COLLABORATION AND LICENSE AGREEMENT

Execution Version		Exhibit 10.1

Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.

COLLABORATION AND LICENSE AGREEMENT

      This COLLABORATION AND LICENSE AGREEMENT (this “ Agreement ”), effective as of July 16, 2007 (the “ Effective Date ”), is made by and between Edison Pharmaceuticals, Inc., a Delaware corporation, having a principal place of business at 5941 Optical Court, Suite 228, San Jose, CA 95138 (“ Edison ”), and Penwest Pharmaceuticals Co., a Washington corporation, having a principal place of business at 39 Old Ridgebury Road, Suite 11, Danbury, CT 06810-5120 (“ Penwest ”).

BACKGROUND

      WHEREAS , Edison has expertise in the discovery and optimization of pharmaceutical compounds;

      WHEREAS, Penwest is in the business of developing and commercializing pharmaceutical products;

      WHEREAS, Penwest and Edison are interested in collaborating on activities relating to A0001, the Future Compound and, if applicable, Replacement Compounds (as each of such terms are defined below), and in providing Penwest the opportunity to develop and commercialize such compounds as potential pharmaceutical products, subject to and in accordance with the terms and conditions of this Agreement.

      NOW THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth in this Agreement, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

     As used herein, the following terms shall have the meanings set forth below:

     1.1 “ A0001 ” shall mean the Compound known as EPI-A0001 [**] having a structure as attached hereto in Schedule 1.1 , together with (a) all known metabolites thereof, (b) all Compounds resulting from [**], and (c) any other Compounds within [**] therefor, each of the foregoing as may be more fully described on Schedule 1.1 .

     1.2 “ Activity ” shall mean activity of a Compound that meets certain concentration parameters, half life, pharmacological stability, oral bioavailability, preliminary toxicity panel and other efficacy criteria set forth on Schedule 1.2 , as such criteria may be modified by the GOC from time to time in accordance with Section 3.1.2.

     1.3 “ Affiliate ” shall mean any Person controlled by, controlling, or under common control with a Party. For the purpose of this Section 1.3 only, “control” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, or (b) the ownership, directly or indirectly, of fifty percent (50%) or more of the voting securities or other ownership interest of a Person.

     1.4 “ Change in Control Event ” shall mean, with respect to Edison, (a) the acquisition by any Person of beneficial ownership of any capital stock of Edison if, after such acquisition, such Person beneficially owns fifty percent (50%) or more of the voting securities of Edison, or (b) any acquisition by any Person pursuant to the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving Edison or a sale or other disposition of all or substantially all of the assets of Edison (“ Business Combination ”), unless, immediately following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of Edison’s voting securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting securities of the resulting or acquiring entity in such Business Combination in substantially the same proportions as their ownership of Edison’s voting securities immediately prior to such Business Combination.

     1.5 “ Collaboration ” shall mean all discovery, research and/or development activities of the Parties under this Agreement during the Collaboration Term.

     1.6 “ Collaboration IP ” shall mean Collaboration Patents and Collaboration Know-how.

     1.7 “ Collaboration Know-how ” shall mean Know-how that is developed by a Party, its Affiliates and/or Sublicensees, as the case may be, either by itself or jointly with Third Parties, or the other Party or such other Party’s Affiliates and/or Sublicensees, during and in the performance of the Collaboration.

     1.8 “ Collaboration Patent ” shall mean any Patent that claims any patentable inventions invented by a Party, its Affiliates and/or Sublicensees, as the case may be, either by itself or jointly with Third Parties, or the other Party, such other Party’s Affiliates and/or Sublicensees or any Third Party, during and in the performance of the Collaboration.

     1.9 “ Collaboration Term ” shall mean the period commencing on the Effective Date and ending upon the completion or earlier termination of both Parties’ obligations under the Development Plan (as amended and updated from time to time in accordance with this Agreement).

     1.10 “ Commercially Reasonable Efforts ” shall mean, with respect to the efforts to be expended by a Party with respect to any objective, the use of efforts and resources commonly used by such Party with its other programs, compounds and pharmaceutical products of similar commercial potential at a similar stage in its product life, but no less than active commitment of efforts and resources (financial and otherwise) consistent with those normally applied in the pharmaceutical industry to accomplish a similar objective under similar circumstances for programs and products of similar commercial potential at a similar stage in its product development, which may include, subject to the last sentence of this Section 1.10, competitiveness of the marketplace, the patent and other proprietary position of the product, the regulatory structure involved and the profitability of the applicable product. Commercially Reasonable Efforts shall require the applicable Party to promptly assign responsibilities for activities for which it is responsible to specific employee(s) who are held accountable for the progress, monitoring and completion of such activities.

     1.11 “ Compound ” shall mean a unique chemical structure with a molecular weight of less than 1,500 daltons (that is not a nucleic acid, polypeptide, protein, antibody or fragment(s) of an antibody), in each case, that is either of natural origin, expressed by recombinant methodology or chemically synthesized and together with prodrugs, metabolites, enantiomers, polymorphs, salt forms, racemates, intermediates, including synthetic intermediates, and isomers thereof, diastereomers and tautomers, solvates, hydrates, esters, geometric isomers, positional isomers and degradation products.

     1.12 “ Confidential Information ” as to a Party, shall mean all Know-how and other information, including, proprietary information and materials (whether or not patentable) regarding such Party’s technology, products, business information or objectives, that is designated as “confidential” in writing by such Party at the time of initial disclosure to the other Party, whether by letter or the use of an appropriate stamp or legend. Notwithstanding the foregoing to the contrary, materials, know-how or other information that is disclosed by a Party orally, electronically, visually or by inspection of intangible objects, or is disclosed in writing without an appropriate letter, stamp or legend, shall constitute Confidential Information of such Party (a) for thirty (30) days after its disclosure and thereafter shall remain Confidential Information only if within such thirty (30) day period after such disclosure the disclosing Party delivers to the other Party a written document or documents describing the materials, know-how or other information and referencing the place and date of such oral, visual, electronic or written disclosure and the names of the persons to whom such disclosure was made, or (b) such information is of the type that is customarily considered to be confidential information in the industry in which such Party operates.

     1.13 “ Controls ” or “ Controlled ” shall mean possession of the ability to grant licenses or sublicenses pursuant to this Agreement without violating the terms of any agreement or other arrangement with, or the rights of, any Third Party.

     1.14 “ Development Plan ” shall mean the plan established, modified and updated by the Parties and the GOC in accordance with Section 2.1.2 for the performance of each Party’s activities under the Collaboration, including a timeline and budget for the activities to be performed thereunder.

     1.15 “ Early Success Candidate ” or “ ESC ” shall mean a Compound which has, or is believed by Edison to have, Activity in the Target Field.

     1.16 “ Edison IP ” shall mean Edison Patents and Edison Know-how.

     1.17 “ Edison Know-how ” shall mean Know-how Controlled by Edison that is reasonably necessary for the nonclinical development, clinical development and/or commercialization of a Specified Compound or Product in accordance with this Agreement, excluding Collaboration Know-how.

     1.18 “ Edison Patents ” shall mean Patents Controlled by Edison that are reasonably necessary for the discovery, research, development and/or commercialization of a Specified Compound or Product in accordance with this Agreement, including without limitation the Patents listed on Schedule 1.18 hereof, but excluding Collaboration Patents.

     1.19 “ Edison Product ” shall mean a pharmaceutical product comprising or containing any (a) Rejected Compound which is rejected by Penwest during the Initial Funding Period in accordance with Section 2.3.3 or (b) Terminated Compound(s).

     1.20 “ Exclusivity Period ” shall mean the period of the Initial Funding Period together with each Exclusivity Extension Period, if any, pursuant to Section 5.2.2.

     1.21 “ Executive Officers ” shall mean the Chief Executive Officer of Penwest and the Chief Executive Officer of Edison or such other senior executive officer of a Party with the requisite decision making authority as may be substituted from time to time upon the giving of written notice to the other Party.

     1.22 “ FDA ” shall mean the U.S. Food and Drug Administration, or any successor agency thereto.

     1.23 “ Field ” shall mean the treatment or prophylaxis of all diseases and conditions in humans including all indications in the Non-Orphan Field and the Target Field.

     1.24 “ First Commercial Sale ” shall mean, with respect to a Royalty-Bearing Product in any country, the first sale for use or consumption by the general public of such Royalty-Bearing Product in such country. Sales for test marketing, clinical trial purposes or compassionate or similar use shall not be considered to constitute a First Commercial Sale. For purposes of the foregoing, “compassionate use” means treatment use of an investigational new drug (as described in 21 CFR §312.34) or emergency use of an investigational new drug (as described in 21 CFR §312.36), or such similar use exemption from the need for formal regulatory approval in the applicable jurisdiction outside of the United States.

     1.25 “ FTE ” (Full Time Equivalent) shall mean (i) each Edison chemist, scientist or technical support person with sufficient scientific expertise to perform his/her duties dedicated full-time to activities under the Collaboration; or (ii) in the case of persons who are less than full-time, the equivalent of the work of one (1) Edison chemist, scientist or technical support person with sufficient scientific expertise to perform his/her duties, based upon a total of [**] hours per year of work, directly related to the Collaboration, including scientific managerial activities primarily related to the Collaboration. For clarity, in no event shall any individual Edison chemist, scientist or technical support person be considered more than a single FTE for any accounting period.

     1.26 “ FTE Rate ” shall mean [**] U.S. Dollars ($[**]) per FTE with respect to activities performed by Edison pursuant to the Research Program during calendar year 2007 and [**] U.S. Dollars ($[**]) per FTE with respect to such activities performed by Edison during calendar year 2008; provided that beginning with the calendar year 2009, Edison shall have the right to increase the FTE Rate once per year by the percentage increase, if any, in the Consumer Price Index, for All Urban Consumers for the San Francisco Bay Area, as published by the U.S. Department of Labor, Bureau of Labor Statistics (1982-1984=100) since the last such increase (or in the case of the first such increase, January 1, 2008) and such increase shall be effective on a going-forward basis for activities performed by Edison pursuant to the Research Program until so further modified.

     1.27 “ Future Compound(s) ” shall mean the ESC which has been designated by Penwest for further development and commercialization pursuant to Section 2.3.3, together with other Compounds within the markush group therefor.

     1.28 “ General Operating Committee ” or “ GOC ” shall mean the entity organized under Section 3.1.1.

     1.29 “ Good Laboratory Practices ” or “ GLP ” shall mean the then-current good laboratory practices for pharmaceuticals as described in regulations promulgated by applicable Regulatory Authorities (including those as more fully defined in 21 C.F.R. Part 58).

     1.30 “ Good Manufacturing Practices ” or “ GMP ” shall mean the then-current good manufacturing practices for pharmaceuticals as described in regulations promulgated by applicable Regulatory Authorities (including those more fully defined in 21 C.F.R. Parts 210 and 211).

     1.31 “ IND ” shall mean any application submitted to a Regulatory Authority to initiate human clinical trials, including (a) an Investigational New Drug application (as more fully defined in 21 C.F.R. §312.3) or any successor application or procedure filed with the FDA, (b) except where otherwise specifically provided in this Agreement, any foreign equivalent of a United States IND, and (c) all supplements and amendments that may be filed with respect to the foregoing.

     1.32 “ Know-how ” shall mean any and all proprietary ideas, inventions, data, know-how, instructions, processes, formulas, materials, expert opinion, technology or other information, whether or not patentable.

     1.33 “ Law ” shall mean, individually and collectively, any and all laws, ordinances, orders, rules, rulings, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction.

     1.34 “ Major Market ” shall mean any and all of the following: France, Germany, Italy, Japan, United Kingdom and the United States.

     1.35 “ Management Steering Committee ” or “ MSC ” shall mean the entity organized under Section 3.2.1.

     1.36 “ NDA ” shall mean an application submitted to a Regulatory Authority for marketing approval of a product, including (a) a New Drug Application (as defined in 21 C.F.R. §314.50 et. seq.) or Product License Application (as defined in 21 C.F.R. §601.2) filed with the FDA or any successor applications or procedures, (b) except where otherwise specifically provided in this Agreement, any foreign equivalent of a United States NDA or Product License Application, and (c) all supplements and amendments that may be filed with respect to the foregoing.

     1.37 “ Net Sales ” shall mean, with respect to any Royalty-Bearing Product, gross amounts invoiced on sales to Third Parties in bona fide, arm’s-length transactions, less the following types of deductions:

          (a) Normal and customary trade and quantity discounts with respect to sales of such Royalty-Bearing Product;

          (b) Amounts repaid or credited by reason of defects, rejection, recalls, returns, rebates and allowances of goods, or because of retroactive price reductions specifically identifiable to such Royalty-Bearing Product;

          (c) Governmental rebates, such as Medicaid chargebacks or rebates, and retroactive price reductions or allowances actually allowed or granted from the invoiced amount;

          (d) Tariffs, duties, excise, sales, value-added, and other taxes (other than taxes based on income) included in the invoiced amount;

          (e) Cash discounts for timely payment actually allowed and properly taken directly with respect to sales of such Royalty-Bearing Product;

          (f) Delayed ship order credits actually allowed and properly taken directly with respect to sales of such Royalty-Bearing Product;

          (g) Discounts pursuant to indigent patient programs and patient discount programs, including coupon discounts specifically identifiable to such Royalty-Bearing Product;

          (h) All freight, postage and insurance included in the invoiced amounts;

          (i) Amounts repaid or credited for uncollectible amounts on previously sold units of such Royalty-Bearing Product;

          (j) Commercially reasonable and customary fees paid to wholesalers, resellers and similar Persons in the distribution chain other than sales representatives; and

          (k) Warehousing costs specifically identifiable to such Royalty-Bearing Product,

all as determined in accordance with generally accepted accounting principles, consistently applied. Sales of Royalty Bearing Products for post-approval clinical studies and disposition of samples in customary quantities shall not be included in the calculation of Net Sales; provided such Royalty Bearing Products are sold at or below cost. In the case of any sale or other disposal of a Royalty-Bearing Product between or among a Party and its Affiliates and Sublicensees for resale, Net Sales shall be calculated as above only on the value charged or invoiced on the transfer thereafter to a Third Party.

          In the case of any transfer for value, such as barter or countertrade, of any Royalty-Bearing Product, or part thereof, otherwise than in an arm’s-length transaction exclusively for money, Net Sales shall be calculated as above on the fair market value of the non-cash consideration received as agreed by the Parties.

          In the event that the Royalty-Bearing Product is sold in a finished dosage form in combination with one or more other active ingredients which are not themselves Specified

Compounds, Terminated Compounds or Rejected Compounds, as applicable (a “ Combination Product ”), the Net Sales of the Royalty-Bearing Product, for the purpose of determining royalty payments, shall be determined by multiplying the Net Sales (as defined above in this Section 1.37) of the Combination Product by the fraction A/(A+B), where A is the weighted (by sales volume) average sales price in a particular country of such Specified Compound, Terminated Compound or Rejected Compound when sold separately in finished form and B is the weighted average sales price in that country of the other active ingredient(s) sold separately in finished form. In the event that such average sales price cannot be determined for both the Royalty-Bearing Product and the other product(s) in combination as set forth in the previous sentence, Net Sales for purposes of determining royalty payments shall be agreed by the Parties based on the relative value contributed by each active ingredient, and such agreement shall not be unreasonably withheld; provided that, if the Parties are unable to agree on the Net Sales in such a case, the dispute shall be submitted to arbitration in accordance with Section 15.17.

     1.38 “ Non-Orphan Field ” shall mean the treatment of any indication that is not a rare disease or condition, as defined in 21 U.S.C. 360bb of the U.S. Federal Food, Drug and Cosmetic Act, as in effect from time to time.

     1.39 “ Party ” shall mean Edison or Penwest, as applicable. “ Parties ” shall mean Edison and Penwest.

     1.40 “ Patent ” shall mean any of the following, whether existing now or in the future anywhere in the world: (a) any issued and unexpired letters patent, including any extension, registration, confirmation, reissue, re-examination or renewal thereof; (b) any pending applications for letters patent for any of the foregoing, including any continuation, divisional, substitution, continuation-in-part, provisional and converted provisional applications; and (c) foreign counterparts of any of the foregoing.

     1.41 “ Penwest IP ” shall mean Patents and Know-How Controlled by Penwest which, in the absence of a license to such Patents and Know-How, would be infringed or violated by Edison’s performance of its obligations under the Development Plan hereunder, excluding Collaboration IP.

     1.42 “ Person ” shall mean any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government or agency or political subdivision thereof.

     1.43 “ Phase IIa Study ” shall mean, with respect to the United States, any human clinical trial conducted in patients with the disease or condition of interest for the purpose of studying the pharmacokinetic or pharmacodynamic properties and preliminary assessment of safety of the drug being studied over a measured dose response as described under 21 C.F.R. § 312.21(b), or, with respect to a jurisdiction other than the United States, a similar clinical study.

     1.44 “ Phase IIb Study ” shall mean, with respect to the United States, any human clinical trial conducted in the specific patient population with the disease or condition of interest intended to be studied in a Pivotal Study for the purpose of preliminary assessment of safety and efficacy, and selection of the dose regime(s) to be studied in a Pivotal Study as described under

21 CFR Section 312.21(b), and that if the defined end-points are met, is sufficient to allow the initiation of a Pivotal Study, or, with respect to a jurisdiction other than the United States, a similar clinical study.

     1.45 “ Pivotal Study ” shall mean any human clinical trial conducted in patients, the results of which, if the study endpoints are met, are intended to be submitted as part of an NDA as statistically significant data in support of the Product’s safety and efficacy for the intended therapeutic indication.

     1.46 “ Product ” shall mean a pharmaceutical product comprising or containing any Specified Compound(s). For avoidance of doubt, Product shall include any Combination Product and where applicable any formulation, delivery device, dispensing device or packaging required for effective use of the Product.

     1.47 “ Regulatory Approval ” shall mean, with respect to a Royalty-Bearing Product in a particular jurisdiction, any and all approvals (including price reimbursement approvals), licenses, registrations, or authorizations of any Regulatory Authority, necessary for the marketing or sale of such Royalty-Bearing Product in such jurisdiction.

     1.48 “ Regulatory Authority ” shall mean any federal, national, multinational, state, provincial or local regulatory authority agency, department, bureau or other governmental entity with authority over the testing, manufacture, use, storage, import, export, promotion, marketing and sale of a therapeutic product in a country, including the FDA, European Medicines Evaluation Agency and the Ministry of Health, Labor and Welfare in Japan.

     1.49 “ Regulatory Filings ” shall mean any filing or application with any Regulatory Authority with respect to a pharmaceutical product, including INDs and Regulatory Approvals, and all correspondence with the relevant Regulatory Authorities, as well as minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority, in each case with respect to a Product.

     1.50 “ Replacement Compound ” shall mean any Compound which is selected by Penwest pursuant to the provisions of Section 2.3.4, together with (a) all known metabolites thereof, (b) all Compounds resulting from standard medicinal chemical optimizing practices to enhance ADME (Absorption, Distribution, Metabolism and Excretion) properties of such Compound, including without limitation esters, prodrugs, salts, and non-covalent derivatives thereof, and (c) any other Compounds within the markush group therefor.

     1.51 “ Required Third Party Payments ” shall mean payments to a Third Party (including license fees, milestone payments and royalties) in consideration of a license under such Third Party’s Patents claiming the composition of matter of any Specified Compound if, in the absence of such license, Penwest’s exercise of its licenses under the Edison IP or Collaboration IP would infringe such Third Party’s Patents (collectively, “ Required Third Party Patents ”).

     1.52 “ Research Funding Amount ” shall mean the aggregate amounts as set forth in Section 5.2.1 to fund the Research Program during the Research Funding Period.

     1.53 “ Research Funding Period ” means the period during which Penwest provides research funding to Edison pursuant to Section 5.2, comprised of the initial eighteen (18) months after the Effective Date (the “ Initial Funding Period ”) and, at the election of Penwest under Section 5.2.2, any Research Extension Period(s), up to an additional eighteen (18) months thereafter.

     1.54 “ Research Program ” shall mean the program to discover or otherwise identify, synthesize and optimize Compounds that have Activity for applications in the Target Field and to optimize Specified Compounds for pharmaceutical development, each in accordance with the Development Plan.

     1.55 “ Responsible Party ” shall mean, with respect to a Patent, the Party responsible for prosecution and maintenance of such Patent, as set forth in Sections 9.4.1, 9.4.2, 9.4.3(a) and 9.4.3(b), as the case may be.

     1.56 “ Royalty-Bearing Product ” shall mean (a) with respect to Penwest or its Affiliates or Sublicensees, any Product, and (b) with respect to Edison or its Affiliates or Sublicensees, any Edison Product.

     1.57 “ Specified Compound(s) ” shall mean (a) A0001, (b) the Future Compound, and (c) any Replacement Compounds.

     1.58 “ Sublicensee ” shall mean, as to each Party, a Third Party that has been granted sublicense rights under the license granted to such Party hereunder.

     1.59 “ Target Field ” shall mean the treatment of inherited mitochondrial diseases of the cellular respiratory chain that satisfy the FDA’s requirements for orphan product designation (as defined in 21 C.F.R part 316).

     1.60 “ Territory ” shall mean worldwide.

     1.61 “ Third Party ” shall mean any Person other than Penwest, Edison, or their respective Affiliates.

     1.62 “ Valid Claim ” shall mean a claim of an issued, unexpired patent or a claim of a pending patent application which has not lapsed or become abandoned, been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or un-appealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise. Notwithstanding the foregoing, if a claim of a pending patent application within the Collaboration Patents or Edison Patents has not issued as a claim of an issued patent within the Collaboration Patents or Edison Patents, within [**] years after the filing date from which such claim takes priority, such pending claim shall not be a Valid Claim for purposes of this Agreement until issued.

     1.63 Additional Definitions . Each of the following definitions shall have the meanings defined in the corresponding sections of this Agreement indicated below:

Definition		Section		Definition		Section
Adverse Drug Reaction		2.4.2(b)		JAMS		15.7.2
Agreement Wind-Down Period		14.4.1(g)		Manufacturing Technology		2.2.3(a)
API		2.2.3(a)		Minimum ESC Requirement		2.2.2
Archetypal Plan		2.1.2(b)		Net Income
Bankruptcy Code		4.7		Non-Breaching Party		14.2.2
Breaching Party		14.2.2		Notice of Abandonment		9.4.4
Co-Chair		3.1.3		Penwest Indemnitees		13.1
Commercialization Update		2.5.2		Post-Funding Activities		2.2.2
Development Criteria		2.2.1(b)		Promissory Note		5.3
Disclosing Party		10.1.1		Pursuing Party		9.6.2
Initial Development Plan		2.1.2(a)		Receiving Party		10.1.1
Edison Indemnitees		13.2		Rejected Compound		2.3.3
Exclusivity Extension Period		5.2.2		Replacement Compound		2.3.4
Failed Compound		6.2		Representatives		10.1.1
Force Majeure		15.9		Required Third Party Patents		1.51
Foundation		4.6		Research Extension Period		5.2.2
Foundation Opportunity		4.6		Secondary Compound		6.2
Foundation Opportunity Compound		4.6		Taxes		8.4
Generic Competition		7.1.3		Term		14.1
Infringing Product		9.6.3		Terminated Compound		14.2
Initial Development Plan		2.1.2(a)		Termination Notice		14.2
Initial Funding Period		1.53		United States Dollar or US$		8.1
				Unreimbursed Edison Costs		4.6

     1.64 Interpretation . The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Schedules mean the particular Articles, Sections or Schedules to this Agreement and references to this Agreement include all Schedules hereto. Unless context otherwise clearly requires, whenever used in this Agreement: (a) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (b) the word “day” or “year” means a calendar day or year unless otherwise specified; (c) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (d) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including any Schedules); (e) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;” (f) provisions that require that a Party, the Parties or a committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (g) words of any gender include the other gender; (h) words using the singular or plural number also include the plural or singular number, respectively; and (i) references to any specific Law (including any article, section or other division thereof) shall be deemed to include the then-current amendments thereto or any replacement Law thereof.

ARTICLE 2
PERFORMANCE OF THE COLLABORATION

     2.1 Collaboration .

          2.1.1 General . During the Collaboration Term and subject to the oversight and review of the GOC, each Party shall:

               (a) undertake an interactive, cooperative role in the Collaboration with the other Party as set forth in this Agreement and the applicable Development Plan, and such other activities which, from time to time, the GOC decides are necessary for the continuing success of the Collaboration, with the objective of identifying novel Specified Compounds suitable for development and commercialization as Products, and of developing Products;

               (b) conduct the Collaboration in good scientific manner, and in compliance in all material respects with all requirements of applicable Laws, including GLP and GMP; and

               (c) use Commercially Reasonable Efforts to achieve the milestones set forth in the Development Plan within the timeframes, if any, set forth in the Development Plan.

          2.1.2 Development Plan . All activities of the Parties under the Collaboration shall be carried out in accordance with a Development Plan.

               (a) The initial Development Plan is attached hereto as Schedule 2.1A (the “ Initial Development Plan ”) and, unless otherwise agreed, shall govern (i) Edison’s performance of the Research Program during the period from the Effective Date through end of

calendar year 2008 and provide guidance over general strategy and tactics for the Research Program during the Research Funding Period, and (ii) Penwest’s development of A0001 and the associated Product in the Field during the period from the Effective Date through end of calendar year 2008 and provide guidance over general strategy and tactics for such development during the remainder of the development of A0001 and the associated Product in the Field.

               (b) Promptly after designation of the Future Compound pursuant to Section 2.3.3, Penwest shall propose an addendum to the Development Plan, together with budgets and timelines for activities, for the development of such Future Compound and Products containing such Future Compound in the Field, each such amendment and any updates and modifications thereto to be consistent with the development proposal set forth in Schedule 2.1B (the “ Archetypal Plan ”).

               (c) Beginning with calendar year 2007 following the Effective Date and during the Research Funding Period, Edison shall propose an update to the Development Plan with respect to its activities under the Development Plan for the upcoming calendar year, together with timelines for activities, to the GOC on or before October 31 of each year, in each case consistent with the funding therefor in Section 5.2. Likewise, beginning with calendar year 2007 following the Effective Date and until completion of all development activities with respect to the Product(s), Penwest shall propose an update to the Development Plan with respect to its activities under the Development Plan for the upcoming calendar year, together with timelines for activities, to the GOC on or before October 31 of each year. The GOC shall promptly review each such proposed update and provide comments to the proposing Party with the goal of approving each such proposed update no later than December 15 of such calendar year. In connection therewith the Party proposing the particular update shall consider in good faith the comments of the GOC. Without limiting the foregoing, an initial calendar schedule setting forth the dates on which (i) the Parties have reporting obligations to one another as set forth in Section 2.9, and (ii) the Parties have meetings with respect to the Development Plan as set forth in this Agreement (whether in person, by teleconference or otherwise), including the individuals involved with such meetings, shall be developed by the GOC for the upcoming calendar year and approved by the MSC by December 15 ^th of each calendar year.

               (d) Notwithstanding the foregoing, the Parties acknowledge that each Party shall be responsible for day-to-day implementation and operations of the activities hereunder for which it has or is otherwise assigned responsibility under the Development Plan, provided that such implementation is not inconsistent with the express terms of this Agreement or the decisions of the GOC within the scope of their authority specified herein. Accordingly, the Parties further acknowledge that exigent circumstances may arise (including patient safety concerns or the like) that require the Development Plan be modified on an expedited basis, in which case the Party responsible for the activities giving rise or associated with such exigent circumstances shall promptly notify the other Party and the GOC of such circumstances but may implement such modifications to the Development Plan as it deems appropriate in good faith under the circumstances until such time as the GOC is able to approve a modified Development Plan taking into consideration such exigent circumstances.

          2.1.3 Resource Commitments . Each Party shall use Commercially Reasonable Efforts to perform its obligations and achieve the milestones set forth under the then-current

Development Plan, including, devoting such personnel, in the numbers and with the required experience and background, and corporate and other resources as are necessary to perform obligations for which it is responsible under such Development Plan. Accordingly, for informational purposes only, each Party shall, upon request of the other Party, provide such requesting Party with reasonable evidence of its access to such resources.

     2.2 Research Responsibilities of Edison .

          2.2.1 Generally . Subject to the authority and direction of the GOC as set forth in Article 3 and in accordance with the Development Plan, Edison shall have primary responsibility for conducting, and shall conduct, the Research Program, including:

               (a) developing, designing and synthesizing one or more chemical classes of Compounds and evaluating such Compounds for Activity in the Target Field;

               (b) presenting to the GOC ESCs, for preliminary assessment by the GOC against criteria predetermined by the GOC with respect to its initial freedom to operate from a Patent use or composition of matter perspective, manufacturability, stability, formulation, bioanalysis, pharmacology, toxicology and regulatory specifications (“ Development Criteria ”); and

               (c) optimizing Compounds based on the Development Criteria.

          2.2.2 Minimum ESC Requirement . It is the expectation of the Parties that at least one ESC that satisfies the Development Criteria shall be presented to the GOC during the Initial Funding Period (the “ Minimum ESC Requirement ”). If Edison fails to meet the Minimum ESC Requirement, it may continue to conduct activities, at Edison’s expense, directed toward the discovery and optimization of Compounds meeting the Activity requirements for the Target Field (“ Post-Funding Activities ”) until it has presented one (1) ESC to the GOC that satisfies the Development Criteria and Penwest has selected an ESC, with Penwest having no obligation to continue funding after the Initial Funding Period. If Edison fails to meet the Minimum ESC Requirement, then anytime after the Initial Funding Period, Edison may discontinue its performance of Post-Funding Activities upon written notice to Penwest and if, at the time of such discontinuance, Edison has not presented at least one (1) ESC to the GOC satisfying the Development Criteria, then Penwest shall have the right to credit a total of [**] Dollars ($[**]) against royalties owing to Edison thereafter pursuant to Section 7.1; provided that Penwest shall not have the right to credit more than [**] Dollars ($[**]) against such royalties during any calendar year, with any excess carried over and credited against royalties payable in any subsequent calendar years.

          2.2.3 Manufacture .

               (a)  API . Edison shall be responsible for, and shall use Commercially Reasonable Efforts in, manufacturing, or having manufactured by a Third Party manufacturer, the active pharmaceutical ingredient (“ API ”) required for each Product in compliance with applicable Law only for its own activities under the Research Program, including for use in pharmacology and/or toxicology studies, and for conducting bio-analytical studies in compliance with GLP as set forth in the Development Plan, provided , that , upon request by Penwest and at

Penwest’s expense, Edison shall (i) transfer, or have transferred, to Penwest copies of all documentation necessary for Penwest, or its designated manufacturer, to manufacture the API for such Product(s), including, specifications, assays, batch records, quality control data, and transportation and storage requirements (collectively, “ Manufacturing Technology ”) and (ii) provide reasonable assistance in connection with the transfer of manufacturing responsibility to Penwest or its designated manufacturer. For the avoidance of doubt, Penwest shall be solely responsible for the manufacture of API for all clinical and commercial purposes.

               (b)  CMC . Edison shall provide reasonable assistance to Penwest for Penwest’s preparation of the chemistry, manufacturing and controls (CMC) section of any IND filed or proposed to be filed by Penwest for a Specified Compound or Product, including requisite stability, pharmacology and/or toxicology data.

               (c)  Other . Except as otherwise provided in this Section 2.2.2 above, Penwest shall be responsible for the manufacture of Products in accordance with Section 2.5.1.

     2.3 Delivery of A0001; Right of First Refusal on Future Compounds .

          2.3.1 A0001 . Promptly after the Effective Date, Edison shall deliver to Penwest such supply of A0001 as set forth in the Initial Development Plan and any Edison Know-how related to the manufacture thereof.

          2.3.2 Presentation of ESC . Within [**] days after Edison has identified, characterized and optimized any ESC under the Research Program, Edison shall provide written notice to Penwest and the GOC thereof and identifying the proposed markush group for such ESC. Additionally, Edison shall provide the GOC with all data and analysis necessary for the GOC to assess the ESC against the Development Criteria, as predetermined by the GOC. Such data shall include (a) data concerning such ESC’s concentration parameters, half life, pharmacological stability, oral bioavailability, preliminary toxicity panel and other efficacy criteria, and (b) preliminary information on freedom to operate from a Patent use or composition of matter perspective, manufacturability, stability, formulation, bioanalysis, pharmacology, toxicology and regulatory specifications, and shall present the ESC and its findings to Penwest for consideration. For the avoidance of doubt, Edison will not be obligated to use GLP in conducting the Research Program and will not be responsible for providing Penwest or the GOC with any GLP data with respect to any ESC. Without limiting Section 4.5, Edison shall not disclose or provide, or enter into any agreement granting any options or rights to, any ESC to a Third Party (i) during the period beginning on the Effective Date until the earlier of (A) Penwest’s selection of an ESC as a Future Compound pursuant to the provisions of Section 2.3.3, and (B) the later of [**] days after the expiration of (I) the Research Funding Period and (II) the occurrence of the Minimum ESC Requirement, or (ii) during the period commencing upon Edison’s receipt of Penwest’s notice of termination of development of a Specified Compound under Section 2.3.4 until Edison’s presentation to Penwest of an ESC as a Replacement Compound pursuant to Section 2.3.4.

          2.3.3 Designation of Future Compound . Promptly after Edison’s presentation of an ESC under Section 2.3.2, the GOC will present to Penwest all relevant data with respect to the ESC, including its findings with respect to the Development Criteria and confirm the appropriate

markush group for such ESC, and Penwest shall, for [**] days thereafter, have the exclusive right to elect, in its sole discretion, to develop such ESC as a Future Compound hereunder. If Penwest notifies Edison and the GOC of its election to develop such ESC as a Future Compound within such [**] day period, then such ESC, and (a) all known [**] thereof, (b) all Compounds resulting from [**], and (c) any other Compounds within [**] therefor, shall be deemed a Future Compound with respect to which Penwest shall have exclusive rights under Section 4.1 hereunder. Such Future Compound shall be subject to development under an amendment to the Development Plan hereunder. If Penwest notifies the GOC and Edison of its decision not to develop such ESC, or if no notification is made during such [**] day period, then such ESC shall be deemed a “ Rejected Compound ” and Edison shall retain all rights in and to such Rejected Compound (together with all Compounds within the markush therefor) and shall be permitted to develop and commercialize such Rejected Compound in accordance with Section 4.3.2. Subject to Section 2.3.4, Penwest shall have the right to select one (1) ESC as a Future Compound under this Section 2.3.3, and after Penwest selects an ESC as a Future Compound, Edison shall not be obligated to present additional ESCs to the GOC pursuant to Section 2.3.2.

          2.3.4 Replacement Compounds . In the event that all development activities for any Specified Compound are terminated by Penwest due to toxicology reasons during the Research Funding Period (which, for the avoidance of doubt, Penwest shall have the right to do at any time, notwithstanding anything in this Agreement or any Development Plan to the contrary), Penwest may provide written notice to Edison of such event, in which case such Specified Compound shall be deemed a Rejected Compound and the provisions of Sections 2.3.2 and 2.3.3 shall become effective until expiration of the Research Funding Period. In the event Penwest terminates development activities for a Specified Compound as set forth in this Section 2.3.4 after expiration of the Research Funding Period, the Parties shall promptly meet and, through the GOC, agree upon a plan pursuant to which Penwest will fund Edison’s efforts to discover one or more Replacement Compounds if the GOC determines that such efforts are necessary beyond the Research Funding Period. Any Future Compound selected by Penwest pursuant to this Section 2.3.4 shall be considered to be a “ Replacement Compound ”. For clarity, the provisions of this Section 2.3.4 requiring Edison to present ESCs that could serve as Replacement Compounds shall not apply to the replacement of any Replacement Compound itself.

     2.4 Development Responsibilities of Penwest .

          2.4.1 Generally . With respect to each Specified Compound or Product and, subject to the authority and direction of the GOC as set forth in Article 3, Penwest shall be primarily responsible for, and shall use Commercially Reasonable Efforts in developing each Product in accordance with the then-current Development Plan for such Specified Compound or Product, including:

               (a) Developing one or more formulations and associated analytical methods;

               (b) Holding a pre-IND meeting with the FDA to review the Development Plan, and filing the IND to initiate clinical development activities;

               (c) Conducting required preclinical safety and toxicology programs;

               (d) Conducting and completing the clinical studies required for regulatory filings and Regulatory Approvals;

               (e) Compiling, filing, obtaining and maintaining Regulatory Approvals; and

               (f) During the period commencing upon selection by Penwest of a Future Compound or, with respect to A0001, upon the date of delivery of A0001 to Penwest under Section 2.3.1, and ending upon First Commercial Sale of a Product containing such Specified Compound, keeping Edison informed of its development activities with respect to such Specified Compound or Product, including, the achievement of the milestones set forth in Section 6.1 and the commercialization of such Product up to the point of First Commercial Sale in each Major Market. Without limiting the foregoing, Penwest will involve Edison to the extent practicable in the development of any Specified Compound (or corresponding Product) through completion of Phase IIb Studies, including reasonably considering any comments Edison provides to Penwest with respect to clinical trials and protocols associated therewith. Accordingly, Penwest shall consider in good faith utilizing Edison as a provider of outside development services hereunder, subject to Edison demonstrating the required technical capabilities for the particular activities and Edison’s agreement to perform such activities at a rate commensurate with that otherwise available to Penwest for similar work from high-quality organizations, provided, that Penwest shall have sole discretion as to whether or not to utilize the services of Edison hereunder. The Parties acknowledge that the Development Program for a Product will likely initially be focused toward indications within the Target Field; however, if Edison provides Penwest with data reasonably supporting the development of a Product for other indications, Penwest shall consider in good faith extending the Development Program for such Product to such other indications. For clarity, nothing herein is intended to require Penwest to or prevent Penwest from developing a Product for any particular indication in the Field.

     Without limiting the foregoing, Edison shall have the opportunity to (i) have at least one (1) representative attend any meetings (whether in person, by teleconference or by any other means) Penwest conducts with any Regulatory Authority under the Collaboration and (ii) provide comments to any anticipated communications Penwest has with any Regulatory Authority regarding the Collaboration, which comments shall be reasonably considered by Penwest.

          2.4.2 Regulatory Matters .

               (a)  Filings . As between the Parties, Penwest shall take the lead and be responsible for, at its expense, filing, obtaining and maintaining approvals for development and commercialization of Products, including any IND or Regulatory Approval therefor. To the extent not prohibited by applicable Laws, Penwest shall own all Regulatory Filings filed by or on behalf of it for Products.

               (b)  Clinical Safety Reporting; Pharmacovigilance . With respect to any Adverse Drug Reaction, IND safety report or similar obligation to report to any Regulatory

Authority relating to any safety issue with respect to Products, Penwest shall be responsible for and shall establish operating procedures to report to the appropriate Regulatory Authority(ies) all such matters in accordance with applicable Law. Such operating procedures and any material revisions to them shall be provided to the GOC for review and comment prior to implementation thereof. For purposes of the foregoing, “ Adverse Drug Reaction ” shall have the meaning as defined in the then-current guidelines and regulations promulgated by the ICH (International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use) and shall include any “Adverse Drug Experience” as defined in the then-current 21 CFR Sections 312.32 and 314.80.

     2.5 Commercialization .

          2.5.1 Penwest shall, at its expense, be solely responsible for, and shall use Commercially Reasonable Efforts in:

               (a) Subject to Section 2.2.3(a) and except as set forth in Section 2.3.1, manufacturing, or having manufactured by a Third Party manufacturer, all clinical and commercial supply of each Product, including supplying at its cost of manufacture reasonable quantities of Product for development in connection with a Foundation Opportunity, in accordance with applicable Laws, including the procurement of all raw materials and other components necessary for Product; and

               (b) Commercializing Product in the Territory including in order to maximize the economic benefit to the Parties to the extent allowable by Law,

provided , that Penwest, its Affiliates and/or Sublicensees shall have control and authority over all activities and business decisions regarding commercialization of Products, including, with respect to the design, sale, pricing, marketing and promotion of Products under this Agreement (including the preparation of marketing or promotional materials with respect to Products).

          2.5.2 During the period commencing upon such time as Penwest commences commercialization of Product, or planning for such commercialization, and ending upon expiration or termination of Penwest’s royalty obligations to Edison hereunder, Penwest shall provide to the GOC periodic (but no less frequently than on an annual basis) updates with respect to Penwest’s general strategy and tactics for commercialization of such Product for the upcoming calendar year and, to the extent applicable, Penwest’s commercialization activities since the prior update (each, a “ Commercialization Update ”).

     2.6 Development Costs . Each Party shall be responsible for its own internal costs and expenses required for the discovery, research and/or development of any ESC, Specified Compound or Product under the Collaboration, except as set forth in the remainder of this Section 2.7 or under Section 5.2 below. In addition to the Research Funding Amount, Penwest shall be responsible for the costs of all Third Party development activities with respect to each ESC or Specified Compound which are conducted by Edison under the Collaboration in accordance with the Development Plan at Penwest’s request or on Penwest’s behalf, in each case which have been approved by the GOC, excluding any costs associated with Edison’s development of Specified Compounds in connection with a Foundation Opportunity under

Section 4.6 (unless and until Penwest elects to commercialize such Specified Compounds for [**], in which event the terms of Section 4.6 shall apply).

     2.7 Affiliates and Subcontractors . Either Party may engage, at its sole expense, its Affiliates or Third Party subcontractors (including contract research organizations) to perform certain of its obligations under this Agreement. Any Affiliate or Third Party subcontractor to be engaged by a Party to perform such Party’s obligations set forth in this Agreement shall meet the qualifications typically required by such Party for the performance of work similar in scope and complexity to the subcontracted activity. The activities of any such Affiliates or Third Party subcontractors shall be considered activities of such Party under this Agreement. Such Party shall be responsible for ensuring compliance by any such Affiliates or Third Party subcontractors with the terms of this Agreement. In any case in which a Party engages an Affiliate or a Third Party subcontractor, such Party shall obtain sole ownership of, or an exclusive license (with the right to sublicense) to, all inventions, data, information and related intellectual property rights made or developed by such Affiliate or Third Party subcontractor involving the research, development, manufacture or other use of any Specified Compound or Product.

     2.8 Records . Each Party shall maintain records in sufficient detail and in good scientific manner appropriate for Patent and FDA purposes and so as to properly reflect all work done and results achieved in the performance of activities pursuant to this Agreement (including all data in the form required under any applicable governmental regulations and as directed by the GOC), which records shall be deemed the Confidential Information of such Party hereunder and kept separate from each Party’s unrelated business activities. Such records shall include applicable books, records, reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs and documentation thereof, samples of materials and other graphic or written data generated in connection with the Collaboration, including any data required to be maintained pursuant to applicable governmental regulations. During the Collaboration Term, each Party shall respond to reasonable requests from the other for information based on such records.

     2.9 Reporting . Without limiting any other provisions of this Agreement, each Party shall keep the other reasonably informed through the GOC as to the progress of its activities under the Collaboration or otherwise under this Article 2 and provide such reports and information with respect thereto as designated by the GOC; provided, however, that Edison shall provide Penwest with feedback on the progress of its efforts under the Collaboration no less frequently than on a monthly basis. In addition, each Party shall disclose all Collaboration Know-How developed in the course of its performance of the Collaboration.

ARTICLE 3
GOVERNANCE OF THE COLLABORATION

     3.1 General Operating Committee .

          3.1.1 Establishment . Within thirty (30) days after the Effective Date, Penwest and Edison shall establish a co-chaired General Operating Committee (“ GOC ”), comprised of representatives from Edison and Penwest as set forth in Section 3.1.3 below, to oversee, review

and coordinate the activities of the Parties under the Collaboration, including the research and development of Products.

          3.1.2 Responsibilities . The responsibilities of the GOC shall include: (a) developing, approving, updating, and managing the implementation of the Development Plan, including developing, reviewing and approving the scientific implementation, timelines, obligations of the Parties, budgets, milestones and development strategies set forth in such Development Plan; (b) monitoring the progress of the Collaboration, reviewing each Party’s progress against the Development Plan, and ensuring open and regular exchange between the Parties; (c) overseeing the integration and coordination of (i) the Research Program in accordance with the Development Plan and (ii) the development of Specified Compounds and Products in accordance with the Development Plan; (d) establishing, reviewing and approving the criteria for Activity and the Development Criteria, and making any necessary modifications thereto; (e) making preliminary assessments of ESCs against the Development Criteria; (f) identifying and resolving any scientific, technical or other conflicts between the Parties with respect to development activities; (g) establishing the objectives and endpoints of any clinical trial for a Specified Compound; and (h) coordinating with the Parties all patent activities as they relate to the results of the Collaboration.

          3.1.3 Membership . The GOC shall include at least two (2) and up to three (3) named representatives of each Party, and each Party’s representatives shall be selected by that Party. The initial representatives for the GOC are set forth on Schedule 3.1.3 . Each Party may replace its representatives at any time with prior notice to the other Party, provided that such replacement is of comparable authority within that Party’s organization as the person he or she is replacing. Unless otherwise agreed by the Parties, the GOC shall have at least one representative with relevant decision-making authority from each Party such that the GOC is able to effectuate all of its decisions within the scope of its responsibilities. Without limiting the foregoing, each Party shall appoint one of its members to the GOC to co-chair the meetings for the GOC (each, a “ Co-Chair ”). The Co-Chairs for the GOC shall (a) coordinate and prepare the agenda and ensure the orderly conduct of the GOC’s meetings, (b) attend (subject to below) each meeting of the GOC, and (c) prepare and issue minutes of each meeting within ten (10) business days thereafter accurately reflecting the discussions and decisions of the GOC. Such minutes from each GOC meeting shall not be finalized until the applicable Co-Chair from each Party has reviewed and confirmed the accuracy of such minutes in writing. The Co-Chairs shall solicit agenda items from the other GOC members and provide an agenda along with appropriate information for such agenda reasonably in advance (to the extent possible) of any meeting. It is understood that such agenda shall include all items requested by either Co-Chair for inclusion therein. In the event the Co-Chair or another member of the GOC from either Party is unable to attend or participate in any meeting of the GOC, the Party who designated such Co-Chair or member may designate a substitute Co-Chair or other representative for the meeting. From time to time, the GOC may establish subcommittees, to oversee particular projects or activities, and to manage the more frequent interactions between the Parties’ scientists with respect to individual research projects. Such subcommittees will be constituted as the GOC determines, in its sole discretion.

          3.1.4 Meetings . During the Collaboration Term, unless otherwise agreed to by the Parties, the GOC shall meet face-to-face at least quarterly, or more frequently or by such

other means as agreed by the representatives of the GOC, at such locations as the representatives of the GOC may determine from time to time. In addition to regularly scheduled meetings, the GOC shall hold special meetings from time to time at the request of either Party; and the GOC representatives will communicate regularly by telephone, electronic mail, facsimile and/or videoconference. Other representatives of Edison or Penwest may attend GOC meetings as nonvoting observers. Each Party shall be responsible for all of its expenses associated with its representatives attending the GOC meetings and otherwise fulfilling his/her responsibilities hereunder. Any Development Plan, or amendment proposed by either Party to such Development Plan, shall be submitted to the GOC for approval. The GOC shall endeavor to review and approve any Development Plan for a Specified Compound, and any proposed amendments thereto, within thirty (30) days of submission thereof. Subject to such approval, a copy of the Development Plan for each Specified Compound shall be signed and appended to the minutes of the GOC meeting at which such Development Plan is approved. The written minutes of each GOC meeting and the written record of all GOC voting and decisions shall be written and disseminated to the GOC members for review within ten (10) business days after the GOC meeting, and upon signature by Edison and Penwest, shall become final.

          3.1.5 Decision-Making . Decisions of the GOC shall be made by unanimous vote, with each Party’s GOC representatives collectively having one (1) vote, and the Parties shall endeavor in good faith to come to consensus with respect to matters appropriately before the GOC. In order to make any decision the GOC must have present (in person or other means) at least one representative of each Party. In the event the GOC is unable to make a decision with respect to any issue, the issue shall be escalated to the MSC for resolution.

     3.2 Management Steering Committee .

          3.2.1 Establishment . Within thirty (30) days after the Effective Date, Penwest and Edison shall establish a Management Steering Committee (“ MSC ”), comprised of representatives from Edison and Penwest as set forth in Section 3.2.3 below, to oversee the Collaboration as set forth in Section 3.2.2.

          3.2.2 Responsibilities . The MSC shall be responsible for (a) overseeing the overall implementation of the Collaboration and providing strategic direction to the Collaboration; and (b) providing a forum to resolve unresolved matters from the GOC as set forth herein. In addition, the MSC shall provide a forum for Edison to provide comments and ask questions regarding the Commercialization Updates.

          3.2.3 Membership . The MSC shall be comprised of [**] senior members of the management teams [**] of each Party. The initial members are set forth on Schedule 3.2.3 .

          3.2.4 Meetings . The MSC shall meet face-to-face at least on an annual basis, or more frequently or by such other teleconferencing means as agreed by the representatives of the MSC, at such locations as the representatives of the MSC may determine from time to time.

          3.2.5 Decision Making . As set forth in Section 3.1.5, in the event the GOC is unable to reach unanimity with respect to a particular matter, then either Party, by written notice to the other, may refer the matter to the MSC for resolution as set forth in this Section 3.2.5.

Notwithstanding anything herein to the contrary, the MSC shall have no authority to amend any terms of this Agreement, or to override Penwest’s decision to elect (or not to elect) an ESC for further development pursuant to Section 2.3.3 or 2.3.4 or to terminate the development and commercialization of a Specified Compound pursuant to Section 2.3.4 or 14.2.1. Decisions of the MSC shall be made by unanimous vote, with each Party’s MSC representatives collectively having one (1) vote.  In the event that the MSC is unable to reach unanimity with respect to a particular matter, despite good faith efforts, within thirty (30) days after such matter is referred to it by the GOC, or initiated by the MSC at the MSC level, as the case may be, Edison shall have the final decision-making authority with respect to matters related to [**], and Penwest shall have the final decision-making authority with respect to [**]; provided , however , that (a) any such decision by Penwest concerning [**] and (b) Penwest agrees to [**] Edison, at Edison’s cost, for a period not to exceed [**] days from the date the dispute is subjected to Penwest’s decision-making authority hereunder. Notwithstanding the foregoing, (x) the decision-making Party may not obligate the other Party to spend money or devote resources outside those previously agreed to in the Development Plan, nor unilaterally amend the terms of this Agreement; (y) in no event may Edison as the decision-making Party [**] or to [**], nor [**]; and (z) in no event may