EXHIBIT 10.40
EXECUTION COPY
Dated April 26, 2001
ELAN TRANSDERMAL TECHNOLOGIES, INC.
AND
PAR PHARMACEUTICAL, INC.
LICENSE AND SUPPLY AGREEMENT
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CONTENTS
Clause I Preliminary
Clause 2 The License
Clause 3 Intellectual Property
Clause 4 Competing Products
Clause 5 Registration Of The Product
Clause 6 Marketing And Promotion Of The Product
Clause 7 Supply Of The Product
Clause 8 Financial Provisions
Clause 9 Payments, Reports And Audits
Clause 10 Duration And Termination
Clause 11 Warranty And Indemnity
Clause 12 Customer Complaints, Product Recall And Insurance
Clause 13 Miscellaneous Provisions
Schedule 1 Product
Schedule 2 Product Manufacturing Cost
Schedule 3 Complaint Handling Procedures
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THIS AGREEMENT is made on April 26, 2001.
BETWEEN:
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(1) ELAN TRANSDERMAL TECHNOLOGIES, INC., a company organized under the
laws of Florida, with offices at 3250 Commerce Parkway, Miramar,
Florida 33025, United States of America ("Elan"); and
(2) PAR PHARMACEUTICAL, INC., a company organized under the laws of New
Jersey, with offices at One Ram Ridge Road, Spring Valley, New York
10977, United States of America ("Par").
RECITALS:
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A. Elan is beneficially entitled to the use of various information,
including the Elan Know-How, in relation to the development and
production of drug specific dosage forms for pharmaceutical products
and processes.
B. Elan is knowledgeable in the development of drug specific oral and
transdermal dosage forms and has developed a unique range of delivery
systems designed to provide newer and better formulations of
medicaments.
C. Elan is prepared to grant Par an exclusive license of the Elan
Know-How to package, import, use, offer for sale and sell the Product
in the Territory and to supply the Product to Par.
D. Elan and Par are desirous of entering into an agreement to give effect
to the arrangements described at Recital C.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1 - PRELIMINARY
1.1. DEFINITIONS: In this Agreement unless the context otherwise requires:
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AB RATEABLE shall have the meaning as defined and accepted by the FDA.
AFFILIATE shall mean any corporation or entity controlling or
controlled or under common control with Elan or Par, as the case may
be. For the purposes of this Agreement, "control" shall mean the
direct or indirect ownership of more than 50% of the issued voting
shares or other voting rights of the subject entity to elect
directors.
cGCP, cGMP, cGLP shall mean respectively current Good Clinical
Practice, current Good Manufacturing Practice and current Good
Laboratory Practice as defined in the US Federal Food, Drug and
Cosmetic Act and the regulations promulgated thereunder, as may be
amended from time to time.
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
CFR shall mean the US Code of Federal Regulations 21, as amended from
time to time.
CMC SECTION shall mean the chemistry, manufacturing, and controls
section of the Regulatory Filing, as defined in the CFR, as may be
amended from time to time, and/or its equivalent in other Regulatory
Filings.
COMPETING PRODUCT shall mean a product AB Rateable to the Product, but
shall exclude Clonidine marketed by Boehringer Ingelheim.
DATE FOR LAUNCH shall mean the date on which Par is obliged to effect
full commercial launch of the Product in the Territory pursuant to
Clause 6.7.
DMF shall mean Drug Master File, as defined in the CFR.
EFFECTIVE DATE shall mean the date on which this Agreement is signed
by the last of the Parties to do so.
ELAN shall mean Elan Transdermal Technologies, Inc. and Affiliates and
subsidiaries of Elan Corporation, plc. within the division of Elan
Corporation, plc. carrying on business as Elan Pharmaceutical
Technologies. For the avoidance of doubt, "Elan" shall exclude the
Excluded Entities.
ELAN KNOW-HOW shall mean all knowledge, information, trade secrets,
data and expertise which is not generally known to the public, owned
by Elan, or to which Elan has rights under the terms of a license or
licenses in force on the Effective Date which permit(s) disclosure of
same to Par relating to the Product, whether or not covered by any
patent, copyright, design patent, trademark, trade secret or other
industrial or any intellectual property rights.
In the event that Elan acquires or merges with a third party entity,
Elan Know-How shall not include any know-how to the extent that such
know-how relates to a product containing the same active ingredient as
the Product which has been approved for marketing or is in development
by the said third party entity at the time of such acquisition or
merger. For the avoidance of doubt, the occurrence of any such
acquisition or merger shall not affect the license of the Elan
Know-How granted to Par hereunder.
EXCLUDED ENTITIES shall mean [****************]
FDA shall mean the United States Food and Drug Administration or any
other successor agency whose approval is necessary to market the
Product in the Territory.
FDA APPROVAL shall mean the final approval to market the Product in
the Territory (notwithstanding that such approval may be subject to
expiration of the 30 month Waxman Hatch patent stay) including post
approval validation and scale up inspection and any other approval
which is required to launch the Product in the normal course of
business.
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
FOB shall have the same meaning as such term is defined in the ICC
Incoterms, 1990, International Rules for the Interpretation of Trade
Terms, ICC Publication No. 460.
FIRST COMMERCIAL SALE shall mean the first sale under this Agreement
in an arm's length transaction to an independent third party. Par will
provide Elan with written notice of the date of the same.
IN MARKET shall mean the sale of the Product in the Territory by Par
or its Affiliates, or where applicable by a permitted sub-licensee or
distributor, to an unaffiliated third party, including but not limited
to a wholesaler, chain store, distributor, managed care organization,
hospital or pharmacy.
LAUNCH STOCKS shall mean [****************]
MARKETING COMMITTEE shall have the meaning set forth in Clause 6. 1.
NET SALES PRICE ("NSP") shall mean [****************]
PAR shall mean Par Pharmaceutical, Inc. and any of its Affiliates.
PAR TRADEMARK shall mean the trademark(s) of Par to be applied to the
Product.
PARTY shall mean Elan or Par as the case may be. Parties shall mean
Elan and Par.
PRODUCT shall mean [****************]
PRODUCT MANUFACTURING COST shall mean [****************]
PRODUCT SPECIFICATIONS shall mean the specifications set forth in the
Regulatory Filings, the specifications set forth in the Agreement, and
such specifications as may from time to time be established by the
applicable regulatory authorities, including without limitation,
cGCPs, cGMPs and cGLPs, and such additional specifications for the
Product as may be agreed by the Parties in writing.
PROFIT shall mean [****************]
REGULATORY FILING shall include, but shall not be limited to, an
abbreviated new drug application ("ANDA"), a new drug application
("NDA") or any other application acceptable to the FDA for marketing
approval for the Product, which Elan will file in the Territory,
including any supplements or amendments thereto.
TECHNOLOGICAL COMPETITOR shall mean a company or corporation having a
substantial part of its business in the oral or transdermal drug
delivery, research, development and manufacturing areas of the
pharmaceutical industry, with a market capitalization of at least $100
million, in the case of a publicly-held company, or at least $75
million of annual revenues, in the case of a privately-held company.
TERRITORY shall mean the United States of America, its territories and
possessions.
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$ shall mean United States Dollars.
US OR USA shall mean the United States of America.
1.2. Interpretation: In this Agreement:
1.2.1. the singular includes the plural and vice versa, the
masculine includes the feminine and vice versa and references
to natural persons include corporate bodies, partnerships and
vice versa.
1.2.2. any reference to a Clause or Schedule, unless otherwise
specifically provided, shall be respectively to a Clause or
Schedule of this Agreement.
1.2.3. the headings of this Agreement are for ease of reference only
and shall not affect its construction or interpretation.
CLAUSE 2 - THE LICENSE
2.1. LICENSE TO PAR:
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2.1.1. Subject to the terms of this Agreement, Elan hereby grants to
Par and Par hereby accepts for the term of this Agreement an
exclusive license of the Elan Know-How to package, use, offer
for sale and sell the Product in the Territory.
2.1.2. Elan shall possess all rights including, without limitation,
the right to research, develop, experiment with, manufacture,
sell, license or otherwise market the Product outside the
Territory.
2.2. Sub-licensing by Par:
2.2.1. Par shall be entitled, subject to the prior written consent
of Elan, which shall not be unreasonably withheld or delayed,
to grant sub-licenses to package, import, use, offer for sale
and sell the Product in the Territory, provided that Par
shall not grant a sub-license to a Technological Competitor
of Elan.
2.2.2. Any sub-license granted hereunder shall be in the same terms
mutatis mutandis as the terms of this Agreement insofar as
they are applicable, but excluding the right to grant a
sub-license.
2.2.3. For the avoidance of doubt, Par shall ensure that Elan shall
have the same rights of audit and inspection vis-a-vis a
sub-licensee, as Elan has pursuant to this Agreement
concerning Par.
2.2.4. Par shall be liable to Elan for all acts and omissions of any
sub-licensee as though such acts and omissions were by Par
and Par shall provide the indemnity to Elan outlined in
Clause 11.7.
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2.2.5. Where a sub-license has been granted under Clause 2.2.1, such
sub-license shall automatically terminate if this Agreement
terminates for the country or countries covered by the
sub-license.
2.2.6. Par shall undertake to protect the confidentiality of Elan's
formulation, engineering and manufacturing processes for the
Product in its dealings with permitted sub-licensees and
shall not disclose any information from the CMC Section
and/or the DMF, as applicable, to any third party, including
a permitted sub-licensee, without the prior written consent
of Elan, which consent shall not be unreasonably withheld or
delayed. Par shall include confidentiality provisions in any
permitted sub-license with the same obligations as are set
out in the confidentiality provisions of this Agreement.
2.2.7. For the avoidance of doubt:
(1) the parties agree that any sub-license granted pursuant
to this Clause 2.2 shall not be capable of surviving
the termination of this Agreement; and
(2) In Market sales of the Product by the sub-licensee
shall be included in calculating NSP for the purposes
of this Agreement.
CLAUSE 3 - INTELLECTUAL PROPERTY
3.1. OWNERSHIP OF ELAN KNOW-HOW:
--------------------------
3.1.1. Elan shall remain the sole owner of the Elan Know-How.
3.1.2. Elan shall be entitled to use the Elan Know-How, and all
technical and clinical data whether generated by Elan or Par
pursuant to this Agreement in connection with Elan's other
commercial arrangements outside the Territory and, following
termination of this Agreement, in the Territory.
3.2. INFRINGEMENTS
------------
3.2.1. Par and Elan shall promptly inform the other in writing of
any alleged infringement of which it shall become aware by
the Product of a third party's patent rights ("Defense
Infringement") or of any alleged infringement by a third
party of any rights within the Elan Know-How ("Enforcement
Infringement"). The Party with such knowledge shall provide
the other Party with any available evidence of alleged
infringement. Elan shall thereafter be entitled to conduct
the defense of such claim (in its own name and/or that of
Par) or, as the case may be, to institute and carry on
proceedings (in its own name and/or that of Par) to prevent
or cease any infringement or unauthorized use. In the event
that Elan decides in writing that it does not wish to
institute such enforcement proceedings, or as the case may be
conduct such defense, Par may at its option elect to do so
instead of Elan.
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3.2.2. In the event of any alleged Defense Infringement, Elan and
Par shall share equally the cost of any patent review. If
such third party institutes proceedings against Par and/or
Elan jointly or separately, the Parties shall share equally
the litigation expenses in defending such an action
(including the reasonable legal costs and expenses incurred
by a Party who elects to have separate legal representation),
including reasonable attorney fees, experts' fees, etc.
3.2.3. Par shall bear all and any liability to one or more third
parties for patent infringement (including a court order for
a lump sum, ongoing royalties or a settlement) and shall
indemnify and keep indemnified Elan against any claim or
order made against Par or Elan in respect of the same.
3.2.4. In each case where only one of the Parties ("THE LITIGATING
PARTY") is a party to proceedings, whether in respect of an
alleged Enforcement Infringement or an alleged Defense
Infringement, the litigating party shall provide to the other
Party ("THE NON-LITIGATING PARTY"):
(i) updates as to its progress on a regular basis; and
(ii) such other information concerning the litigation as the
non-litigating party may reasonably request, subject
always to the non-litigating party having provided
undertakings as to confidentiality and the non-waiver
of privilege to the reasonable satisfaction of the
litigating party.
PROVIDED THAT the litigating party shall be under no
obligation to disclose to the non-litigating party any advice
of outside attorneys. Furthermore the litigating party shall
discuss litigation strategy at reasonable times with the
non-litigating party (but shall not be bound to follow any
recommendation of the non-litigating party) and shall keep
the non-litigating party informed of any actual or proposed
change in outside counsel used in respect of the said
litigation.
3.2.5. The non-litigating party shall provide all reasonable
co-operation in the litigation, including without limitation
Product technical expertise to the other Party to support any
Defense Infringement litigation or Enforcement Infringement
litigation (including complying with requests for orders for
discovery and depositions). Any expenses incurred by Elan or
Par in providing such Product technical expertise shall be
included in the total patent review and legal expenses, in
accordance with Clause 3.2.2.
3.2.6. Costs which are shared pursuant to this Clause 3.2 shall be
paid in the first instance by Elan. Par shall pay its share
of such costs to Elan as and when sufficient Profit becomes
available to it to discharge such share PROVIDED THAT in the
event of (i) the termination of this Agreement, howsoever
arising; or (ii) Par not having effected full scale
commercial launch of the Product in the Territory on or
before the Date For Launch (whether or not Elan exercises its
right of termination in respect of the same), the entire
balance of Par's share of such costs shall become immediately
due and payable.
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
3.2.7. Elan confirms that to the best of its knowledge and belief,
the Product does not infringe patent number [******] as
listed in the Orange Book.
3.3. TRADEMARKS
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3.3.1. Par may market, sell and/or distribute the Product under any
trademark or trademarks and trade dress as Par or its
customers may from time to time select. Such trademarks shall
remain the sole property of Par or its customers as the case
may be, and Elan shall not use any such trademark(s) whether
during the term or thereafter, without the prior written
consent of Par.
3.3.2. For the term of this Agreement Par shall grant Elan a
royalty-free license to the applicable Par Trademarks solely
to enable Elan to fulfill its obligations pursuant to the
terms of this Agreement.
CLAUSE 4 - COMPETING PRODUCTS
Par shall not develop, market or sell any Competing Product in the Territory
during the term of the Agreement (and for one year after the termination of this
Agreement if the Agreement is terminated due to Par's default of its obligations
hereunder beyond any applicable cure period).
CLAUSE 5 - REGISTRATION OF THE PRODUCT
5.1. Elan shall be responsible for the compilation and filing of the
Regulatory Filings in respect of the Product with the FDA and shall be
the holder of any FDA Approvals granted for the Product and the Party
principally responsible for interaction with the FDA.
5.2. Elan shall notify Par of the date of submission of any Regulatory
Filing for the Product in the Territory and shall also notify Par in
writing of the FDA Approval as soon as is reasonably possible
following said FDA Approval. Elan shall notify Par in writing as soon
as possible of any notification received by Elan from the FDA to
conduct an inspection of its manufacturing, clinical or other
facilities as directly related to the Product. Copies of all
correspondence with the FDA with respect to the Product post its
acceptance for filing shall be provided to the other Party; such
correspondence shall be subject to redaction by Elan to the extent
that such correspondence relates to the confidential portions of the
CMC Section relating to formulation and manufacturing processes. On or
after the date of First Commercial Sale, Elan shall provide Par with a
status update with regard to any audit or inspection conducted by FDA
which relates directly to the Product.
5.3. Par shall be responsible for obtaining all applicable state and local
regulatory approvals for the distribution of the Product in the
Territory. Elan shall co-operate with Par in obtaining such approvals.
5.4. It is hereby acknowledged that there are inherent uncertainties
involved in the registration of pharmaceutical products with the FDA
in relation to achieving the Product Specifications and obtaining the
FDA Approval and such uncertainties form part of the business risk
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involved in undertaking the form of commercial collaboration outlined
in this Agreement.
CLAUSE 6 - MARKETING AND PROMOTION OF THE PRODUCT
6.1. No later than January 2002 the Parties shall establish a Marketing
Committee consisting of at least one representative from each Party
who shall act as liaison between the Parties to ensure that Elan is up
to date on the prevailing market conditions and Par's efforts at
marketing and selling the Product. Within 90 days of the Regulatory
Filing in the Territory with respect to the Product, Par will outline
to Elan the structure of the promotional activities to be carried out
by Par for the period up to the First Commercial Sale of the Product
and for a period of 1 year thereafter. Par shall both prior to and
subsequent to the launch of the Product communicate with Elan
regarding its objectives for and performance of such Product in the
Territory. At such meetings, Par shall report on the ongoing sales
performance of the Product in the Territory, including marketing
approaches, educational campaigns, promotional and advertising
materials and campaigns, sales plans and results, performance against
competitors, its objectives for the Product and its plans for the next
year of the Agreement. In addition the Marketing Committee shall
review the quarterly royalty statements.
6.2. Unless otherwise agreed by the Parties, the Marketing Committee shall
meet at least once each calendar quarter, such meetings to continue
until 2 years after launch of the last Product or such later time as
may be agreed. Thereafter, the Parties shall meet on an annual basis.
The Marketing Committee shall meet alternately at the offices of Elan
and Par or as otherwise agreed by the Parties. Each Party shall bear
the cost of its own travel expenses.
6.3. Par shall control and shall be responsible for all decisions regarding
the pricing policies and strategies with respect to the marketing and
sales of the Product. Par shall control the format of the promotional
campaign to be submitted to the FDA, but shall inform Elan thereof and
provide to Elan a copy of each such promotional material for
submission, at latest concurrent with its submission to the FDA. Par
shall use reasonable efforts to obtain approval by the FDA of the
promotional campaign for the Product and will provide to Elan any FDA
correspondence thereto.
6.4. Par shall use reasonable efforts consistent with its normal business
practices to market and promote the Product throughout the Territory
to all appropriate classes of trade and in doing so, shall use the
same level of effort as with other similar products of similar sales
potential which it markets.
6.5. Par shall submit layout and designs for all trade packaging, cartons
and labels and other printed materials to Elan at least 6 months prior
to First Commercial Sale of the Product. Elan shall provide label and
insert copy in the Regulatory Filing to the FDA in accordance with
current FDA requirements. To the extent permitted by law, such
materials shall include due acknowledgment that the Product is
developed and manufactured by Elan. Such acknowledgment shall take
into consideration regulatory requirements and Par's commercial
requirements.
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
6.6. The Party responsible for packaging the Product shall mark or have
marked all relevant patent number(s) (if any) on all relevant
packaging and labelling of the Product, subject to FDA control and
regulations of all packaging copy, or otherwise reasonably communicate
to the trade the existence of any patents of Elan for the Territory in
such a manner as to ensure compliance with, and enforceability under,
applicable laws in the Territory.
6.7. Par shall effect the full scale commercial launch of the Product in
the Territory as expeditiously as practical when allowed by law,
subject to the receipt of Launch Stocks of the Product, PROVIDED THAT
6.7.1. Par shall not be required to launch the Product during a
period in which Par would be at material risk of liability in
damages arising from litigation instigated by Boehringer
Ingelheim to enforce patent number [*****] as listed in the
Orange Book or any equivalent patent; provided that
notwithstanding such risk or litigation Par shall effect such
launch not later than the later of (a) 3 May 2002; and (b)
thirty (30) days after FDA Approval;
6.7.2. Par shall not be required to launch the Product during a
period in which Par would be at material risk of liability in
damages arising from litigation instigated to enforce any
patent other than that numbered [*****] as listed in the
Orange Book or any equivalent thereof; and
6.7.3. in no circumstances shall Par delay launch solely as a means
of reducing the license fees payable under Clause 8.5.
6.8. Par warrants that it shall not use the Product as a "loss leader" in
its marketing programs and shall at all times use its reasonable
efforts in marketing the Product.
CLAUSE 7 - SUPPLY OF THE PRODUCT
7.1. Save as otherwise provided in this Agreement, Elan shall produce and
supply to Par on an exclusive basis its entire requirements of the
Product for the Territory. Elan shall be the sole and exclusive
supplier of the Product to Par in the Territory. Par shall purchase
the Product exclusively from Elan in the Territory.
7.2. Elan shall deliver the Product to Par and/or any party designated by
Par in proper packaging so as to permit safe storage and transport.
7.3. Product shall be manufactured by Elan in FDA approved manufacturing
facilities containing active ingredients listed in the DMF from FDA
approved facilities.
7.4. Within 120 days following the submission of the Regulatory Filing to
the FDA, Par shall provide Elan with a forecast of Par's requirements
for the Product for the 12 month period following the anticipated FDA
Approval. The said forecast shall be updated monthly until the date on
which Par places a firm order for Launch Stocks. Except as otherwise
provided herein, all forecasts made hereunder shall be made to assist
Elan in planning its production and Par in planning marketing and
sales. Such forecasts shall not be binding purchase orders, and shall
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be without prejudice to Par's subsequent firm purchase orders for the
Product in accordance with the terms of this Agreement.
7.5. The Parties shall negotiate in good faith as to the quantities of
Launch Stocks. Par shall place a firm order for Launch Stocks not
later than one hundred and fifty (150) days before the date on which
it intends to launch the Product. Par shall in any event be
responsible for ensuring that it has placed a firm order for Launch
Stocks not later than one hundred and fifty (150) days before the Date
For Launch (notwithstanding that such date may not be capable of
determination at the time for the order). However, for the avoidance
of doubt, the Parties hereby confirm that Elan's manufacturing
obligations shall only arise on receipt of firm purchase orders.
7.6. Elan shall use its reasonable efforts to deliver the Product to Par
within 120 days of the receipt of a firm purchase order therefor (150
days in the case of Launch Stocks).
7.7. Upon placing a firm order for Launch Stocks and on or before the 23rd
day of each calendar month thereafter, Par shall provide a rolling 12
month forecast for the period beginning on the first day of the
relevant calendar month. The first four calendar months of such 12
months' forecast shall be a binding purchase commitment of Par and
shall be formalized by a firm purchase order from Par to Elan.
7.8. Elan shall make appropriate manufacturing arrangements in order to be
able to supply Par with between 80% and 120% of the rolling annual
forecasted requirements provided by Par for the Product.
7.9. Elan will use its reasonable efforts to fulfill Par's requirements in
excess of 120% of forecasted amounts, but shall not be obliged to meet
such requirements if it is not reasonably practicable to do so
provided that Elan shall supply the Product so ordered as soon
thereafter as reasonably practicable.
7.10. Elan shall advise Par of a minimum batch size for the manufacture and
supply of each dosage strength of Product.
7.11. Save as otherwise agreed between the Parties, delivery of consignments
of Product shall be effected by Elan FOB Miramar, Florida, or such
other manufacturing facility(ies) designated by Elan and all risks
therein shall pass to Par when each such consignment of the Product is
loaded onto the vehicle of Par's agent on which it is to be dispatched
from the manufacturing facility designated by Elan.
7.12. After receipt of a Product shipment, Par shall visually inspect the
Product shipment and communicate rejection of all or part of such
shipment as appropriate to Elan in writing. The Parties agree that
Par's visual inspection consists of (i) comparing the applicable order
against the documentation accompanying the shipment to verify that the
delivery date, identity, quantity and exterior shipment labelling
comply with the order and (ii) visually inspecting the exterior of the
Product shipment to verify that the shipment appears to be in good
condition. Elan is to provide Par with a copy of a fully executed
Certificate of Analysis for each batch of Product shipped to Par. All
claims for failure of any delivery of the Product to conform to
Product Specifications under Clause 11 shall be made by Par to Elan in
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
writing within 45 days following delivery except in the case of
defects not identifiable upon visual inspection. Claims for defects
not discovered during the visual inspection as set out above, shall be
made by Par to Elan in writing within 30 days of discovery. Failure to
make timely claims in the manner prescribed shall constitute
acceptance of the delivery.
7.13. Product which has been delivered and which Par notifies Elan within
the period designated in Clause 7.12. does not conform to the Product
Specifications shall be replaced at Elan's cost within 90 days of the
receipt by Elan of the failed Product except where such non-conformity
is due to the negligent acts or omissions of Par.
7.14. In the event of an unresolved dispute as to conformity in all material
respects of the Product with Product Specifications, the Parties shall
within 30 days appoint an independent laboratory to undertake the
relevant testing and its findings shall be conclusive and binding upon
the Parties. All costs relating to this process shall be borne solely
by the unsuccessful Party. In the event that the Product is shown to
have complied with the Product Specifications or that the failure to
do so is attributable to the negligent acts or omissions of Par, Par
shall promptly pay Elan for the additional Product supplied.
CLAUSE 8 - FINANCIAL PROVISIONS
8.1. REGULATORY MANAGEMENT FEE
[****************]
8.2. MILESTONE PAYMENT
[****************]
8.3. PRICE OF PRODUCT:
8.3.1. Elan shall supply the Product to Par at Product Manufacturing
Cost in accordance with the terms of this Agreement.
8.3.2. Subject to the following paragraph, the Product Manufacturing
Cost of the Product may be reviewed by Elan once per annum
and may be adjusted for the following calendar year
reflecting actual changes in direct manufacturing expenses.
Elan shall provide Par with written notice of any such
increase in the Product Manufacturing Cost 60 days before the
end of each calendar year to take effect in the following
calendar year.
8.3.3. Any increases or decreases in the cost of the active
ingredient or any other components used in the Product in
excess of 3% from the then current base are to be passed on
in the Product Manufacturing Cost manufactured from the
effective date of use of such active ingredient or any other
component.
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
8.3.4. Payment for all Product delivered from Elan's manufacturing
facility to Par shall be effected in U.S. Dollars ($) within
thirty (30) days of the date of the delivery of the Product
FOB the applicable Elan manufacturing facility.
8.4. ALLOCATION
8.4.1. [****************]
8.4.2. Within four weeks of the end of each calendar quarter, Par
shall notify Elan of the NSP of Product for that previous
calendar quarter. Payments shown by each calendar quarter
report to have accrued but which have not yet been paid shall
be included in calculating the NSP for that quarter.
8.4.3. Payment of Profit shall be made once in each calendar quarter
within 45 days after the expiry of the relevant calendar
quarter.
8.4.4. All payments due hereunder shall be made in U.S. Dollars.
8.4.5. In the event that Par or any Affiliate of Par shall sell the
Product together with other products of Par to third parties
(by the method commonly known in the pharmaceutical industry
as "bundling"), Par shall not conduct such bundling in such a
manner as to discount the Product at a greater proportion
than the other products bundled by Par.
8.5. ADJUSTMENT
8.5.1. In this Clause 8.5:
"Period of Exclusivity" means the period (if any) beginning
on the Relevant Date and ending on the later of (a) the last
day of any period of exclusivity granted to Elan under the
terms of the FDA Approval; or (b) the date on which a
Competing Product becomes actually available in the market
for delivery and onward sale (whether or not exclusivity has
been granted under the terms of the FDA Approval for all of
such period or at all); and
"Relevant Date" means the earlier of (a) the Date For Launch
and (b) the date on which Par in fact effects a fall scale
commercial launch of the Product in the Territory.
8.5.2. In the event of there being a Period of Exclusivity, in
addition to the payments set out above, Par shall pay to Elan
additional milestone payments in respect of the period
referred to in the first column of the table appearing below
equal to the sum in the corresponding second column. For the
avoidance of doubt, such payments are cumulative and not
alternative, but each shall only be payable where the whole
of the period referred to falls within the Period of
Exclusivity.
-------------------------------------------------------------
PERIOD [****************]
------
-------------------------------------------------------------
14
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
-------------------------------------------------------------
30 days beginning on the [****************]
Relevant Date
-------------------------------------------------------------
60 days beginning 30 days after [****************]
the Relevant Date
-------------------------------------------------------------
90 days beginning 90 days after [****************]
the Relevant Date
-------------------------------------------------------------
8.5.3. A payment referred to in Clause 8.5.2 shall be due:
(a) if the period in question falls within the Period of
Exclusivity solely by reason of exclusivity granted to
Elan under the terms of the FDA Approval, on the
Relevant Date;
(b) in each other case, within fourteen (14) days of the
last day of the period in question.
8.5.4. [****************]
8.5.4.1. [****************]
8.5.4.2. [****************]
8.6. FURTHER ADJUSTMENT
8.6.1. Where in a period in respect of which an additional milestone
payment is payable under Clause 8.5.2:
(a) Par is unable in all or part of that period to sell the
Product by reason of Elan's failure to supply Product
confirming to its Specification or at all (other than
in circumstances of force majeure as described in
Clause 13.5) or by reason of action taken by the FDA to
restrain such sale; and
(b) such inability to sell causes demonstrable and material
harm to Par's commercial interests in respect of the
Product -
each additional milestone payment paid or payable under
Clause 8.5.2 shall be reduced on a pro rata basis (or as the
case may be eliminated) having regard to the proportion of
the period in respect of which such payment is payable in
which the circumstances set out in paragraphs (a) and (b)
apply.
8.6.2. For the avoidance of doubt, the reduction or elimination of
the additional milestone payment as provided for in Clause
8.6.1 shall be Par's sole remedy in respect of the
consequences of the circumstances described in paragraph (a)
of that Clause.
15
CLAUSE 9 - PAYMENTS, REPORTS AND AUDITS
9.1. In accordance with its ordinary business practice, Par shall keep true
and accurate records of gross sales of the Product, the items deducted
from the gross amount in calculating the NSP, the NSP and the
royalties payable to Elan under Clause 8. Par shall deliver to Elan a
written statement ("the Statement") thereof within 28 days following
the end of each calendar quarter, (or any part thereof in the first or
last calendar quarter of this Agreement) for such calendar quarter.
The Statement shall outline the calculation of the NSP from gross
revenues during that calendar quarter, the applicable percentage rate,
the units of Product sold, marketing, selling and distribution
expenses allocated to the Product and a computation of the sums due to
Elan. The Parties' financial officers shall agree upon the precise
format of the Statement.
9.2. Any income or other taxes which Par is required by law to pay or
withhold on behalf of Elan with respect to royalties and any other
monies payable to Elan under this Agreement shall be deducted from the
amount of such NSP payments, royalties and other monies due. Par shall
furnish Elan with proof of such payments. Any such tax required to be
paid or withheld shall be an expense of and borne solely by Elan. Par
shall promptly provide Elan with a certificate or other documentary
evidence to enable Elan to support a claim for a refund or a foreign
tax credit with respect to any such tax so withheld or deducted by
Par. The Parties will reasonably co-operate in completing and filing
documents required under the provisions of any applicable tax treaty
or under any other applicable law, in order to enable Par to make such
payments to Elan without any deduction or withholding.
9.3. All payments due hereunder shall be made to the designated bank
account of Elan in accordance with such timely written instructions as
Elan shall from time to time provide.
9.4. If meetings of the Marketing Committee have ceased, and where Elan so
requests, to supplement the information available to Elan at the
meetings of the Parties pursuant to Clause 6. 1, Par shall provide
Elan with quarterly sales reports outlining the status of the Product
in the Territory, including a summary of the market share for each of
the Product in their respective market segments.
9.5. For the 90 day period following the close of each calendar year of the
Agreement, Elan and Par will, in the event that the other Party
reasonably requests such access, provide each other's independent
certified accountants (reasonably acceptable to the other Party) with
access, during regular business hours and subject to the
confidentiality provisions as contained in this Agreement, to such
Party's books and records relating to the Product, solely for the
purpose of verifying the accuracy and reasonable composition of the
calculations hereunder for the calendar year then ended.
9.6. In the event of a discovery of a discrepancy which exceeds 5% of the
amount due or charged by a Party for any period, the cost of such
audit shall be borne by the audited Party; otherwise, such cost shall
be borne by the auditing Party.
16
9.7. During normal business hours and provided reasonable notice has been
furnished by Par, Elan shall make (and where relevant shall procure
that Elan's subcontractor shall make) that portion of its
manufacturing, testing or storage facility where Product is
manufactured, tested or stored, including all record and reference
samples relating to the Product available for inspection by Par's duly
qualified employee or by the relevant governmental or regulatory
authority. The investigation shall be limited to determining whether
there is compliance with the Regulatory Filing, cGMP and other
requirements of applicable law.
CLAUSE 10 - DURATION AND TERMINATION
10.1. This Agreement shall be deemed to have come into force on the
Effective Date and, subject to the rights of termination outlined in
this Clause 10 will expire on the 15th anniversary of the date of
First Commercial Sale of the Product in the Territory.
10.2. In addition to the rights of termination provided for elsewhere in
this Agreement, either Party will be entitled forthwith to terminate
this Agreement by written notice to the other Party if;
10.2.l. that other Party commits any material breach of any of the
provisions of this Agreement, and in the case of a breach
capable of remedy, fails to remedy the same within 60 days
after receipt of a written notice giving full particulars of
the breach and requiring it to be remedied; or
10.2.2. that other Party goes into liquidation (except for the
purposes of amalgamation or reconstruction and in such manner
that the company resulting therefrom effectively agrees to be
bound by or assume the obligations imposed on that other
Party under this Agreement); or
10.2.3. an encumbrancer takes possession or a receiver is appointed
over any of the property or assets of that other Party; or
10.2.4. any proceedings are filed or commenced by that other Party
under bankruptcy, insolvency or debtor relief laws or
anything analogous to any of the foregoing under the laws of
any jurisdiction occurs in relation to that other Party; or
10.2.5. the other Party fails to promptly secure or renew any
material license, registration, permit, authorization or
approval for the conduct of its business in any manner
contemplated by this Agreement or if any such material
license, registration, permit, authorization or approval is
revoked or suspended and not reinstated within sixty (60)
days; or
10.2.6. an award is made against Elan and/or Par in a patent
infringement action (which is not appealed, or is
unsuccessfully appealed) so that further development or
marketing of the Product is prohibited or becomes
economically unviable to Elan and/or Par.
17
10.3. In further addition to the rights and termination provided for
elsewhere in this Agreement, Elan shall be entitled to terminate the
license granted to Par under this Agreement for the Territory in the
event that:
10.3.1. Par fails to effect the commercial launch of the Product
required by Clause 6.7. in accordance with the provisions
thereof or fails to place a firm order for Launch Stocks on
or before the date required by Clause 7.5; or
10.3.2. Par notifies Elan in writing that it does not wish to
commercialize the Product in the Territory.
10.3.3. a Technological Competitor of Elan or a company with a
Competing Product acquires 20% or more of Par's voting stock
or where 20% or more of such company's voting stock is
acquired by Par; or
10.3.4. the net price payable to Elan (that is the price of Product
and the percentage of Profit) is less than Manufacturing Cost
plus 15% for a period of one year; or
10.3.5. if the innovator for such Product acquires more than 20% of
Par's voting stock; or
10.3.6. in the event that Par should market any Competing Product in
the Territory during the term of this Agreement, Elan shall
be entitled to terminate the Agreement.
10.4. In further addition to the rights and termination provided for
elsewhere in this Agreement, Par shall be entitled to terminate the
Agreement for the Territory in the event that: -
10.4.1. Elan fails to file the Regulatory Filing for such Product
within 2 years of the date of this Agreement or FDA Approval
is not obtained within 30 months of the date of a Regulatory
Filing, unless otherwise extended by the Parties in writing;
or
10.4.2. Elan has submitted fraudulent filings to the FDA or has
failed to respond to FDA deficiency correspondence as
requested by FDA in a timely manner; or
10.4.3. the share of the Net Profits payable to Par is less than 15%
of the Product Manufacturing Cost for the said Product for a
period of one year.
10.5. Upon exercise of those rights of termination specified in this Clause
10 or elsewhere in this Agreement, this Agreement shall, subject to
the provisions of the Agreement which survive the termination of the
Agreement, automatically terminate forthwith and be of no further
legal force or effect.
10.6. Upon termination of the Agreement by either Party, or upon termination
by Elan of the license for the Product, the following shall be the
consequences relating to the Product:
10.6.l. any sums that were due from Par to Elan under the provisions
of Clause 8 or otherwise howsoever prior to the exercise of
the right to terminate this Agreement as set forth herein
shall be paid in full within 30 days of termination of this
18
Agreement and Elan shall not be liable to repay to Par any
amount of money paid or payable by Par to Elan up to the date
of the termination of this Agreement;
10.6.2. all confidentiality provisions set out herein shall remain in
full force and effect for a period of 5 years from the date
of termination of this Agreement;
10.6.3. all responsibilities and warranties shall insofar as
appropriate remain in full force and effect;
10.6.4. the rights of inspection and audit shall continue in force
for the period referred to in the relevant provisions of this
Agreement;
10.6.5. Elan shall be entitled to research, develop and commercialize
the Product for its own benefit in the Territory;
10.6.6. Par shall have an ongoing right for a period of six (6)
months to sell or otherwise dispose of the stock of any
Product on hand as of the date of termination of the
Agreement, which such sale shall be subject to Clause 8 and
the other applicable terms of this Agreement.
10.7. Elan shall be entitled to use the Elan Know-How, and all technical and
clinical data whether generated by Elan or Par pursuant to this
Agreement in the Territory following termination of this Agreement.
CLAUSE 11 - WARRANTY AND INDEMNITY
11.1. Elan represents and warrants as follows;
11.1.1. Except as set forth in this Clause 11.1.1, that it has the
sole, exclusive and unencumbered right to grant the licenses
and rights herein granted to Par, and that it has not granted
any option, license, right or interest in or to the Elan
Know-How to any third party which would conflict with the
rights granted by this Agreement. The execution of this
Agreement and the full performance and enjoyment of the
rights of Par under this Agreement will not breach or in any
way be inconsistent with the terms and conditions of any
license, contract, understanding or agreement, whether
express, implied, written or oral between Elan and any third
party;
11.1.2. the Product supplied by Elan to Par under this Agreement will
conform to the Product Specifications and regulations
governing the conduct of clinical trials and stability
requirements;
11.1.3. the Product sold by Elan to Par pursuant hereto shall be of
good, merchantable and usable quality, free of defects, and
shall not be adulterated or misbranded within the meaning of
the US Food, Drug and Cosmetics Act;
19
11.1.4. Elan's manufacturing facilities conform in all material
respects to applicable laws, regulations and approvals
governing such facility and are adequate to produce the
quantities of the Product contemplated hereby;
11.1.5. to the best of Elan's knowledge, all bulk active ingredient
used in the manufacture of the Product shall be manufactured
at an FDA-approved manufacturing facility in accordance with
cGMP and current Bulk Drug Substances Guidelines, and shall
be in compliance with the applicable specifications under the
bulk product monograph.
11.2. Par represents and warrants as follows;
11.2.1. Par represents and warrants that it has the sole, exclusive
and unencumbered right to enter into this Agreement and that
it has not granted any obligations to any third party which
would conflict with the terms of this Agreement. The
execution of this Agreement and the full performance and
enjoyment of the rights of Elan under this Agreement will not
breach or in any way be inconsistent with the terms and
conditions of any license, contract, understanding or
agreement, whether express, implied, written or oral between
Par and any third party; and
11.2.2. Par is cognizant in all material respects of all Applicable
statutes, ordinances and regulations of the Territory with
respect to the handling, packaging, storage, distribution,
marketing and sale of the Product including, but not limited
to, the U.S. Federal Food, Drug and Cosmetic Act and
regulations promulgated thereunder, including cGLP and cGMP
and shall conduct such activities in a manner which complies
with such statutes, ordinances, regulations and practices;
11.3. Each of Elan and Par represents and warrants to the other that:
11.3.l. it has such permits, licenses and authorizations of
governmental or regulatory authorities as are necessary to
own its respective properties, conduct its business and
consummate the transactions contemplated hereby; and
11.3.2. each of Elan and Par represents and warrants to the other
that it is not currently debarred, suspended or otherwise
excluded by any United States governmental agency from
receiving Federal contracts.
11.4. Except as expressly stated in this Clause 11, all other warranties,
conditions and representations, express or implied, statutory or
otherwise, including a warranty as to the quality or fitness for any
particular purpose of the Product are hereby excluded.
11.5. Par represents and warrants that:
11.5.1. the execution of this Agreement and the full performance of
its obligations and rights under this Agreement will not
breach or in any way be inconsistent with the terms and
conditions of any license, contract, understanding or
agreement, whether express, implied, written or oral between
Par and any third party; and
20
11.5.2. it acknowledges and agrees that it shall be a condition to
the effectiveness of this Agreement that this Agreement does
not require any filings under Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules promulgated thereunder (16 C.F.R.
801.1 et seq.).
11.6. Indemnification
11.6.1. Elan shall indemnify and hold Par and its Affiliates harmless
from and against any claim, action, suit, proceeding, loss,
liability, damage or expense (including without limitation
reasonable attorneys' fees) arising directly or indirectly as
a result of Elan's negligent acts or omission or breach of
its representations, warranties, covenants or other
obligations hereunder; provided, however that Elan shall not
be required to indemnify Par with respect to any claim,
action, suit, proceeding, loss, liability, damage or expense
to the extent arising from or related to Par's breach of its
representations, warranties, covenants or other obligations
hereunder, or from information supplied by Par to Elan or
contained in regulatory filings or correspondence prepared or
delivered by Par.
11.6.2. Par shall indemnify and hold Elan harmless from and against
any claim, action, suit, proceeding, loss, liability, damage
or expense (without limitation reasonable attorneys' fees)
arising directly or indirectly as a result of Par's negligent
acts or omission or breach of its representations,
warranties, covenants or other obligations hereunder,
provided; however that Par shall not be required to indemnify
Elan with respect to any claim, action, suit, proceeding,
loss, liability, damage or expense to the extent arising from
or related to Elan's breach of its representations,
warranties, covenants or other obligations hereunder, or from
information supplied by Elan to Par or contained in
regulatory filings or correspondence prepared or delivered by
Elan.
11.7. With reference to Clause 2.2.4, Par shall indemnify and hold harmless
Elan to the extent that any claims, damages, liabilities, claims,
costs or expenses arise out of any such acts or omissions of any
sub-licensee.
11.8. As a condition of obtaining an indemnity in the circumstances set out
in Clauses 11.6 and/or 11.7, the Party seeking an indemnity shall:
11.8.1. fully and promptly notify the other Party of any claim or
proceedings, or threatened claim or proceedings, provided
that failure to do so shall not release the indemnifying
Party of its obligations under this Clause 11 except to the
extent that it is actually prejudiced;
11.8.2. permit the indemnifying Party to take full control of such
claim or proceedings;
11.8.3. assist in the investigation and defense of such claim or
proceedings;
11.8.4. neither the indemnifying Party or the Party to be indemnified
shall compromise or otherwise settle any such claim or
proceedings without the prior written consent of the other
Party, which consent shall not be unreasonably withheld; and
21
11.8.5. take all reasonable steps to mitigate any loss or liability
in respect of any such claim or proceedings.
11.9. This Clause 11 and the obligations contained herein shall survive
termination of this Agreement, whether pursuant to Clause 10 hereof,
by expiration of the Term, or otherwise.
11.10. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ELAN AND
PAR SHALL NOT BE LIABLE TO THE OTHER BY REASON OF ANY REPRESENTATION
OR WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR
UNDER THE EXPRESS TERMS OF THIS AGREEMENT, FOR ANY INDIRECT, SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS
OF PROFITS OR OTHERWISE) AND WHETHER OCCASIONED BY THE NEGLIGENCE OF
THE RESPECTIVE PARTIES, THEIR EMPLOYEES OR AGENTS OR OTHERWISE EXCEPT
FOR THIRD PARTY PRODUCT LIABILITY CLAIMS.
CLAUSE 12 - ADVERSE EVENTS, CUSTOMER COMPLAINTS, PRODUCT
RECALLS AND INSURANCE
12.1. Par shall notify Elan promptly of any reports from third parties
reported to Par involving any serious and unexpected adverse events
resulting from the use of the Product in the Territory. Elan shall
notify Par promptly of any reports from third parties reported to Elan
involving any serious and unexpected adverse events resulting from the
use of the Product outside of the Territory.
12.2. Par and Elan have established a procedure for formal adverse event
handling and reporting as set out in Schedule 3. This procedure shall
be reviewed by Elan and Par from time to time. It is envisaged that
Par shall be responsible for furnishing post-marketing reports to Elan
and where applicable, Elan will be responsible for furnishing such
reports to the FDA. Par and Elan shall keep each other informed and
shall copy the other Party with all communications with the FDA and
other relevant regulatory agencies with respect to the Product.
12.3. Par and Elan will establish a procedure for complaint handling and
reporting. It is envisaged that Par will have primary responsibility
for addressing complaints, however Elan will provide support in
addressing responses to technical queries as requested by Par. Par and
Elan shall keep each other informed and copy the other party with all
communications with the FDA and other relevant regulatory agencies
with respect to the Product.
12.4. Subject to and without in any way limiting or altering Elan's
statutory duties and obligations as the holder of the ANDA, Elan and
Par shall consult when reviewing whether or not to perform a recall of
Product and if so, the extent and method of such recall in the
Territory.
12.5. In the event of any recall of the Product, as suggested or requested
by any governmental authority:
22
12.5.1. Par shall perform the recall of the Product in the Territory;
12.5.2. if the recall arises from Par's acts or omissions in the
transportation, storage, distribution, marketing or sale of
the Product, the recall costs shall be borne by Par;
12.5.3. if the recall arises from Elan's acts or omissions in the
manufacturing and packaging of the Product, the recall costs
shall be borne by Elan. In such event, Elan shall be entitled
but not obliged to take over and perform the recall of the
Product and Par shall provide Elan at no cost with all such
reasonable assistance as may be required by Elan; and
12.5.4. if the recall arises from any other reason than set out
above, the recall costs shall be borne by Elan and Par in
proportion to the percentage of Profit allocated to the
Parties for such Product.
12.6. Par and Elan shall each maintain in force, during the term of this
Agreement, products liability insurance coverage in minimum limits of
$10,000,000 and, upon request, each Party shall furnish to the other a
Certificate of Insurance; provided, however to so request such
Certificate shall not be deemed a waiver to the Party's obligations
hereunder.
CLAUSE 13 - MISCELLANEOUS PROVISIONS
13.1. SECRECY:
-------
13.1.1. Any information, whether written or oral (oral information
shall be reduced to writing within one month by the Party
giving the oral information and the written form shall be
furnished to the other Party) pertaining to the Product that
has been or will be communicated or delivered by Elan to Par,
or by Par to Elan, including, without limitation, trade
secrets, business methods, and cost, supplier, manufacturing
and customer information, shall be treated by Par and Elan,
respectively, as confidential information, and shall not be
disclosed or revealed to any third party whatsoever or used
in any manner except as expressly provided for herein;
provided, however, that such confidential information shall
not be subject to the restrictions and prohibitions set forth
in this Clause to the extent that such confidential
information:
13.1.1.1. is available to the public in public literature or
otherwise, or after disclosure by one Party to the
other becomes public knowledge through no default of
the Party receiving such confidential information; or
13.1.1.2. was known to the Party receiving such confidential
information prior to the receipt of such confidential
information by such Party, whether received before or
after the date of this Agreement; or
23
13.1.1.3. is obtained by the Party receiving such confidential
information from a third party not subject to a
requirement of confidentiality with respect to such
confidential information; or
13.1.1.4. is required to be disclosed pursuant to: (A) any order
of a court having jurisdiction and power to order such
information to be released or made public; or (B) any
lawful action of a governmental or regulatory agency
provided that each Party shall notify the other in
writing of any disclosure of information required under
this sub-Clause prior to such disclosure, or
13.1.1.5. is independently discovered by the receiving Party
without the aid or application of the confidential
information.
13.1.2. Each Party shall take in relation to the confidential
information of the other Party all such precautions as it
normally takes with its own confidential information to
prevent any improper disclosure of such confidential
information to any third party; provided, however, that such
confidential information may be disclosed within the limits
required to obtain any authorization from the applicable FDA
or any governmental or regulatory agency or, with the prior
written consent of the other Party, which shall not be
unreasonably withheld, or as may otherwise be required in
connection with the purposes of this Agreement.
13.1.3. Each of the Parties agrees that it will not use, directly or
indirectly, any know-how of the other Party, or other
confidential information disclosed to it by the other Party
or obtained by it from the other Party pursuant to this
Agreement, other than as expressly provided herein.
13.1.4. Neither Party will publicize the existence of this Agreement
in any way without the prior written consent of the other
Party subject to the disclosure requirements of applicable
laws and regulations. In the event that either Party wishes
to make an announcement concerning the Agreement, that Party
will seek the consent of the other Party. The terms of any
such announcement shall be agreed in good faith but in any
event shall refer to the Product as having been developed and
manufactured by Elan.
13.2. ASSIGNMENTS/SUB-CONTRACTING:
---------------------------
Neither Party shall be permitted to assign or sub-license any of its
rights under this Agreement without the prior written consent of the
other; provided that Elan and Par may assign this Agreement to an
Affiliate without such consent provided that such assignment has no
adverse tax consequences for the other Party (which shall not include
consequences of an administrative nature only) and provided further
that such assigning Party is not relieved of its obligations
hereunder. Elan shall also have the right to subcontract all or any
portion of the manufacturing or packaging of one or more of the
Product to one or more third parties. Each Party shall be responsible
for the acts and/or omissions of its respective Affiliates and
subcontractors.
24
13.3. PARTIES BOUND:
-------------
This Agreement shall be binding upon and inure for the benefit of
Parties hereto, their successors and permitted assigns.
13.4. SEVERABILITY:
------------
If any provision in this Agreement is agreed by the Parties to be, or
is deemed to be, or becomes invalid, illegal, void or unenforceable
under any law that is applicable hereto:
13.4.1. such provision will be deemed amended to conform to
applicable laws so as to be valid and enforceable or, if it
cannot be so amended without materially altering the
intention of the Parties, it will be deleted, with effect
from the date of such agreement or such earlier date as the
Parties may agree; and
13.4.2. the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or
affected in any way.
13.5. FORCE MAJEURE:
-------------
Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results
from causes beyond its reasonable control, including, without
limitation, acts of God, fires, strikes, acts of war, or intervention
of a government authority, non-availability of raw materials, but any
such delay or failure shall be remedied by such Party as soon as
practicable.
13.6. RELATIONSHIP OF THE PARTIES:
---------------------------
Nothing contained in this Agreement is intended or is to be construed
to constitute Elan and Par as partners or members of a joint venture
or either Party as an employee of the other. Neither Party hereto
shall have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other Party
or to bind the other Party to any contract, agreement or undertaking
with any third party.
13.7. AMENDMENTS:
----------
No amendment, modification or addition hereto shall be effective or
binding on either Party unless set forth in writing and executed by a
duly authorized representative of both Parties.
13.8. WAIVER:
------
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged
with such waiver, and no waiver of any breach or failure to perform
shall be deemed to be a waiver of any future breach or failure to
perform or of any other right arising under this Agreement.
13.9. NO EFFECT ON OTHER AGREEMENTS:
-----------------------------
25
No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement
between the Parties unless specifically referred to, and solely to the
extent provided, in any such other agreement.
13.10. APPLICABLE LAW AND JURISDICTION:
-------------------------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of
conflicts of law. For the purpose of this Agreement the Parties agree
that any dispute shall be adjudicated upon and hereby submit to the
jurisdiction of the United States District Court for the Southern
District of the State of New York. Each Party consents to service of
process pursuant to the notice provisions of this Agreement.
13.11. NOTICE:
------
13.11.1. Any notice to be given under this Agreement shall be sent in
writing in English by registered airmail or telecopied to:
Elan at
Elan Transdermal Technologies, Inc.
3250 Commerce Parkway
Miramar
Florida 33025
United States of America
Attention: Vice-President & General Counsel,
Elan Pharmaceutical Technologies
Telephone: +l 954 430 3340
Telefax :+1954 430 3390
with a copy to
Lincoln House
Lincoln Place
Dublin 2
Ireland
Telephone: +353 1709 4000
Telefax: +353 1709 4124
Attention: Vice-President & General Counsel,
Elan Pharmaceutical Technologies
Par at
26
Par Pharmaceuticals
One Ram Ridge Road
Spring Valley, New York 10977
Attention: Office of the President
Fax: +1 845 425 7922
or to such other address(es) and telecopier numbers as may
from time to time be notified by either Party to the other
hereunder.
13.11.2. Any notice sent by registered air mail shall be deemed to
have been delivered within 7 working days after dispatch and
any notice sent by telex or telecopy shall be deemed to have
been delivered within 24 hours of the time of the dispatch.
Notice of change of address shall be effective upon receipt.
13.12 SET-OFF
------
Each of the Parties will be entitled but not obliged to set-off
against any amount of money payable to it by the other Party
hereunder, any amount of money payable by it to the other Party
hereunder.
IN WITNESS of which the Parties have executed this Agreement.
Executed by PAR on April 26, 2001
/s/ Kenneth I. Sawyer
By:____________________________
Name: Kenneth I. Sawyer
Title: Chairman & CEO
Executed by Elan on April 26, 2001
/s/ Larry Stenson
By:____________________________
Name: Larry Stenson
Title: Director
27