<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1998
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10/A
AMENDMENT NO. 3
TO REGISTRATION STATEMENT ON FORM 10
------------------------
GENERAL FORM FOR REGISTRATION OF
SECURITIES PURSUANT TO SECTION 12(B) OR 12(G) OF
THE SECURITIES EXCHANGE ACT OF 1934
------------------------
PENWEST PHARMACEUTICALS CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C>
WASHINGTON 91-1513032
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
<TABLE>
<S> <C>
2981 ROUTE 22, 12563-9970
PATTERSON, NY (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(914) 878-3414
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NONE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $.001 PER SHARE
PREFERRED STOCK PURCHASE RIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN INFORMATION STATEMENT
ITEM 15. FINANCIAL STATEMENT SCHEDULES AND EXHIBITS.
(a) Financial Statements Schedules:
Schedule II -- Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.
(b) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <C> <S>
2.1** -- Form of Separation and Distribution Agreement to be entered
into between Registrant and Penford Corporation ("Penford").
3.1* -- Amended and Restated Articles of Incorporation.
3.2** -- Articles of Amendment to the Amended and Restated Articles
of Incorporation filed on June 19, 1998.
3.3* -- Amended and Restated Bylaws of the Registrant.
3.4** -- Designation of Rights and Preference of Series A Junior
Participating Preferred Stock of the Company filed on July
17, 1998.
4.1* -- Specimen certificate representing the Common Stock.
4.2** -- Form of Rights Agreement dated as of July 27, 1998 between
the Company and the Rights Agent.
8.1** -- Tax Private Letter Revenue Ruling dated April 15, 1998
issued by the Internal Revenue Service, as supplemented on
July 13, 1998.
+10.1 -- Product Development and Supply Agreement dated August 17,
1994 by and between the Registrant and Mylan Pharmaceuticals
Inc. ("Mylan").
+10.2 -- Product Development and Supply Agreement dated August 3,
1995 by and between the Registrant and Mylan.
+10.3 -- Product Development and Supply Agreement dated March 22,
1996 by and between the Registrant and Mylan.
+10.4* -- Sales and Distribution Agreement dated January 3, 1997 by
and between the Registrant and Mylan.
10.5 -- [Intentionally Omitted]
+10.6* -- Product Development and Supply Agreement dated August 30,
1996 by and between the Registrant and Kremers Urban
Development Company.
+10.7* -- Product Development, License and Supply Agreement dated
February 28, 1997 by and between the Registrant and Sanofi
Winthrop International S.A., as amended.
+10.8* -- Agreement dated May 26, 1995 by and between the Registrant
and Leiras OY.
+10.9* -- Agreement dated July 27, 1992 by and between the Registrant
and Leiras OY.
+10.10* -- Strategic Alliance Agreement dated as of September 17, 1997
by and between the Registrant and Endo Pharmaceuticals Inc.
10.11* -- 1997 Equity Incentive Plan.
10.12* -- 1997 Employee Stock Purchase Plan.
10.13** -- 1998 Spinoff Option Plan.
10.14** -- Form of Excipient Supply Agreement to be entered into
between the Registrant and Penford.
10.15** -- Form of Services Agreement to be entered into between the
Registrant and Penford.
10.16** -- Form of Tax Allocation Agreement to be entered into between
the Registrant and Penford.
</TABLE>
II-1
<PAGE> 3
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <C> <S>
10.17** -- Form of Employee Benefits Agreement to be entered into
between the Registrant and Penford.
10.18* -- Recognition and Incentive Agreement dated as of May 14, 1990
between the Registrant and Anand Baichwal, as amended.
+10.19** -- License Agreement dated December 17, 1997 between Synthelabo
and the Registrant.
+10.20** -- Supply Agreement dated December 17, 1997 by and between
Synthelabo and the Registrant.
10.21** -- Revolving Term Credit Facility dated July 2, 1998 by and
between the Company and the Bank of Nova Scotia.
21.1* -- Subsidiaries.
27.1** -- Financial Data Schedule (December 31, 1997).
27.2** -- Financial Data Schedule (March 31, 1998).
</TABLE>
- ---------------
* Incorporated by reference to Exhibits to the Registrant's Registration
Statement on Form S-1 (File No. 333-38389).
** Previously filed.
+ Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
II-2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
PENWEST PHARMACEUTICALS CO.
By: /s/ TOD R. HAMACHEK
------------------------------------
Tod R. Hamachek
Chairman of the Board and
Chief Executive Officer
Date: July 31, 1998
II-3
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <C> <S>
2.1** -- Form of Separation and Distribution Agreement to be entered
into between Registrant and Penford Corporation ("Penford").
3.1* -- Amended and Restated Articles of Incorporation.
3.2** -- Articles of Amendment to the Amended and Restated Articles
of Incorporation filed on June 19, 1998.
3.3* -- Amended and Restated Bylaws of the Registrant.
3.4** -- Designation of Rights and Preference of Series A Junior
Participating Preferred Stock of the Company filed on July
17, 1998.
4.1* -- Specimen certificate representing the Common Stock.
4.2** -- Form of Rights Agreement dated as of July 27, 1998 between
the Company and the Rights Agent.
8.1** -- Tax Private Letter Revenue Ruling dated April 15, 1998
issued by the Internal Revenue Service, as supplemented on
July 13, 1998.
+10.1 -- Product Development and Supply Agreement dated August 17,
1994 by and between the Registrant and Mylan Pharmaceuticals
Inc. ("Mylan").
+10.2 -- Product Development and Supply Agreement dated August 3,
1995 by and between the Registrant and Mylan.
+10.3 -- Product Development and Supply Agreement dated March 22,
1996 by and between the Registrant and Mylan.
+10.4* -- Sales and Distribution Agreement dated January 3, 1997 by
and between the Registrant and Mylan.
10.5 -- [Intentionally Omitted]
+10.6* -- Product Development and Supply Agreement dated August 30,
1996 by and between the Registrant and Kremers Urban
Development Company.
+10.7* -- Product Development, License and Supply Agreement dated
February 28, 1997 by and between the Registrant and Sanofi
Winthrop International S.A., as amended.
+10.8* -- Agreement dated May 26, 1995 by and between the Registrant
and Leiras OY.
+10.9* -- Agreement dated July 27, 1992 by and between the Registrant
and Leiras OY.
+10.10* -- Strategic Alliance Agreement dated as of September 17, 1997
by and between the Registrant and Endo Pharmaceuticals Inc.
10.11* -- 1997 Equity Incentive Plan.
10.12* -- 1997 Employee Stock Purchase Plan.
10.13** -- 1998 Spinoff Option Plan.
10.14** -- Form of Excipient Supply Agreement to be entered into
between the Registrant and Penford.
10.15** -- Form of Services Agreement to be entered into between the
Registrant and Penford.
10.16** -- Form of Tax Allocation Agreement to be entered into between
the Registrant and Penford.
10.17** -- Form of Employee Benefits Agreement to be entered into
between the Registrant and Penford.
10.18* -- Recognition and Incentive Agreement dated as of May 14, 1990
between the Registrant and Anand Baichwal, as amended.
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <C> <S>
+10.19** -- License Agreement dated December 17, 1997 between Synthelabo
and the Registrant.
+10.20** -- Supply Agreement dated December 17, 1997 by and between
Synthelabo and the Registrant.
10.21** -- Revolving Term Credit Facility dated July 2, 1998 by and
between the Company and the Bank of Nova Scotia.
21.1* -- Subsidiaries.
27.1** -- Financial Data Schedule (December 31, 1997).
27.2** -- Financial Data Schedule (March 31, 1998).
</TABLE>
- ---------------
* Incorporated by reference to Exhibits to the Registrant's Registration
Statement on Form S-1 (File No. 333-38389).
** Previously filed.
*** To be filed by amendment.
+ Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE> 1
Exhibit 10.1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
THIS AGREEMENT is entered into as of the 17th day of August, 1994, by
and between Penwest Ltd., a Delaware corporation ("Penwest"), and Mylan
Pharmaceuticals Inc., a West Virginia corporation ("Mylan").
A. Penwest has developed a controlled-release agent covered by
one or more patents, patent applications, know-how and other proprietary
technology, which agent Penwest markets under the name "TIMERx" ("TIMERx").
Penwest has conducted initial biostudies with respect to the potential
development of a pharmaceutical product incorporating the active ingredient
Nifedipine ("Nifedipine"), TIMERx, and one or more other excipients.
B. Mylan is interested in developing for manufacture a
pharmaceutical product incorporating Nifedipine in a solid-dosage
controlled-release delivery system for oral administration in humans.
C. The parties desire to engage in certain research, development,
and testing activities designed to determine if Penwest's TIMERx
controlled-release system can be adapted and combined with Nifedipine to make a
generic controlled-release version of Nifedipine for oral solid-dosage
administration in humans that is bioequivalent to the product currently being
marketed in the United States under the name "Procardia XL." If such activities
are successful, Mylan desires to contract for a supply of TIMERx for use in the
manufacture of such a controlled-release form of Nifedipine, and Penwest is
willing to supply the same provided that Mylan agrees to obtain all of its
requirements for controlled-release agents for Nifedipine products that are
essentially bioequivalent to "Procardia XL" in the form of TIMERx from Penwest
as provided herein.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 "AFFILIATE" shall mean any individual, partnership,
corporation, limited company, trust, or other entity of whatever nature
(hereinafter collectively referred to as "Person"), which is directly or
indirectly controlling, controlled by or under common control with another
Person, identifiable based upon the context in which the term is used. The term
"control" shall mean the possession of the power to direct or cause the
direction of the management and policies and/or the distribution of the profits
of a Person.
-1-
<PAGE> 2
1.2 "APPROVAL DATE" shall mean the date on which the Designated
Product (in any dosage strength) is first approved by the U.S. Food and Drug
Administration (herein the "FDA") for commercial sale in oral solid-dosage form
for administration in humans, pursuant to an abbreviated new drug application
("ANDA").
1.3 "APPROVED GENERIC VERSION" shall mean a drug that is
bioequivalent to the product that is currently being marketed in the United
States under the name "Procardia XL", and that has been fully approved for
commercial sale in oral solid-dosage form for administration in humans by the
FDA or, as applicable, the parallel regulatory authorities in the Non-Exclusive
Territory, and which is not branded, labelled, or marketed under the names
"Procardia" or "Procardia XL", and which is not marketed by Mylan, any of its
Affiliates, or under a license or sublicense from Mylan or its Affiliate.
1.4 "CERTIFICATION PERIOD" shall mean the period beginning on the
Submission Date and ending on the earlier of:
1.4.1 the Approval Date; or
1.4.2 the termination of this Agreement as provided herein.
1.5 "CONFIDENTIAL TECHNOLOGY" shall mean all technology and
know-how disclosed hereunder that is, at the relevant time hereunder, protected
or required to be protected by both parties hereto as confidential information
pursuant to Section hereof.
1.6 "DESIGNATED PRODUCT" shall mean the solid-dosage form of a
controlled-release pharmaceutical for oral administration in humans that
combines Nifedipine with TIMERx and other excipients and that is bioequivalent
to the product currently (as of the Effective Date) marketed in the United
States under the name "Procardia XL," as more fully described in Exhibit subject
to modifications as Penwest and Mylan may mutually agree during the Development
Period. The parties intend that the Designated Product will be developed in more
than one dosage strength, as more fully described in Exhibit .
1.7 "DEVELOPMENT PERIOD" shall mean the period from the Effective
Date through the Submission Date or the earlier termination of this Agreement as
provided herein.
1.8 "DEVELOPMENT STEPS" shall mean the activities specified in
Exhibit hereto to be undertaken by the parties during the Development Period.
-2-
<PAGE> 3
1.9 "DMF" shall mean Drug Master File as defined in 21 CFR 300
et seq., including amendments and supplements which will be filed by Penwest.
1.10 "EFFECTIVE DATE" shall mean the effective date of this
Agreement, which is the date first written above.
1.11 "EXCLUSIVE TERRITORY" shall mean the United States and its
territories and possessions.
1.12 "FORMULATED TIMERx" shall mean TIMERx and certain additives in
a formulation to be developed hereunder specifically for use in the Designated
Product.
1.13 "JOINT DEVELOPMENTS" shall mean any and all inventions,
improvements, modifications, alterations, or enhancements that are developed
jointly by Mylan or any of its Affiliates, on the one hand, and Penwest or any
of its Affiliates, on the other hand, during the term of this Agreement or
during any period of mutual cooperative development prior to the Effective Date,
together with all United States and foreign intellectual property and other
rights and interests of the parties and their respective Affiliates thereto and
therein, including without limitation patents, trade secrets, copyright, periods
of market exclusivity, and other related rights or interests, to the extent the
same remain protected by any such rights and interests from being used freely by
others.
1.14 "LICENSE TERM" shall mean the cumulative period covered by the
Development Period, the Certification Period, and the Marketing Period.
1.15 "MARKETING PERIOD" shall mean the period beginning on the
Approval Date and ending on the earlier of:
1.15.1 the twentieth anniversary of the Approval Date; or
1.15.2 the termination of the License Term and/or this Agreement as
provided herein.
1.16 "MYLAN IMPROVEMENTS" shall mean, except for any Joint
Developments, any and all improvements, modifications, alterations, or
enhancements to any of the inventions covered by the Penwest Patents, Penwest's
Confidential Technology, or the TIMERx Production Technology, that are
developed, owned, or controlled by Mylan or any of its Affiliates or
sublicensees, or in which Mylan or any of its Affiliates or sublicensees
otherwise has any rights or interests during the term of this Agreement (or,
with respect to such sublicensees, during the term of the respective
sublicenses) or during any period of mutual cooperative development prior to the
Effective Date; together with all United States and foreign intellectual
property and other rights and interests of Mylan and its Affiliates and
sublicensees thereto and therein, including
-3-
<PAGE> 4
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
without limitation patents, trade secrets, copyright, periods of market
exclusivity, and other related rights or interests, to the extent the same
remain protected by any such rights and interests from being used freely by
others.
1.17 "MYLAN TEST AND REGULATORY DATA" shall mean any and all test
data, test designs and protocols, clinical studies and results thereof,
government licenses and applications therefor, government certifications and
findings, and related materials, information and rights (including without
limitation information regarding bioavailability and bioequivalence, and any
adverse drug reactions), developed, commissioned or otherwise obtained by Mylan
or any of its Affiliates or sublicensees during the term of this Agreement (or,
with respect to such sublicensees, during the term of the respective
sublicenses) relating to TIMERx, Mylan Improvements, the Designated Product,
Penwest Patents, TIMERx Production Technology, and/or Penwest's Confidential
Technology, together with all intellectual property and other rights and
interests of Mylan and its Affiliates or sublicensees thereto and therein,
worldwide. It is understood that:
1.17.1 To the extent any of the Mylan Test and Regulatory Data is
available for review by the public without confidentiality restrictions, it
shall be referred to herein as the "Available Portion" of the Mylan Test and
Regulatory Data; and that
1.17.2 To the extent any of the Mylan Test and Regulatory Data meets
the criteria specified in Exhibit , it shall be referred to herein as the
"Deliverable Portion" of the Mylan Test and Regulatory Data.
1.18 "NET SALES" shall ********************************************
mean****************************************************************************
********************************************************************************
************************, calculated in accordance with United States Generally
Accepted Accounting Principles ("GAAP") consistently applied, which pertains to
the Designated Product. The calculation of Net Sales shall include *************
********************************************************************************
********************************************************************************
********************************************************************************
************************** Amounts to be included in the calculation of Net
Sales shall be those representing:
*******************************
-4-
<PAGE> 5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
***********************************************************************
****************************
***********************************************************************
****************************************************************
****************
****************
****************************************
***********************************************************************
**********************************************************************
********************************************************************************
*************
**************************************************
********************
*********************************
***************************
*********************
******************
********************************************************************************
********************************************************************************
*******************
1.19 "NON-EXCLUSIVE TERRITORY" shall mean Canada and Mexico and the
respective territories and possessions of each.
-5-
<PAGE> 6
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
1.20 "PENWEST PATENTS" shall mean:
1.20.1 those United States patents and foreign equivalents in
the NonExclusive Territory and United States and foreign patent applications
listed in Exhibit and all divisions, continuations, reissues, or extensions
thereof, any periods of marketing exclusivity relating thereto, and any letters
patent that issue thereon; and
1.20.2 Penwest's rights under United States patents and
foreign patents in the Non-Exclusive Territory, if any, obtained and in force
during the License Term covering any of Penwest's improvements, modifications,
alterations, or enhancements to any of the inventions covered by the Penwest
Patents.
1.21 "PENWEST TEST AND REGULATORY DATA" shall mean any and all test
data, test designs and protocols, clinical studies and results thereof,
government licenses and applications therefor, government certifications and
findings, and related materials, information and rights (including without
limitation information regarding bioavailability and bioequivalence, and any
adverse drug reactions), developed, commissioned or otherwise obtained by
Penwest or any of its Affiliates during the term of this Agreement relating to
TIMERx, Penwest Patents, TIMERx Production Technology, and/or Penwest's
Confidential Technology, together with all intellectual property and other
rights and interests of Penwest and its Affiliates thereto and therein in the
Territory.
1.22 "PERCENTAGE MARKET SHARE" shall mean the share of the total
United States market for the aggregate of all Approved Generic Versions, the
product currently being marketed under the name "Procardia XL," and the
Designated Product which is represented by sales of the Designated Product,
stated as a percentage of such total market. The sales of such products shall be
determined through the publicly available reports of IMS or an alternate public
source mutually approved by the parties hereto.
1.23 "PRODUCTION ROYALTIES" shall mean ***************************
**************************************************************** pursuant to
Section 5.8.
1.24 "PROJECT CONTACT(S)" shall mean the persons appointed by each
party to serve as contact person between the parties during the Development
Period and the Certification Period. The initial Project Contact for Penwest is
Dr. Paul K. Wotton and the initial Project Contact for Mylan is Dr. John P.
O'Donnell. Each party shall
-6-
<PAGE> 7
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
promptly notify the other party of any substitution of other personnel as its
Project Contact. Each party may select and supervise its other project staff as
needed.
1.25 "ROYALTIES" (or "Royalty") shall mean the royalties payable to
Penwest pursuant to Section hereof.
1.26 "SPECIFICATIONS" shall mean such standards and analytical methods
established in writing by Penwest and Mylan as are reasonably necessary or
appropriate to assure the identity, strength, quality and purity of the TIMERx
and Formulated TIMERx, and any such other standards or methods as may be
required or approved by the FDA. It is understood and agreed that the
Specifications for Formulated TIMERx for use in Designated Product to be sold in
the Non-Exclusive Territory shall be the same as those for Formulated TIMERx for
use in Designated Product to be sold in the Exclusive Territory, and in no event
will Mylan permit the Designated Product to be certified for sale in the
Non-Exclusive Territory on any other basis.
1.27 "SUBMISSION DATE" shall mean the date on which Mylan submits to
the FDA an ANDA for the Designated Product (in any dosage strength), as approved
by the parties at the end of the Development Period.
1.28 "TERRITORY" shall mean the Exclusive Territory and the
Non-Exclusive Territory.
1.29 "TIMERX PRODUCTION TECHNOLOGY" shall mean Penwest's rights under
the Penwest Patents and any and all other patents, patent applications, and
other technology and know-how belonging to Penwest from time to time during the
term of this Agreement that directly relate to, and are necessary for the
production of, Formulated TIMERx for use in the Designated Product.
1.30 "UNIT PRICE" shall mean ****************** of Formulated TIMERx,
subject to adjustment ********************* to reflect any percentage increases
or decreases in the United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers for the New York City
Metropolitan Area, "All Items" (1982-84 = 100) (the "Index") over the base
period Index. The Index, which may be a monthly, quarterly or other fiscal
period Index ***************** *********************************************,
shall be considered the "base period" Index. If at any time publication of the
Consumer Price Index is discontinued, Penwest shall, with the consent of Mylan
(which consent shall not be unreasonably withheld), substitute any other index
published by the Bureau of Labor Statistics, or successor or
-7-
<PAGE> 8
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
similar governmental agency or quasi-governmental or private entity
providing similar information as may then be in existence and shall be most
nearly equivalent thereto.
2. DEVELOPMENT PERIOD.
2.1 In consideration of Penwest's entering into this Agreement,
Mylan shall pay Penwest upon the Effective Date a nonrefundable initial fee of
************.
2.2 As additional inducement to Penwest to enter into this
Agreement, Mylan hereby affirms that, other than confidentiality agreements not
binding either party to any further agreement, it currently has no agreement or
arrangement with any Person other than Penwest for or including the development,
design, testing, certification, manufacture or marketing by it or such other
Person (or the Affiliate(s) of either) of any controlled-release Nifedipine
product that is intended to be essentially bioequivalent to "Procardia XL," and
agrees that it will refrain from entering into any such agreement or arrangement
(other than such confidentiality agreements) throughout the duration of the
Development Period or the period of eighteen months following the date hereof,
whichever expires later.
2.3 During the Development Period, each of Penwest and Mylan will
exert its continuing best efforts to perform their respective tasks specified in
Exhibit , within the estimated time periods there stated, in order to create and
produce the Designated Product, and each will cooperate with the other in such
efforts. It is understood that the exertion of a party's best efforts will mean
that this project will receive a priority at least as high as any of such
party's other generic drug development efforts. Each party will, promptly and
throughout the Development Period, provide to the other all necessary
information in or coming into its possession or reasonably available to it for
such purposes. Notwithstanding anything else to the contrary contained herein,
nothing shall require either party to disclose confidential information for
which such party has an obligation of confidentiality to a third party. Each
party understands and agrees that the other does not warrant or commit that the
Designated Product will be successfully developed, and neither party shall have
any liability or responsibility to the other or to third parties for any such
failure of the development process hereunder, except to the extent such failure
results from said party's intentional misconduct, negligence, or breach of its
duties or obligations as set forth herein.
2.4 Mylan shall be responsible for, and hereby agrees to conduct
or arrange for, at Mylan's expense, all testing and studies during the
Development Period,
-8-
<PAGE> 9
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
including as to bioavailability and bioequivalence, in connection with the
development, licensing, manufacture and marketing of the Designated Product, and
for substantial compliance with all material and relevant governmental
requirements imposed in the Territory with respect to the manufacture, use, and
sale of the Designated Product.
2.5 Mylan shall be primarily responsible for the preparation, at
its expense, of an ANDA for the Designated Product, to be filed with the FDA at
the end of the Development Period. In consideration of Penwest's entering into
this Agreement, Mylan agrees to pay Penwest a first milestone fee of *******,
payable *********************************************************************
(but only with respect to the ***********************************************,
where ********************** are ***********************************************
2.6 Each party's Project Contact will provide written reports to
the other party's Project Contact at least monthly throughout the Development
Period, stating in detail all efforts made and in process, and all significant
progress achieved and difficulties encountered in the development effort since
the last such report. Each party's Project Contact will also be available
throughout the Development Period to answer any reasonable questions from the
other party's Project Contact. The parties will cooperate reasonably during the
Development Period such that the sites for meetings among their respective
personnel shall be alternated among the parties' facilities to the extent
practicable.
2.7 During the Development Period, Mylan will supply, at its own
expense, all Nifedipine reasonably required to support the development effort,
and Penwest shall provide at its own expense all TIMERx reasonably required for
such effort. Each party shall bear its own expenses for all activities during
the Development Period, except as otherwise stated in Exhibit .
2.8 Either party may terminate this Agreement before completion of
the Development Period by delivery of 90 days' written notice to the other if
such party reasonably determines that, due to unfavorable or inconclusive
results to that time, no further Development Steps are likely to lead to the
successful development of the target Designated Product listed in Exhibit .
3. CERTIFICATION PERIOD.
3.1 During the Certification Period, Mylan will exert its
continuing best efforts, at its expense, to prosecute the ANDA(s) for the
Designated Product (in all
-9-
<PAGE> 10
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
the contemplated dosage strengths) filed hereunder successfully to the granting
of an FDA approval to market the Designated Product. Penwest will, promptly and
throughout the Certification Period, provide to Mylan all necessary information
in or coming into Penwest's possession or reasonably available to it for such
purpose. Each party understands and agrees that the other does not warrant or
commit that the Designated Product will be successfully licensed or certified
for marketing by the FDA, and neither party shall have any liability or
responsibility to the other or to third parties for any such failure of the
certification process hereunder, except to the extent such failure results from
said party's intentional misconduct, negligence, or breach of its duties or
obligations as set forth herein.
3.2 Either party may terminate this Agreement before completion of
the Certification Period by delivery of 90 days' written notice to the other if
such party reasonably determines that, due to unfavorable action by the FDA, the
ANDA is not likely to be approved by the FDA, regardless of any further steps or
submissions that could be made.
3.3 Mylan's Project Contact will provide written reports to
Penwest's Project Contact at least quarterly throughout the Certification
Period, stating in detail all efforts made and in process, and all significant
progress achieved and difficulties encountered in the certification effort since
the last such report. Mylan's Project Contact will also be available throughout
the Certification Period to answer any reasonable questions from Penwest's
Project Contact.
3.4 During the Certification Period, Mylan shall provide at its
own expense all Nifedipine and other materials and manufacturing and testing
services reasonably required to support the testing and certification effort,
and Penwest shall provide at its own expense all TIMERx reasonably required for
such effort. Each party will bear its own expenses during the Certification
Period.
3.5 In consideration of Penwest's entering into this Agreement,
Mylan agrees to pay Penwest a second milestone fee of ****************, payable
within ************************************************** (but only with respect
to the ***********************************, where *********************** are
**************************************************. Mylan shall notify Penwest
of the occurrence of the Approval Date no later than the next business day
following Mylan's learning of such occurrence.
4. MARKETING PERIOD.
-10-
<PAGE> 11
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
4.1 Subject to the granting of all necessary governmental
approvals or concurrences to sell the Designated Product, Mylan hereby agrees,
during the Marketing Period, to use its continuing best efforts to market,
promote and sell the Designated Product throughout the Territory.
4.2 In consideration of Penwest's entering into this Agreement,
Mylan agrees to pay Penwest a third milestone fee of ***************, payable
within **************************************************** for the
******************************************* anywhere in the Territory.
4.3 Mylan hereby agrees to pay to Penwest Royalties on Net Sales
made during the License Term, pursuant to the following Royalty rate schedule:
4.3.1 with respect to all Net Sales with respect to Designated
Product sold in a nation during a quarter in which there is *****************
******************************************* on the market in such nation, the
Royalty rate shall be ********************* of such Net Sales;
4.3.2 with respect to all Net Sales with respect to Designated
Product sold in a nation during a quarter in which there is
************************************ on the market in such nation, the Royalty
rate shall be ************************* of such Net Sales;
4.3.3 with respect to all Net Sales with respect to Designated
Product sold in a nation during a quarter in which there are
*************************************** on the market in such nation, the
Royalty rate shall be ******************* of such Net Sales;
provided, however, that the Royalty rates set forth above shall be
************** **************************************************** with respect
to the initial ************* of Net Sales during the License Term; and provided
further, however, that such Royalties shall be *******************************
with respect to Net Sales of the Designated Product as to which no license to
Penwest Patents hereunder is applicable to the manufacture, sale or use of the
Designated Product (it being understood that a Penwest Patent shall not be
considered applicable to the manufacture of the Designated Product solely by
virtue of its applicability to the manufacture and/or sale of the Formulated
TIMERx to be provided by Penwest to Mylan for such purpose hereunder, unless
such Penwest Patent is also otherwise applicable to the manufacture, sale or use
of the Designated Product). For purposes of the foregoing, to be "sold in a
nation" refers to the nation in which such Designated Product will be initially
placed into actual commercial distribution, regardless of the FOB point or
-11-
<PAGE> 12
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
where the agreement for such sale may have been struck. If an Approved Generic
Version (other than the Designated Product) is first put on the market in a
nation during the first half of a calendar quarter, it will be deemed for
purposes of this Section to have been on the market in such nation from the
first day of such quarter, and if it is first put on the market in a nation
during the second half of a calendar quarter, it will be deemed for purposes of
this Section not to have been on the market in such nation until the first day
of the following quarter.
4.4 All Royalties payable pursuant to this Agreement shall be due
quarterly ********************* following the end of each calendar quarter for
Net Sales in such calendar quarter. Each such payment shall be accompanied by a
statement of Net Sales for the quarter and the calculation of Royalties payable
hereunder. All Royalties and all other amounts which are overdue under this
Agreement will bear interest at the rate of 1 1/2% per month from the date due
through the date of payment. Mylan shall keep and shall cause its Affiliates and
its and their sublicensees to keep complete, true and accurate records for the
purpose of showing the derivation of all Royalties payable to Penwest under this
Agreement. Penwest's duly accredited representatives (which representatives are
approved for such purpose by Mylan, which approval shall not be unreasonably
withheld nor shall it be revocable by Mylan following the start of any
inspection hereunder) shall have the right to inspect, copy, and audit such
records at any time during reasonable business hours upon reasonable prior
notice to Mylan or any of its Affiliates or sublicensees, respectively, but such
right will not be exercised more often than annually (it being understood that a
single exercise of such right may include a series of related or continuing
inspections, copying and audits). Any such audit shall be at the expense of
Penwest, unless the audit reveals that, with respect to the period under audit,
less than 97% of the Royalties due to Penwest hereunder have been reported, in
which event Mylan shall pay or reimburse Penwest for the reasonable expenses of
such audit, in addition to Penwest's other remedies for such underpayment.
4.5 All monies due hereunder shall be paid in United States
Dollars to Penwest in Patterson, New York, USA. Said payment may be made at
Mylan's option by check or wire transfer.
5. SUPPLY OF FORMULATED TIMERx.
5.1 Except as provided in Section , and subject to the other
provisions hereof, Penwest will supply Mylan and its Affiliates and sublicensees
with quantities of Formulated TIMERx to meet their reasonable requirements for
manufacturing of the Designated Product during the Marketing Period, and Mylan
-12-
<PAGE> 13
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
shall purchase all of its and its Affiliates' and sublicensees' requirements for
controlled-release agents for Nifedipine products that are essentially
bioequivalent to "Procardia XL" in the form of TIMERx from Penwest during such
period.
5.2 The price for all Formulated TIMERx sold hereunder shall equal
the Unit Price multiplied by the applicable units purchased. All sales
*******************************************, and Mylan shall bear all
transportation, insurance, taxes, duties, and other costs and risks of loss,
spoilage and damage associated with the shipping and delivery of Formulated
TIMERx to Mylan or its Affiliates or sublicensees.
5.3 Penwest warrants that it will not change or modify its DMF,
the Specifications, or its method of manufacture for Formulated TIMERx without
prior written consent from Mylan, which consent shall not be unreasonably
withheld.
5.4 Penwest shall perform quality control tests with respect to
all Formulated TIMERx as required by the FDA as set forth in the DMF. In
addition, Penwest may perform such other tests as Penwest deems necessary in
accordance with its applicable policies. No other or special tests by Penwest
with respect to the raw materials or Formulated TIMERx will be required, unless
and to the extent that Mylan establishes that the same are required in order to
obtain or maintain an FDA approval to market the Designated Product in the
Exclusive Territory. Penwest shall promptly, upon completion of each lot or
batch of Formulated TIMERx, deliver to Mylan a copy of the record of such test
performed on said lot or batch.
5.5 Each shipment of the TIMERx or Formulated TIMERx shall:
i) be accompanied by a Certificate of Analysis and a
certificate of Origin;
ii) meet all present, FDA, Compendial, and the applicable
Specifications; and
iii) be manufactured, packaged, stored and shipped in
conformance with the applicable Specifications, and
Current Good Manufacturing Practices ("cGMPs").
5.6 Within a reasonable period but not more than thirty (30) days
after receipt, Mylan will analyze each shipment of the Formulated TIMERx. If
Mylan considers any such shipment not to conform to the applicable
Specifications, Mylan shall notify Penwest immediately and provide Penwest with
the relevant analysis. If Penwest does not agree, the parties shall submit such
disagreement to the arbitration of one mutually accepted neutral analytical
laboratory. If Penwest or the neutral laboratory
-13-
<PAGE> 14
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
agree with Mylan, Penwest shall not have any obligation to Mylan other than to
accomplish at Mylan's option any of the following:
i) at its own expense accept return of any shipment not
accepted; or
ii) reimburse Mylan for the cost of disposal or
destruction; and
iii) use commercially reasonable efforts to replace the
non-conforming shipment with conforming Formulated
TIMERx.
5.7 In case Penwest cannot supply Mylan the requested quantities
of the Formulated TIMERx, the shipments may be made by an alternate supplier
designated by Penwest with Mylan's consent, which consent shall not be
unreasonably withheld. Penwest will qualify (in Penwest's reasonable judgment)
at least one such alternate supplier and notify Mylan thereof no later than 180
days following the Approval Date. If Mylan has any objections to such supplier,
it shall so notify Penwest within fifteen days following Penwest's notice of
such qualification, or else Mylan will be deemed to have consented to such
qualification and the designation of such supplier. Such shipment by the
alternate supplier shall be made under the same agreed terms and conditions as
those set forth herein, except that an additional 60 days shall be added to the
order lead time stated in any then-outstanding order for Formulated TIMERx
hereunder to reflect the transition time required to shift to such alternate
supplier. Notwithstanding anything to the contrary set forth herein, Penwest
will be responsible for enforcing all relevant terms and conditions set forth
herein against such alternate supplier and remain liable to Mylan for any breach
of such terms and conditions by such supplier.
5.8 If for any reason Penwest (or the alternate supplier) fails to
supply Mylan with its and its Affiliates' and sublicensees' requirements of
Formulated TIMERx during the Marketing Period as agreed hereunder, Penwest shall
grant Mylan a nonexclusive license to manufacture Formulated TIMERx under the
TIMERx Production Technology and make knowledgeable personnel reasonably
available to consult with Mylan, all to the extent necessary to enable Mylan to
produce Formulated TIMERx that would otherwise have been supplied by Penwest or
an alternate supplier hereunder for Mylan and its Affiliates and sublicensees in
connection with the production of the Designated Product pursuant to this
Agreement.
5.8.1 In such event Mylan shall pay to Penwest, in addition to the
Royalties under Section , Production Royalties equal to *************, if any,
of the then-current
-14-
<PAGE> 15
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
Unit Price for each kilogram of Formulated TIMERx produced by Mylan hereunder,
*************************** **************************************************
Such Production Royalties shall be payable and reported and accounted for as
stated in Sections and, except that the Production Royalties will be payable
within******* after the end of the calendar quarter in which the applicable
kilogram of Formulated TIMERx was produced.
5.8.2 Mylan shall maintain all information and technology delivered
to Mylan pursuant to this Section, whether orally or in writing, in confidence
in accordance with Section (to the extent the same is Confidential Technology)
and shall use such information and technology only for the purpose of producing
Formulated TIMERx for its own use and the use of its Affiliates and sublicensees
in connection with this Agreement.
5.8.3 Mylan acknowledges that, in doing the foregoing, Penwest will
not be providing a "turnkey" operation. Rather, Penwest will only be required to
make reasonably available to Mylan the best standard of knowledge and
information then available to Penwest and directly used in its or its
Affiliate's manufacture of Formulated TIMERx. If any professional licenses,
visas, or other permits are required for any of the consulting to be provided by
Penwest's or its Affiliates' or licensees' personnel, Mylan shall so inform
Penwest and Mylan shall bear the costs of obtaining the same.
5.8.4 Neither Penwest nor its Affiliates or licensees will be
responsible for any failure of Mylan or its personnel to understand or properly
to implement such knowledge and information or for any materials made by any
party other than Penwest or such respective Affiliate or licensee using such
knowledge and information.
5.8.5 If Penwest's non-delivery of Formulated TIMERx resulted in
whole or in part from a temporary inability to produce and deliver the same,
Penwest may, at its option and on at least 120 days' prior written notice to
Mylan, terminate the license to produce Formulated TIMERx hereunder once Penwest
or its alternative supplier is again able and willing to supply Formulated
TIMERx hereunder.
5.9 Penwest shall, after receipt of reasonable prior notice, give
duly accredited representatives of Mylan access at all reasonable times during
regular business hours to inspect, copy, and audit any relevant records of
Penwest's or its Affiliate's plant in which the Formulated TIMERx is being
produced.
-15-
<PAGE> 16
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
5.10 Mylan shall deliver to Penwest a firm written order stating its
(and/or its Affiliates' and sublicensees') requirements for Formulated TIMERx to
be used for production of the Designated Product for commercial use or sale
********* *************************************** therefor.
5.11 At least **************** before Mylan and/or its Affiliates or
sublicensees begin production of the Designated Product for commercial use or
sale, Mylan shall deliver to Penwest a written, non-binding estimate of all
requirements of Formulated TIMERx therefor. Mylan will deliver to Penwest
updates to such estimates on or before the first day of each January, April,
July and October thereafter during the Marketing Period, which updates may
revise estimates previously submitted and will add estimates for additional
months so that each such estimate covers the **************** following the end
of the firm-order period (that is, the ******************** month after the
month in which such estimates are made). Penwest shall not be obligated to
supply Mylan with quantities of Formulated TIMERx during any quarter in excess
of ************************ of the quantities estimated in Mylan's written
estimate applicable to that quarter, which estimate was given to Penwest
**************** prior to such quarter (the "************ Prior Estimate" as to
that quarter). Mylan shall be responsible for purchasing from Penwest in each
quarter at least ******************** of the quantities of Formulated TIMERx
estimated in the ************* Prior Estimate as to such quarter.
5.12 No order for Formulated TIMERx hereunder may be cancelled or
deferred by Mylan except by written notice delivered to Penwest at least
*************** the scheduled delivery date. No orders may be cancelled or
deferred ************************** without Penwest's approval if such
cancellation or deferral would reduce Mylan's purchases for the applicable
quarter to less than the ******* level referred to in Section.
5.13 Each party shall promptly notify the other of any fact,
circumstance, condition or knowledge dealing with TIMERx or the Designated
Product of which the Party becomes aware that bears upon the safety or efficacy
of TIMERx or the Designated Product. Each party shall immediately notify the
other of any inspection or audit relating to TIMERx, Formulated TIMERx, or the
Designated Product by any governmental regulatory authority in the Territory. If
a representative of the governmental authority takes samples in connection with
such audit or inspection, the parties shall immediately provide each other, as
appropriate, samples from the same batch. The party in receipt of such notice
will provide the other party within 72 hours, with copies of all relevant
documents, including FDA Forms 482, 483, warning letters and other
correspondence and notifications as such other party may
-16-
<PAGE> 17
reasonably request. Penwest and Mylan agree to cooperate with each other during
any inspection, investigation or other inquiry by the FDA or other governmental
entity, including providing information and/or documentation, as requested by
the FDA, or other governmental entity. To the extent permissible, Penwest and
Mylan also agree to discuss any responses to observations or notifications
received and to give the other party an opportunity to comment on any proposed
response before it is made. In the event of disagreement concerning the content
or form of such response, Mylan shall be responsible for deciding the
appropriate form and content of any response with respect to any of its cited
activities and Penwest shall be responsible for deciding the appropriate form
and content of any response with respect to any of its cited activities. Each
party shall inform the other of all comments and conclusions received from the
governmental authority.
6. OWNERSHIP AND LICENSES.
6.1 Except as otherwise explicitly licensed or transferred as provided
herein, each party will, as between it and the other party hereto, retain
ownership of any and all inventions, copyrights, trade secrets, know-how, patent
rights and other technology and rights to the extent conceived or developed by
its personnel or contractors (other than the other party hereto). Neither party
makes any grant of rights by implication.
6.2 Except as otherwise provided herein, each party shall be
responsible, as it shall determine, for the filing and prosecution of any and
all patent applications with respect, in whole or in part, to its own
intellectual property and for the maintenance of any available patent protection
with respect thereto; provided however, that neither party commits that any such
patent protection will be available or continuous hereunder. If one party
believes that an application for a patent in the Territory should be filed with
respect to any invention of the other party hereunder related to the Designated
Product, it may so notify such other party, and the parties will cooperate in
the investigation of the propriety of such an application, taking into account
the respective interests of the parties and the anticipated costs and benefits
of such patent protection.
6.3 Penwest hereby grants to Mylan and its Affiliates a license under
the Penwest Patents, the Joint Developments, and Penwest's Confidential
Technology disclosed to Mylan hereunder to make, have made, use and sell the
Designated Product in the Territory during the License Term. Such license shall
be exclusive for such purposes as to the Penwest Patents listed in Exhibit
within the Exclusive Territory and shall be non-exclusive in the Non-Exclusive
Territory. Such license does not extend to the making of TIMERx or Formulated
TIMERx, but does cover the incorporation of the same into the Designated
Product. Mylan shall have no right to grant sublicenses hereunder without the
prior written consent of Penwest, which consent may be withheld in Penwest's
discretion as to sublicenses in the Exclusive
-17-
<PAGE> 18
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
Territory, but will not be unreasonably withheld as to sublicenses in the
NonExclusive Territory. Penwest will, throughout the License Term, promptly
notify Mylan of all Penwest Patents referred to in Subsection and provide Mylan
with access to all of the same, solely for use within the scope of the license
stated in this section.
6.4 Mylan hereby grants to Penwest and its Affiliates a nonexclusive,
paid-up, worldwide license, with right to sublicense, under any and all patents,
patent applications, trade secrets, copyrights, and other intellectual property
rights of any sort owned or controlled by Mylan or its Affiliates or
sublicensees, to make, have made, use and sell Formulated TIMERx during the
License Term, if and to the extent such license is necessary for Penwest to do
so as agreed hereunder. Penwest and its Affiliates shall have the right to grant
sublicenses of its rights hereunder to an alternate supplier as and for the
purposes described in Section , but shall otherwise have no right to grant
sublicenses hereunder without the prior written consent of Mylan, which consent
shall not be unreasonably withheld.
6.5 Subject to and conditional upon the failure of Penwest (or the
alternate supplier) to meet Mylan's and its Affiliates' and sublicensees'
requirements as provided in Section , Penwest grants to Mylan a nonexclusive,
worldwide license under the TIMERx Production Technology to make and have made
Formulated TIMERx solely for use in the Designated Product for sale in the
Territory during the License Term. Mylan shall have no right to grant
sublicenses of its rights hereunder (whether to Affiliate(s) or otherwise)
without the prior written consent of Penwest, which consent shall not be
unreasonably withheld.
6.6 Mylan acknowledges that Penwest and its Affiliates, for itself and
for others, applies, and will seek to apply, TIMERx to products other than the
Designated Product. No provision hereof, and no exclusivity hereunder, shall
prevent Penwest from so applying TIMERx or Formulated TIMERx, so long as the end
product is not the Designated Product hereunder.
6.7 Mylan hereby grants to Penwest and its Affiliates a nonexclusive,
worldwide license, with right to sublicense, under any and all Mylan
Improvements, to make, have made, use and sell any products or services using or
based upon TIMERx or related technology, other than Designated Products in the
Territory during the License Term. Such license shall require the payment of a
reasonable royalty to Mylan if any commercial sales are made under such license.
Penwest shall notify Mylan at least *********** prior to granting any sublicense
to the rights under this section (other than to a Penwest Affiliate), and shall
consult with Mylan as to the
-18-
<PAGE> 19
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
propriety of such sublicense if Mylan, within such ********** period, notifies
Penwest of Mylan's belief, on reasonable grounds stated in such notice, that
such a sublicense would have a substantial adverse effect on Mylan or its
business. Mylan will, throughout the License Term, promptly notify Penwest of
all Mylan Improvements and provide Penwest with access to all of the same,
solely for use within the scope of the license stated in this section.
6.8 In recognition of the parties' cooperative efforts with respect to
the Joint Developments, it is agreed that each party and its Affiliates shall
have the nonexclusive, worldwide right and license, with right to sublicense,
under the Joint Developments, to make, have made, use and sell any products or
services (other than the Designated Product by Penwest or its Affiliates in the
Exclusive Territory during the License Term); provided, however.
********************************************************************************
********************************************************************************
********** Each party shall promptly notify the other of any such licenses or
sublicenses of any Joint Developments. Each party will, throughout the License
Term, promptly notify the other of all Joint Developments and provide such other
party with access to all of the same.
6.9 Mylan hereby grants Penwest and its Affiliates a nonexclusive
license under all rights of Mylan and its Affiliates and sublicensees in and to
that portion of the Mylan Test and Regulatory Data that is disclosed or provided
to Penwest hereunder, to use the same for purposes of complying with
governmental requirements of any country, other than with respect to the
Designated Product for marketing or use in the Territory. Such license shall be
on a paid-up, royalty-free basis as to Penwest and its Affiliates, and as to any
of the Available Portion of the Mylan Test and Regulatory Data (whether as to
Penwest or others), but shall ************************************************
if any but the Available Portion is used by any other party under a sublicense
from Penwest or its Affiliate. Penwest shall notify Mylan at least *********
prior to granting any sublicense to the rights under this section (other than to
a Penwest Affiliate or as to the Available Portion), and shall consult with
Mylan as to the propriety of such sublicense if Mylan, within such ********
period, notifies Penwest of Mylan's belief, on reasonable grounds stated in such
notice, that such a sublicense would have a substantial adverse effect on Mylan
or its business. Mylan hereby consents to Penwest's and its Affiliates' and
sublicensees' cross-referencing, in any filings that are essentially the
equivalent of the sorts of filings that are termed "ANDA" or "NDA" filings if
made with the FDA, made by them within the scope of such license, any ANDA or
NDA filing made or FDA master file created by Mylan or its Affiliates or
sublicensees relating to or containing any of the Mylan Test and Regulatory
Data. The license under this section
-19-
<PAGE> 20
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
shall survive any termination or expiration of the term of this Agreement,
except a termination under Section due to an uncured breach by Penwest. Mylan
will, throughout the License Term and solely for use within the scope of the
license stated in this section, promptly provide to Penwest copies of all of the
Deliverable Portion of the Mylan Test and Regulatory Data in or coming into
Mylan's possession or otherwise reasonably available to it.
6.10 Penwest hereby grants Mylan and its Affiliates (with right to
sublicense only to sublicensees under Section , as approved by Penwest) a
nonexclusive, paid-up license under all rights of Penwest and its Affiliates in
and to the Penwest Test and Regulatory Data to use the same for purposes of
complying with governmental requirements, but solely with respect to the
Designated Product for marketing or use in the Territory. Penwest hereby
consents to Mylan's and its Affiliates' and such sublicensees'
cross-referencing, in any ANDA or NDA filings made by them within the scope of
such license, any ANDA or NDA filing made or FDA master file created by Penwest
or its Affiliates relating to or containing any of the Penwest Test and
Regulatory Data. The license and rights under this section shall survive any
termination or expiration of the term of this Agreement, except a termination
under Section due to an uncured breach by Mylan. Penwest will, throughout the
License Term and solely for use within the scope of the license stated in this
section, promptly provide to Mylan copies of all of the Penwest Test and
Regulatory Data in or coming into Penwest's possession or otherwise reasonably
available to it.
6.11 Each party agrees to mark and to have marked by its Affiliates and
sublicensees (if any) every product manufactured, used or sold by it or its
Affiliates or sublicensees in accordance with the laws of the United States or
other applicable nation relating to the marking of patented articles with
notices of patent.
6.12 Any dispute concerning **************************************
********************************************************************************
**************** Each party hereto shall afford, to the extent permissible under
its agreements with the third parties, the other party hereto the same audit
rights that such party obtains from its licensees or sublicensees with respect
to any of the rights described in such sections.
-20-
<PAGE> 21
7. CONFIDENTIALITY.
7.1 In the course of performance under this Agreement, a party may
disclose to the other confidential information belonging to such party in
writing, orally or by demonstration or sample, which information is marked or
stated in writing at or within 30 days after its disclosure to be "confidential"
or "trade secret" information. All such confidential information of a party
shall be maintained in confidence by the other and will not be used by the other
party for any purpose except as authorized hereunder. Each party shall exercise,
and shall cause its Affiliates, sublicensees and consultants to exercise, a
reasonable degree of care and at least the same degree of care as it uses to
protect its own confidential information of similar nature to preserve the
confidentiality of such information of the other party. Each party shall
safeguard such information against disclosure to third parties, including
without limitation employees and persons working or consulting for such party
that do not have an established, current need to know such information for
purposes authorized under this Agreement. This obligation of confidentiality
does not apply to information and material that:
7.1.1 were properly in the possession of the receiving party,
without any restriction on use or disclosure, prior to receipt from the other
party;
7.1.2 are at the time of disclosure hereunder in the public domain
by public use, publication, or general knowledge;
7.1.3 become general or public knowledge through no fault of the
receiving party or its Affiliates or sublicensees following disclosure
hereunder;
7.1.4 are properly obtained by the receiving party from a third
party not under a confidentiality obligation to the disclosing party hereto;
7.1.5 are independently developed by or on behalf of the receiving
party without the use or assistance of the confidential information of the other
party;
7.1.6 consist merely of an idea or conception for the combination of
one or more active drug ingredients with a controlled-release agent such as
TIMERx; or
7.1.7 are required to be disclosed by order of any court or
governmental authority;
provided, however, that the exceptions stated in Sections , , and shall not
affect the continuing obligation of Mylan as the receiving party to pay any
Royalties pursuant to the terms hereof with respect to the use of such
information or materials that have not, as of the relevant time, been placed
into the public domain by the act of Penwest or its Affiliates.
-21-
<PAGE> 22
7.2 Neither party shall make any public announcement or other
publication regarding this Agreement (whether as to the existence or terms
hereof) or the development work or project hereunder or the results thereof
without the prior, written consent of the other party, which consent shall not
be unreasonably withheld; provided that the foregoing shall not prohibit any
disclosure which, in the opinion of counsel to the disclosing party, is required
by any applicable law or by any competent governmental authority. In no event
shall either party make any disclosure of any such results before a patent
application has been filed with respect thereto, except upon the prior written
approval of the other party.
8. INFRINGEMENT.
8.1 Penwest shall promptly inform Mylan of any suspected
infringement of any of the Penwest Patents or the infringement or
misappropriation of the TIMERx Production Technology by a third party, to the
extent such infringement involves the manufacture, use or sale of the Designated
Product in the Territory ("Covered Infringement"). Mylan shall promptly inform
Penwest of any suspected infringement of any of the Penwest Patents or
infringement or misappropriation of the TIMERx Production Technology, whether or
not the same involves a Covered Infringement.
8.2 If the suspected infringement or misappropriation does not
involve a Covered Infringement, Penwest may take, or refrain from taking, any
action it chooses, with or without notice to Mylan, and Mylan shall have no
right to take any action with respect to such suspected infringement or
misappropriation, nor to any recoveries with respect thereto. If the suspected
infringement or misappropriation involves a Covered Infringement, Penwest shall,
within 30 days of the first notice referred to in Section , inform Mylan whether
or not Penwest intends to institute suit against such third party with respect
to a Covered Infringement. Mylan will not take any steps toward instituting suit
against any third party involving a Covered Infringement until Penwest has
informed Mylan of its intention pursuant to the previous sentence.
8.3 If Penwest notifies Mylan that it intends to institute suit
against a third party with respect to a Covered Infringement, and Mylan does not
agree to join in such suit as provided in Section , Penwest may bring such suit
on its own and shall in such event bear all costs of, and shall exercise all
control over, such suit. Penwest may, at its expense, bring such action in the
name of Mylan and/or cause Mylan to be joined in the suit as a plaintiff.
Recoveries, if any, whether by judgment, award, decree or settlement, shall
belong solely to Penwest.
8.4 If Penwest notifies Mylan that it desires to institute suit
against such third party with respect to a Covered Infringement, and Mylan
notifies Penwest within 30 days after receipt of such notice that Mylan desires
to institute suit jointly,
-22-
<PAGE> 23
the suit shall be brought jointly in the names of both parties and all costs
thereof shall be borne equally. Recoveries, if any, whether by judgment, award,
decree or settlement, shall, after the reimbursement of each of Penwest and
Mylan for its share of the joint costs in such action, be shared between Penwest
and Mylan equally; provided however that, any portion of such net recoveries
which constitutes the equivalent of, or damages or payments in lieu of, a
royalty measured by the defendant's Net Sales shall not be shared equally, but
shall be shared between Penwest and Mylan in accordance with Section as if they
were Mylan's Net Sales.
8.5 If Penwest notifies Mylan that it does not intend to institute
suit against such third party with respect to a Covered Infringement, Mylan may
institute suit on its own. Mylan shall bear all costs of, and shall exercise all
control over, such suit. Recoveries, if any, whether by judgment, award, decree
or settlement, shall belong solely to Mylan; provided however that, after
reimbursement of Mylan for its costs in such action, any portion of such net
recoveries which constitutes the equivalent of, or damages or payments in lieu
of, a royalty measured by the defendant's Net Sales shall be shared between
Penwest and Mylan in accordance with Section as if they were Mylan's Net Sales.
8.6 Should either Penwest or Mylan commence a suit under the
provisions of this Section and thereafter elect to abandon the same, it shall
give timely notice to the other party, who may, if it so desires, be joined as a
plaintiff in the suit (or continue as such if it is already one) and continue
prosecution of such suit. The sharing of expenses and any recovery of such suit
shall be as reasonably agreed between Penwest and Mylan.
9. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
9.1 Each party represents and warrants to the other that, to the
best of its current knowledge, it has the full right and authority to enter into
this Agreement and to grant the licenses granted herein. Each party believes, to
the best of its current knowledge, that any existing patents licensed by it to
the other party under this Agreement are valid.
9.2 Penwest represents and warrants that any Formulated TIMERx
supplied by it to Mylan hereunder for use in the Designated Product, at the
point of delivery:
9.2.1 will conform to the product Specifications that Penwest and
Mylan have agreed in writing are to apply to such delivery of TIMERx; and
9.2.2 to the best of Penwest's current knowledge, will not infringe
upon an article patent of any third party.
-23-
<PAGE> 24
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
PENWEST MAKES NO REPRESENTATIONS OR WARRANTIES AS TO ANY TIMERx OR FORMULATED
TIMERx SUPPLIED BY IT TO MYLAN EXCEPT AS ARE EXPLICITLY STATED HEREIN.
9.3 Each party represents and warrants to the other party that it
has obtained and will at all times during the term of this Agreement, hold and
comply with all licenses, permits and authorizations necessary to perform this
Agreement and to test, manufacture, market, export, and import the products and
assistance to be provided by it hereunder, as now or hereafter required under
any applicable statutes, laws, ordinances, rules and regulations of the United
States and any applicable foreign, state, and local governments and governmental
entities.
9.4 Mylan warrants that any Designated Product manufactured,
marketed or distributed by Mylan or its Affiliates or sublicensees shall meet
and be manufactured, packaged, labeled, sold, and promoted in accordance with
all applicable regulatory requirements within the Territory.
9.5 Penwest shall indemnify, defend and hold harmless Mylan and
its Affiliates and sublicensees from any claim, action or damages arising out of
any alleged infringement by reason of the manufacture, use or sale by Mylan of
the Designated Product to the extent such infringement would apply as well to
the manufacture, sale or distribution of TIMERx alone. If Mylan or its Affiliate
or sublicensee, by reason of its manufacture, sale or distribution of Designated
Product, is accused of infringing the patent of a third party, and such claim of
infringement, as framed by the claimant, would apply as well to the manufacture,
sale or distribution of TIMERx alone, Mylan shall immediately so notify Penwest
and provide Penwest all available information, and the parties shall consult
reasonably as to the proper course of action. If Penwest and Mylan jointly
determine that such claim is likely to prevail, or if an arbitrator hereunder or
a court of competent jurisdiction so determines, Mylan shall be entitled to
offset against any Royalties payable to Penwest hereunder any third party
royalties for which Mylan or its Affiliate or sublicensee becomes liable.
9.6 Penwest shall indemnify, defend and hold Mylan and its
Affiliates and sublicensees harmless from any and all third-party claims to the
extent arising from, in connection with, based upon, by reason of, or relating
in any way to:
9.6.1 the ************************************************ TIMERx in
the Designated Product;
-24-
<PAGE> 25
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
9.6.2 Penwest's *********************************************** and
the Specifications therefor hereunder;
9.6.3 any failure of the Formulated TIMERx manufactured by Penwest
or its alternate supplier (but not by Mylan under Section ), as delivered to
Mylan hereunder for use in the Designated Product, to conform to the
Specifications; or
9.6.4 any failure of Penwest to comply with its obligation under
Section 5.13 to notify Mylan of any information coming into Penwest's possession
and *************************** the Designated Product and not arising from any
other aspect of the Designated Product or its formulation, development, supply,
production, manufacture, sale, delivery, distribution or use, nor from any act
or omission of Mylan with respect to the Formulated TIMERx following its
delivery to Mylan hereunder.
9.7 Mylan shall indemnify, defend and hold Penwest harmless from
any and all third-party claims to the extent arising from, in connection with,
based upon, by reason of, or relating in any way to, the formulation,
development, supply, production, manufacture, sale, delivery, distribution or
use of the Designated Product, except for any matters which are covered by
Penwest's indemnities under Sections 9.5 and 9.6.
9.8 Notwithstanding anything to the contrary set forth elsewhere
herein, neither Mylan nor Penwest shall be obligated to indemnify the other
party for claims or liabilities to the extent arising from such other party's,
or its Affiliates', sublicensees' or assigns', negligence, intentional
misconduct, or breach of its duties, obligations, warranties or representations
set forth herein.
9.9 Whenever indemnification is provided for a party under this
Agreement, such right of indemnification shall extend also to the indemnified
party's Affiliates, officers, directors, shareholders, successors, assigns,
agents, employees, and insurers to the extent the same become subject to such
claim in such capacity. The party seeking indemnification shall provide the
indemnifying party with written notice of any claim or action within ten (10)
days of its receipt thereof, and shall afford the indemnifying party the right
to control the defense and settlement of such claim or action. The party seeking
indemnification shall provide reasonable assistance to the indemnifying party in
the defense of such claim or action. If the defendants in any such action
include both Mylan and Penwest and either party concludes that there may be
legal defenses available to it which are different from, additional to, or
inconsistent with, those available to the other, that party shall have the right
to select separate counsel to participate in the defense of such action on its
-25-
<PAGE> 26
behalf, and such party shall thereafter bear the cost and expense of such
separate defense. Should the indemnifying party determine not to defend such
claim or action, the other party shall have the right to maintain the defense of
such claim or action and the indemnifying party agrees to provide reasonable
assistance to it in the defense of such claim or action. Neither party shall
settle any such claim or action in a way that prejudices or adversely impacts
the other party to this Agreement without the prior approval of such other party
(which approval shall not be unreasonably withheld).
9.10 Any dispute concerning indemnification will be determined by
arbitration in accordance with Section of this Agreement.
9.11 THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS, IMPLIED OR ARISING BY LAW, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NOTHING IN
THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY (i) BY PENWEST
AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION ), OR SCOPE OF
ANY PENWEST PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERx PRODUCTION
TECHNOLOGY, JOINT DEVELOPMENTS, OR PENWEST TEST AND REGULATORY DATA; OR (ii) BY
MYLAN AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION ), OR SCOPE
OF ANY MYLAN IMPROVEMENTS, JOINT DEVELOPMENTS, OR MYLAN TEST AND REGULATORY
DATA.
9.12 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN (OTHER
THAN THE INDEMNITIES STATED IN THIS SECTION ), NEITHER PARTY SHALL UNDER ANY
CIRCUMSTANCES BE LIABLE FOR ANY THIRD PARTY CLAIMS OR FOR ANY INCIDENTAL,
CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES, INCLUDING ANY LOST PROFITS OR
SAVINGS, ARISING FROM ANY BREACH OF WARRANTY OR THE PERFORMANCE OR BREACH OF ANY
OTHER PROVISION OF THIS AGREEMENT OR THE USE OR INABILITY TO USE TIMERx, THE
DESIGNATED PRODUCT, PENWEST PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERx
PRODUCTION TECHNOLOGY, PENWEST TEST AND REGULATORY DATA, MYLAN IMPROVEMENTS, OR
MYLAN TEST AND REGULATORY DATA, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
9.13 Each party shall, at its own cost and expense, obtain and maintain
from a qualified insurance company comprehensive general liability and products
liability insurance coverage during the term of this Agreement (and any
subsequent period of sale or distribution pursuant to Section ). Such insurance
shall be in an amount no
-26-
<PAGE> 27
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
less than ************************* combined single limit for each occurrence
for bodily injury and/or property damage. Each party agrees to provide the other
party with a certificate of insurance evidencing such insurance within thirty
(30) days after the execution of this Agreement and again thereafter from time
to time as reasonably requested by such other party.
10. TERM AND TERMINATION.
10.1 The term of this Agreement shall begin on the date set forth
above and shall, unless earlier terminated as provided herein, continue until
the end of the License Term.
10.2 Subject to Sections 10.3 and 10.4, Penwest may at its option
terminate this Agreement following the Approval Date if Mylan and its Affiliates
and sublicensees, in the aggregate, fail to sell, in Royalty-bearing
transactions triggering "Net Sales" hereunder, Designated Product in volumes
sufficient to satisfy at least one of the following tests: (A) the sale of
minimum volumes of tablets (stated as the "units," regardless of dosage strength
in each tablet) as described in Section 10.2.1; or (B) for each of the years
following Year 2 (as defined below), the sale of volumes representing the
minimum Percentage Market Share determined under Section 10.2.2.
10.2.1 The minimum tablet volumes described in clause (A) above shall
be as follows:
(i) Beginning on the Approval Date and continuing through the first
full calendar year thereafter (Year 1), the minimum volume shall be
***************************************************** for the partial calendar
year in which the Approval Date occurs.
(ii) In each of the next four successive calendar years,
the minimum volumes shall be as follow:
Calendar Year Minimum Unit Volume
------------- -------------------
2 ***********
3 ***********
4 ***********
5 ***********
(iii) In each calendar year thereafter during the License Term,
the minimum volume shall equal ****** of the average actual unit volumes so sold
in the immediately preceding two calendar years.
-27-
<PAGE> 28
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
10.2.2 The minimum percentage market shares described in clause (B)
above shall be as follows:
(i) For Year 1 and Year 2, there will be no minimum market share test,
and only the minimum unit volumes set forth in Section 10.2.1 will be
applicable.
(ii) For Year 3 and each year thereafter during the License Term, the
minimum Percentage Market Share for purposes of this Section shall be the
greater of ********************* or the actual Percentage Market Share achieved
by the Designated Product sold by Mylan and its Affiliates and sublicensees in
Royalty-bearing transactions triggering "Net Sales" hereunder during Year 2.
10.3 If there is any period during which Mylan's ability to sell the
Designated Product is materially retarded due to:
10.3.1 events beyond its reasonable control as described in
Section 11.8 or
10.3.2 a failure of Penwest and its alternate supplier to supply
Formulated TIMERx as described in Section 5.8,
then an additional period of the lesser of the duration of such event (or
failure) or one year shall be added at that point to the schedule described in
Section .
10.4 If, at the Approval Date, there are in the United States
****************************************, the minimum amounts stated in
Section 10.2 shall ***************************** to be reasonably agreed between
Mylan and Penwest in good faith negotiations during the ninety (90) days
following the Approval Date.
10.5 Mylan may at its option terminate this Agreement following the
Approval Date, provided that any such elective termination shall require that
Mylan pay an early termination fee to Penwest **********************************
********************************************************************************
************************* stated in Section 10.2.1 prior to renegotiation of the
minimums under Section 10.4, if any ********************************************
**** ******************** during the period in which such termination occurs
(whether or not any part of
-28-
<PAGE> 29
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
************************************************** during such period), and such
termination fee shall be paid to Penwest on or before the effective date of such
termination.
10.6 Following any expiration or termination of the License Term (but
subject to Section 10.10), the licenses to Penwest under Sections 6.7, 6.8, and
6.9 shall be extended to include (in addition to their coverage as stated in
such sections) making, using and selling the Designated Product in the Territory
and the use of Mylan Test and Regulatory Data for purposes of complying with
governmental requirements with respect to the Designated Product for marketing
or use in the Territory, and otherwise shall continue to be governed by the
terms stated in such sections.
10.7 In the event that either party materially breaches any of the
terms, conditions or agreements contained in this Agreement to be kept, observed
or performed by it, then the other party may terminate this Agreement, at its
option and without prejudice to any of its other legal or equitable rights or
remedies, by giving the party who committed the breach (i) in the case of breach
of obligations other than the payment of money, 90 days' notice in writing,
unless the notified party within such 90-day period shall have cured the breach,
and (ii) in the case of breach of an obligation for the payment of money, 30
days' notice in writing, unless the notified party within such 30-day period
shall have cured the breach, including any required payment of interest on
previously unpaid amounts as set forth herein; provided, however, that:
10.7.1 no termination of this Agreement under this Section shall become
effective during the pendency of a good faith dispute between the parties as to
the existence of grounds for such a termination, provided that the parties are
complying with the process in Section 11.10 in good faith in order to resolve
such dispute, and that such termination shall become effective immediately upon
any binding determination that such grounds did exist at the time the notice of
termination was given; and
10.7.2 if a notice of termination is given pursuant to this Section and
it is subsequently determined that grounds for such a notice did not exist, the
giving of such notice shall not itself constitute a repudiation or default under
this Agreement, so long as such notice was given in the good faith belief that
such grounds did exist.
-29-
<PAGE> 30
10.8 In the event of any termination of this Agreement, Mylan shall
be entitled to sell and distribute reasonable inventories of Designated Product
remaining on hand as of the effective date of termination, provided that such
sales and distribution are otherwise in conformance with this Agreement. Mylan
may continue to make, use or sell such Designated Product only until Mylan has
exhausted remaining raw materials in its possession at the time of termination
of the license. Net Sales of the Designated Product pursuant to this Section
shall be subject to the Royalties pursuant to Section .
10.9 Any sublicenses granted by Mylan or its Affiliates under this
Agreement shall provide for termination or assignment to Penwest, at the option
of Penwest, of Mylan's or its Affiliate's interest therein upon termination of
this Agreement.
10.10 Mylan's obligations regarding payment of Royalties (and
Production Royalties, if any) accrued as of the date of termination and as
provided under Section 10.8; Penwest's rights under Sections 6.7, 6.8 and 6.9 as
modified by Section 10.6 (except if this Agreement is terminated due to an
uncured breach on the part of Penwest); and Mylan's rights under Section 6.10
(except if this Agreement is terminated due to an uncured breach on the part of
Mylan); and the provisions of Sections 7, 9 and 11 hereof shall survive any
expiration or termination of this Agreement.
11. MISCELLANEOUS.
11.1 Each of Penwest and Mylan agrees to duly execute and deliver,
or cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things as are reasonably within its
control and its responsibilities under this Agreement, including, without
limitation, the filing of such additional assignments, agreements, documents and
instruments, that may be necessary or as the other party hereto may from time to
time reasonably request in connection with this Agreement to carry out more
effectively the provisions and purposes of this Agreement.
11.2 This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter hereof.
11.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their Affiliates, successors and permitted assigns;
provided, however, that except for assignments or delegations to Affiliates of a
party (which shall not release such party from any of its rights or
responsibilities hereunder), or as part of the transfer of all or substantially
all assets to a single buyer or pursuant to a merger or other corporate
reorganization, or as otherwise specifically permitted hereunder, neither party
shall assign or delegate any of its rights or obligations
-30-
<PAGE> 31
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
hereunder at any time without the prior written consent of the other party
hereto, which consent shall not be unreasonably withheld.
11.4 All notices, requests or other communication provided for or
permitted hereunder shall be given in writing and shall be hand delivered or
sent by facsimile, reputable courier or by registered or certified mail, postage
prepaid, return receipt requested, to the address set forth on the signature
page of this Agreement, or to such other address as either party may inform the
other of in writing. Notices will be deemed delivered on the earliest of
transmission by facsimile, actual receipt or three days after mailing as set
forth herein.
11.5 No change, modification, extension, termination or waiver of any
obligation, term or provision contained herein shall be valid or enforceable
unless same is reduced to writing and signed by a duly authorized representative
of each of the parties to be bound hereby. No waiver of any right in any one
instance shall constitute a waiver of that right or of any other right in other
instances under this Agreement.
11.6 If any provision of this Agreement shall be held invalid, illegal
or unenforceable, such provision shall be enforced to the maximum extent
permitted by law and the parties' fundamental intentions hereunder, and the
remaining provisions shall not be affected or impaired.
11.7 Nothing herein contained shall constitute this a joint venture
agreement or constitute either party as the partner, principal or agent of the
other, this being an Agreement between independent contracting entities. Neither
party shall have the authority to bind the other in any respect whatsoever.
Except as provided herein, nothing contained in this Agreement shall be
construed as conferring any right on either party to use any name, trade name,
trademark or other designation of the other party hereto, unless the express,
written permission of such other party has been obtained.
11.8 In the event that either party hereto is prevented from carrying
out its obligations under this Agreement by events beyond its reasonable
control, including without limitation acts or omissions of the other party, acts
of God or government, natural disasters or storms, fire, political strife, labor
disputes, failure or delay of transportation, default by suppliers or
unavailability of parts, then such party's performance of its obligations
hereunder shall be excused during the period of such event and for a reasonable
period of recovery thereafter, and the time for performance of such obligations
shall be automatically extended for a period of time equal to the duration of
such event or events.
-31-
<PAGE> 32
11.9 This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to its
conflict of laws rules.
11.10 Should the parties to this Agreement fail to resolve any
controversy or claim arising out of or relating to the interpretation or
application of any term or provision set forth herein, or the alleged breach
thereof, such controversy or claim shall be resolved by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any award rendered pursuant to the terms set forth
herein may be entered in any court having jurisdiction of the party against whom
the award is rendered. Any award rendered pursuant to the terms and conditions
set forth herein shall be final and binding upon the parties and their
Affiliates. Any arbitration held pursuant to this Agreement shall be held in
Washington, D.C., or such other site as the parties may mutually agree. All
costs and expenses including reasonable attorney's fees and the fees and
expenses of the arbitrators and the AAA, incurred in the enforcement of this
Agreement shall be paid to the prevailing party by the non-prevailing party,
provided that the same may be apportioned between the parties by the arbitrators
if they determine that each party has prevailed in part. Notwithstanding the
foregoing, either party may, on good cause shown, seek a temporary restraining
order and/or a preliminary injunction from a court of competent jurisdiction, to
be effective pending the institution of the arbitration process and the
deliberation and award of the arbitration panel.
-32-
<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and acknowledge this Agreement as of the
Effective Date. This Agreement may be executed in one or more counterparts, each
of which will be an original instrument, but all of which together shall
constitute a single agreement creating one set of rights and obligations.
Mylan Pharmaceuticals Inc. Penwest Ltd.
By /s/ Roderick P. Jackson By /s/ John V. Talley
----------------------- ------------------
Roderick P. Jackson John V. Talley
Senior Vice President Vice President
Address: Address:
781 Chestnut Ridge Road 2981 Route 22
Morgantown, W.V. 26504 Patterson, N.Y.
12563
FAX: (304) 598-5409 FAX: (914) 878-3420
Attn: Dr. John P. O'Donnell Attn: Dr. Paul K. Wotton
-33-
<PAGE> 34
EXHIBIT 1.6
Target Designated Product
Solid-dosage forms of a controlled-release pharmaceutical for oral
administration in humans that combine Nifedipine with TIMERx and other
excipients and that are bioequivalent to the product currently (as of the
Effective Date) marketed in the United States under the name "Procardia XL," in
the following tablet dosage strengths: 30 mgs, 60 mgs, and 90 mgs, and that are
eligible for approval by the FDA under an ANDA.
-34-
<PAGE> 35
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
EXHIBIT 1.17
Deliverable Portion of the Mylan Test and Regulatory Data
All material under or directly related to the following headings (or their
substantive equivalents) ****************************
*****************************************
******************************
*****************************************
******************************************
**********************************************
Test Procedures under the heading "Controls for the Finished Dosage
Form" (except for any Assay information that is proprietary to Mylan)
Finished Product Specifications and Test Data under the heading
"Controls for the Finished Dosage Form"
Drug Substance under the heading "Analytical Methods" (except for
Mylan's Certificate of Analysis)
Analytical Procedures - ***********************************************
******************************************************************
******************************************
Such other information and data as is reasonably necessary or facilitative for
Penwest's performance of its obligations hereunder *************************
**************************************************************
-35-
<PAGE> 36
EXHIBIT 1.20
Penwest Patents
UNITED STATES:
1) U.S. Patent No. 4,994,276, entitled "Directly Compressible Slow Release
Granulation," issued February 19, 1991.
2) U.S. Patent No. 5,128,143, entitled "Sustained Release Excipient and Tablet
Formulation," issued July 7, 1992.
3) U.S. Patent No. 5,135,757, entitled "Compressible Sustained Release Dosage
Forms," issued August 4, 1992.
4) U.S. Application Serial No. 08\118,924, entitled "Sustained Release Hetero-
Disperse Hydrogel Systems for Insoluble Drugs," filed September 9, 1993.
CANADA:
5) Canadian Patent Application No. 611,700, filed September 18, 1989
(corresponding to items 1), 2) and 3) above).
6) Canadian Patent Application to be filed corresponding to item 4) above.
MEXICO:
7) Mexican Patent Application to be filed corresponding to item 4) above.
-36-
<PAGE> 37
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
EXHIBIT 2.3:
Development Steps
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Expected Dates Activity Responsibility
-------------- -------- --------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
***** ********** Penwest
- --------------------------------------------------------------------------------------------------------------------
***** Lab Scale formulation Mylan
- --------------------------------------------------------------------------------------------------------------------
Analytical methodology Penwest
transfer
- --------------------------------------------------------------------------------------------------------------------
********* TIMERx-N bulk Penwest
****** manufacture ******
******
- --------------------------------------------------------------------------------------------------------------------
Bio-batch production Mylan
nifedipine C.R. tablets
********
- --------------------------------------------------------------------------------------------------------------------
******** Pilot bio-study Mylan
- --------------------------------------------------------------------------------------------------------------------
******** Pivotal bio-studies (fasted, Mylan
fed, steady state) stability
studies
- --------------------------------------------------------------------------------------------------------------------
******** ********** Mylan
</TABLE>
-37-
<PAGE> 1
Exhibit 10.2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
THIS AGREEMENT is entered into as of the 3rd day of August, 1995, by and
between Penwest, Ltd., a Washington corporation ("Penwest"), and Mylan
Pharmaceuticals Inc., a West Virginia corporation ("Mylan").
A. Penwest has developed a controlled-release agent covered by one or
more patents, patent applications, know-how and other proprietary technology,
which agent Penwest markets under the name "TIMERx" ("TIMERx"). Penwest has
conducted initial biostudies with respect to the potential development of one or
more pharmaceutical products incorporating the active ingredient Nifedipine
("Nifedipine"), TIMERx, and one or more other excipients.
B. Mylan is interested in developing for manufacture a pharmaceutical
product incorporating Nifedipine in a solid-dosage controlled-release delivery
system for oral administration in humans.
C. The parties, under a separate agreement (the "August 1994
Agreement"), are engaging in certain activities relating to the development and
testing of a product incorporating Nifedipine and TIMERx, and designed to be
bioequivalent to the product currently being marketed in the United States under
the name "Procardia XL." The parties now desire to engage in a separate program
of research, development, and testing activities designed to determine if
Penwest's TIMERx controlled-release system can be adapted and combined with
Nifedipine to make a generic controlled-release version of Nifedipine for oral
solid-dosage administration in humans that is bioequivalent to the product
currently being marketed in the United States under the name "Adalat CC." If
such activities are successful, Mylan desires to contract for a supply of TIMERX
for use in the manufacture of such a controlled-release form of Nifedipine, and
Penwest is willing to supply the same provided that Mylan agrees to obtain all
of its requirements for controlled-release agents for Nifedipine products that
are essentially bioequivalent to "Adalat CC" in the form of TIMERx from Penwest
as provided herein.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 "AFFILIATE" shall mean any individual,
-1-
<PAGE> 2
partnership, corporation, limited company, trust, or other entity of whatever
nature (hereinafter collectively referred to as "Person"), which is directly or
indirectly controlling, controlled by or under common control with another
Person, identifiable based upon the context in which the term is used. The term
"control" shall mean the possession of the power to direct or cause the
direction of the management and policies and/or the distribution of the profits
of a Person.
1.2 "APPROVAL DATE" shall mean the date on which the Designated
Product (in any dosage strength) is first approved by the U.S. Food and Drug
Administration (herein the "FDA") for commercial sale in oral solid-dosage form
for administration in humans, pursuant to an abbreviated new drug application
("ANDA").
1.3 "APPROVED GENERIC VERSION" shall mean a drug that is bioequivalent
to the product that is currently being marketed in the United States under the
name "Adalat CC", and that has been fully approved for commercial sale in oral
solid- dosage form for administration in humans by the FDA or, as applicable,
the parallel regulatory authorities in the Non-Exclusive Territory, and which is
not branded, labelled, or marketed under the names "Adalat" or "Adalat CC" and
which is not marketed by Mylan, any of its Affiliates, or under a license or
sublicense from Mylan or its Affiliate 1.4
1.4 "CERTIFICATION PERIOD" shall mean the period beginning on the
Submission Date and ending on the earlier of:
1.4.1 the Approval Date; or
1.4.2 the termination of this Agreement as provided herein.
1.5 "CONFIDENTIAL TECHNOLOGY" shall mean all technology and know-how
disclosed hereunder that is, at the relevant time hereunder, protected or
required to be protected by both parties hereto as confidential information
pursuant to Section 7 hereof.
1.6 "DESIGNATED PRODUCT" shall mean the solid-dosage form of a
controlled- release pharmaceutical for oral administration in humans that
combines Nifedipine with TIMERx and other excipients and that is bioequivalent
to the product currently (as of the Effective Date) marketed in the United
States under the name "Adalat CC," as more fully described in Exhibit 1.6
subject to modifications as Penwest and Mylan may mutually agree during the
Development Period. The parties intend that the Designated Product will be
developed in more than one dosage strength, as more fully described in Exhibit
1.6.
-2-
<PAGE> 3
1.7 "DEVELOPMENT PERIOD" shall mean the period from the Effective Date
through the Submission Date or the earlier termination of this Agreement as
provided herein.
1.8 "DEVELOPMENT STEPS" shall mean the activities specified in Exhibit
2.3 hereto to be undertaken by the parties during the Development Period.
1.9 "DMF" shall mean Drug Master File as defined in 21 CFR 300 et
seq., including amendments and supplements which will be filed by Penwest.
1.10 "EFFECTIVE DATE" shall mean the effective date of this Agreement,
which is the date first written above.
1.11 "EXCLUSIVE TERRITORY" shall mean the United States and its
territories and possessions.
1.12 "FORMULATED TIMERx" shall mean TIMERx and certain additives in a
formulation to be developed hereunder specifically for use in the Designated
Product.
1.13 "JOINT DEVELOPMENTS" shall mean any and all inventions,
improvements, modifications, alterations, or enhancements that are developed
jointly by Mylan or any of its Affiliates, on the one hand, and Penwest or any
of its Affiliates, on the other hand, during the term of this Agreement or
during any period of mutual cooperative development prior to the Effective Date,
together with all United States and foreign intellectual property and other
rights and interests of the parties and their respective Affiliates thereto and
therein, including without limitation patents, trade secrets, copyright, periods
of market exclusivity, and other related rights or interests, to the extent the
same remain protected by any such rights and interests from being used freely by
others.
1.14 "LICENSE TERM" shall mean the cumulative period covered by the
Development Period, the Certification Period, and the Marketing Period.
1.15 "MARKETING PERIOD" shall mean the period beginning on the Approval
Date and ending on the earlier of:
1.15.1 the twentieth anniversary of the Approval Date; or
1.15.2 the termination of the License Term and/or this Agreement as
provided herein.
1.16 "MYLAN IMPROVEMENTS" shall mean, except for any Joint
Developments, any and all improvements, modifications, alterations, or
enhancements to any of the inventions covered by the Penwest Patents, Penwest's
Confidential Technology, or the
-3-
<PAGE> 4
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
TIMERx Production Technology, that are developed, owned, or controlled by Mylan
or any of its Affiliates or sublicensees, or in which Mylan or any of its
Affiliates or sublicensees otherwise has any rights or interests,during the term
of this Agreement (or, with respect to such sublicensees, during the term of the
respective sublicenses) or during any period of mutual cooperative development
prior to the Effective Date; together with all United States and foreign
intellectual property and other rights and interests of Mylan and its Affiliates
and sublicensees thereto and therein, including without limitation patents,
trade secrets, copyright, periods of market exclusivity, and other related
rights or interests, to the extent the same remain protected by any such rights
and interests from being used freely by others.
1.17 "MYLAN TEST AND REGULATORY DATA" shall mean any and all test data,
test designs and protocols, clinical studies and results thereof, government
licenses and applications therefor, government certifications and findings, and
related materials, information and rights (including without limitation
information regarding bioavailability and bioequivalence, and any adverse drug
reactions), developed, commissioned or otherwise obtained by Mylan or any of its
Affiliates or sublicensees during the term of this Agreement (or, with respect
to such sublicensees, during the term of the respective sublicenses) relating to
TIMERx, Mylan Improvements, the Designated Product, Penwest Patents, TIMERx
Production Technology, and/or Penwest's Confidential Technology, together with
all intellectual property and other rights and interests of Mylan and its
Affiliates or sublicensees thereto and therein, worldwide. It is understood
that:
1.17.1 To the extent any of the Mylan Test and Regulatory Data is
available for review by the public without confidentiality restrictions, it
shall be referred to herein as the "Available Portion" of the Mylan Test and
Regulatory Data; and that
1.17.2 To the extent any of the Mylan Test and Regulatory Data meets the
criteria specified in Exhibit 1.17, it shall be referred to herein as the
"Deliverable Portion" of the Mylan Test and Regulatory Data.
1.18 "NET SALES" shall************************************************
mean***************************************************************************
*******************************************************************************
********, calculated in accordance with United States Generally Accepted
Accounting Principles ("GAAP") consistently applied, which pertains to the
Designated Product. The calculation of Net Sales shall include*****************
in accordance with GAAP,*******************************************************
*******************************************************************************
-4-
<PAGE> 5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
*************************************************************Amounts to be
included in the calculation of Net Sales shall be those representing:
**********************************************
**********************************************
**********************************************
**********************************************
**********************************************
************************
************************
***********************************
**********************************************
********************************************************
******************************************
******************************************
******************************************
******************************************
******************************************
******************************************
******************************************
******************************************
1.19 "NON-EXCLUSIVE TERRITORY" shall mean Canada and Mexico and the
respective territories and possessions of each.
1.20 "PENWEST PATENTS" shall mean:
1.20.1 those United States patents and foreign equivalents in the
Non-Exclusive Territory and United States and foreign patent applications listed
in Exhibit 1.20 and
-5-
<PAGE> 6
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
all divisions, continuations, reissues, or extensions thereof, any periods of
marketing exclusivity relating thereto, and any letters patent that issue
thereon; and
1.20.2 Penwest's rights under United States patents and foreign patents
in the Non-Exclusive Territory, if any, obtained and in force during the License
Term covering any of Penwest's improvements, modifications, alterations, or
enhancements to any of the inventions covered by the Penwest Patents.
1.21 "PENWEST TEST AND REGULATORY DATA" shall mean any and all test
data, test designs and protocols, clinical studies and results thereof,
government licenses and applications therefor, government certifications and
findings, and related materials, information and rights (including without
limitation information regarding bioavailability and bioequivalence, and any
adverse drug reactions), developed, commissioned or otherwise obtained by
Penwest or any of its Affiliates during the term of this Agreement relating to
TIMERx, Penwest Patents, TIMERx Production Technology, and/or Penwest's
Confidential Technology, together with all intellectual property and other
rights and interests of Penwest and its Affiliates thereto and therein in the
Territory.
1.22 "PERCENTAGE MARKET SHARE" shall mean the share of the total United
States market for the aggregate of all Approved Generic Versions, the product
currently being marketed under the name "Adalat CC," and the Designated Product
which is represented by unit sales of the Designated Product, stated as a
percentage of such total market. The unit sales of such products shall be
determined through the publicly available reports of IMS or an alternate public
source mutually approved by the parties hereto.
1.23 "PRODUCTION ROYALTIES" shall mean****************************
************************************************* Mylan pursuant to Section 5.8.
1.24 "PROJECT CONTACT(S)" shall mean the persons appointed by each
party to serve as contact person between the parties during the Development
Period and the Certification Period. The initial Project Contact for Penwest is
Dr. Paul K. Wotton and the initial Project Contact for Mylan is J. Gregory Ford.
Each party shall promptly notify the other party of any substitution of other
personnel as its Project Contact. Each party may select and supervise its other
project staff as needed.
1.25 "ROYALTIES" (or "Royalty") shall mean the royalties payable to
Penwest pursuant to Section 4.3 hereof.
-6-
<PAGE> 7
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
1.26 "SPECIFICATIONS" shall mean such standards and analytical methods
established in writing by Penwest and Mylan as are reasonably necessary or
appropriate to assure the identity, strength, quality and purity of the TIMERx
and Formulated TIMERx, and any such other standards or methods as may be
required or approved by the FDA. It is understood and agreed that the
Specifications for Formulated TIMERx for use in Designated Product to be sold in
the Non-Exclusive Territory shall be the same as those for Formulated TIMERx for
use in Designated Product to be sold in the Exclusive Territory, and in no event
will Mylan permit the Designated Product to be certified for sale in the
Non-Exclusive Territory on any other basis.
1.27 "SUBMISSION DATE" shall mean the date on which Mylan submits to
the FDA an ANDA for the Designated Product (in any dosage strength), as approved
by the parties at the end of the Development Period.
1.28 "TERRITORY" shall mean the Exclusive Territory and the
Non-Exclusive Territory.
1.29 "TIMERx PRODUCTION TECHNOLOGY" shall mean Penwest's rights under
the Penwest Patents and any and all other patents, patent applications, and
other technology and know-how belonging to Penwest from time to time during the
term of this Agreement that directly relate to, and are necessary for the
production of, Formulated TIMERx for use in the Designated Product.
1.30 "UNIT PRICE" shall mean ************************ of Formulated
TIMERx, subject to adjustment ******************************* to reflect any
percentage increases or decreases in the United States Department of Labor,
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers for the
New York City Metropolitan Area, "All Items" (1982-84 = 100) (the "Index") over
the base period Index. The Index, which may be a monthly, quarterly or other
fiscal period Index **********************************************************,
shall be considered the "base period" Index. If at any time publication of the
Consumer Price Index is discontinued, Penwest shall, with the consent of Mylan
(which consent shall not be unreasonably withheld), substitute any other index
published by the Bureau of Labor Statistics, or successor or similar
governmental agency or quasi-governmental or private entity providing similar
information as may then be in existence and shall be most nearly equivalent
thereto.
-7-
<PAGE> 8
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
2. DEVELOPMENT PERIOD.
2.1 In consideration of Penwest's entering into this Agreement, Mylan
shall pay Penwest upon the Effective Date a nonrefundable initial fee of
************. Upon receipt of such sum, Penwest shall conduct a pilot bio-study,
the results of which will be supplied to Mylan within 180 days of payment.
2.2 As additional inducement to Penwest to enter into this Agreement,
Mylan hereby affirms that, other than confidentiality agreements not binding
either party to any further agreement, it currently has no agreement or
arrangement with any Person other than Penwest for or including the development,
design, testing, certification, manufacture or marketing by it or such other
Person (or the Affiliate(s) of either) of any controlled-release Nifedipine
product that is intended to be essentially bioequivalent to "Adalat CC," and
agrees that it will refrain from entering into any such agreement or arrangement
(other than such confidentiality agreements) throughout the duration of the
Development Period or the period of eighteen months following the date hereof,
whichever expires later.
2.3 During the Development Period, each of Penwest and Mylan will
exert its continuing best efforts to perform their respective tasks specified in
Exhibit 2.3, within the estimated time periods there stated, in order to create
and produce the Designated Product, and each will cooperate with the other in
such efforts. Each party will, promptly and throughout the Development Period,
provide to the other all necessary information in or coming into its possession
or reasonably available to it for such purposes. Notwithstanding anything else
to the contrary contained herein, nothing shall require either party to disclose
confidential information for which such party has an obligation of
confidentiality to a third party. Each party understands and agrees that the
other does not warrant or commit that the Designated Product will be
successfully developed, and neither party shall have any liability or
responsibility to the other or to third parties for any such failure of the
development process hereunder, except to the extent such failure results from
said party's intentional misconduct, negligence, or breach of its duties or
obligations as set forth herein.
2.4 Mylan shall be responsible for, and hereby agrees to conduct or
arrange for, at Mylan's expense, all testing and studies during the Development
Period, including as to bioavailability and bioequivalence, in connection with
the development, licensing, manufacture and marketing of the Designated Product,
and for substantial compliance with all material and relevant governmental
requirements imposed in the Territory with respect to the manufacture, use, and
sale of the
-8-
<PAGE> 9
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Designated Product. In consideration of Penwest's entering into this Agreement,
Mylan agrees to pay Penwest:
2.4.1 a first milestone fee of *****************, payable
*******************************************************************************
********************************************************************* (but only
with respect to the ****************************************************, where
******************** are ****************************************************.
2.5 Mylan shall be primarily responsible for the preparation, at its
expense, of an ANDA for the Designated Product, to be filed with the FDA at the
end of the Development Period.
2.6 Each party's Project Contact will provide written reports to the
other party's Project Contact at least monthly throughout the Development
Period, stating in detail all efforts made and in process, and all significant
progress achieved and difficulties encountered in the development effort since
the last such report. Each party's Project Contact will also be available
throughout the Development Period to answer any reasonable questions from the
other party's Project Contact. The parties will cooperate reasonably during the
Development Period such that the sites for meetings among their respective
personnel shall be alternated among the parties, facilities to the extent
practicable.
2.7 During the Development Period, Mylan will supply, at its own
expense, all Nifedipine reasonably required to support the development effort,
and Penwest shall provide at its own expense all TIMERx reasonably required for
such effort. Each party shall bear its own expenses for all activities during
the Development Period, except as otherwise stated in Exhibit 2.3.
2.8 Either party may terminate this Agreement before completion of the
Development Period by delivery of 90 days' written notice to the other if such
party reasonably determines that, due to unfavorable or inconclusive results to
that time, no further Development Steps are likely to lead to the successful
development of the target Designated Product listed in Exhibit 1.6.
3. CERTIFICATION PERIOD.
3.1 During the Certification Period, Mylan will exert its continuing
best efforts, at its expense, to prosecute the ANDA(s) for the Designated
Product (in all the contemplated dosage strengths) filed hereunder successfully
to the granting of an
-9-
<PAGE> 10
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
FDA approval to market the Designated Product. Penwest will, promptly and
throughout the Certification Period, provide to Mylan all necessary information
in or coming into Penwest's possession or reasonably available to it for such
purpose. Each party understands and agrees that the other does not warrant or
commit that the Designated Product will be successfully licensed or certified
for marketing by the FDA, and neither party shall have any liability or
responsibility to the other or to third parties for any such failure of the
certification process hereunder, except to the extent such failure results from
said party's intentional misconduct, negligence, or breach of its duties or
obligations as set forth herein.
3.2 Either party may terminate this Agreement before completion of the
Certification Period by delivery of 90 days' written notice to the other if such
party reasonably determines that, due to unfavorable action by the FDA, the ANDA
is not likely to be approved by the FDA, regardless of any further steps or
submissions that could be made.
3.3 Mylan's Project Contact will provide written reports to Penwest's
Project Contact at least quarterly throughout the Certification Period, stating
in detail all efforts made and in process, and all significant progress achieved
and difficulties encountered in the certification effort since the last such
report. Mylan's Project Contact will also be available throughout the
Certification Period to answer any reasonable questions from Penwest's Project
Contact.
3.4 During the Certification Period, Mylan shall provide at its own
expense all Nifedipine and other materials and manufacturing and testing
services reasonably required to support the testing and certification effort,
and Penwest shall provide at its own expense all TIMERx reasonably required for
such effort. Each party will bear its own expenses during the Certification
Period.
3.5 In consideration of Penwest's entering into this Agreement, Mylan
agrees to pay Penwest a second milestone fee of $1,000,000, payable within
********************************************* (but only with respect to the
*********************************, where ********************* are
**************************************************************. Mylan shall
notify Penwest of the occurrence of the Approval Date no later than the next
business day following Mylan's learning of such occurrence.
-10-
<PAGE> 11
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
4. MARKETING PERIOD.
4.1 Subject to the granting of all necessary governmental approvals or
concurrences to sell the Designated Product, Mylan hereby agrees, during the
Marketing Period, to use its continuing best efforts to market, promote and sell
the Designated Product throughout the Territory.
4.2 Mylan hereby agrees to pay to Penwest Royalties as follows:
4.2.1 with respect to all Net Sales with respect to Designated Product
sold in a nation during a quarter in which there is ***************************
on the market in such nation, the Royalty rate shall be *************** of such
Net Sales;
4.2.2 with respect to all Net Sales with respect to Designated Product
sold in a nation during a quarter in which there is ***************************
on the market in such nation, the Royalty rate shall be ***********************
of such Net Sales;
4.2.3 with respect to all Net Sales with respect to Designated Product
sold in a nation during a quarter in which there are *************************
on the market in such nation, the Royalty rate shall be **********************
of such Net Sales;
provided, however, that such Royalties shall be********************************
************************************************** with respect to Net Sales of
the Designated Product as to which no license to Penwest Patents hereunder is
applicable to the manufacture, sale or use of the Designated Product (it being
understood that a Penwest Patent shall not be considered applicable to the
manufacture of the Designated Product solely by virtue of its applicability to
the manufacture and/or sale of the Formulated TIMERx to be provided by Penwest
to Mylan for such purpose hereunder, unless such Penwest Patent is also
otherwise applicable to the manufacture, sale or use of the Designated Product).
For purposes of the foregoing, to be "sold in a nation" refers to the nation in
which such Designated Product will be initially placed into actual commercial
distribution, regardless of the FOB point or where the agreement for such sale
may have been struck. If an Approved Generic Version (other than the Designated
Product) is first put on the market in a nation during the first half of a
calendar quarter, it will be deemed for purposes of this Section to have been on
the market in such nation from the first day of such quarter, and if it is first
put on the market in a nation during the second half of a calendar quarter, it
will be deemed for purposes of this Section not to have been on the market in
such nation until the first day of the following quarter.
-11-
<PAGE> 12
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
4.3 All Royalties payable pursuant to this Agreement shall be due
quarterly ************************ following the end of each calendar quarter
for Net Sales in such calendar quarter. Each such payment shall be accompanied
by a statement of Net Sales for the quarter and the calculation of Royalties
payable hereunder. All Royalties and all other amounts which are overdue under
this Agreement will bear interest at the rate of 1 1/2% per month from the date
due through the date of payment. Mylan shall keep and shall cause its Affiliates
and its and their sublicensees to keep complete, true and accurate records for
the purpose of showing the derivation of all Royalties payable to Penwest under
this Agreement. Penwest's duly accredited representatives (which representatives
are approved for such purpose by Mylan, which approval shall not be unreasonably
withheld nor shall it be revocable by Mylan following the start of any
inspection hereunder) shall have the right to inspect, copy, and audit such
records at any time during reasonable business hours upon reasonable prior
notice to Mylan or any of its Affiliates or sublicensees, respectively, but such
right will not be exercised more often than annually (it being understood that a
single exercise of such right may include a series of related or continuing
inspections, copying and audits). Any such audit shall be at the expense of
Penwest, unless the audit reveals that, with respect to the period under audit,
less than 97% of the Royalties due to Penwest hereunder have been reported, in
which event Mylan shall pay or reimburse Penwest for the reasonable expenses of
such audit, in addition to Penwest's other remedies for such underpayment.
4.4 All monies due hereunder shall be paid in United States Dollars to
Penwest in Patterson, New York, USA. Said payment may be made at Mylan's option
by check or wire transfer.
5. SUPPLY OF FORMULATED TIMERx.
5.1 Except as provided in Section 5.8, and subject to the other
provisions hereof, Penwest will supply Mylan and its Affiliates and sublicensees
with sufficient quantities of Formulated TIMERx to meet their reasonable
requirements for manufacturing of the Designated Product during the Marketing
Period, and Mylan shall purchase all of its and its Affiliates, and
sublicensees, requirements for controlled-release agents for Nifedipine products
that are essentially bioequivalent to "Adalat CC" in the form of TIMERx from
Penwest during such period.
5.2 The price for all Formulated TIMERx sold hereunder shall equal the
Unit Price multiplied by the applicable units purchased. All sales**************
********************************************, and Mylan shall bear all
transportation, insurance, taxes, duties, and other costs and risks of loss,
spoilage and damage
-12-
<PAGE> 13
associated with the shipping and delivery of Formulated TIMERx to Mylan or its
Affiliates or sublicensees.
5.3 Penwest warrants that it will not change or modify its DMF, the
Specifications, or its method of manufacture for Formulated TIMERx without prior
written consent from Mylan, which consent shall not be unreasonably withheld.
5.4 Penwest shall perform quality control tests with respect to all
Formulated TIMERx as required by the FDA as set forth in the DMF. In addition,
Penwest may perform such other tests as Penwest deems necessary in accordance
with its applicable policies. No other or special tests by Penwest with respect
to the raw materials or Formulated TIMERx will be required, unless and to the
extent that Mylan establishes that the same are required in order to obtain or
maintain an FDA approval to market the Designated Product in the Exclusive
Territory. Penwest shall promptly, upon completion of each lot or batch of
Formulated TIMERx, deliver to Mylan a copy of the record of such test performed
on said lot or batch.
5.5 Each shipment of the TIMERx or Formulated TIMERx shall:
i) be accompanied by a Certificate of Analysis and a
certificate of Origin;
ii) meet all present, FDA, Compendial, and the applicable
Specifications; and
iii) be manufactured, packaged, stored and shipped in
conformance with the applicable Specifications, and Current
Good Manufacturing Practices ("cGMPs").
5.6 Within a reasonable period but not more than thirty (30) days
after receipt, Mylan will analyze each shipment of the Formulated TIMERx. If
Mylan considers any such shipment not to conform to the applicable
Specifications, Mylan shall notify Penwest immediately and provide Penwest with
the relevant analysis. If Penwest does not agree, the parties shall submit such
disagreement to the arbitration of one mutually accepted neutral analytical
laboratory. If Penwest or the neutral laboratory agree with Mylan, Penwest shall
not have any obligation to Mylan other than to accomplish at Mylan's option any
of the following:
-13-
<PAGE> 14
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
i) at its own expense accept return of any shipment not
accepted; or
ii) reimburse Mylan for the cost of disposal or destruction;
and
iii) use commercially reasonable efforts to replace the non-
conforming shipment with conforming Formulated TIMERx.
5.7 In case Penwest cannot supply Mylan the requested quantities of
the Formulated TIMERx, the shipments may be made by an alternate supplier
designated by Penwest with Mylan's consent, which consent shall not be
unreasonably withheld. Penwest will qualify (in Penwest's reasonable judgment)
at least one such alternate supplier and notify Mylan thereof at least ninety
(90) days prior to submission of the ANDA. If Mylan has any objections to such
supplier, it shall so notify Penwest within fifteen days following Penwest's
notice of such qualification, or else Mylan will be deemed to have consented to
such qualification and the designation of such supplier. Such shipment by the
alternate supplier shall be made under the same agreed terms and conditions as
those set forth herein, except that an additional 60 days shall be added to the
order lead time stated in any then-outstanding order for Formulated TIMERx
hereunder to reflect the transition time required to shift to such alternate
supplier. Notwithstanding anything to the contrary set forth herein, Penwest
will be responsible for enforcing all relevant terms and conditions set forth
herein against such alternate supplier and remain liable to Mylan for any breach
of such terms and conditions by such supplier.
5.8 If for any reason Penwest (or the alternate supplier) fails to
supply Mylan with its and its Affiliates, and sublicensees, requirements of
Formulated TIMERx during the Marketing Period as agreed hereunder, Penwest shall
grant Mylan a nonexclusive license to manufacture Formulated TIMERx under the
TIMERx Production Technology and make knowledgeable personnel reasonably
available to consult with Mylan, all to the extent necessary to enable Mylan to
produce Formulated TIMERx that would otherwise have been supplied by Penwest or
an alternate supplier hereunder for Mylan and its Affiliates and sublicensees in
connection with the production of the Designated Product pursuant to this
Agreement.
5.8.1 In such event Mylan shall pay to Penwest, in addition to the
Royalties under Section 4.3, Production Royalties equal to *******************,
if any, of the then-current Unit Price for each kilogram of Formulated TIMERx
produced by Mylan hereunder, ***************************************************
************************. Such Production Royalties shall be payable and
reported and accounted for as stated in
-14-
<PAGE> 15
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Sections 4.4 and 4.5, except that the Production Royalties will be payable
******************** after the end of the calendar quarter in which the
applicable kilogram of Formulated TIMERx was produced.
5.8.2 Mylan shall maintain all information and technology delivered to
Mylan pursuant to this Section, whether orally or in writing, in confidence in
accordance with Section 7 (to the extent the same is Confidential Technology)
and shall use such information and technology only for the purpose of producing
Formulated TIMERx for its own use and the use of its Affiliates and sublicensees
in connection with this Agreement.
5.8.3 Mylan acknowledges that, in doing the foregoing, Penwest will not
be providing a "turnkey" operation. Rather, Penwest will only be required to
make reasonably available to Mylan the best standard of knowledge and
information then available to Penwest and directly used in its or its
Affiliate's manufacture of Formulated TIMERx. If any professional licenses,
visas, or other permits are required for any of the consulting to be provided by
Penwest's or its Affiliates, or licensees, personnel, Mylan shall so inform
Penwest and Mylan shall bear the costs of obtaining the same.
5.8.4 Neither Penwest nor its Affiliates or licensees will be
responsible for any failure of Mylan or its personnel to understand or properly
to implement such knowledge and information or for any materials made by any
party other than Penwest or such respective Affiliate or licensee using such
knowledge and information.
5.8.5 If Penwest's non-delivery of Formulated TIMERx resulted in whole
or in part from a temporary inability to produce and deliver the same, Penwest
may, at its option and on at least 120 days, prior written notice to Mylan,
terminate the license to produce Formulated TIMERx hereunder once Penwest or its
alternative supplier is again able and willing to supply Formulated TIMERx
hereunder.
5.9 Penwest shall, after receipt of reasonable prior notice, give duly
accredited representatives of Mylan access at all reasonable times during
regular business hours to inspect, copy, and audit any relevant records of
Penwest's or its Affiliate's plant in which the Formulated TIMERx is being
produced.
5.10 Mylan shall deliver to Penwest a firm written order stating its
(and/or its Affiliates, and sublicensees') requirements for Formulated TIMERx to
be used for production of the Designated Product for commercial use or sale
***************
-15-
<PAGE> 16
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
******************************************************** therefor. Mylan shall,
within one month following the filing by Mylan of an ANDA with the FDA for the
Designated Product, submit to Penwest Mylan's first such order for Formulated
TIMERx under this Agreement, for an amount equal to the quantity necessary to
reach the Percentage Market Share *************** for the Designated Product in
the dosage strengths) submitted in such ANDA filings **************************
*******************************************************, inclusive, following
the submission of such order.
5.11 At least ********************* before Mylan and/or its Affiliates
or sublicensees begin production of the Designated Product for commercial use or
sale (and in any event not later than concurrently with the submission of the
first order described in Section 5.10), Mylan shall deliver to Penwest a
written, non-binding estimate of all requirements of Formulated TIMERx therefor.
Mylan will deliver to Penwest updates to such estimates on or before the first
day of each January, April, July and October thereafter during the Marketing
Period, which updates may revise estimates previously submitted and will add
estimates for additional months so that each such estimate covers the
****************** following the end of the firm-order period (that is, the
************************ after the month in which such estimates are made).
Penwest shall not be obligated to supply Mylan with quantities of Formulated
TIMERx during any quarter in excess of ************************ of the
quantities estimated in Mylan's written estimate applicable to that quarter,
which estimate was given to Penwest ************ prior to such quarter (the
"************** Prior Estimate" as to that quarter). Mylan shall be responsible
for purchasing from Penwest in each quarter at least *************** of the
quantities of Formulated TIMERx estimated in the *********** Prior Estimate as
to such quarter.
5.12 No order for Formulated TIMERx hereunder may be cancelled or
deferred by Mylan except by written notice delivered to Penwest **************
to the scheduled delivery date. No orders may be cancelled or deferred
*************************** without Penwest's approval if such cancellation or
deferral would reduce Mylan's purchases for the applicable quarter to less than
the ********* level referred to in Section 5.11.
5.13 Each party shall promptly notify the other of any fact,
circumstance, condition or knowledge dealing with TIMERx or the Designated
Product of which the Party becomes aware that bears upon the safety or efficacy
of TIMERx or the Designated Product. Each party shall immediately notify the
other of any inspection or audit relating to TIMERx, Formulated TIMERx, or the
Designated Product by any governmental regulatory authority in the Territory. If
a representative of the
-16-
<PAGE> 17
governmental authority takes samples in connection with such audit or
inspection, the parties shall immediately provide each other, as appropriate,
samples from the same batch. The party in receipt of such notice will provide
the other party within 72 hours, with copies of all relevant documents,
including FDA Forms 482, 483, warning letters and other correspondence and
notifications as such other party may reasonably request. Penwest and Mylan
agree to cooperate with each other during any inspection, investigation or other
inquiry by the FDA or other governmental entity, including providing information
and/or documentation, as requested by the FDA, or other governmental entity. To
the extent permissible, Penwest and Mylan also agree to discuss any responses to
observations or notifications received and to give the other party an
opportunity to comment on any proposed response before it is made. In the event
of disagreement concerning the content or form of such response, Mylan shall be
responsible for deciding the appropriate form and content of any response with
respect to any,of its cited activities and Penwest shall be responsible for
deciding the appropriate form and content of any response with respect to any of
its cited activities. Each party shall inform the other of all comments and
conclusions received from the governmental authority.
6. OWNERSHIP AND LICENSES.
6.1 Except as otherwise explicitly licensed or transferred as provided
herein, each party will, as between it and the other party hereto, retain
ownership of any and all inventions, copyrights, trade secrets, know-how, patent
rights and other technology and rights to the extent conceived or developed by
its personnel or contractors (other than the other party hereto). Neither party
makes any grant of rights by implication.
6.2 Except as otherwise provided herein, each party shall be
responsible, as it shall determine, for the filing and prosecution of any and
all patent applications with respect, in whole or in part, to its own
intellectual property and for the ,maintenance of any available patent
protection with respect thereto; provided however, that neither party commits
that any such patent protection will be available or continuous hereunder. If
one party believes that an application for a patent in the Territory should be
filed with,respect to any invention of the other party hereunder related to the
Designated Product, it may so notify such other party, and the parties will
cooperate in the investigation of the propriety of such an application, taking
into account the respective interests of the parties and the anticipated costs
and benefits of such patent protection.
6.3 Penwest hereby grants to Mylan and its Affiliates a license under
the Penwest Patents, the Joint Developments, and Penwest's Confidential
Technology disclosed to Mylan hereunder to make, have made, use and sell the
Designated Product in the Territory during the License Term. Such license shall
be exclusive for such purposes as to the Penwest Patents listed in Exhibit 1.20
within the Exclusive
-17-
<PAGE> 18
Territory and shall be nonexclusive in the Non-Exclusive Territory. Such license
does not extend to the making of TIMERx or Formulated TIMERx, but does cover the
incorporation of the same into the Designated Product. Mylan shall have no right
to grant sublicenses hereunder without the prior written consent of Penwest,
which consent may be withheld in Penwest's discretion as to sublicenses in the
Exclusive Territory, but will not be unreasonably withheld as to sublicenses in
the NonExclusive Territory. Penwest will, throughout the License Term, promptly
notify Mylan of all Penwest Patents referred to in Subsection 1.20.2 and provide
Mylan with access to all of the same, solely for use within the scope of the
license stated in this section.
6.4 Mylan hereby grants to Penwest and its Affiliates a nonexclusive,
paid-up, worldwide license,,with right to sublicense, under any and all patents,
patent applications, trade secrets, copyrights, and other intellectual property
rights of any sort owned or controlled by Mylan or its Affiliates or
sublicensees, to make, have made, use and sell Formulated TIMERx during the
License Term, if and to the extent such license is necessary for Penwest to do
so as agreed hereunder. Penwest and its Affiliates shall have the right to grant
sublicenses of its rights hereunder to an alternate supplier as and for the
purposes described in Section 5.7, but shall otherwise have no right to grant
sublicenses hereunder without the prior written consent of Mylan, which consent
shall not be unreasonably withheld.
6.5 Subject to and conditional upon the failure of Penwest (or the
alternate supplier) to meet Mylan's and its Affiliates' and sublicensees,
requirements as provided in Section 5.8, Penwest grants to Mylan a nonexclusive,
worldwide license under the TIMERx Production Technology to make and have made
Formulated TIMERx solely for use in the Designated Product for sale in the
Territory during the License Term. Mylan shall have no right to grant
sublicenses of its rights hereunder (whether to Affiliate(s) or otherwise)
without the prior written consent of Penwest, which consent shall not be
unreasonably withheld.
6.6 Mylan acknowledges that Penwest and its Affiliates, for itself and
for others, applies, and will seek to apply, TIMERx to products other than the
Designated Product. No provision hereof, and no exclusivity hereunder, shall
prevent Penwest from so applying TIMERx or Formulated TIMERx, so long as the end
product is not the Designated Product hereunder, it being understood that the
August 1994 Agreement will continue to govern on this point as to the products
covered by it.
6.7 Mylan hereby grants to Penwest and its Affiliates a nonexclusive,
worldwide license, with right to sublicense, under any and all Mylan
Improvements, to make, have made, use and sell any products or services using or
based upon TIMERx or related technology, other than: (i) Designated Products in
the Territory during the License Term, and (ii), to the extent so provided in
the August 1994
-18-
<PAGE> 19
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Agreement, the "Designated Products" defined in that agreement. Such license
shall require the payment of a reasonable royalty to Mylan if any commercial
sales are made under such license. Penwest shall notify Mylan at least
*********** prior to granting any sublicense to the rights under this section
(other than to a Penwest Affiliate), and shall consult with Mylan as to the
propriety of such sublicense if Mylan, within such ********* period, notifies
Penwest of Mylan's belief, on reasonable grounds stated in such notice, that
such a sublicense would have a substantial adverse effect on Mylan or its
business. Mylan will, throughout the License Term, promptly notify Penwest of
all Mylan Improvements and provide Penwest with access to all of the same,
solely for use within the scope of the license stated in this section.
6.8 In recognition of the parties' cooperative efforts with respect to
the Joint Developments, it is agreed that each party and its Affiliates shall
have the nonexclusive, worldwide right and license, with right to sublicense,
under the Joint Developments, to make, have made, use and sell any products or
services (other than the Designated Product by Penwest or its Affiliates in the
Exclusive Territory during the License Term, or, to the extent so provided in
the August 1994 Agreement, the "Designated Products" defined in that agreement);
provided, ********************* however,***************************************
*******************************************************************************
Each party shall promptly notify the other of any such licenses or sublicenses
of any Joint Developments. Each party will, throughout the License Term,
promptly notify the other of all Joint Developments and provide such other party
with access to all of the same.
6.9 Mylan hereby grants Penwest and its Affiliates a nonexclusive
license under all rights of Mylan and its Affiliates and sublicensees in and to
that portion of the Mylan Test and Regulatory Data that is disclosed or provided
to Penwest hereunder, to use the same for purposes of complying with
governmental requirements of any country, other than with respect to the
Designated Product for marketing or use in the Territory. Such license shall be
on a paid-up, royalty-free basis as to Penwest and its Affiliates, and as to any
of the Available Portion of the Mylan Test and Regulatory Data (whether as to
Penwest or others), but shall********************************************** if
any but the Available Portion is used by any other party under a sublicense from
Penwest or its Affiliate. Penwest shall notify Mylan at least *****************
prior to granting any sublicense to the rights under this section (other than to
a Penwest Affiliate or as to the Available Portion), and shall consult with
Mylan as to the propriety of such sublicense if Mylan, within such ************
period, notifies Penwest of Mylan's belief, on reasonable grounds stated in
-19-
<PAGE> 20
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
such notice, that such a sublicense would have a substantial adverse effect on
Mylan or its business. Mylan hereby consents to Penwest's and its Affiliates'
and sublicensees' cross-referencing, in any filings that are essentially the
equivalent of the sorts of filings that are termed "ANDA" or "NDA" filings if
made with the FDA, made by them within the scope of such license, any ANDA or
NDA filing made or FDA master file created by Mylan or its Affiliates or
sublicensees relating to or containing any of the Mylan Test and Regulatory
Data. The license under this section shall survive any termination or expiration
of the term of this Agreement, except a termination under Section 10.7 due to an
uncured breach by Penwest. Mylan will, throughout the License Term and solely
for use within the scope of the license stated in this section, promptly provide
to Penwest copies of all of the Deliverable Portion of the Mylan Test and
Regulatory Data in or coming into Mylan's possession or otherwise reasonably
available to it.
6.10 Penwest hereby grants Mylan and its Affiliates (with right to
sublicense only to sublicensees under Section 6.3, as approved by Penwest) a
nonexclusive, paid-up license under all rights of Penwest and its Affiliates in
and to the Penwest Test and Regulatory Data to use the same for purposes of
complying with governmental requirements, but solely with respect to the
Designated Product for marketing or use in the Territory, it being understood
that the August 1994 Agreement will continue to govern on this point as to the
products covered by it. Penwest hereby consents to Mylan's and its Affiliates'
and such sublicensees, cross-referencing, in any ANDA or NDA filings made by
them within the scope of such license, any ANDA or NDA filing made or FDA master
file created by Penwest or its Affiliates relating to or containing any of the
Penwest Test and Regulatory Data. The license and rights under this section
shall survive any termination or expiration of the term of this Agreement,
except a termination under Section 10.7 due to an uncured breach by Mylan.
Penwest will, throughout the License Term and solely for use within the scope of
the license stated in this section, promptly provide to Mylan copies of all of
the Penwest Test and Regulatory Data in or coming into Penwest's possession or
otherwise reasonably available to it.
6.11 Each party agrees to mark and to have marked by its Affiliates and
sublicensees (if any) every product manufactured, used or sold by it or its
Affiliates or sublicensees in accordance with the laws of the United States or
other applicable nation relating to the marking of patented articles with
notices of patent.
6.12 Any dispute concerning *******************************************
*******************************************************************************
************************************************************* Each party hereto
shall afford,
-20-
<PAGE> 21
to the extent permissible under its agreements with the third parties, the other
party hereto the same audit rights that such party obtains from its licensees or
sublicensees with respect to any of the rights described in such sections.
7. CONFIDENTIALITY.
7.1 In the course of performance under this Agreement, a party may
disclose to the other confidential information belonging to such party in
writing, orally or by demonstration or sample, which information is marked or
stated in writing at or within 30 days after its disclosure to be "confidential"
or "trade secret" information. All such confidential information of a party
shall be maintained in confidence by the other and will not be used by the other
party for any purpose except as authorized hereunder. Each party shall exercise,
and shall cause its Affiliates, sublicensees and consultants to exercise, a
reasonable degree of care and at least the same degree of care as it uses to
protect its own confidential information of similar nature to preserve the
confidentiality of such information of the other party. Each party shall
safeguard such information against disclosure to third parties, including
without limitation employees and persons working or consulting for such party
that do not have an established, current need to know such information for
purposes authorized under this Agreement. This obligation of confidentiality
does not apply to information and material that:
7.1.1 were properly in the possession of the receiving party, without
any restriction on use or disclosure, prior to receipt from the other party;
7.1.2 are at the time of disclosure hereunder in the public domain by
public use, publication, or general knowledge;
7.1.3 become general or public knowledge through no fault of the
receiving party or its Affiliates or sublicensees following disclosure
hereunder;
7.1.4 are properly obtained by the receiving party from a third party
not under a confidentiality obligation to the disclosing party hereto;
7.1.5 are independently developed by or on behalf of the receiving party
without the use or assistance of the confidential information of the other
party;
7.1.6 consist merely of an idea or conception for the combination of one
or more active drug ingredients with a controlled-release agent such as TIMERx;
or
7.1.7 are required to be disclosed by order of any court or governmental
authority;
-21-
<PAGE> 22
provided, however, that the exceptions stated in Sections 7.1.3, 7.1.4, 7.1.5
and 7.1.7 shall not affect the continuing obligation of Mylan as the receiving
party to pay any Royalties pursuant to the terms hereof with respect to the use
of such information or materials that have not, as of the relevant time, been
placed into the public domain by the act of Penwest or its Affiliates.
7.2 Neither party shall make any public announcement or other
publication regarding this Agreement (whether as to the existence or terms
hereof) or the development work or project hereunder or the results thereof
without the prior, written consent of the other party, which consent shall not
be unreasonably withheld; provided that the foregoing shall not prohibit any
disclosure which, in the opinion of counsel to the disclosing party, is required
by any applicable law or by any competent governmental authority. In no event
shall either party make any disclosure of any such results before a patent
application has been filed with respect thereto, except upon the prior written
approval of the other party.
8. INFRINGEMENT.
8.1 Penwest shall promptly inform Mylan of any suspected infringement
of any of the Penwest Patents or the infringement or misappropriation of the
TIMERx Production Technology by a third party, to the extent such infringement
involves the manufacture, use or sale of the Designated Product in the Territory
("Covered Infringement"). Mylan shall promptly inform Penwest of any suspected
infringement of any of the Penwest Patents or infringement or misappropriation
of the TIMERx Production Technology, whether or not the same involves a Covered
Infringement.
8.2 If the suspected infringement or misappropriation does not involve
a Covered Infringement, Penwest may take, or refrain from taking, any action it
chooses, with or without notice to Mylan, and Mylan shall have no right to take
any action with respect to such suspected infringement or misappropriation, nor
to any recoveries with respect thereto. If the suspected infringement or
misappropriation involves a Covered Infringement, Penwest shall, within 30 days
of the first notice referred to in Section 8.1, inform Mylan whether or not
Penwest intends to institute suit against such third party with respect to a
Covered Infringement. Mylan will not take any steps toward instituting suit
against any third party involving a Covered Infringement until Penwest has
informed Mylan of its intention pursuant to the previous sentence.
8.3 If Penwest notifies Mylan that it intends to institute suit
against a third party with respect to a Covered Infringement, and Mylan does not
agree to join in such suit as provided in Section 8.4, Penwest may bring such
suit on its own and shall in such event bear all costs of, and shall exercise
all control over, such suit. Penwest may, at its expense, bring such action in
the name of Mylan and/or cause
-22-
<PAGE> 23
Mylan to be joined in the suit as a plaintiff. Recoveries, if any, whether by
judgment, award, decree or settlement, shall belong solely to Penwest.
8.4 If Penwest notifies Mylan that it desires to institute suit
against such third party with respect to a Covered Infringement, and Mylan
notifies Penwest within 30 days after receipt of such notice that Mylan desires
to institute suit jointly, the suit shall be brought jointly in the names of
both parties and all costs thereof shall be borne equally. Recoveries, if any,
whether by judgment, award, decree or settlement, shall, after the reimbursement
of each of Penwest and Mylan for its share of the joint costs in such action, be
shared between Penwest and Mylan equally; provided however that, any portion of
such net recoveries which constitutes the equivalent of, or damages or payments
in lieu of, a royalty measured by the defendant's Net Sales shall not be shared
equally, but shall be shared between Penwest and Mylan in accordance with
Section 4.3 as if they were Mylan's Net Sales.
8.5 If Penwest notifies Mylan that it does not intend to institute
suit against such third party with respect to a Covered Infringement, Mylan may
institute suit on its own. Mylan shall bear all costs of, and shall exercise all
control over, such suit. Recoveries, if any, whether by judgment, award, decree
or settlement, shall belong solely to Mylan; provided however that, after
reimbursement of Mylan for its costs in such action, any portion of such net
recoveries which constitutes the equivalent of, or damages or payments in lieu
of, a royalty measured by the defendant's Net Sales shall be shared between
Penwest and Mylan in accordance with Section 4.3 as if they were Mylan's Net
Sales.
8.6 Should either Penwest or Mylan commence a suit under the
provisions of this Section 8 and thereafter elect to abandon the same, it shall
give timely notice to the other party, who may, if it so desires, be joined as a
plaintiff in the suit (or continue as such if it is already one) and continue
prosecution of such suit. The sharing of expenses and any recovery of such suit
shall be as reasonably agreed between Penwest and Mylan.
9. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
9.1 Each party represents and warrants to the other that, to the best
of its current knowledge, it has the full right and authority to enter into this
Agreement and to grant the licenses granted herein. Each party believes, to the
best of its current knowledge, that any existing patents licensed by it to the
other party under this Agreement ate valid.
9.2 Penwest represents and warrants that any Formulated TIMERx
supplied by it to Mylan hereunder for use in the Designated Product, at the
point of delivery:
-23-
<PAGE> 24
9.2.1 will conform to the product Specifications that Penwest and Mylan
have agreed in writing are to apply to such delivery of TIMERx; and
9.2.2 to the best of Penwest's current knowledge, will not infringe upon
an article patent of any third party.
PENWEST MAKES NO REPRESENTATIONS OR WARRANTIES AS TO ANY TIMERx OR FORMULATED
TIMERx SUPPLIED BY IT TO MYLAN EXCEPT AS ARE EXPLICITLY STATED HEREIN.
9.3 Each party represents and warrants to the other party that it has
obtained and will at all times during the term of this Agreement, hold and
comply with all licenses, permits and authorizations necessary to perform this
Agreement and to test, manufacture, market, export, and import the products and
assistance to be provided by it hereunder, as now or hereafter required under
any applicable statutes, laws, ordinances, rules and regulations of the United
States and any applicable foreign, state, and local governments and governmental
entities.
9.4 Mylan warrants that any Designated Product manufactured, marketed
or distributed by Mylan or its Affiliates or sublicensees shall meet and be
manufactured, packaged, labeled, sold, and promoted in accordance with all
applicable regulatory requirements within the Territory.
9.5 Penwest shall indemnify, defend and hold harmless Mylan and its
Affiliates and sublicensees from any claim, action or damages arising out of any
alleged infringement by reason of the manufacture, use or sale by Mylan of the
Designated Product to the extent such infringement would apply as well to the
manufacture, sale or distribution of TIMERx alone. If Mylan or its Affiliate or
sublicensee, by reason of its manufacture, sale or distribution of Designated
Product, is accused of infringing the patent of a third party, and such claim of
infringement, as framed by the claimant, would apply as well to the manufacture,
sale or distribution of TIMERx alone, Mylan shall immediately so notify Penwest
and provide Penwest all available information, and the parties shall consult
reasonably as to the proper course of action. If Penwest and Mylan jointly
determine that such claim is likely to prevail, or if an arbitrator hereunder or
a court of competent jurisdiction so determines, Mylan shall be entitled to
offset against any Royalties payable to Penwest hereunder any third party
royalties for which Mylan or its Affiliate or sublicensee becomes liable.
9.6 Penwest shall indemnify, defend and hold Mylan and its Affiliates
and sublicensees harmless from any and all third-party claims to the extent
arising from, in connection with, based upon, by reason of, or relating in any
way to:
-24-
<PAGE> 25
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
9.6.1 the *************************************************************
TIMERx in the Designated Product;
9.6.2 Penwest's *******************************************************
and the Specifications therefor hereunder;
9.6.3 any failure of the Formulated TIMERx manufactured by Penwest or
its alternate supplier (but not by Mylan under Section 5.8), as delivered to
Mylan hereunder for use in the Designated Product, to conform to the
Specifications; or
9.6.4 any failure of Penwest to comply with its obligation under Section
5.13 to notify Mylan of any information coming into Penwest's possession and
************************************************* Product,and not arising from
any other aspect of the Designated Product or its formulation, development,
supply, production, manufacture, sale, delivery, distribution or use, nor from
any act or omission of Mylan with respect to the Formulated TIMERx following its
delivery to Mylan hereunder.
9.7 Mylan shall indemnify, defend and hold Penwest harmless from any
and all third-party claims to the extent arising from, in connection with, based
upon, by reason of, or relating in any way to, the formulation, development,
supply, production, manufacture, sale, delivery, distribution or use of the
Designated Product, except for any matters which are covered by Penwest's
indemnities under Sections 9.5 and 9.6.
9.8 Notwithstanding anything to the contrary set forth elsewhere
herein, neither Mylan nor Penwest shall be obligated to indemnify the other
party for claims or liabilities to the extent arising from such other party's,
or its Affiliates', sublicensees' or assigns', negligence, intentional
misconduct, or breach of its duties, obligations, warranties or representations
set forth herein.
9.9 Whenever indemnification is provided for a party under this
Agreement, such right of indemnification shall extend also to the indemnified
party's Affiliates, officers, directors, shareholders, successors, assigns,
agents, employees, and insurers to the extent the same become subject to such
claim in such capacity. The party seeking indemnification shall provide the
indemnifying party with written notice of any claim or action within ten (10)
days of its receipt thereof, and shall afford the indemnifying party the right
to control the defense and settlement of such claim or action. The party seeking
indemnification shall provide reasonable assistance to the indemnifying party in
the defense of such claim or action. If the defendants in any such action
include both Mylan and Penwest and either party
-25-
<PAGE> 26
concludes that there may be legal defenses available to it which are different
from, additional to, or inconsistent with, those available to the other, that
party shall have the right to select separate counsel to participate in the
defense of such action on its behalf, and such party shall thereafter bear the
cost and expense of such separate defense. Should the indemnifying party
determine not to defend such claim or action, the other party shall have the
right to maintain the defense of such claim or action and the indemnifying party
agrees to provide reasonable assistance to it in the defense of such claim or
action. Neither party shall settle any such claim or action in a way that
prejudices or adversely impacts the other party to this Agreement without the
prior approval of such other party (which approval shall not be unreasonably
withheld) .
9.10 Any dispute concerning indemnification will be determined by
arbitration in accordance with Section 11.10 of this Agreement.
9.11 THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS, IMPLIED OR ARISING BY LAW, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NOTHING IN
THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY (i) BY PENWEST
AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION 9.1), OR SCOPE OF
ANY PENWEST PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERx PRODUCTION
TECHNOLOGY, JOINT DEVELOPMENTS, OR PENWEST TEST AND REGULATORY DATA; OR (ii) BY
MYLAN AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION 9.1), OR
SCOPE OF ANY MYLAN IMPROVEMENTS, JOINT DEVELOPMENTS, OR MYLAN TEST AND
REGULATORY DATA.
9.12 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN (OTHER
THAN THE INDEMNITIES STATED IN THIS SECTION 9), NEITHER PARTY SHALL UNDER ANY
CIRCUMSTANCES BE LIABLE FOR ANY THIRD PARTY CLAIMS OR FOR ANY INCIDENTAL,
CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES, INCLUDING ANY LOST PROFITS OR
SAVINGS, ARISING FROM ANY BREACH OF WARRANTY OR THE PERFORMANCE OR BREACH OF ANY
OTHER PROVISION OF THIS AGREEMENT OR THE USE OR INABILITY TO USE TIMERx, THE
DESIGNATED PRODUCT, PENWEST PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERx
PRODUCTION TECHNOLOGY, PENWEST TEST AND REGULATORY DATA, MYLAN IMPROVEMENTS, OR
MYLAN TEST AND REGULATORY DATA, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
-26-
<PAGE> 27
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
9.13 Each party shall, at its own cost and expense, obtain and maintain
from a qualified insurance company comprehensive general liability and products
liability insurance coverage during the term of this Agreement (and any
subsequent period of sale or distribution pursuant to Section 10.8). Such
insurance shall be in an amount no less than **********************************
combined single limit for each occurrence for bodily injury and/or property
damage. Each party agrees to provide the other party with a certificate of
insurance evidencing such insurance within thirty (30) days after the execution
of this Agreement and again thereafter from time to time as reasonably requested
by such other party.
10. TERM AND TERMINATION.
10.1 The term of this Agreement shall begin on the date set forth above
and shall, unless earlier terminated as provided herein, continue until the end
of the License Term.
10.2 Subject to Sections 10.3 and 10.4, Penwest may at its option
terminate this Agreement following the Approval Date if Mylan and its Affiliates
and sublicensees, in the aggregate, fail to sell, in Royalty-bearing
transactions triggering "Net Sales" hereunder, Designated Product *************
*******************************************************************************
******************************************** determined under Section 10.2.1.
10.2.1 The minimum percentage market shares described above shall be as
follows:
(i) For Year 1, the minimum Percentage Market Share for
purposes of this Section 10.2 shall be ************.
(ii) For Year 2, the minimum Percentage Market Share for
purposes of this Section 10.2 shall be *******************.
(iii) For Year 3 and each year thereafter during the License
Term, the minimum Percentage Market Share for purposes of
this Section 10.2 shall be ******************* .
10.3 If there is any period during which Mylan's ability to sell the
Designated Product is materially retarded due to:
10.3.1 events beyond its reasonable control as described in Section 11.8
or
-27-
<PAGE> 28
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
10.3.2 a failure of Penwest and its alternate supplier to supply
Formulated TIMERx as described in Section 5.8,
then an additional period of the lesser of the duration of such event (or
failure) or one year shall be added at that point to the schedule described in
Section 10.2.
10.4 If, at the Approval Date, there are in the United States
********************************************, the minimum amounts stated in
Section 10.2 shall ************************** to be reasonably agreed between
Mylan and Penwest in good faith negotiations during the ninety (90) days
following the Approval Date.
10.5 Mylan may at its option terminate this Agreement following the
Approval Date, provided that any such elective termination shall require that
Mylan pay an early termination fee to Penwest *********************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
during the period in which such termination occurs ****************************
*******************************************************************************
*******************************************************************************,
and such termination fee shall be paid to Penwest on or before the effective
date of such termination.
10.6 Following any expiration or termination of the License Term (but
subject to Section 10.10), the licenses to Penwest under Sections 6.7, 6.8, and
6.9 shall be extended to include (in addition to their coverage as stated in
such sections) making, using and selling the Designated Product in the Territory
and the use of Mylan Test and Regulatory Data for purposes of complying with
governmental requirements with respect to the Designated Product for marketing
or use in the Territory, and otherwise shall continue to be governed by the
terms stated in such sections.
10.7 In the event that either party materially breaches any of the
terms, conditions or agreements contained in this Agreement to be kept, observed
or performed by it, then the other party may terminate this Agreement, at its
option and without prejudice to any of its other legal or equitable rights or
remedies, by giving the party who committed the breach (i) in the case of breach
of obligations other than the payment of money, 90 days' notice in writing,
unless the notified party within such 90-day period shall have cured the breach,
and (ii) in the case of breach of an obligation for the payment of money, 30
days' notice in writing, unless the notified
-28-
<PAGE> 29
party within such 30-day period shall have cured the breach, including any
required payment of interest on previously unpaid amounts as set forth herein;
provided, however, that:
10.7.1 no termination of this Agreement under this Section shall become
effective during the pendency of a good faith dispute between the parties as to
the existence of grounds for such a termination, provided that the parties are
complying with the process in Section 11.10 in good faith in order to resolve
such dispute, and that such termination shall become effective immediately upon
any binding determination that such grounds did exist at the time the notice of
termination was given; and
10.7.2 if a notice of termination is given pursuant to this Section and
it is subsequently determined that grounds for such a notice did not exist, the
giving of such notice shall not itself constitute a repudiation or default under
this Agreement, so long as such notice was given in the good faith belief that
such grounds did exist.
10.8 In the event of any termination of this Agreement, Mylan shall be
entitled to sell and distribute reasonable inventories of Designated Product
remaining on hand as of the effective date of termination, provided that such
sales and distribution are otherwise in conformance with this Agreement. Mylan
may continue to make, use or sell such Designated Product only until Mylan has
exhausted remaining raw materials in its possession at the time of termination
of the license. Net Sales of the Designated Product pursuant to this Section
shall be subject to the Royalties pursuant to Section 4.3.
10.9 Any sublicenses granted by Mylan or its Affiliates under this
Agreement shall provide for termination or assignment to Penwest, at the option
of Penwest, of Mylan's or its Affiliate's interest therein upon termination of
this Agreement.
10.10 Mylan's obligations regarding payment of Royalties (and Production
Royalties, if any) accrued as of the date of termination and as provided under
Section 10.8; Penwest's rights under Sections 6.7, 6.8, and 6.9, as modified by
Section 10.6 (except if this Agreement is terminated due to an uncured breach on
the part of Penwest); and Mylan's rights under Section 6.10 (except if this
Agreement is terminated due to an uncured breach on the part of Mylan); and the
provisions of Sections 7, 9, and 11, hereof shall survive any expiration or
termination of this Agreement.
11. MISCELLANEOUS.
11.1 Each of Penwest and Mylan agrees to duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things as are reasonably within its
control and,its
-29-
<PAGE> 30
responsibilities under this Agreement, including, without limitation, the filing
of such additional assignments, agreements, documents and instruments, that may
be necessary or as the other party hereto may from time to time reasonably
request in connection with this Agreement to carry out more effectively the
provisions and purposes of this Agreement.
11.2 This Agreement constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, between the parties
hereto with respect to the subject matter hereof, it being understood that the
August 1994 Agreement is not superseded by or merged into this Agreement, but,
rather, shall continue in effect as to its subject matter and in accordance with
its terms.
11.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their Affiliates, successors and permitted assigns;
provided, however, that except for assignments or delegations to Affiliates of a
party (which shall not release such party from any of its rights or
responsibilities hereunder), or as part of the transfer of all or substantially
all assets to a single buyer or pursuant to a merger or other corporate
reorganization, or as otherwise specifically permitted hereunder, neither party
shall assign or delegate any of its rights or obligations hereunder at any time
without the prior written consent of the other party hereto, which consent shall
not be unreasonably withheld.
11.4 All notices, requests or other communication provided for or
permitted hereunder shall be given in writing and shall be hand delivered or
sent by facsimile, reputable courier or by registered or certified mail, postage
prepaid, return receipt requested, to the address set forth on the signature
page of this Agreement, or to such other address as either party may inform the
other of in writing. Notices will be deemed delivered on the earliest of
transmission by facsimile, actual receipt or three days after mailing as set
forth herein.
11.5 No change, modification, extension, termination or waiver of any
obligation, term or provision contained herein shall be valid or enforceable
unless same is reduced to writing and signed by a duly authorized representative
of each of the parties to be bound hereby. No waiver of any right in any one
instance shall constitute a waiver of that right or of any other right in other
instances under this Agreement.
11.6 If any provision of this Agreement shall be held invalid, illegal
or unenforceable, such provision shall be enforced to the maximum extent
permitted by law and the parties, fundamental intentions hereunder, and the
remaining provisions shall not be affected or impaired.
-30-
<PAGE> 31
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
11.7 Nothing herein contained shall constitute this a joint venture
agreement or constitute either party as the partner, principal or agent of the
other, this being an Agreement between independent contracting entities. Neither
party shall have the authority to bind the other in any respect whatsoever.
Except as provided herein, nothing contained in this Agreement shall be
construed as conferring any right on either party to use any name, trade name,
trademark or other designation of the other party hereto, unless the express,
written permission of such other party has been obtained.
11.8 In the event that either party hereto is prevented from carrying
out its obligations under this Agreement by events beyond its reasonable
control, including without limitation acts or omissions of the other party, acts
of God or government, natural disasters or storms, fire, political strife, labor
disputes, failure or delay of transportation, default by suppliers or
unavailability of parts, then such party's performance of its obligations
hereunder shall be excused during the period of such event and for a reasonable
period of recovery thereafter, and the time for performance of such obligations
shall be automatically extended for a period of time equal to the duration of
such event or events.
11.9 This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to its
conflict of laws rules.
11.10 Should the parties to this Agreement fail to resolve any
controversy or claim arising out of or relating to the interpretation or
application of any term or provision set forth herein, or the alleged breach
thereof, such controversy or claim shall be resolved by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any award rendered pursuant to the terms set forth
herein may be entered in any court having jurisdiction of the party against whom
the award is rendered. Any award rendered pursuant to the terms and conditions
set forth herein shall be final and binding upon the parties and their
Affiliates. Any arbitration held pursuant to this Agreement shall be held in
Washington, D.C., or such other site as the parties may mutually agree. All
costs and expenses including reasonable attorney's fees and the fees and
expenses of the arbitrators and the AAA, incurred in the enforcement of this
Agreement shall be paid to the prevailing party by the non-prevailing party,
provided that the same may be apportioned between the parties by the arbitrators
if they determine that each party has prevailed in part. Notwithstanding the
foregoing, either party may, on good cause shown, seek a temporary restraining
order and/or a preliminary injunction
-31-
<PAGE> 32
from a court of competent jurisdiction, to be effective pending the institution
of the arbitration process and the deliberation and award of the arbitration
panel.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and acknowledge this Agreement as of the Effective Date.
This Agreement may be executed in one or more counterparts, each of which will
be an original instrument, but all of which together shall constitute a single
agreement creating one set of rights and obligations.
Mylan Pharmaceuticals Inc. Penwest, Ltd.
By /s/ Roderick P. Jackson By /s/ John V. Talley
----------------------------- -------------------------------
Roderick P. Jackson John V. Talley
Senior Vice President Vice President
Address: Address:
781 Chestnut Ridge Road 2981 Route 22
Morgantown, W.V. 26504 Patterson, N.Y. 12563
FAX: (304) 598-5409 FAX: (914) 878-3420
Attn: J. Gregory Ford Attn: Dr. Paul K. Wotton
-32-
<PAGE> 33
EXHIBIT 1.6
Target Designated Product
Solid-dosage forms of a controlled-release pharmaceutical for oral
administration in humans that combine Nifedipine with TIMERx and other
excipients and that are bioequivalent to the product currently (as of the
Effective Date) marketed in the United States under the name "Adalat CC," in the
following tablet dosage strengths: 30 mg, 60 mg, 90 mg, and that are eligible
for approval by the FDA under an ANDA.
-33-
<PAGE> 34
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 1.17
Deliverable Portion of the Mylan Test and Regulatory Data
All material under or directly related to the following headings (or their
substantive equivalents) ****************************************************
***********************************************
***********************************************
***********************************************
***********************************************
***********************************************
***********************************************
Test Procedures under the heading "Controls for the Finished Dosage Form"
(except for any Assay information that is proprietary to Mylan)
Finished Product Specifications and Test Data under the heading "Controls
for the Finished Dosage Form"
Drug Substance under the heading "Analytical Methods" (except for Mylan's
Certificate of Analysis)
Analytical Procedures ****************************************************
*******************************************************************************
**********************************************
**************************************
Such other information and data as is reasonably necessary or facilitative for
Penwest's performance of its obligations hereunder to *************************
*******************************************************************************
*********************************************************
-34-
<PAGE> 35
EXHIBIT 1.20
Penwest Patents
UNITED STATES:
1) U.S. Patent No. 4,994,276, entitled "Directly Compressible Slow Release
Granulation," issued February 19, 1991.
2) U.S. Patent No. 5,128,143, entitled "Sustained Release Excipient and
Tablet Formulation," issued July 7, 1992.
3) U.S. Patent No. 5,135,757, entitled "Compressible Sustained Release
Dosage Forms," issued August 4, 1992.
4) U.S. Application Serial No. 08\118,924, entitled "Sustained Release
Hetero-Disperse Hydrogel Systems for Insoluble Drugs," filed September 9, 1993.
CANADA:
5) Canadian Patent Application No. 611,700, filed September 18, 1989
(corresponding to items 1), 2) and 3) above).
6) Canadian Patent Application to be filed corresponding to item 4) above.
MEXICO:
7) Mexican Patent Application to be filed corresponding to item 4) above.
-35-
<PAGE> 36
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 2.3:
Development Steps
EXPECTED
DATES ACTIVITY RESPONSIBILITY
----- -------- --------------
******************** * Penwest
******************* * Penwest
******************** * Mylan
*******************
***************
Analytical methodology Penwest
transfer
TIMERx-A bulk Penwest
********************
********************
Bio-batch production Mylan
nifedipine C.R. tablets
********************* ** Mylan
Pilot bio-study Mylan
Pivotal bio-studies Mylan
(fasted, fed,
steady state)
Stability studies Mylan
ANDA Filing Mylan
-36-
<PAGE> 1
Exhibit 10.3
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of March, 1996, by and
between Penwest, Ltd., a Washington corporation ("Penwest"), and Mylan
Pharmaceuticals Inc., a West Virginia corporation ("Mylan").
A. Penwest has developed a controlled-release agent covered by one
or more patents, patent applications, know-how and other proprietary technology,
which agent Penwest markets under the name "TIMERx(R)" ("TIMERx"). Penwest has
conducted initial biostudies with respect to the potential development of one or
more pharmaceutical products incorporating the active ingredient glipizide
("Glipizide"), TIMERx, and one or more other excipients.
B. Mylan is interested in developing for manufacture a
pharmaceutical product incorporating Glipizide in a solid-dosage
controlled-release delivery system for oral administration in humans.
C. The parties, under two prior agreements (the "Nifedipine
Agreements"), are engaging in certain activities relating to the development and
testing of a product incorporating the active ingredient Nifedipine and TIMERx,
and designed to be bioequivalent, respectively, to the products currently being
marketed in the United States under the names "Procardia XL" and "Adalat CC."
The parties now desire to engage in a separate program of research, development,
and testing activities designed to determine if Penwest's TIMERx
controlled-release system can be adapted and combined with Glipizide to make a
generic controlled-release version of Glipizide for oral solid-dosage
administration in humans that is bioequivalent to the product currently being
marketed in the United States under the name "Glucotrol XL." If such activities
are successful, Mylan desires to contract for a supply of TIMERx for use in the
manufacture of such a controlled-release form of Glipizide, and Penwest is
willing to supply the same provided that Mylan agrees to obtain all of its
requirements for controlled-release agents for Glipizide products that are
essentially bioequivalent to "Glucotrol XL" in the form of TIMERx from Penwest
as provided herein.
1
<PAGE> 2
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 "AFFILIATE" shall mean any individual, partnership, corporation,
limited company, trust, or other entity of whatever nature (hereinafter
collectively referred to as "Person"), which is directly or indirectly
controlling, controlled by or under common control with another Person,
identifiable based upon the context in which the term is used. The term
"control" shall mean the possession of the power to direct or cause the
direction of the management and policies and/or the distribution of the profits
of a Person.
1.2 "APPROVAL DATE" shall mean the date on which the Designated
Product (in the applicable dosage strength) is first approved by the U.S. Food
and Drug Administration (herein the "FDA") for commercial sale in oral
solid-dosage form for administration in humans, pursuant to an abbreviated new
drug application ("ANDA").
1.3 "APPROVED GENERIC VERSION" shall mean a drug that is
bioequivalent to the product that is currently being marketed in the United
States under the name "Glucotrol XL", and that has been fully approved for
commercial sale in oral solid- dosage form for administration in humans by the
FDA or, as applicable, the parallel regulatory authorities in the Non-Exclusive
Territory, and which is not branded, labelled, or marketed under the name
"Glucotrol" or "Glucotrol XL" and which is not marketed by Mylan, any of its
Affiliates, or under a license or sublicense from Mylan or its Affiliate.
1.4 "CERTIFICATION PERIOD" shall mean, for each dosage strength, the
period beginning on the Submission Date for such dosage strength and ending on
the earlier of:
1.4.1 the Approval Date for such dosage strength; or
1.4.2 the termination of this Agreement as provided herein.
1.5 "CONFIDENTIAL TECHNOLOGY" shall mean all technology and know-how
disclosed hereunder that is, at the relevant time hereunder, protected or
required to be protected by both parties hereto as confidential information
pursuant to Section hereof.
1.6 "DESIGNATED PRODUCT" shall mean the solid-dosage form of a
controlled- release pharmaceutical for oral administration in humans that
combines Glipizide with TIMERx and other excipients and that is bioequivalent to
the product currently (as of the Effective Date) marketed in the United States
under the name "Glucotrol
2
<PAGE> 3
XL," as more fully described in Exhibit 1.6 subject to modifications as Penwest
and Mylan may mutually agree during the Development Period. The parties intend
that the Designated Product will be developed in more than one dosage strength,
as more fully described in Exhibit 1.6.
1.7 "DEVELOPMENT PERIOD" shall mean, for each dosage strength, the
period from the Effective Date through the Submission Date for such dosage
strength or the earlier termination of this Agreement as provided herein.
1.8 "DEVELOPMENT STEPS" shall mean the activities specified in
Exhibit hereto to be undertaken by the parties during the Development Period.
1.9 "DMF" shall mean Drug Master File as defined in 21 CFR 300 et
seq., including amendments and supplements which will be filed by Penwest.
1.10 "EFFECTIVE DATE" shall mean the effective date of this
Agreement, which is the date first written above.
1.11 "EXCLUSIVE TERRITORY" shall mean the United States and its
territories and possessions.
1.12 "FORMULATED TIMERX" shall mean TIMERx and certain additives in a
formulation to be developed hereunder specifically for use in the Designated
Product.
1.13 "JOINT DEVELOPMENTS" shall mean any and all inventions,
improvements, modifications, alterations, or enhancements that are developed
jointly by Mylan or any of its Affiliates, on the one hand, and Penwest or any
of its Affiliates, on the other hand, during the term of this Agreement or
during any period of mutual cooperative development prior to the Effective Date,
together with all United States and foreign intellectual property and other
rights and interests of the parties and their respective Affiliates thereto and
therein, including without limitation patents, trade secrets, copyright, periods
of market exclusivity, and other related rights or interests, to the extent the
same remain protected by any such rights and interests from being used freely by
others.
1.14 "LICENSE TERM" shall mean the cumulative period covered by the
Development Period, the Certification Period, and the Marketing Period.
1.15 "MARKETING PERIOD" shall mean, for each dosage strength, the
period beginning on the Approval Date for such dosage strength and ending on the
earlier of:
1.15.1 the twentieth anniversary of such Approval Date; or
3
<PAGE> 4
1.15.2 the termination of the License Term and/or this
Agreement as provided herein.
1.16 "MYLAN IMPROVEMENTS" shall mean, except for any Joint
Developments, any and all improvements, modifications, alterations, or
enhancements to any of the inventions covered by the Penwest Patents, Penwest's
Confidential Technology, or the TIMERx Production Technology, that are
developed, owned, or controlled by Mylan or any of its Affiliates or
sublicensees, or in which Mylan or any of its Affiliates or sublicensees
otherwise has any rights or interests during the term of this Agreement (or,
with respect to such sublicensees, during the term of the respective
sublicenses) or during any period of mutual cooperative development prior to the
Effective Date; together with all United States and foreign intellectual
property and other rights and interests of Mylan and its Affiliates and
sublicensees thereto and therein, including without limitation patents, trade
secrets, copyright, periods of market exclusivity, and other related rights or
interests, to the extent the same remain protected by any such rights and
interests from being used freely by others.
1.17 "MYLAN TEST AND REGULATORY DATA" shall mean any and all test
data, test designs and protocols, clinical studies and results thereof,
government licenses and applications therefor, government certifications and
findings, and related materials, information and rights (including without
limitation information regarding bioavailability and bioequivalence, and any
adverse drug reactions), developed, commissioned or otherwise obtained by Mylan
or any of its Affiliates or sublicensees during the term of this Agreement (or,
with respect to such sublicensees, during the term of the respective
sublicenses) relating to TIMERx, Mylan Improvements, the Designated Product,
Penwest Patents, TIMERx Production Technology, and/or Penwest's Confidential
Technology, together with all intellectual property and other rights and
interests of Mylan and its Affiliates or sublicensees thereto and therein,
worldwide. It is understood that:
1.17.1 To the extent any of the Mylan Test and Regulatory Data
is available for review by the public without confidentiality
restrictions, it shall be referred to herein as the "Available
Portion" of the Mylan Test and Regulatory Data; and that
1.17.2 To the extent any of the Mylan Test and Regulatory Data
meets the criteria specified in Exhibit , it shall be referred
to herein as the "Deliverable Portion" of the Mylan Test and
Regulatory Data.
4
<PAGE> 5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
1.18 "NET SALES" shall mean ****************************************
*******************************************************************************
*******************************************************************************,
calculated in accordance with United States Generally Accepted Accounting
Principles ("GAAP") consistently applied, which pertains to the Designated
Product. The calculation of Net Sales shall include
*******************************************************************************
in accordance with GAAP, ******************************************************
*******************************************************************************
*******************************************************************************
**************************************************************
(a) ******************************
(b) ***********************************************
(c) ***************************************************
*********************
*********************
****************************************
*******************************************************
*******************************************************
****************************************
************************
*******************************
**************************
*************************
************************
***************************************************
1.19 "NON-EXCLUSIVE TERRITORY" shall mean Canada and Mexico and the
respective territories and possessions of each.
1.20 "PENWEST PATENTS" shall mean:
5
<PAGE> 6
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
1.20.1 those United States patents and foreign equivalents in
the NonExclusive Territory and United States and foreign patent
applications listed in Exhibit and all divisions, continuations,
reissues, or extensions thereof, any periods of marketing
exclusivity relating thereto, and any letters patent that issue
thereon; and
1.20.2 Penwest's rights under United States patents and foreign
patents in the Non-Exclusive Territory, if any, obtained and in
force during the License Term covering any of Penwest's
improvements, modifications, alterations, or enhancements to any
of the inventions covered by the Penwest Patents.
1.21 "PENWEST TEST AND REGULATORY DATA" shall mean any and all test
data, test designs and protocols, clinical studies and results thereof,
government licenses and applications therefor, government certifications and
findings, and related materials, information and rights (including without
limitation information regarding bioavailability and bioequivalence, and any
adverse drug reactions), developed, commissioned or otherwise obtained by
Penwest or any of its Affiliates during the term of this Agreement relating to
TIMERx, Penwest Patents, TIMERx Production Technology, and/or Penwest's
Confidential Technology, together with all intellectual property and other
rights and interests of Penwest and its Affiliates thereto and therein in the
Territory.
1.22. "PERCENTAGE MARKET SHARE" shall mean the share of the total
United States market for the aggregate of all Approved Generic Versions, the
product currently being marketed under the name "Glucotrol XL," and the
Designated Product which is represented by unit sales of the Designated Product,
stated as a percentage of such total market. The unit sales of such products
shall be determined through the publicly available reports of IMS or an
alternate public source mutually approved by the parties hereto.
1.23 "PRODUCTION ROYALTIES" shall mean *****************************
*******************************************************************************
*******.
1.24 "PROJECT CONTACT(S)" shall mean the persons appointed by each
party to serve as contact person between the parties during the Development
Period and the Certification Period. The initial Project Contact for Penwest is
Dr. Paul K. Wotton and the initial Project Contact for Mylan is J. Gregory Ford.
Each party shall promptly notify the other party of any substitution of other
personnel as its Project Contact. Each party may select and supervise its other
project staff as needed.
1.25 "ROYALTIES" (or "Royalty") shall mean the royalties payable to
Penwest pursuant to Section hereof.
6
<PAGE> 7
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
1.26 "SPECIFICATIONS" shall mean such standards and analytical
methods established in writing by Penwest and Mylan as are reasonably necessary
or appropriate to assure the identity, strength, quality and purity of the
TIMERx and Formulated TIMERx, and any such other standards or methods as may be
required or approved by the FDA. It is understood and agreed that the
Specifications for Formulated TIMERx for use in Designated Product to be sold in
the Non-Exclusive Territory shall be the same as those for Formulated TIMERx for
use in Designated Product to be sold in the Exclusive Territory, and in no event
will Mylan permit the Designated Product to be certified for sale in the
Non-Exclusive Territory on any other basis.
1.27 "SUBMISSION DATE" shall mean the date on which Mylan submits to
the FDA an ANDA for the Designated Product (in the applicable dosage strength),
as approved by the parties at the end of the Development Period for such dosage
strength.
1.28 "TERRITORY" shall mean the Exclusive Territory and the Non-
Exclusive Territory.
1.29 "TIMERX PRODUCTION TECHNOLOGY" shall mean Penwest's rights under
the Penwest Patents and any and all other patents, patent applications, and
other technology and know-how belonging to Penwest from time to time during the
term of this Agreement that directly relate to, and are necessary for the
production of, Formulated TIMERx for use in the Designated Product.
1.30 "UNIT PRICE" shall mean ******************* of Formulated
TIMERx, subject to adjustment ********************* to reflect any percentage
increases or decreases in the United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers for the New York City
Metropolitan Area, "All Items" (1982-84 = 100) (the "Index") over the base
period Index. The Index, which may be a monthly, quarterly or other fiscal
period Index *************** **************************, shall be considered the
"base period" Index. If at any time publication of the Consumer Price Index is
discontinued, Penwest shall, with the consent of Mylan (which consent shall not
be unreasonably withheld), substitute any other index published by the Bureau of
Labor Statistics, or successor or similar governmental agency or
quasi-governmental or private entity providing similar information as may then
be in existence and shall be most nearly equivalent thereto.
2. DEVELOPMENT PERIOD.
2.1 In consideration of Penwest's entering into this Agreement,
Mylan shall pay Penwest upon the Effective Date a nonrefundable initial fee of
**************. Upon receipt of such sum, Penwest will deliver to Mylan the
results of the initial
7
<PAGE> 8
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
pilot biostudy conducted by Penwest, and Mylan will conduct a second or
subsequent pilot biostudy(ies) (the "Mylan Pilot Biostudy(ies)").
2.2 As additional inducement to Penwest to enter into this
Agreement, Mylan hereby affirms that, other than confidentiality agreements not
binding either party to any further agreement, it currently has no agreement or
arrangement with any Person other than Penwest for or including the development,
design, testing, certification, manufacture or marketing by it or such other
Person (or the Affiliate(s) of either) of any controlled-release Glipizide
product that is intended to be essentially bioequivalent to "Glucotrol XL," and
agrees that it will refrain from entering into any such agreement or arrangement
(other than such confidentiality agreements) throughout the duration of the
Development Period or the period of eighteen months following the date hereof,
whichever expires later.
2.3 During the Development Period, each of Penwest and Mylan will
exert its continuing best efforts to perform their respective tasks specified in
Exhibit , within the estimated time periods there stated, in order to create and
produce the Designated Product, and each will cooperate with the other in such
efforts. Each party will, promptly and throughout the Development Period,
provide to the other all necessary information in or coming into its possession
or reasonably available to it for such purposes. Notwithstanding anything else
to the contrary contained herein, nothing shall require either party to disclose
confidential information for which such party has an obligation of
confidentiality to a third party. Each party understands and agrees that the
other does not warrant or commit that the Designated Product will be
successfully developed, and neither party shall have any liability or
responsibility to the other or to third parties for any such failure of the
development process hereunder, except to the extent such failure results from
said party's intentional misconduct, negligence, or breach of its duties or
obligations as set forth herein.
2.4 Mylan shall be responsible for, and hereby agrees to conduct or
arrange for, at Mylan's expense, all testing and studies during the Development
Period, including as to bioavailability and bioequivalence, in connection with
the development, licensing, manufacture and marketing of the Designated Product,
and for substantial compliance with all material and relevant governmental
requirements imposed in the Territory with respect to the manufacture, use, and
sale of the Designated Product. In consideration of Penwest's entering into this
Agreement, Mylan agrees to pay Penwest:
2.4.1 A milestone fee of ***************, payable
****************************************************** that the
**************************************************** under this
Agreement *****************************************************
8
<PAGE> 9
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
******************************************************* such
milestone payment will be ************************.
2.4.2 An additional milestone fee of ****************, payable
******************************************************* that the
***************************************************************
*****************************************************under this
Agreement *****************************************************
***************************************************************
********************************************************** such
milestone payment will be ************************.
2.5 Mylan shall be primarily responsible for the preparation, at its
expense, of an ANDA for the Designated Product, to be filed with the FDA at the
end of the Development Period. In consideration of Penwest's entering into this
Agreement, Mylan agrees to pay Penwest additional milestone fees as follows:
2.5.1 *************** payable *******************************
***************************************************************;
provided, however, that if the ************************ *******
******************************************************* **** for
such dosage strength, such milestone fee under this clause shall
be **************************.
2.5.2 ***************** payable *****************************
***************************************************************
********************** (whether or not made in conjunction with
**********************************); provided, however, that if
the ******************************************* for such dosage
strength, such milestone fee under this clause shall be
*********************************.
2.6 Each party's Project Contact will provide written reports to the
other party's Project Contact at least monthly throughout the Development
Period, stating in detail all efforts made and in process, and all significant
progress achieved and difficulties encountered in the development effort since
the last such report. Each party's Project Contact will also be available
throughout the Development Period to answer any reasonable questions from the
other party's Project Contact. The parties will cooperate reasonably during the
Development Period such that the sites for meetings among their respective
personnel shall be alternated among the parties' facilities to the extent
practicable.
9
<PAGE> 10
2.7 During the Development Period, Mylan will supply, at its own
expense, all Glipizide reasonably required to support the development effort,
and Penwest shall provide at its own expense all TIMERx reasonably required for
such effort. Each party shall bear its own expenses for all activities during
the Development Period, except as otherwise stated in Exhibit .
2.8 Either party may terminate this Agreement before completion of
the Development Period by delivery of 90 days' written notice to the other if
such party reasonably determines that, due to unfavorable or inconclusive
results to that time, no further Development Steps are likely to lead to the
successful development of the target Designated Product listed in Exhibit 2.3.
3. CERTIFICATION PERIOD.
3.1 During the Certification Period, Mylan will exert its continuing
best efforts, at its expense, to prosecute the ANDA(s) for the Designated
Product (in the contemplated dosage strengths) filed hereunder successfully to
the granting of an FDA approval to market the Designated Product. Penwest will,
promptly and throughout the Certification Period, provide to Mylan all necessary
information in or coming into Penwest's possession or reasonably available to it
for such purpose. Each party understands and agrees that the other does not
warrant or commit that the Designated Product will be successfully licensed or
certified for marketing by the FDA, and neither party shall have any liability
or responsibility to the other or to third partiesfor any such failure of the
certification process hereunder, except to the extent such failure results from
said party's intentional misconduct, negligence, or breach of its duties or
obligations as set forth herein.
3.2 Either party may terminate this Agreement before completion of
the Certification Period by delivery of 90 days' written notice to the other if
such party reasonably determines that, due to unfavorable action by the FDA, the
ANDA is not likely to be approved by the FDA, regardless of any further steps or
submissions that could be made.
3.3 Mylan's Project Contact will provide written reports to
Penwest's Project Contact at least quarterly throughout the Certification
Period, stating in detail all efforts made and in process, and all significant
progress achieved and difficulties encountered in the certification effort since
the last such report. Mylan's Project Contact will also be available throughout
the Certification Period to answer any reasonable questions from Penwest's
Project Contact.
3.4 During the Certification Period, Mylan shall provide at its own
expense all Glipizide and other materials and manufacturing and testing services
reasonably required to support the testing and certification effort, and
10
<PAGE> 11
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
Penwest shall provide at its own expense all TIMERx reasonably required for such
effort. Each party will bear its own expenses during the Certification Period.
3.5 In consideration of Penwest's entering into this Agreement,
Mylan agrees to pay Penwest additional milestone fees as follows:
3.5.1 ************* payable *********************************
***************************************************************;
provided, however, that if the ********************************
********************************************************** such
milestone fee under this clause shall be********************.
3.5.2 *************** payable *******************************
(whether or not concurrent with the **************************);
provided, however, that if the ********************************
***************************************************************
**************, such milestone fee under this clause shall be
*******************************.
Mylan shall notify Penwest of the occurrence of the Approval Date no later than
the next business day following Mylan's learning of such occurrence.
4. MARKETING PERIOD.
4.1 Subject to the granting of all necessary governmental approvals
or concurrences to sell the Designated Product, Mylan hereby agrees, during the
Marketing Period, to use its continuing best efforts to market, promote and sell
the Designated Product throughout the Territory.
4.2 Mylan shall launch the 5mg Designated Product and the 10mg
Designated Product on the market within thirty days following the respective
Approval Date therefor. In consideration of Penwest's entering into this
Agreement, Mylan agrees to pay Penwest additional milestone fees as follows:
4.2.1 ******************* payable concurrently with the market
launch of the **************************************; provided,
however, that if the ******************************************
***************************************************************
************************, such milestone fee under this clause
shall be *********************************.
4.2.2 ******************* payable concurrently with the market
launch of the ***************************** (whether or not
11
<PAGE> 12
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
concurrent with the ******************************************);
provided, however, that if the ****************************such
milestone fee under this clause shall be**********************.
4.3 Mylan hereby agrees to pay to Penwest Royalties as follows:
4.3.1 with respect to all Net Sales with respect to Designated
Product sold in a nation during a quarter in which there
is ****** ******************* in the same dosage
strength on the market in such nation, the Royalty rate
shall be ******************************* of such Net
Sales;
4.3.2 with respect to all Net Sales with respect to Designated
Product sold in a nation during a quarter in which there
is*********************************************** in the
same dosage strength on the market in such nation, the
Royalty rate shall be ***************************** of
such Net Sales;
4.3.3 with respect to all Net Sales with respect to Designated
Product sold in a nation during a quarter in which there
are ******************************** in the same dosage
strength on the market in such nation, the Royalty rate
shall be ********************* of such Net Sales;
provided, however, that such Royalties shall be reduced
by ****************************************************
with respect to Net Sales of the Designated Product as
to which no license to Penwest Patents hereunder is
applicable to the manufacture, sale or use of the
Designated Product (it being understood that a Penwest
Patent shall not be considered applicable to the
manufacture of the Designated Product solely by virtue
of its applicability to the manufacture and/for such
purpose hereunder, unless such Penwest Patent is also
otherwise applicable to the manufacture, sale or use of
the Designated Product). For purposes of the foregoing,
to be "sold in a nation" refers to the nation in which
such Designated Product will be initially placed into
actual commercial distribution, regardless of the FOB
point or where the agreement for such sale may have been
struck. If an Approved Generic Version (other than the
Designated Product) is first put on the market in a
nation during the first half of a calendar quarter, it
will be deemed for purposes of this Section to have been
on the market in such nation from the first day
12
<PAGE> 13
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
of such quarter, and if it is first put on the market in
a nation during the second half of a calendar quarter,
it will be deemed for purposes of this Section not to
have been on the market in such nation until the first
day of the following quarter.
4.4 All Royalties payable pursuant to this Agreement shall be due
quarterly **************** following the end of each calendar quarter for Net
Sales in such calendar quarter. Each such payment shall be accompanied by a
statement of Net Sales for the quarter and the calculation of Royalties payable
hereunder. All Royalties and all other amounts which are overdue under this
Agreement will bear interest at the rate of 1 1/2% per month from the date due
through the date of payment. Mylan shall keep and shall cause its Affiliates and
its and their sublicensees to keep complete, true and accurate records for the
purpose of showing the derivation of all Royalties payable to Penwest under this
Agreement. Penwest's duly accredited representatives (which representatives are
approved for such purpose by Mylan, which approval shall not be unreasonably
withheld nor shall it be revocable by Mylan following the start of any
inspection hereunder) shall have the right to inspect, copy, and audit such
records at any time during reasonable business hours upon reasonable prior
notice to Mylan or any of its Affiliates or sublicensees, respectively, but such
right will not be exercised more often than annually (it being understood that a
single exercise of such right may include a series of related or continuing
inspections, copying and audits). Any such audit shall be at the expense of
Penwest, unless the audit reveals that, with respect to the period under audit,
less than 97% of the Royalties due to Penwest hereunder have been reported, in
which event Mylan shall pay or reimburse Penwest for the reasonable expenses of
such audit, in addition to Penwest's other remedies for such underpayment.
4.5 All monies due hereunder shall be paid in United States Dollars
to Penwest in Patterson, New York, USA. Said payment may be made at Mylan's
option by check or wire transfer.
4.6 Mylan and Penwest will negotiate in good faith, for at least 60
days following the first written request by either party for such negotiations,
with respect to a separate agreement whereby Mylan would produce Designated
Product for sale to Penwest for distribution outside of the Exclusive Territory.
It is understood that neither party will be bound hereby to enter such an
agreement.
5. SUPPLY OF FORMULATED TIMERx.
5.1 Except as provided in Section , and subject to the other
provisions hereof, Penwest will supply Mylan and its Affiliates and sublicensees
with sufficient quantities of Formulated TIMERx to meet their reasonable
requirements for manufacturing of the Designated Product during the Marketing
Period, and Mylan
13
<PAGE> 14
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
shall purchase all of its and its Affiliates' and sublicensees' requirements for
controlled-release agents for Glipizide products that are essentially
bioequivalent to "Glucotrol XL" in the form of TIMERx from Penwest during such
period.
5.2 The price for all Formulated TIMERx sold hereunder shall
equal the Unit Price multiplied by the applicable units purchased. All sales
********************************************************************, and Mylan
shall bear all transportation, insurance, taxes, duties, and other costs and
risks of loss, spoilage and damage associated with the shipping and delivery of
Formulated TIMERx to Mylan or its Affiliates or sublicensees.
5.3 Penwest warrants that it will not change or modify its
DMF, the Specifications, or its method of manufacture for Formulated TIMERx
without prior written consent from Mylan, which consent shall not be
unreasonably withheld.
5.4 Penwest shall perform quality control tests with respect
to all Formulated TIMERx as required by the FDA as set forth in the DMF. In
addition, Penwest may perform such other tests as Penwest deems necessary in
accordance with its applicable policies. No other or special tests by Penwest
with respect to the raw materials or Formulated TIMERx will be required, unless
and to the extent that Mylan establishes that the same are required in order to
obtain or maintain an FDA approval to market the Designated Product in the
Exclusive Territory. Penwest shall promptly, upon completion of each lot or
batch of Formulated TIMERx, deliver to Mylan a copy of the record of such test
performed on said lot or batch.
5.5 Each shipment of the TIMERx or Formulated TIMERx shall:
i) be accompanied by a Certificate of Analysis and
a certificate of Origin;
ii) meet all present, FDA, Compendial, and the
applicable Specifications; and
iii) be manufactured, packaged, stored and shipped in
conformance with the applicable Specifications,
and Current Good Manufacturing Practices
("cGMPs").
5.6 Within a reasonable period but not more than thirty (30)
days after receipt, Mylan will analyze each shipment of
the Formulated TIMERx. If Mylan considers any such
shipment not to conform to the applicable
Specifications, Mylan shall notify Penwest immediately
and provide Penwest with the relevant analysis. If
Penwest does not agree, the parties shall submit such
disagreement to the arbitration of one mutually accepted
neutral
14
<PAGE> 15
analytical laboratory. If Penwest or the neutral
laboratory agree with Mylan, Penwest shall not have any
obligation to Mylan other than to accomplish at Mylan's
option any of the following:
i) at its own expense accept return of any shipment
not accepted; or
ii) reimburse Mylan for the cost of disposal or
destruction; and
iii) use commercially reasonable efforts to replace
the non-conforming shipment with conforming
Formulated TIMERx.
5.7 In case Penwest cannot supply Mylan the requested
quantities of the Formulated TIMERx, the shipments may be made by an alternate
supplier designated by Penwest with Mylan's consent, which consent shall not be
unreasonably withheld. Penwest will qualify (in Penwest's reasonable judgment)
at least one such alternate supplier and notify Mylan thereof at least 90 days
prior to the submission of the ANDA. If Mylan has any objections to such
supplier, it shall so notify Penwest within fifteen days following Penwest's
notice of such qualification, or else Mylan will be deemed to have consented to
such qualification and the designation of such supplier. Such shipment by the
alternate supplier shall be made under the same agreed terms and conditions as
those set forth herein, except that an additional 60 days shall be added to the
order lead time stated in any then-outstanding order for Formulated TIMERx
hereunder to reflect the transition time required to shift to such alternate
supplier. Notwithstanding anything to the contrary set forth herein, Penwest
will be responsible for enforcing all relevant terms and conditions set forth
herein against such alternate supplier and remain liable to Mylan for any breach
of such terms and conditions by such supplier.
5.8 If for any reason Penwest (or the alternate supplier)
fails to supply Mylan with its and its Affiliates' and sublicensees'
requirements of Formulated TIMERx during the Marketing Period as agreed
hereunder, Penwest shall grant Mylan a nonexclusive license to manufacture
Formulated TIMERx under the TIMERx Production Technology and make knowledgeable
personnel reasonably available to consult with Mylan, all to the extent
necessary to enable Mylan to produce Formulated TIMERx that would otherwise have
been supplied by Penwest or an alternate supplier hereunder for Mylan and its
Affiliates and sublicensees in connection with the production of the Designated
Product pursuant to this Agreement.
15
<PAGE> 16
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
5.8.1 In such event Mylan shall pay to Penwest, in
addition to the Royalties under Section ,
Production Royalties equal to ****************,
if any, of the then-current Unit Price for each
kilogram of Formulated TIMERx produced by Mylan
hereunder, ******************************. Such
Production Royalties shall be payable and
reported and accounted for as stated in Sections
and , except that the Production Royalties will
be payable ********************* after the end
of the calendar quarter in which the applicable
kilogram of Formulated TIMERx was produced.
5.8.2 Mylan shall maintain all information and
technology delivered to Mylan pursuant to this
Section, whether orally or in writing, in
confidence in accordance with Section (to the
extent the same is Confidential Technology) and
shall use such information and technology only
for the purpose of producing Formulated TIMERx
for its own use and the use of its Affiliates
and sublicensees in connection with this
Agreement.
5.8.3 Mylan acknowledges that, in doing the foregoing,
Penwest will not be providing a "turnkey"
operation. Rather, Penwest will only be required
to make reasonably available to Mylan the best
standard of knowledge and information then
available to Penwest and directly used in its or
its Affiliate's manufacture of Formulated
TIMERx. If any professional licenses, visas, or
other permits are required for any of the
consulting to be provided by Penwest's or its
Affiliates' or licensees' personnel, Mylan shall
so inform Penwest and Mylan shall bear the costs
of obtaining the same.
5.8.4 Neither Penwest nor its Affiliates or licensees
will be responsible for any failure of Mylan or
its personnel to understand or properly to
implement such knowledge and information or for
any materials made by any party other than
Penwest or such respective Affiliate or licensee
using such knowledge and information.
5.8.5 If Penwest's non-delivery of Formulated TIMERx
resulted in whole or in part from a temporary
inability to produce and deliver the same,
Penwest may, at its option and on at least 120
days' prior written notice to Mylan, terminate
the
16
<PAGE> 17
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
license to produce Formulated TIMERx hereunder
once Penwest or its alternative supplier is
again able and willing to supply Formulated
TIMERx hereunder.
5.9 Penwest shall, after receipt of reasonable prior notice,
give duly accredited representatives of Mylan access at all reasonable times
during regular business hours to inspect, copy, and audit any relevant records
of Penwest's or its Affiliate's plant in which the Formulated TIMERx is being
produced.
5.10 Mylan shall deliver to Penwest a firm written order
stating its (and/or its Affiliates' and sublicensees') requirements for
Formulated TIMERx to be used for production of the Designated Product for
commercial use or sale no less than 6 months in advance of the requested
delivery date therefor. Mylan shall, within one month following the filing by
Mylan of an ANDA with the FDA for the Designated Product, submit to Penwest
Mylan's first such order for Formulated TIMERx under this Agreement, for an
amount ************************************************************************
*******************************************************************************
************ inclusive, following the submission of such order.
5.11 At least twelve months before Mylan and/or its
Affiliates or sublicensees begin production of the Designated Product for
commercial use or sale (and in any event not later than concurrently with the
submission of the first order described in Section 5.10), Mylan shall deliver to
Penwest a written, non-binding estimate of all requirements of Formulated TIMERx
therefor. Mylan will deliver to Penwest updates to such estimates on or before
the first day of each January, April, July and October thereafter during the
Marketing Period, which updates may revise estimates previously submitted and
will add estimates for additional months so that each such estimate covers the
************** following the end of the firm-order period (that is, the
****************** after the month in which such estimates are made). Penwest
shall not be obligated to supply Mylan with quantities of Formulated TIMERx
during any quarter in excess of ******************************** of the
quantities estimated in Mylan's written estimate applicable to that quarter,
which estimate was given to Penwest ********** prior to such quarter (the
"************* Prior Estimate" as to that quarter). Mylan shall be responsible
for purchasing from Penwest in each quarter at least ************* of the
quantities of Formulated TIMERx estimated in the ***************** Prior
Estimate as to such quarter.
5.12 No order for Formulated TIMERx hereunder may be
cancelled or deferred by Mylan except by written notice delivered to Penwest at
**************** prior to the scheduled delivery date. No orders may be
cancelled or deferred (***************************) without Penwest's approval
if such cancellation or deferral
17
<PAGE> 18
would reduce Mylan's purchases for the applicable quarter to less than the 80%
level referred to in Section 5.11.
5.13 Each party shall promptly notify the other of any fact,
circumstance, condition or knowledge dealing with TIMERx or the Designated
Product of which the Party becomes aware that bears upon the safety or efficacy
of TIMERx or the Designated Product. Each party shall immediately notify the
other of any inspection or audit relating to TIMERx, Formulated TIMERx, or the
Designated Product by any governmental regulatory authority in the Territory. If
a representative of the governmental authority takes samples in connection with
such audit or inspection, the parties shall immediately provide each other, as
appropriate, samples from the same batch. The party in receipt of such notice
will provide the other party within 72 hours, with copies of all relevant
documents, including FDA Forms 482, 483, warning letters and other
correspondence and notifications as such other party may reasonably request.
Penwest and Mylan agree to cooperate with each other during any inspection,
investigation or other inquiry by the FDA or other governmental entity,
including providing information and/or documentation, as requested by the FDA,
or other governmental entity. To the extent permissible, Penwest and Mylan also
agree to discuss any responses to observations or notifications received and to
give the other party an opportunity to comment on any proposed response before
it is made. In the event of disagreement concerning the content or form of such
response, Mylan shall be responsible for deciding the appropriate form and
content of any response with respect to any of its cited activities and Penwest
shall be responsible for deciding the appropriate form and content of any
response with respect to any of its cited activities. Each party shall inform
the other of all comments and conclusions received from the governmental
authority.
6. OWNERSHIP AND LICENSES.
6.1 Except as otherwise explicitly licensed or transferred
as provided herein, each party will, as between it and the other party hereto,
retain ownership of any and all inventions, copyrights, trade secrets, know-how,
patent rights and other technology and rights to the extent conceived or
developed by its personnel or contractors (other than the other party hereto).
Neither party makes any grant of rights by implication.
6.2 Except as otherwise provided herein, each party shall be
responsible, as it shall determine, for the filing and prosecution of any and
all patent applications with respect, in whole or in part, to its own
intellectual property and for the maintenance of any available patent protection
with respect thereto; provided however, that neither party commits that any such
patent protection will be available or continuous hereunder. If one party
believes that an application for a patent in the Territory should be filed with
respect to any invention of the other party hereunder
18
<PAGE> 19
related to the Designated Product, it may so notify such other party, and the
parties will cooperate in the investigation of the propriety of such an
application, taking into account the respective interests of the parties and the
anticipated costs and benefits of such patent protection.
6.3 Penwest hereby grants to Mylan and its Affiliates a
license under the Penwest Patents, the Joint Developments, and Penwest's
Confidential Technology disclosed to Mylan hereunder to make, have made, use and
sell the Designated Product in the Territory during the License Term. Such
license shall be exclusive for such purposes as to the Penwest Patents listed in
Exhibit within the Exclusive Territory and shall be non-exclusive in the
Non-Exclusive Territory. Such license does not extend to the making of TIMERx or
Formulated TIMERx, but does cover the incorporation of the same into the
Designated Product. Mylan shall have no right to grant sublicenses hereunder
without the prior written consent of Penwest, which consent may be withheld in
Penwest's discretion as to sublicenses in the Exclusive Territory, but will not
be unreasonably withheld as to sublicenses in the NonExclusive Territory.
Penwest will, throughout the License Term, promptly notify Mylan of all Penwest
Patents referred to in Subsection and provide Mylan with access to all of the
same, solely for use within the scope of the license stated in this section.
6.4 Mylan hereby grants to Penwest and its Affiliates a
nonexclusive, paid-up, worldwide license, with right to sublicense, under any
and all patents, patent applications, trade secrets, copyrights, and other
intellectual property rights of any sort owned or cibtrikked by Mylan or its
Affiliates or sublicensees, to make, have made, use and sell Formulated TIMERx
during the License Term, if and to the extent such license is necessary for
Penwest to do so as agreed hereunder. Penwest and its Affiliates shall have the
right to grant sublicenses of its rights hereunder to an alternate supplier as
and for the purposes described in Section , but shall otherwise have no right to
grant sublicenses hereunder without the prior written consent of Mylan, which
consent shall not be unreasonably withheld.
6.5 Subject to and conditional upon the failure of Penwest
(or the alternate supplier) to meet Mylan's and its Affiliates' and
sublicensees' requirements as provided in Section , Penwest grants to Mylan a
nonexclusive, worldwide license under the TIMERx Production Technology to make
and have made Formulated TIMERx solely for use in the Designated Product for
sale in the Territory during the License Term. Mylan shall have no right to
grant sublicenses of its rights hereunder (whether to Affiliate(s) or otherwise)
without the prior written consent of Penwest, which consent shall not be
unreasonably withheld.
6.6 Mylan acknowledges that Penwest and its Affiliates, for
itself and for others, applies, and will seek to apply, TIMERx to products other
than the Designated Product. No provision hereof, and no exclusivity hereunder,
shall
19
<PAGE> 20
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
prevent Penwest from so applying TIMERx or Formulated TIMERx, so long as the end
product is not the Designated Product hereunder, it being understood that the
Nifedipine Agreements will continue to govern on this point as to the products
covered by them.
6.7 Mylan hereby grants to Penwest and its Affiliates a
nonexclusive, worldwide license, with right to sublicense, under any and all
Mylan Improvements, to make, have made, use and sell any products or services
using or based upon TIMERx or related technology, other than: (i) Designated
Products in the Territory during the License Term, and (ii), to the extent so
provided in the Nifedipine Agreements, the "Designated Products" defined in
those agreements. Such license shall require the payment of a reasonable royalty
to Mylan if any commercial sales are made under such license. Penwest shall
notify Mylan at least **************** prior to granting any sublicense to the
rights under this section (other than to a Penwest Affiliate), and shall consult
with Mylan as to the propriety of such sublicense if Mylan, within such
*********** period, notifies Penwest of Mylan's belief, on reasonable grounds
stated in such notice, that such a sublicense would have a substantial adverse
effect on Mylan or its business. Mylan will, throughout the License Term,
promptly notify Penwest of all Mylan Improvements and provide Penwest with
access to all of the same, solely for use within the scope of the license stated
in this section.
6.8 In recognition of the parties' cooperative efforts with
respect to the Joint Developments, it is agreed that each party and its
Affiliates shall have the nonexclusive, worldwide right and license, with right
to sublicense, under the Joint Developments, to make, have made, use and sell
any products or services (other than the Designated Product by Penwest or its
Affiliates in the Exclusive Territory during the License Term, or, to the extent
so provided in the Nifedipine Agreements, the "Designated Products" defined in
those agreements); provided, however, that each party
******************************************************************************
*****************************************************************. Each party
shall promptly notify the other of any such licenses or sublicenses of any Joint
Developments. Each party will, throughout the License Term, promptly notify the
other of all Joint Developments and provide such other party with access to all
of the same.
6.9 Mylan hereby grants Penwest and its Affiliates a
nonexclusive license under all rights of Mylan and its Affiliates and
sublicensees in and to that portion of the Mylan Test and Regulatory Data that
is disclosed or provided to Penwest hereunder, to use the same for purposes of
complying with governmental requirements of any country, other than with respect
to the Designated Product for marketing or use in the Territory. Such license
shall be on a paid-up, royalty-free basis as to Penwest and its Affiliates, and
as to any of the Available Portion of the Mylan Test and Regulatory Data
(whether as to Penwest or others), ********************************** to
************ if any but the Available Portion is used
20
<PAGE> 21
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
by any other party under a sublicense from Penwest or its Affiliate. Penwest
shall notify Mylan at least ************ prior to granting any sublicense to the
rights under this section (other than to a Penwest Affiliate or as to the
Available Portion), and shall consult with Mylan as to the propriety of such
sublicense if Mylan, within such **************** period, notifies Penwest of
Mylan's belief, on reasonable grounds stated in such notice, that such a
sublicense would have a substantial adverse effect on Mylan or its business.
Mylan hereby consents to Penwest's and its Affiliates' and sublicensees'
cross-referencing, in any filings that are essentially the equivalent of the
sorts of filings that are termed "ANDA" or "NDA" filings if made with the FDA,
made by them within the scope of such license, any ANDA or NDA filing made or
FDA master file created by Mylan or its Affiliates or sublicensees relating to
or containing any of the Mylan Test and Regulatory Data. The license under this
section shall survive any termination or expiration of the term of this
Agreement, except a termination under Section due to an uncured breach by
Penwest. Mylan will, throughout the License Term and solely for use within the
scope of the license stated in this section, promptly provide to Penwest copies
of all of the Deliverable Portion of the Mylan Test and Regulatory Data in or
coming into Mylan's possession or otherwise reasonably available to it.
6.10 Penwest hereby grants Mylan and its Affiliates (with
right to sublicense only to sublicensees under Section , as approved by Penwest)
a nonexclusive, paid-up license under all rights of Penwest and its Affiliates
in and to the Penwest Test and Regulatory Data to use the same for purposes of
complying with governmental requirements, but solely with respect to the
Designated Product for marketing or use in the Territory, it being understood
that the Nifedipine Agreements will continue to govern on this point as to the
products covered by them. Penwest hereby consents to Mylan's and its Affiliates'
and such sublicensees' cross-referencing, in any ANDA or NDA filings made by
them within the scope of such license, any ANDA or NDA filing made or FDA master
file created by Penwest or its Affiliates relating to or containing any of the
Penwest Test and Regulatory Data. The license and rights under this section
shall survive any termination or expiration of the term of this Agreement,
except a termination under Section due to an uncured breach by Mylan. Penwest
will, throughout the License Term and solely for use within the scope of the
license stated in this section, promptly provide to Mylan copies of all of the
Penwest Test and Regulatory Data in or coming into Penwest's possession or
otherwise reasonably available to it.
6.11 Each party agrees to mark and to have marked by its
Affiliates and sublicensees (if any) every product manufactured, used or sold by
it or its Affiliates or sublicensees in accordance with the laws of the United
States or other applicable nation relating to the marking of patented articles
with notices of patent.
6.12 Any dispute concerning the ****************************
*****************************
21
<PAGE> 22
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
*******************************************************************************
**************. Each party hereto shall afford, to the extent permissible under
its agreements with the third parties, the other party hereto the same audit
rights that such party obtains from its licensees or sublicensees with respect
to any of the rights described in such sections.
7. CONFIDENTIALITY.
7.1 In the course of performance under this Agreement, a
party may disclose to the other confidential information belonging to such party
in writing, orally or by demonstration or sample, which information is marked or
stated in writing at or within 30 days after its disclosure to be "confidential"
or "trade secret" information. All such confidential information of a party
shall be maintained in confidence by the other and will not be used by the other
party for any purpose except as authorized hereunder. Each party shall exercise,
and shall cause its Affiliates, sublicensees and consultants to exercise, a
reasonable degree of care and at least the same degree of care as it uses to
protect its own confidential information of similar nature to preserve the
confidentiality of such information of the other party. Each party shall
safeguard such information against disclosure to third parties, including
without limitation employees and persons working or consulting for such party
that do not have an established, current need to know such information for
purposes authorized under this Agreement. This obligation of confidentiality
does not apply to information and material that:
7.1.1 were properly in the possession of the receiving
party, without any restriction on use or disclosure,
prior to receipt from the other party;
7.1.2 are at the time of disclosure hereunder in the
public domain by public use, publication, or general
knowledge;
7.1.3 become general or public knowledge through no
fault of the receiving party or its Affiliates or
sublicensees following disclosure hereunder;
7.1.4 are properly obtained by the receiving party
from a third party not under a confidentiality
obligation to the disclosing party hereto;
7.1.5 are independently developed by or on behalf of
the receiving party without the use or assistance of the
confidential information of the other party;
22
<PAGE> 23
7.1.6 consist merely of an idea or conception for the
combination of one or more active drug ingredients with
a controlled-release agent such as TIMERx; or
7.1.7 are required to be disclosed by order of any
court or governmental authority; provided, however, that
the exceptions stated in Sections 7.1.3, 7.1.4, 7.1.5
and 7.1.7 shall not affect the continuing obligation of
Mylan as the receiving party to pay any Royalties
pursuant to the terms hereof with respect to the use of
such information or materials that have not, as of the
relevant time, been placed into the public domain by the
act of Penwest or its Affiliates.
7.2 Neither party shall make any public announcement or
other publication regarding this Agreement (whether as to the existence or terms
hereof) or the development work or project hereunder or the results thereof
without the prior, written consent of the other party, which consent shall not
be unreasonably withheld; provided that the foregoing shall not prohibit any
disclosure which, in the opinion of counsel to the disclosing party, is required
by any applicable law or by any competent governmental authority. In no event
shall either party make any disclosure of any such results before a patent
application has been filed with respect thereto, except upon the prior written
approval of the other party.
8. INFRINGEMENT.
8.1 Penwest shall promptly inform Mylan of any suspected
infringement of any of the Penwest Patents or the infringement or
misappropriation of the TIMERx Production Technology by a third party, to the
extent such infringement involves the manufacture, use or sale of the Designated
Product in the Territory ("Covered Infringement"). Mylan shall promptly inform
Penwest of any suspected infringement of any of the Penwest Patents or
infringement or misappropriation of the TIMERx Production Technology, whether or
not the same involves a Covered Infringement.
8.2 If the suspected infringement or misappropriation does
not involve a Covered Infringement, Penwest may take, or refrain from taking,
any action it chooses, with or without notice to Mylan, and Mylan shall have no
right to take any action with respect to such suspected infringement or
misappropriation, nor to any recoveries with respect thereto. If the suspected
infringement or misappropriation involves a Covered Infringement, Penwest shall,
within 30 days of the first notice referred to in Section , inform Mylan whether
or not Penwest intends to institute suit against such third party with respect
to a Covered Infringement. Mylan will not take any steps toward instituting suit
against any third party
23
<PAGE> 24
involving a Covered Infringement until Penwest has informed Mylan of its
intention pursuant to the previous sentence.
8.3 If Penwest notifies Mylan that it intends to institute
suit against a third party with respect to a Covered Infringement, and Mylan
does not agree to join in such suit as provided in Section , Penwest may bring
such suit on its own and shall in such event bear all costs of, and shall
exercise all control over, such suit. Penwest may, at its expense, bring such
action in the name of Mylan and/or cause Mylan to be joined in the suit as a
plaintiff. Recoveries, if any, whether by judgment, award, decree or settlement,
shall belong solely to Penwest.
8.4 If Penwest notifies Mylan that it desires to institute
suit against such third party with respect to a Covered Infringement, and Mylan
notifies Penwest within 30 days after receipt of such notice that Mylan desires
to institute suit jointly, the suit shall be brought jointly in the names of
both parties and all costs thereof shall be borne equally. Recoveries, if any,
whether by judgment, award, decree or settlement, shall, after the reimbursement
of each of Penwest and Mylan for its share of the joint costs in such action, be
shared between Penwest and Mylan equally; provided however that, any portion of
such net recoveries which constitutes the equivalent of, or damages or payments
in lieu of, a royalty measured by the defendant's Net Sales shall not be shared
equally, but shall be shared between Penwest and Mylan in accordance with
Section as if they were Mylan's Net Sales.
8.5 If Penwest notifies Mylan that it does not intend to
institute suit against such third party with respect to a Covered Infringement,
Mylan may institute suit on its own. Mylan shall bear all costs of, and shall
exercise all control over, such suit. Recoveries, if any, whether by judgment,
award, decree or settlement, shall belong solely to Mylan; provided however
that, after reimbursement of Mylan for its costs in such action, any portion of
such net recoveries which constitutes the equivalent of, or damages or payments
in lieu of, a royalty measured by the defendant's Net Sales shall be shared
between Penwest and Mylan in accordance with Section as if they were Mylan's Net
Sales.
8.6 Should either Penwest or Mylan commence a suit under the
provisions of this Section and thereafter elect to abandon the same, it shall
give timely notice to the other party, who may, if it so desires, be joined as a
plaintiff in the suit (or continue as such if it is already one) and continue
prosecution of such suit. The sharing of expenses and any recovery of such suit
shall be as reasonably agreed between Penwest and Mylan.
9. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
9.1 Each party represents and warrants to the other that, to
the best of its current knowledge, it has the full right and authority to enter
into this
24
<PAGE> 25
Agreement and to grant the licenses granted herein. Each party believes, to the
best of its current knowledge, that any existing patents licensed by it to the
other party under this Agreement are valid.
9.2 Penwest represents and warrants that any Formulated
TIMERx supplied by it to Mylan hereunder for use in the Designated Product, at
the point of delivery:
9.2.1 will conform to the product Specifications that
Penwest and Mylan have agreed in writing are to apply to
such delivery of TIMERx; and
9.2.2 to the best of Penwest's current knowledge, will
not infringe upon an article patent of any third party.
PENWEST MAKES NO REPRESENTATIONS OR WARRANTIES AS TO ANY TIMERx OR
FORMULATED TIMERx SUPPLIED BY IT TO MYLAN EXCEPT AS ARE EXPLICITLY STATED
HEREIN.
9.3 Each party represents and warrants to the other party
that it has obtained and will at all times during the term of this Agreement,
hold and comply with all licenses, permits and authorizations necessary to
perform this Agreement and to test, manufacture, market, export, and import the
products and assistance to be provided by it hereunder, as now or hereafter
required under any applicable statutes, laws, ordinances, rules and regulations
of the United States and any applicable foreign, state, and local governments
and governmental entities.
9.4 Mylan warrants that any Designated Product manufactured,
marketed or distributed by Mylan or its Affiliates or sublicensees shall meet
and be manufactured, packaged, labeled, sold, and promoted in accordance with
all applicable regulatory requirements within the Territory.
9.5 Penwest shall indemnify, defend and hold harmless Mylan
and its Affiliates and sublicensees from any claim, action or damages arising
out of any alleged infringement by reason of the manufacture, use or sale by
Mylan of the Designated Product to the extent such infringement would apply as
well to the manufacture, sale or distribution of TIMERx alone. If Mylan or its
Affiliate or sublicensee, by reason of its manufacture, sale or distribution of
Designated Product, is accused of infringing the patent of a third party, and
such claim of infringement, as framed by the claimant, would apply as well to
the manufacture, sale or distribution of TIMERx alone, Mylan shall immediately
so notify Penwest and provide Penwest all available information,
25
<PAGE> 26
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
and the parties shall consult reasonably as to the proper course of
action. If Penwest and Mylan jointly determine that such claim is likely to
prevail, or if an arbitrator hereunder or a court of competent jurisdiction so
determines, Mylan shall be entitled to offset against any Royalties payable to
Penwest hereunder any third party royalties for which Mylan or its Affiliate or
sublicensee becomes liable.
9.6 Penwest shall indemnify, defend and hold Mylan and its
Affiliates and sublicensees harmless from any and all third-party claims to the
extent arising from, in connection with, based upon, by reason of, or relating
in any way to:
9.6.1
*****************************************TIMERx
in the Designated Product;
9.6.2 Penwest's ********************************* and
the Specifications therefor hereunder;
9.6.3 any failure of the Formulated TIMERx
manufactured by Penwest or its alternate supplier (but
not by Mylan under Section ), as delivered to Mylan
hereunder for use in the Designated Product, to conform
to the Specifications; or
9.6.4 any failure of Penwest to comply with its
obligation under Section 5.13 to notify Mylan of any
information coming into Penwest's possession and
***************************************and not arising
from any other aspect of the Designated Product or its
formulation,development, supply, production,
manufacture, sale, delivery, distribution or usenor from
any act or omission of Mylan with respect to the
Formulated timer following its delivery to Mylan
hereunder.
9.7 Mylan shall indemnify, defend and hold Penwest harmless
from any and all third-party claims to the extent arising from, in connection
with, based upon, by reason of, or relating in any way to, the formulation,
development, supply, production, manufacture, sale, delivery, distribution or
use of the Designated Product, except for any matters which are covered by
Penwest's indemnities under Sections 9.5 and 9.6.
9.8 Notwithstanding anything to the contrary set forth
elsewhere herein, neither Mylan nor Penwest shall be obligated to indemnify the
other party for claims or liabilities to the extent arising from such other
party's, or its Affiliates', sublicensees' or assigns', negligence, intentional
misconduct, or breach of its duties, obligations, warranties or representations
set forth herein.
9.9 Whenever indemnification is provided for a party under
this Agreement, such right of indemnification shall extend also to the
indemnified party's
26
<PAGE> 27
Affiliates, officers, directors, shareholders, successors, assigns, agents,
employees, and insurers to the extent the same become subject to such claim in
such capacity. The party seeking indemnification shall provide the indemnifying
party with written notice of any claim or action within ten (10) days of its
receipt thereof, and shall afford the indemnifying party the right to control
the defense and settlement of such claim or action. The party seeking
indemnification shall provide reasonable assistance to the indemnifying party in
the defense of such claim or action. If the defendants in any such action
include both Mylan and Penwest and either party concludes that there may be
legal defenses available to it which are different from, additional to, or
inconsistent with, those available to the other, that party shall have the right
to select separate counsel to participate in the defense of such action on its
behalf, and such party shall thereafter bear the cost and expense of such
separate defense. Should the indemnifying party determine not to defend such
claim or action, the other party shall have the right to maintain the defense of
such claim or action and the indemnifying party agrees to provide reasonable
assistance to it in the defense of such claim or action. Neither party shall
settle any such claim or action in a way that prejudices or adversely impacts
the other party to this Agreement without the prior approval of such other party
(which approval shall not be unreasonably withheld).
9.10 Any dispute concerning indemnification will be
determined by arbitration in accordance with Section of this Agreement.
9.11 THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS, IMPLIED OR ARISING BY LAW, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY (i)
BY PENWEST AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION), OR
SCOPE OF ANY PENWEST PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERX
PRODUCTION TECHNOLOGY, JOINT DEVELOPMENTS, OR PENWEST TEST AND REGULATORY DATA;
OR (ii) BY MYLAN AS TO THE PATENTABILITY, VALIDITY (EXCEPT AS STATED IN SECTION
), OR SCOPE OF ANY MYLAN IMPROVEMENTS, JOINT DEVELOPMENTS, OR MYLAN TEST AND
REGULATORY DATA.
9.12 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN (OTHER THAN THE INDEMNITIES STATED IN THIS SECTION ), NEITHER PARTY SHALL
UNDER ANY CIRCUMSTANCES BE LIABLE FOR ANY THIRD PARTY CLAIMS OR FOR ANY
INCIDENTAL, CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES, INCLUDING ANY LOST
PROFITS OR SAVINGS, ARISING FROM ANY BREACH OF WARRANTY OR THE PERFORMANCE OR
BREACH OF ANY OTHER PROVISION OF THIS
27
<PAGE> 28
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
AGREEMENT OR THE USE OR INABILITY TO USE TIMERx, THE DESIGNATED PRODUCT, PENWEST
PATENTS, PENWEST'S CONFIDENTIAL TECHNOLOGY, TIMERx PRODUCTION TECHNOLOGY,
PENWEST TEST AND REGULATORY DATA, MYLAN IMPROVEMENTS, OR MYLAN TEST AND
REGULATORY DATA, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
9.13 Each party shall, at its own cost and expense, obtain
and maintain from a qualified insurance company comprehensive general liability
and products liability insurance coverage during the term of this Agreement (and
any subsequent period of sale or distribution pursuant to Section ). Such
insurance shall be in an amount no less than ************************* combined
single limit for each occurrence for bodily injury and/or property damage. Each
party agrees to provide the other party with a certificate of insurance
evidencing such insurance within thirty (30) days after the execution of this
Agreement and again thereafter from time to time as reasonably requested by such
other party.
10. TERM AND TERMINATION.
10.1 The term of this Agreement shall begin on the date set
forth above and shall, unless earlier terminated as provided herein, continue
until the end of the License Term.
10.2 Subject to Sections and , Penwest may at its option
terminate this Agreement following any Approval Date if Mylan and its Affiliates
and sublicensees, in the aggregate, fail to sell, in Royalty-bearing
transactions triggering "Net Sales" hereunder, ********************************
*******************************************************************************
*************************
10.2.1 The minimum************************************:
(i) For the first full calendar year following the
Approval Date ("Year 1"),**********************
***********************************************
**************************
(ii) For the next following calendar year ("Year 2"),
the *******************************************
************************
(iii) For the next calendar year following Year 2
("Year 3") and each year thereafter during the
License Term, the *****************************
**********************************************
28
<PAGE> 29
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
10.3 If there is any period during which Mylan's ability to
sell the Designated Product is materially retarded due to:
10.3.1 events beyond its reasonable control as
described in Section or
10.3.2 a failure of Penwest and its alternate supplier
to supply Formulated TIMERx as described in Section ,
then an additional period of the lesser of the duration of such event
(or failure) or one year shall be added at that point to the schedule described
in Section 5.8.
10.4 If, at the Approval Date, there are in the United States
*******************************************************************************,
the minimum amounts stated in Section 10.2 shall **************************** to
be reasonably agreed between Mylan and Penwest in good faith negotiations during
the ninety (90) days following the Approval Date.
10.5 Mylan may at its option terminate this Agreement
following any Approval Date, provided that any such elective termination shall
require that Mylan pay an early termination fee to Penwest equal **************
*******************************************************************************
*******************************************************************************
****** the period in which such termination occurs (whether or not any part of
*******************************************************************************
******************, and such termination fee shall be paid to Penwest on or
before the effective date of such termination.
10.6 Following any expiration or termination of the License
Term (but subject to Section 10.10), the licenses to Penwest under Sections 6.7,
6.8, and 6.9 shall be extended to include (in addition to their coverage as
stated in such sections) making, using and selling the Designated Product in the
Territory and the use of Mylan Test and Regulatory Data for purposes of
complying with governmental requirements with respect to the Designated Product
for marketing or use in the Territory, and otherwise shall continue to be
governed by the terms stated in such sections.
10.7 In the event that either party materially breaches any
of the terms, conditions or agreements contained in this Agreement to be kept,
observed or performed by it, then the other party may terminate this Agreement,
at its option and without prejudice to any of its other legal or equitable
rights or remedies, by giving the party who committed the breach (i) in the case
of breach of obligations other than the payment of money, 90 days' notice in
writing, unless the notified party within
29
<PAGE> 30
such 90-day period shall have cured the breach, and (ii) in the case of breach
of an obligation for the payment of money, 30 days' notice in writing, unless
the notified party within such 30-day period shall have cured the breach,
including any required payment of interest on previously unpaid amounts as set
forth herein; provided, however, that:
10.7.1 no termination of this Agreement under this Section shall become
effective during the pendency of a good faith dispute between the parties as to
the existence of grounds for such a termination, provided that the parties are
complying with the process in Section in good faith in order to resolve such
dispute, and that such termination shall become effective immediately upon any
binding determination that such grounds did exist at the time the notice of
termination was given; and
10.7.2 if a notice of termination is given pursuant to this Section and it is
subsequently determined that grounds for such a notice did not exist, the giving
of such notice shall not itself constitute a repudiation or default under this
Agreement, so long as such notice was given in the good faith belief that such
grounds did exist.
10.8 In the event of any termination of this Agreement, Mylan
shall be entitled to sell and distribute reasonable inventories of Designated
Product remaining on hand as of the effective date of termination, provided that
such sales and distribution are otherwise in conformance with this Agreement.
Mylan may continue to make, use or sell such Designated Product only until Mylan
has exhausted remaining raw materials in its possession at the time of
termination of the license. Net Sales of the Designated Product pursuant to this
Section shall be subject to the Royalties pursuant to Section 4.3.
10.9 Any sublicenses granted by Mylan or its Affiliates under
this Agreement shall provide for termination or assignment to Penwest, at the
option of Penwest, of Mylan's or its Affiliate's interest therein upon
termination of this Agreement.
10.10 Mylan's obligations regarding payment of Royalties (and
Production Royalties, if any) accrued as of the date of termination and as
provided under Section 10.8; Penwest's rights under Sections 6.7, 6.8 and 6.9 as
modified by Section (except if this Agreement is terminated due to an uncured
breach on the part of Penwest); and Mylan's rights under Section (except if this
Agreement is terminated due to an uncured breach on the part of Mylan); and the
provisions of Sections 7, 9, and 11, hereof shall survive any expiration or
termination of this Agreement.
30
<PAGE> 31
11. MISCELLANEOUS.
11.1 Each of Penwest and Mylan agrees to duly execute and
deliver, or cause to be duly executed and delivered, such further instruments
and do and cause to be done such further acts and things as are reasonably
within its control and its responsibilities under this Agreement, including,
without limitation, the filing of such additional assignments, agreements,
documents and instruments, that may be necessary or as the other party hereto
may from time to time reasonably request in connection with this Agreement to
carry out more effectively the provisions and purposes of this Agreement.
11.2 This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter hereof, it being
understood that the Nifedipine Agreements are not superseded by or merged into
this Agreement, but, rather, shall continue in effect as to their subject matter
and in accordance with their terms.
11.3 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their Affiliates, successors and permitted
assigns; provided, however, that except for assignments or delegations to
Affiliates of a party (which shall not release such party from any of its rights
or responsibilities hereunder), or as part of the transfer of all or
substantially all assets to a single buyer or pursuant to a merger or other
corporate reorganization, or as otherwise specifically permitted hereunder,
neither party shall assign or delegate any of its rights or obligations
hereunder at any time without the prior written consent of the other party
hereto, which consent shall not be unreasonably withheld.
11.4 All notices, requests or other communication provided
for or permitted hereunder shall be given in writing and shall be hand delivered
or sent by facsimile, reputable courier or by registered or certified mail,
postage prepaid, return receipt requested, to the address set forth on the
signature page of this Agreement, or to such other address as either party may
inform the other of in writing. Notices will be deemed delivered on the earliest
of transmission by facsimile, actual receipt or three days after mailing as set
forth herein.
11.5 No change, modification, extension, termination or
waiver of any obligation, term or provision contained herein shall be valid or
enforceable unless same is reduced to writing and signed by a duly authorized
representative of each of the parties to be bound hereby. No waiver of any right
in any one instance shall constitute a waiver of that right or of any other
right in other instances under this Agreement.
31
<PAGE> 32
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
11.6 If any provision of this Agreement shall be held
invalid, illegal or unenforceable, such provision shall be enforced to the
maximum extent permitted by law and the parties' fundamental intentions
hereunder, and the remaining provisions shall not be affected or impaired.
11.7 Nothing herein contained shall constitute this a joint
venture agreement or constitute either party as the partner, principal or agent
of the other, this being an Agreement between independent contracting entities.
Neither party shall have the authority to bind the other in any respect
whatsoever. Except as provided herein, nothing contained in this Agreement shall
be construed as conferring any right on either party to use any name, trade
name, trademark or other designation of the other party hereto, unless the
express, written permission of such other party has been obtained.
11.8 In the event that either party hereto is prevented from
carrying out its obligations under this Agreement by events beyond its
reasonable control, including without limitation acts or omissions of the other
party, acts of God or government, natural disasters or storms, fire, political
strife, labor disputes, failure or delay of transportation, default by suppliers
or unavailability of parts, then such party's performance of its obligations
hereunder shall be excused during the period of such event and for a reasonable
period of recovery thereafter, and the time for performance of such obligations
shall be automatically extended for a period of time equal to the duration of
such event or events.
11.9 This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York without regard to
its conflict of laws rules.
11.10 Should the parties to this Agreement fail to resolve any
controversy or claim arising out of or relating to the interpretation or
application of any term or provision set forth herein, or the alleged breach
thereof, such controversy or claim shall be resolved by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any award rendered pursuant to the terms set forth
herein may be entered in any court having jurisdiction of the party against whom
the award is rendered. Any award rendered pursuant to the terms and conditions
set forth herein shall be final and binding upon the parties and their
Affiliates. Any arbitration held pursuant to this Agreement shall be held in
Washington, D.C., or such other site as the parties may mutually agree. All
costs and expenses including reasonable attorney's fees and the fees and
expenses of the arbitrators and the AAA, incurred in the enforcement of this
Agreement shall be paid to the prevailing party by the non-prevailing party,
provided that the same may be apportioned between the parties by the arbitrators
if they determine that each party has prevailed in part. Notwithstanding the
foregoing, either party may, on good cause shown, seek a temporary restraining
order and/or a
32
<PAGE> 33
preliminary injunction from a court of competent jurisdiction, to be effective
pending the institution of the arbitration process and the deliberation and
award of the arbitration panel.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and acknowledge this Agreement as of the Effective Date
Mylan Pharmaceuticals Inc. Penwest, Ltd.
By /s/ Roderick P. Jackson By /s/ John V. Talley
------------------------ -------------------
Roderick P. Jackson John V. Talley
Senior Vice President Vice President
Address: Address:
781 Chestnut Ridge Road 2981 Route 22
Morgantown, W.V. 26504 Patterson, N.Y. 12563
FAX: (304) 598-5409 FAX: (914) 878-3420
Attn: J. Gregory Ford Attn: Dr. Paul K. Wotton
33
<PAGE> 34
EXHIBIT 1.6
Target Designated Product
Solid-dosage forms of a controlled-release pharmaceutical for oral
administration in humans that combine Glipizide with TIMERx and other excipients
and that are bioequivalent to the product currently (as of the Effective Date)
marketed in the United States under the name "Glucotrol XL," in 5mg and 10mg
tablet dosage strengths, and that are eligible for approval by the FDA under an
ANDA.
34
<PAGE> 35
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
EXHIBIT 1.17
Deliverable Portion of the Mylan Test and Regulatory Data
All material under or directly related to the following headings (or their
substantive equivalents) *******************************
*********************************************
*********************************************
***********************************************
*********************************************************
*********************************************************
Test Procedures under the heading "Controls for the Finished Dosage Form"
(except for any Assay information that is proprietary to Mylan)
Finished Product Specifications and Test Data under the heading "Controls for
the Finished Dosage Form"
Drug Substance under the heading "Analytical Methods" (except for Mylan's
Certificate of Analysis)
Analytical Procedures - *********************************************
**********************************************
Such other information and data as is reasonably necessary or facilitative for
Penwest's performance of its obligations hereunder*****************************
***************************************************
35
<PAGE> 36
EXHIBIT 1.20
Penwest Patents
UNITED STATES:
1) U.S. Patent No. 4,994,276, entitled "Directly Compressible Slow Release
Granulation," issued February 19, 1991.
2) U.S. Patent No. 5,128,143, entitled "Sustained Release Excipient and
Tablet Formulation," issued July 7, 1992.
3) U.S. Patent No. 5,135,757, entitled "Compressible Sustained Release
Dosage Forms," issued August 4, 1992.
4) U.S. Application Serial No. 08\118,924, entitled "Sustained Release
Hetero-Disperse Hydrogel Systems for Insoluble Drugs," filed September 9, 1993.
CANADA:
5) Canadian Patent Application No. 611,700, filed September 18, 1989
(corresponding to items 1), 2) and 3) above).
6) Canadian Patent Application to be filed corresponding to item 4) above.
MEXICO:
7) Mexican Patent Application to be filed corresponding to item 4) above.
36
<PAGE> 37
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS
EXHIBIT 2.4.1
Milestone Payment Payment Payment Payment
******* ******* ******* *******
******* ******* ******* *******
******* ******* ******* *******
******* ******* ******* *******
******* ******* ******* *******
******* ******* ******* *******
********* ******* ******* ******* *******
********* ******* ******* ******* *******
*********
****
********* ******* ******* ******* *******
*********
****
********* ******* ******* ******* *******
********* ******* ******* ******* *******
********* ******* ******* ******* *******
********* ******* ******* ******* *******
*******
********* ******* ******* ******* *******
********* ******* ******* ******* *******
********* ******* ******* ******* *******
Royalty *************************
*************************
*************************
Price of TIMERx: **********
Territories: *************************
37
