amendment shall inure to the benefit of and be binding upon the parties hereto and
their successors and permitted assigns.
	 
	 	7.5.	 	If any provision of this Amendment shall be found by any court or
administrative body of competent jurisdiction to be invalid or unenforceable, the
invalidity or unenforceability of that provision shall not affect the other provisions
of this Amendment or the Agreement and all provisions hereof and thereof not affected
by the invalidity or unenforceability shall remain in full force and effect.
	 
	 	7.6.	 	This Amendment, together with the Agreement and the Transaction Agreement,
represents the entire agreement between the parties relating to the subject matter
hereof. Neither party shall have any obligation to the other party hereunder other
than as expressly set forth in this Amendment, the Agreement and the Transaction
Agreement.

     If you are in agreement with the terms and conditions set forth herein, please so indicate by
signing where indicated below and return an executed copy to me.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ Robert C. Strauss
 	 
	 	 	 
	 	Robert C. Strauss

President, CEO and Chairman 	 
	 

Acknowledged and agreed this

4th day of May, 2007:

SHIRE PHARMACEUTICALS IRELAND LIMITED

	 	 	 	 	 
	 	 	 
	/s/ Michael Cola
 	 
	By:  	 	 
	Title:  	 	 
	 

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