EXHIBIT 10.49
Dated 31st March, 1998
ELAN CORPORATION, plc
AND
SCHEIN PHARMACEUTICAL, INC.
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
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CONTENTS
CLAUSE 1 PRELIMINARY
CLAUSE 2 TUE LICENSE
CLAUSE 3 INTELLECTUAL PROPERTY
CLAUSE 4 SCHEIN COMPETING PRODUCTS
CLAUSE 5 DEVELOPMENT OF THE PRODUCT
CLAUSE 6 PROJECT TEAM AND PROJECT MANAGEMENT
CLAUSE 7 REGISTRATION OF THE PRODUCT
CLAUSE 8 MARKETING AND PROMOTION OF THE PRODUCT
CLAUSE 9 SUPPLY OF THE PRODUCT
CLAUSE 10 FINANCIAL PROVISIONS
CLAUSE 11 PAYMENTS, REPORTS AND AUDITS
CLAUSE 12 DURATION AND TERMINATION
CLAUSE 13 WARRANTY AND INDEMNITY
CLAUSE 14 CUSTOMER COMPLAINTS AND PRODUCT RECALL
CLAUSE 15 MISCELLANEOUS PROVISIONS
CLAUSE 16 CONDITIONS
SCHEDULE 1 NORMAL DOSAGE FORM
SCHEDULE 4 PRODUCT SPECIFICATIONS
SCHEDULE 5 THE PROJECT
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THIS AGREEMENT is made on 31st March, 1998.
BETWEEN:
- -------
(1) ELAN CORPORATION PLC, a company incorporated in Ireland having its
registered office at Lincoln House, Lincoln Place, Dublin 2, Ireland
(ELAN); and
(2) SCHEIN PHARMACEUTICAL, INC., a company organized under the laws of
Delaware, with offices at 100 Campus Drive, Florham Park, New Jersey,
United States of America (SCHEIN).
RECITALS:
- --------
A. ELAN is beneficially entitled to the use of various patents, including the
ELAN PATENT RIGHTS,which have been granted or are pending under the
international Convention 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. SCHEIN wishes to have ELAN develope A Rated (as defined) equivalent PRODUCTS
of the NORMAL DOSAGE FORMS and ELAN is willing to use its technology to do
so.
D. ELAN is prepared to develope the PRODUCTS for SCHEIN; to grant SCHEIN an
exclusive license of the ELAN PATENT RIGHTS and ELAN KNOW-HOW to package,
import, use, offer for sale and sell the PRODUCTS in the TERRITORY and to
supply the PRODUCTS to SCHEIN.
E. ELAN and SCHEIN are desirous of entering into an agreement to give effect to
the arrangements described at Recitals C and D.
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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A RATED 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 SCHEIN, 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.
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.
DATE OF FIRST COMMERCIAL SALE shall mean on a PRODUCT BY PRODUCT basis the first
sale under this Agreement in an arm's length transaction to an independent third
party. SCHEIN will provide ELAN with written notice of such date on a PRODUCT by
PRODUCT basis.
DMF shall mean Drug Master File, as defined in the CFR.
DSDF shall mean one or more of the transdermal and solid drug specific dosage
forms which ELAN shall develop or shall have developed in the course of the
PROJECT being A-Rated, or such other dosage forms that may be agreed in writing
by the Parties equivalent to the NORMAL DOSAGE FORMS and to meet the PRODUCT
SPECIFICATIONS.
EFFECTIVE DATE shall mean 31st MARCH 1998.
ELAN shall mean ELAN Corporation, plc and any of its AFFILIATES, including Sano
Corporation.
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 SCHEIN relating to the
PRODUCTS, or to be developed by ELAN pursuant to the PROJECT, whether or not
covered by any patent, copyright, design patent, trademark, trade secret or
other industrial or any intellectual property rights.
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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 DSDF 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 SCHEIN hereunder.
ELAN PATENT RIGHTS shall mean all patents and patent applications listed in
Schedule 2 as said schedule may be amended from time to time by mutual written
agreement. For the avoidance of doubt, the parties acknowledge that there are no
ELAN PATENT RIGHTS at the Effective Date, but that ELAN PATENT RIGHTS shall
include patents and patent applications emanating from anything developed by
ELAN pursuant to the PROJECT. ELAN PATENT RIGHTS shall also include all
continuations, continuations-in-part, divisionals, and any patents issuing
thereon, and re-issues or re-examinations of such patents and extensions of any
patents licensed hereunder. Extensions of patents shall include extensions under
the U.S. Patent Term Restoration Act.
In the event that ELAN acquires or merges with a third party entity, ELAN PATENT
RIGHTS shall not include any patent rights to the extent that such patent rights
relate to a product containing the same active ingredient as the DSDFS 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 PATENT RIGHTS granted to SCHEIN hereunder.
FDA shall mean the United States Food and Drug Administration or any other
successor agency whose approval is necessary to market the PRODUCTS in the
TERRITORY.
FDA APPROVAL shall mean the final approval to market the PRODUCTS in the
TERRITORY, including post approval validation and scale up inspection and any
other approval which is required to launch the PRODUCTS in the normal course of
business.
FOB shall have the meaning set forth in the State of New York Uniform Commercial
Code as amended.
INITIAL PERIOD shall mean the initial period of this Agreement, as more fully
described in Clause 12.
IN MARKET shall mean the sale of the PRODUCT in the Territory by SCHEIN or its
AFFILIATES, or where applicable by a permitted sub-licensee, to an unaffiliated
third party, including but not limited to a wholesaler, chain store,
distributor, managed care organization, hospital or pharmacy.
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LAUNCH STOCKS shall mean the quantities of stocks of the PRODUCT required by
SCHEIN to support the commercial introduction of the Product following FDA
Approval.
NORMAL DOSAGE FORM shall mean one or more of the brand name products set forth
in Schedule 1 used as reference products for the PROJECTS, as maybe amended by
mutual written agreement or as otherwise contemplated by this Agreement.
MARKETING COMMITTEE shall have the meaning set forth in Clause 8. 1.
NET SALES PRICE ("NSP") shall mean in the case of PRODUCT sold by SCHEIN or an
AFFILIATE, that sum determined by deducting from the aggregate gross IN MARKET
sales proceeds billed for the PRODUCT by SCHEIN or its AFFILIATE, as the case
may be, the following deductions:
(a) ordinary course trade, quantity and cash discounts, credits and allowances
(including inventory and price protection, chargebacks, volume
reimbursements, Medicaid rebates), contract administration fees, if any
incurred or granted;
(b) marketing, selling and distribution expenses prorated as to the fraction of
the PRODUCTS' sales relative to total generic SCHEIN sales, subject to a cap
of ** of the sum of the aggregate gross IN MARKET sales proceeds less the
deductible items at (a) above;
(c) dedicated direct marketing expenses for each PRODUCT associated with
activities to ******** *********** ************ ******* ***** ******** ****
*** **** ****** *********** ***** **** *** ****** ****** **** ** ***** ***
******** ***** ****** *********** ** *** *********** ******* ** ** ** ***
*** ** ********* ***** ** ****** ***** ******** **** *** ********** ***** **
*** Such marketing programs will be developed in consultation with the
Marketing Committee.
PATENT DETERMINATION PERIOD shall mean on a PRODUCT by PRODUCT basis the period
of time from the EFFECTIVE DATE until such time that Schein makes a PATENT
DETERMINATION in accordance with Clause 3.2.
PRODUCT shall mean one or more of the DSDF packaged and labeled for sale in the
TERRITORY.
PIVOTAL BIO PK STUDY shall mean a pivotal 1 pharmacokinetic bio-equivalency
study in support of a REGULATORY FILING for a PRODUCT in accordance with FDA
requirements and guidelines.
PRODUCT MANUFACTURING COST shall mean the fully allocated cost which is the sum
total of all production related costs for the Product (direct labor, direct
materials, facility overhead and expenses which can be allocated to the PRODUCT,
QA/QC and
* redacted pursuant to confidential treatment request
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analytical charges, packaging and regulatory compliance costs for the Product
including, but not limited to, stability and FDA fees in accordance with United
States General Accepted Accounting Principles).
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 NSP less PRODUCT MANUFACTURING COST.
PROJECT(S) shall mean all activity in order to develop each of the PRODUCTS,
including activities in accordance with the plan to be attached for each of the
PRODUCTS (other than *************** ***********) in SCHEDULE 3 within ninety
(90) days of the EFFECTIVE DATE.
PROJECT TEAM shall mean the group to be established pursuant to Clause 6.
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.
SCHEIN shall mean SCHEIN Pharmaceutical, Inc. and shall include the following
AFFILIATES: Danbury Pharmacal, Inc., Marsarn Pharmaceuticals Inc., Steris
Laboratories, Inc. and Schein Pharmaceutical (Bermuda) Ltd.
SCHEIN TRADEMARK shall mean the trademark(s) of SCHEIN to be applied to the
PRODUCT.
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 $100 million, in the case of a publicly-held
company, or $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.
$ shall mean United States Dollars.
"US" or "USA" shall mean the United States of America.
* redacted pursuant to confidential treatment request
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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 LICENSE
2.1 License to SCHEIN:
-----------------
2.1. Subject to the terms of this Agreement, ELAN hereby grants to SCHEIN
and SCHEIN hereby accepts for the term of this Agreement an exclusive
license of the ELAN PATENT RIGHTS and the ELAN KNOW-HOW to package,
import, use, offer for sale and sell the PRODUCTS in the TERRITORY.
2.2. ELAN shall possess all rights including, without limitation, the right
to research, develop, experiment with, manufacture, sell, license or
otherwise market the PRODUCTS outside the TERRITORY.
2.3 ELAN shall neither, directly or indirectly, solicit customers for the
PRODUCTS, or make sales of the PRODUCTS, or establish or maintain in
the TERRITORY any branch or distribution depot for the sale or
marketing of the PRODUCTS in the TERRITORY, or assist any party in
doing so. Subject to one agreement which is in existence as of the
EFFECTIVE DATE, in all agreements between ELAN and its customers, ELAN
shall use its reasonable endeavors to require such customers to
represent, warrant and covenant that such customers shall not directly
or indirectly use, market, sell or distribute the PRODUCTS in the
TERRITORY, or assist any other party to do so, and (ii) at such time as
ELAN learns that such customer is directly or indirectly using,
marketing, selling or distributing a Product in the TERRITORY, or that
such customer is assisting any other party to do so, then ELAN shall
immediately notify SCHEIN in writing of such occurrence and immediately
cease supplying the PRODUCTS to such customer.
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CLAUSE 3 - INTELLECTUAL PROPERTY
3. 1. Ownership of ELAN PATENT RIGHTS/KNOW-HOW:
3.1.1 ELAN shall remain the sole owner of the ELAN PATENT RIGHTS and
ELAN KNOW-HOW, whether developed pursuant to the PROJECT or
otherwise.
3.1.2 ELAN shall be entitled to use the ELAN PATENT RIGHTS and ELAN
KNOWHOW, and all technical and clinical data whether generated by
ELAN or SCHEIN pursuant to this Agreement in connection with
ELAN's other commercial arrangements outside the TERRITORY. If
Elan utilizes the PIVOTAL BIO PK STUDIES funded by Schein, then
Elan shall pay to Schein a fee calculated as follows: the product
obtained by multiplying (i) a fraction the numerator of which
shall be the market sales in the country in question as reported
by IMS or similar source, and the denominator of which shall be
the US market sales as reported by IMS or similar source, times
(ii) the expense of the PIVOTAL BIO PK STUDY; provided that such
aggregate amount shall not exceed $200,000.
3.2. Patent Strategy/Patent Determination
------------------------------------
In an effort to provide Schein sufficient time to conduct patent due diligence
with respect to the Products as initially set forth on Schedule 1, the parties
agree that:
3.2.1 Upon execution of an appropriate Confidentiality Agreement,
Schein's outside independent patent counsel shall have adequate
access to all technical information currently available on each of
the Products and to enlist the co-operation of Elan's and Sano's
outside patent counsel who have conducted an infringement/validity
study concerning one or more of the Products with respect to any
third party patents for the purpose of expediting Schein's due
diligence review;
3.2.2 Schein shall report to Elan Schein's decision that Schein believes
the risk of an infringement concerning each Product is or is not
acceptable within a period of not more than 150 days from the
Effective Date of the Agreement; however, Elan and Schein shall
prioritize the order in which the Products are to be reviewed;
3.2.3 If Schein reports that the risk of infringement is unacceptable,
Schein will commission validity studies of the relevant patents to
determine if such patent can be invalidated or rendered
unenforceable and/or, in cooperation with Elan's technical staff,
work to attempt to develop a non-infringing process or
formulation;
3.2.4 If it is determined to Schein's reasonable satisfaction that the
relevant patent (on a Product-by-Product basis) is invalid or
unenforceable, or if Schein believes the risk of infringement is
acceptable, the Product will move forward for further development.
All such decisions will be finalized no later than 150 days from
the Effective Date. The
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failure by Schein to accept or reject the Products by this time
shall cause the Products to be deemed accepted by Schein;
3.2.5 If in Schein's reasonable, independent judgement, the risk of
infringement is unacceptable and the validity study does not
reasonably satisfy Schein that the relevant patent is invalid or
unenforceable and/or the process cannot be re-formulated to be
non-infringing, then the Product in question shall be deemed a
"Patent Determination" In the event of such Patent Determination,
such Product in question shall cease to be deemed a Product for
the purpose of this Agreement;
3.2.6 For each Patent Determination Product, the parties shall mutually
choose a replacement Product which is of approximately equal
market value from those within the capabilities of Elan;
3.2.7 Schein shall be entitled to select one replacement Product for
each of the initial **** Products set forth on Schedule I for
which a Patent Determination arises. This is separate from and not
in place of any "Failure" under Clause 10.3.
3.3. INFRINGEMENTS
--------------
3.3.1. SCHEIN and ELAN shall promptly inform the other in writing of any
alleged infringement of which it shall become aware by the
PRODUCTS of a third party's patent rights ("Defense Infringement")
or of any alleged infringement by a third party of any patents
within the ELAN PATENT RIGHTS ("Enforcement Infringement"). The
Party with such knowledge shall provide the other Party with any
available evidence of alleged infringement.
3.3.2. In the event of any alleged Defense Infringement, ELAN and SCHEIN
shall ***** ******* *** **** ** *** ****** ******. If such third
party institutes proceedings against SCHEIN and/or ELAN jointly or
separately, the Parties shall ***** ******* *** **********
******** 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. and ***** **** ***** *** ********* to one
or more third parties for patent infringement (including a court
order for a lump sum, ongoing royalties or a settlement).
3.3.3. Where the primary issues in the Defense Infringement litigation
concerns the alleged infringement of the process for the
manufacture of the bulk active or compound patents of the active
ingredient for the PRODUCT, SCHEIN shall have principal
responsibility for the direction of all patent litigation
activities including the selection of counsel and will consult
with ELAN on an ongoing basis. SCHEIN shall have due regard to
ELAN's commercial interests and shall not conclude a settlement or
consent to any court order without the prior written consent of
ELAN, not to be unreasonably withheld or delayed.
* redacted pursuant to confidential treatment request
Page 10 of 43
3.3.4. Where the primary issues in the Defense Infringement litigation
concerns the alleged infringement of a third party's galenical
formulation or galenical patent rights or know how (including the
method or process of manufacturing the PRODUCT), ELAN shall have
principal responsibility for the direction of all patent
litigation activities including the selection of counsel and will
consult with SCHEIN on an ongoing basis. ELAN shall have due
regard to SCHEIN's commercial interests and shall not conclude a
settlement or consent to any court order without the prior written
consent of SCHEIN, not to be unreasonably withheld or delayed.
3.3.5. Where the primary issues in the Defense Infringement litigation
are outside the provisions of Clause 3.3.4. or Clause 3.3.5,
SCHEIN and ELAN shall meet to discuss in what manner the said
Defense Infringement proceedings should be defended having due
regard for the Parties' respective legal and commercial interests.
3.3.6. In the event of any alleged Enforcement Infringement, ELAN and
SCHEIN may decide to institute enforcement proceedings in their
joint names and shall share equally the proceeds of any such
proceedings, and the expense of any costs not recovered, or the
costs or damages payable to the third party. In the event that
either Party decides in writing that it does not wish to institute
such enforcement proceedings, the other Party may at its option
elect to institute proceedings to pursue the alleged Enforcement
Infringement at its own cost and shall retain the proceeds of any
such proceedings and shall bear liability for the costs or damages
payable to the third party. The non litigating Party shall co-
operate with the other party.
3.3.7. Each Party shall provide all reasonable 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 SCHEIN in providing such PRODUCT
technical expertise shall be included in the total patent
expenses, in accordance with Section 3.3.2.
3.4 Trademarks
----------
3.4.1 SCHEIN may market, sell and/or distribute the PRODUCTS under any
trademark or trademarks as SCHEIN or its customers may from time
to time select. Such trademarks shall remain the sole property of
SCHEIN or its customers as the case may be, and ELAN shall not use
any such trademark(s) whether during the INITIAL PERIOD or
thereafter, without the prior written consent of SCHEIN.
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3.4.2. For the term of this Agreement Schein shall grant Elan a royalty-
free license to the applicable Schein Trademarks solely to enable
Elan to fulfill its obligation pursuant to the terms of this
Agreement.
CLAUSE 4 - COMPETING PRODUCTS
4.1 Subject to the following paragraph, SCHEIN shall not develop, market or
sell any solid or transdermal formulations for prescription use which are
A Rated to the NORMAL DOSAGE FORMS other than the PRODUCTS ("SCHEIN
COMPETING PRODUCT") in the TERRITORY during the term of the Agreement (or
for one year after the termination of this Agreement if the Agreement is
terminated due to Schein's default of its obligations hereunder beyond any
applicable cure period.)
4.2 SCHEIN has disclosed to ELAN the fact that SCHEIN has contracted with a
third party for the development ** ** ********* *********** ** ** ****
********** ** ******** **** **********. In the event that SCHEIN notifies
Elan in writing that it wishes to proceed with the commercialization of
the said product and not the PRODUCT to be developed by ELAN, Elan shall
be entitled to terminate this Agreement as regards the said Product. In
such event the parties shall negotiate in good faith such provisions as
are appropriate with respect to the Product.
4.3 For the duration of the Agreement, ELAN shall not itself or through a
third party sell in the TERRITORY nor shall ELAN license another party in
the TERRITORY any other solid or transdermal formulations for prescription
use which are A Rated to the NORMAL DOSAGE FORMS ("ELAN COMPETING
PRODUCT"). For the avoidance of doubt the parties agree that the foregoing
provision shall not apply to a combination product of which the active
ingredient for the PRODUCT is only one of two or more active ingredients.
For the avoidance of doubt, with reference to the definition of ELAN
PATENT RIGHTS and ELAN KNOW-HOW in Clause 1, in the event that ELAN
acquires or merges with a third party entity, this provision shall have no
application to any 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.
CLAUSE 5 - DEVELOPMENT OF THE PRODUCT
5.1 ELAN shall use its reasonable efforts to successfully complete the
development program on a timely basis in accordance with the PROJECT.
5.2 ELAN and SCHEIN shall undertake their respective obligations under the
PROJECT on a collaborative basis. Accordingly, the Parties shall co-
operate in good faith particularly with
* redacted pursuant to confidential treatment request
Page 12 of 43
respect to unknown problems or contingencies and shall perform their
respective obligations in good faith and in a commercially reasonable,
diligent and workmanlike manner.
5.3 If requested to do so by ELAN, SCHEIN may at its discretion provide
technical, scientific, regulatory and clinical assistance to ELAN, at
SCHEIN's own cost, during the PROJECT
5.4. ELAN shall conduct the PIVOTAL BIO PK STUDY which may be required in
accordance with the PROJECT for each PRODUCT;
5.4.1 the design and cost of such studies and associated analytical
testing shall be agreed with SCHEIN prior to commencement of each
such study and shall be designed to meet then current FDA
guidelines and requirements for such PRODUCT;
5.4.2. ELAN shall furnish a full and detailed report to SCHEIN on the
results of all such PIVOTAL BIO PK STUDIES;
5.4.3. the Parties agree that in the event that ELAN plans to conduct the
PIVOTAL BIO PK STUDY at its own facility, then ELAN shall obtain a
competitive quote for said PIVOTAL BIO PK STUDY from a third party
who shall be reasonably acceptable to SCHEIN and ELAN's charges for
such PIVOTAL BIO PK STUDY shall be the lower of the quoted costs
and payment for such studies shall be made to ELAN by SCHEIN upon
receipt by Schein of a relevant invoice therefor;
5.4.4. ELAN undertakes that it shall carry out all such pharmacokinetic
studies to prevailing cGCP and cGLP and most specifically in
accordance with the applicable FDA standards and guidelines;
5.6 Pursuant to the PROJECT, ELAN shall use its reasonable endeavors to
develop the dosage strengths of each of the PRODUCTS for commercial sale
as set forth in SCHEDULE 1.
5.7 In the event that SCHEIN wishes to have more than the number of unit
dosage strengths of each of the PRODUCTS developed pursuant to this
Agreement, the Parties shall negotiate in good faith as to the additional
costs to be paid to ELAN for such development and such amendments as are
required to the PROJECT.
5.8 By mutual agreement the parties may pursue, alternate to an ANDA,
regulatory strategies such as NDAs, 505(b)(2) filings or such other
options as may be made available by FDA.
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CLAUSE 6 - PROJECT TEAM AND PROJECT MANAGEMENT
6.1 It is recognized by the Parties that a significant resource shall be
required from each party to accomplish successful FDA APPROVAL in the
TERRITORY and launch of the PRODUCT, particularly in the co-ordination of
logistics, finalization of various specifications, preparation and
agreement of ELAN's clinical study designs and protocols, methodologies
transfer, supply and packaging configurations, shipping and handling
procedures etc. and for this purpose, the Parties will establish a PROJECT
TEAM.
6.2 The PROJECT TEAM shall include a project manager from each Party who shall
act as liaison between the Parties and who shall co-ordinate development
efforts. The PROJECT TEAM shall contain additional business and
development personnel from each Party who are appropriately skilled and
knowledgeable in relation to the PROJECT and who are deemed necessary to
accomplish the work of the PROJECT.
6.3 Unless otherwise agreed by the Parties, the PROJECT TEAM shall meet at
least once each calendar quarter, such meetings to continue until the time
of launch or such later time as may be agreed. The PROJECT TEAM shall meet
alternately at the offices of ELAN and SCHEIN or as otherwise agreed by
the Parties. Each Party shall bear the cost of its own travel expenses.
Meetings shall be chaired alternatively by the project managers of the
Parties. The project managers shall monitor progress against milestones
and shall recommend corrective action when needed. At and between meetings
of the PROJECT TEAM, each Party shall keep the other fully and regularly
informed as to its progress with its respective obligations.
6.4 In the event of a dispute between the project managers of each Party, the
project managers shall refer the dispute to the President of ELAN
Pharmaceutical Technologies and the Schein Senior Vice President of
Strategic Development, who shall discuss the matter and attempt to reach
an amicable solution. In the event that the foregoing officers cannot
resolve the dispute amicably, the said officers shall refer the dispute to
the Chairmen of SCHEIN and ELAN who shall discuss the matter and attempt
to reach an amicable solution. The provisions of this Clause 6.4 shall be
without prejudice to the Parties' other rights and remedies.
CLAUSE 7 - REGISTRATION OF THE PRODUCT
7.1 The primary objectives of the PROJECT are to generate the REGULATORY
FILING and to secure FDA APPROVAL. ELAN shall be responsible for the
compilation and filing of the REGULATORY FILING in respect of the PRODUCTS
with the FDA and shall be the holder of any FDA APPROVALS granted for the
PRODUCTS and the Party principally responsible for interaction with the
FDA.
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7.2 The Parties recognize the expertise developed by SCHEIN in prosecuting
ANDAs in the TERRITORY as well as the proprietary and confidential nature
of ELAN'S PATENT RIGHTS and ELAN KNOW HOW which shall be contained in the
Regulatory Filing. Having regard to the foregoing criteria the Parties
hereby confirm their intention and desire to collaborate and co-operate so
as to obtain FDA APPROVAL for the PRODUCTS in a timely fashion. ELAN shall
consult with SCHEIN during the preparation of the REGULATORY FILING and
shall allow SCHEIN an opportunity to review all of the sections of the
ANDA, except the confidential portions of the CMC SECTION relating to
formulation and manufacturing processes. Prior to submitting the
REGULATORY FILING to the FDA. ELAN shall consider any amendments to the
REGULATORY FILING which may be suggested by SCHEIN but ELAN shall at its
sole discretion decided on the ultimate content of the REGULATORY FILING.
7.3 ELAN shall notify SCHEIN of the date of submission of any REGULATORY
FILING for the PRODUCT in the TERRITORY and shall also notify SCHEIN in
writing of the FDA APPROVAL as soon as is reasonably possible following
said FDA APPROVAL. Each Party shall notify the other in writing as soon as
possible of any notification received by that Party from the FDA to
conduct an inspection of its manufacturing, clinical or other facilities
used in the development, clinical testing (if ELAN conducts the PIVOTAL
BIO STUDIES) packaging, storage or handling of the DSDF and/or the
PRODUCT. Copies of all correspondence with the FDA with respect to the
Product 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 furnish SCHEIN with copies of daily management
reports or summaries prepared in connection with an audit or inspection by
the FDA relating to one or more of the PRODUCTS to the extent that such
reports or summaries are prepared for internal management of ELAN.
7.4 If any additional information or clinical data are requested by the FDA in
order to obtain approval of the REGULATORY FILING in the TERRITORY, ELAN
and SCHEIN shall discuss and agree on an appropriate plan of action to
generate such data.
7.5 ELAN shall be responsible for obtaining all FDA and other approvals
necessary for ELAN to package the PRODUCT into final marketing packaging.
SCHEIN shall be responsible for obtaining all applicable state and local
regulatory approvals for the distribution of the PRODUCTS in the
TERRITORY. SCHEIN shall co-operate with ELAN in obtaining such approvals.
To the extent that SCHEIN packages the *** *** PRODUCT, SCHEIN shall be
responsible for obtaining all FDA and other approvals necessary for SCHEIN
to package the PRODUCT into final marketing packaging, and to provide Elan
with the appropriate documentation relating to the packaging section of
the Products's Regulatory Filing. The commercial stability program will be
the responsibility of Elan.
* redacted pursuant to confidential treatment request
Page 15 of 43
7.6 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 involved in undertaking
the form of commercial collaboration outlined in this Agreement.
CLAUSE 8 - MARKETING AND PROMOTION OF THE PRODUCT
8.1 No later than 30th June 1998, 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 SCHEIN's efforts at marketing and
selling the PRODUCTS. Within 90 days of the REGULATORY FILING in the
TERRITORY with respect to a Product, SCHEIN will outline to ELAN the
structure of the promotional activities to be carried out by SCHEIN for
the period up to the First Commercial Sale of the PRODUCT and for a period
of 1 year thereafter. SCHEIN shall both prior to and subsequent to the
launch of a PRODUCT communicate with ELAN regarding its objectives for and
performance of such PRODUCT in the TERRITORY. At such meetings, SCHEIN
shall report on the ongoing sales performance of the PRODUCTS 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 PRODUCTS
and its plans for the next year of the Agreement. In addition the
MARKETING COMMITTEE shall review the quarterly royalty statements and in
particular the deductible items (c)and (d) listed in the definition of
NSP.
8.2 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 alternately on an annual basis.
The MARKETING COMMITTEE shall meet at the offices of ELAN and SCHEIN or as
otherwise agreed by the Parties. Each Party shall bear the cost of its own
travel expenses.
8.3 SCHEIN shall control and shall be responsible for all decisions regarding
the pricing policies and strategies with respect to the marketing and
sales of the Products. SCHEIN 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 such submissions. SCHEIN shall use reasonable
efforts to obtain approval by the FDA of the promotional campaign for the
PRODUCT.
8.4 SCHEIN 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.
Page 16 of 43
8.5 SCHEIN shall submit layout and designs for all trade packaging, cartons
and labels and other printed materials to ELAN 6 months prior to First
Commercial Sale of a 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 SCHEIN's commercial requirements.
8.6. The party responsible for packaging the PRODUCT shall mark or have marked
all patent number(s) in respect of the ELAN PATENT RIGHTS 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 ELAN PATENT RIGHTS for the TERRITORY in
such a manner as to ensure compliance with, and enforceability under,
applicable laws in the TERRITORY.
8.7 SCHEIN shall effect the first full scale commercial launch of each PRODUCT
in the TERRITORY after FDA APPROVAL within thirty (30) days of the
receipt of the LAUNCH STOCKS of the PRODUCT; provided that if litigation
is pending at the time that the FDA APPROVAL is obtained, the Parties
shall mutually agree whether to launch the PRODUCT or withhold the PRODUCT
from launch. The Parties shall maintain under active review whether and
when to launch such PRODUCT.
8.8 SCHEIN warrants that it shall not use any of the PRODUCTS as "loss
leaders" in its marketing programs and shall at all times use its
reasonable efforts in marketing the PRODUCTS.
CLAUSE 9 - SUPPLY OF THE PRODUCT
9.1 Save as otherwise provided in this Agreement, ELAN shall produce and
supply to SCHEIN 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 SCHEIN in the TERRITORY. SCHEIN shall purchase the
PRODUCT exclusively from ELAN in the TERRITORY unless on a PRODUCT by
PRODUCT basis, there is a failure on the part of ELAN to supply PRODUCT as
set out in Clause 9.15.
9.2 The PRODUCT to be supplied to SCHEIN by ELAN shall be packaged in the
galenical form to be agreed by the Parties during the PROJECT and
complying with the PRODUCT SPECIFICATIONS. ELAN shall deliver the PRODUCT
to SCHEIN and/or any party designated by SCHEIN in proper packaging so as
to permit safe storage and transport. The Parties shall agree whether the
*** PRODUCT is to be supplied by ELAN in bulk or final market packaged
form. If in bulk form, SCHEIN shall be responsible for the packaging of
the *** PRODUCT into final market packaging.
* redacted pursuant to confidential treatment request
Page 17 of 43
9.3 PRODUCT shall be manufactured by ELAN in FDA approved manufacturing
facilities containing active ingredients listed in the DMF from FDA
approved facilities. ELAN shall conduct stability studies to support the
shipping container used in the case of bulk PRODUCT and post market
stability to support PRODUCTS packaged at ELAN.
9.4 Within 120 days following the submission of the REGULATORY FILING to the
FDA, SCHEIN shall provide ELAN with a forecast of SCHEIN requirements for
the PRODUCT for the 18 month period following the first anticipated FDA
APPROVAL in the TERRITORY. The said forecast will be updated quarterly
until the FDA APPROVAL for the said PRODUCT. Except as otherwise provided
herein, all forecasts made hereunder shall be made to assist ELAN in
planning its production and SCHEIN in planning marketing and sales. Such
forecasts shall not be binding purchase orders, and shall be without
prejudice to SCHEIN's subsequent firm purchase orders for the PRODUCT in
accordance with the terms of this Agreement.
9.5 In advance of FDA APPROVAL, the Parties shall discuss and agree upon the
manufacture and purchase of specific quantities of LAUNCH STOCKS;
however, for the avoidance of doubt, the Parties hereby confirm that
ELAN's manufacturing obligations shall only arise on receipt of firm
purchase orders.
9.6 ELAN shall deliver the PRODUCT to SCHEIN within 120 days of the receipt of
a firm purchase order therefore (150 days in the caseSTOCKS). In any event
and notwithstanding any firm purchase orders for LAUNCH STOCKS which
SCHEIN has already placed with ELAN, ELAN will notify SCHEIN within 5
working days of its receipt of an approval letter, or a pre-approval
letter for in respect of a REGULATORY FILING from an FDA. SCHEIN shall
within 15 days of such notification place a firm purchase order with ELAN
for LAUNCH STOCKS, unless such a purchase order has already been submitted
to ELAN prior to that date. In addition, SCHEIN will provide forecasts for
deliveries in addition to the LAUNCH STOCKS for the 12 months after the
FDA APPROVAL is obtained.
9.7 On a PRODUCT by PRODUCT basis, within 15 days after the FDA APPROVAL in
the TERRITORY and on or before the 23rd day of each calendar quarter
thereafter, SCHEIN shall provide a rolling 4 quarter forecast for the
period beginning on the first day of the relevant calendar quarter. The
first calendar quarter of such 12 months' forecast shall be a binding
purchase commitment of SCHEIN and shall be formalized by a firm purchase
order from SCHEIN to ELAN. The remaining non-binding 3 calendar quarters
are provided by SCHEIN to ELAN for planning purposes only.
9.8 ELAN shall make appropriate manufacturing arrangements in order to be able
to supply SCHEIN with between 80% and 120% of the rolling annual
forecasted requirements provided by SCHEIN for each PRODUCT.
Page 18 of 43
9.9 ELAN will use its reasonable efforts to fulfill SCHEIN'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.
9.10 Elan Shall advise Schein of a minimum batch size for the manufacture and
supply of each dosage strength of PRODUCT.
9.11 Save as otherwise agreed between the Parties, delivery of consignments of
PRODUCT shall be effected by ELAN FOB ******** *******, or such other
manufacturing facility(ies) designated by ELAN and all risks therein shall
pass to SCHEIN when each such consignment of the PRODUCT is loaded onto
the vehicle of SCHEIN's agent on which it is to be dispatched from the
manufacturing facility designated by ELAN. SCHEIN shall fully insure or
procure the insurance of all consignments of the PRODUCT from the time
when risk passes as aforesaid and shall produce the supporting insurance
when requested by ELAN. At SCHEIN's cost, ELAN shall arrange for delivery
of consignments of PRODUCT to SCHEIN's distribution centers in Brewster,
New York or Phoenix, Arizona or such other site as may be specified from
time to time in writing by SCHEIN.
9.12 After receipt of a PRODUCT shipment, SCHEIN 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 SCHEIN'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 Schein with a copy of a fully executed Certificate of Analysis for
each batch of Product shipped to Schein. All claims for failure of any
delivery of the PRODUCT to conform to PRODUCT SPECIFICATIONS under Clause
13 shall be made by SCHEIN to ELAN in 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 SCHEIN to ELAN in writing within 30
days of discovery. Failure to make timely claims in the manner prescribed
shall constitute acceptance of the delivery.
9.13 PRODUCT which has been delivered and which SCHEIN notifies ELAN within the
period designated in Clause 9.12 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 SCHEIN.
9.14 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
* redacted pursuant to confidential treatment request
Page 19 of 43
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 SCHEIN, SCHEIN
shall promptly pay ELAN for the additional PRODUCT supplied.
9.15. On a PRODUCT by PRODUCT basis, in the event that ELAN obtains FDA APPROVAL
for the PRODUCT, and ELAN is unable to supply the LAUNCH STOCKS (as
ordered by SCHEIN in accordance with the provisions of the Agreement) for
a period of more than 180 days from the date of receipt of FDA APPROVAL
for such PRODUCT, ELAN shall use reasonable endeavors to appoint a third
party to manufacture the PRODUCT. In the event that ELAN is successful in
appointing such a third party, ELAN shall invoice SCHEIN at ELAN's
projected manufacturing cost and shall bear any additional costs payable
to the third party. In the event that ELAN or a third party is not in a
position to supply the PRODUCT at the end of the foregoing 180 day period,
SCHEIN may at its option terminate the Agreement in respect of the
relevant PRODUCT in which case the sums paid by SCHEIN to ELAN in respect
of the research and development of the PRODUCT and the pivotal bio studies
shall be credited against the royalties payable by SCHEIN to ELAN in
relation to the other PRODUCTS.
9.16 If at any time during the INITIAL PERIOD, ELAN is or expects that it will
be unable to satisfy SCHEIN's requirements for a PRODUCT as ordered by
SCHEIN in accordance with the terms of the Agreement, in full or in part,
ELAN shall promptly notify SCHEIN, detailing the extent to which it will
not meet such requirements. On a PRODUCT by PRODUCT basis, if there is a
failure by ELAN to supply PRODUCT (other than LAUNCH STOCKS) ELAN shall
use its reasonable endeavors to appoint a third party to manufacture the
PRODUCT. In the event that ELAN is successful in appointing such a third
party, ELAN shall invoice SCHEIN ** ****** ********* ************* ****
*** ***** **** *** ********** ***** ******* ** *** ***** ****** In the
event that ELAN or a third party is not in a position to supply the
PRODUCT and SCHEIN is out of stock for a period of three months SCHEIN may
at its option either terminate the Agreement in respect of the relevant
PRODUCT, or source such PRODUCT elsewhere during the period of supply
interruption by ELAN to ensure that market share position can be
maintained. SCHEIN shall make reasonable efforts to minimize purchases of
such PRODUCT from third parties during the period of supply interruption.
In such event and for the duration of third party supply, **** ***** ***
** ******** ** *** ********** ** *** ****** ******** ** ****** ** ****
********
9.17 When ELAN has remedied the cause of its failure to satisfy SCHEIN's
requirements and is once again able to fulfill its obligations to supply
the PRODUCT, SCHEIN shall cease sourcing the PRODUCT from a third party
and shall resume purchasing the PRODUCT exclusively from ELAN pursuant to
the terms of this Agreement. SCHEIN shall be entitled to sell the PRODUCT
on hand which has been manufactured by the third party. ** ****** *****
***** ** *** ** **** *** ******* ******* **** ***** ********
* redacted pursuant to confidential treatment request
Page 20 of 43
9.18 ELAN will grant to ELAN Pharma Ltd., ELAN Pharma Inc., Sano Corporation
or any other subsidiaries of ELAN, as necessary or appropriate, a license
of the ELAN PATENT RIGHTS and ELAN KNOW-HOW and other intellectual
property rights necessary for such company or companies to manufacture the
PRODUCT in accordance with the terms of this Agreement.
CLAUSE 10 - FINANCIAL PROVISIONS
10. DEVELOPMENT ROYALTIES:
---------------------
10.1.1 *** *********** ******** ******** ** ***** ****** ** ********* ********
** *** ********** ***** ** ***** ** *****
10.1.2 SCHEIN will bear the full cost of the PIVOTAL BIO PK STUDY definitive
biostudies as evidenced by the invoices of the bio-study clinic ** *****
** ***********. In the event that ELAN and SCHEIN disagree as to whether
a formulation nominated by ELAN should proceed to a pivotal biostudy and
ELAN elects to proceed with such a pivotal biostudy, **** shall bear the
costs of the said biostudy if, and only if, the results of the said
PIVOTAL BIO PK STUDY do not establish bio-equivalence to the formulation
selected.
10.1.3 Development Fees agreed in advance by the Parties in writing shall be
payable if SCHEIN requires ELAN to carry out work or tasks relating to
the development and registration of the PRODUCTS which are not included
in the PROJECT, including but not limited to, pharmacokinetic studies and
related assays, stability data generation, clinical studies and
compilation and submission of dossiers required for registration
purposes, and market pack stability studies.
10.1.4 SCHEIN shall reimburse ELAN on a quarterly basis for all development
expenses incurred by ELAN in accordance with this Agreement in U.S.
Dollars ($) within 30 days of the receipt of the relevant invoice.
10.1.5 To the extent Schein decides that the *************** *********** Product
is a Patent Determination Product, in consideration for the development
of the replacement Product, SCHEIN shall ********* **** *** ***
*********** ********* ******** ** **** ** *** **** *** ***** **** ** ** *
******* ** **** ********
10.2 LICENSE FEES:
------------
10.2.1 In consideration of the license of the ELAN PATENT RIGHTS and ELAN
KNOW-HOW granted to SCHEIN under this Agreement, SCHEIN shall pay to ELAN
the following license fees:
* redacted pursuant to confidential treatment request
Page 21 of 43
(i) $14 million due upon execution (subject to Clause 15.13) and payable
as follows: *** ** ******* ****** * ******** **** ** *** *********
***** *** ** ******* ** ****** *** ***** *** ** ******* ** *******
*** ***** *** ** ******* ** ***** *** ****
(ii) ******** upon receipt of the FDA APPROVAL of the ************* **
PRODUCT,
(iii) ******** upon issuance of an ANDA number and receipt of a
REGULATORY FILING acceptance letter by FDA for each of the PRODUCTS
other than the ************* ** PRODUCT; and
(iv) ******** upon receipt of FDA APPROVAL for each of the PRODUCTS other
than the ************* ** PRODUCT.
In the event that ELAN achieves FDA APPROVAL of the *** ** PRODUCT prior to
*** ***** **** (as extended by the Patent Determination Period), then the
******** license fee to be paid to ELAN under this paragraph shall be
increased to ************ However, in the event that FDA APPROVAL is achieved
by ELAN after *** ********* **** (as extended by the Patent Determination
Period), then the ******** license royalty payable here shall be reduced to
*********
In the event that ELAN achieves FDA APPROVAL of the ********* ** PRODUCT
prior to *** **** **** (as extended by the Patent Determination Period), then
the ******** license royalty to be paid to ELAN under this paragraph shall be
increased to ************ However, in the event that FDA APPROVAL is achieved
by ELAN after *** ********* **** (as extended by the Patent Determination
Period), then the ******** license royalty payable here shall be reduced to
*********
10.2.2 In the event SCHEIN receives * ****** * ***** exclusivity in the
TERRITORY for either the *** ** ********* PRODUCTS, either through patent
litigation or as first market entry, then SCHEIN shall pay ELAN an
additional ******** license fee for each such PRODUCT after such ***
***** exclusivity period.
10.2.3 Payment of all license fees shall be made by SCHEIN within thirty (30)
days after the receipt of the relevant invoice from ELAN.
10.3 Failure
--------
10.3.1 If a REGULATORY FILING is not filed for a PRODUCT (other than due to
patent related reasons) within * ***** of the date of signing of the
Agreement or such longer period as the Parties may agree, then SCHEIN
shall be entitled to ******** * *******
* redacted pursuant to confidential treatment request
Page 22 of 43
***** ***** ** ******** ********** ** *** ******** to replace such failed
PRODUCT ("Replacement Product"). Notwithstanding the foregoing, SCHEIN
shall be entitled to ******** * ******* ** *** *********** ******** ***
** ********** ******* **** ***** ** ******* ** ****** ** **** *** ***
**** *********** *********
10.3.2 ELAN shall bear all development expenses for development of the *****
Replacement Product, excluding the cost of the BIO PK STUDIES which shall
be borne by SCHEIN. For *** ****** Replacement Product, SCHEIN shall bear
no more than ******** of development expense, together with the cost of
the BIO PK STUDIES.
10.3.3 If a REGULATORY FILING is not be filed for a PRODUCT (other than due to
patent related reasons) within * ***** of the date of signing of the
Agreement (as extended by the Patent Determination Period) or such longer
period as the Parties may agree, and the Parties are unable to mutually
agree upon a Replacement Product, ****** *********** ******** *** ***
**** ******* *** ** * ******* ** *********** ***** ** ******** *******
*** ******* ******* ** ****** ** **** ** *** ** **** ** *** *****
******** ******** ** ****** *****
10.3.4 If a REGULATORY FILING is not filed for a ****** PRODUCT (other than due
to patent related reasons) within * ***** of the date of signing of the
Agreement (as extended by the Patent Determination Period) or such longer
period as the Parties may agree and the Parties are unable to mutually
agree upon a Replacement Product ****** *********** ********* *** ***
**** ******* *** ** * ******* ** ********* ***** ** ******** ******* ***
******* ******* ** ****** ** **** ** *** ** **** ** *** ***** ********
******** ** ****** *****
10.4 Price of PRODUCT:
----------------
10.4.1 ELAN shall supply each PRODUCT to SCHEIN ** ************* **** in
accordance with the terms of this Agreement.
10.4.2 Subject to the following paragraph, *** ************* **** of each
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 SCHEIN with written notice of
any such increase in *** ************* **** 60 days before the end of
each calendar year to take effect in the following calendar year.
10.4.3 Any increases or decreases in the cost of the active ingredient or any
other components used in the PRODUCTS in excess of ** from the then
current base are to be passed on in *** ************* **** of the PRODUCT
manufactured from the effective date of use of such active ingredient or
any other component.
* redacted pursuant to confidential treatment request
Page 23 of 43
10.4.4 Payment for all PRODUCT delivered from ELAN's manufacturing facility to
SCHEIN 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.
10.5 LOCATION
--------
10.5.1 In consideration of the license of the ELAN PATENT RIGHTS, ELAN KNOW-HOW
to SCHEIN hereunder, Schein shall pay royalty to Elan as follows:
********* ** *******
*** ** ****** ** ****
******** ***** **** *** ********* ** *******
*** ** ****** ** ****** *** *** ** ****** ** ****
10.5.2 Within four weeks of the end of each calendar quarter, SCHEIN 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.
10.5.3 Payment of PROFIT shall be made once in each calendar quarter within 45
days after the expiry of the relevant calendar quarter.
10.5.4 All payments due hereunder shall be made in U.S. Dollars.
10.5.5 In the event that SCHEIN or any AFFILIATE of SCHEIN shall sell the
PRODUCT together with other products of SCHEIN to third parties (by the
method commonly known in the pharmaceutical industry as "bundling"),
SCHEIN shall not conduct such bundling in such a manner as to discount
one or more of the PRODUCTS at a greater proportion than the other
products bundled by SCHEIN.
CLAUSE 11 - PAYMENTS, REPORTS AND AUDITS
11.1 In accordance with its ordinary business practice, SCHEIN shall keep true
and accurate records of gross sales of each PRODUCT, the items deducted
from the gross amount in calculating the NSP, the NSP and the royalties
payable to ELAN under Clause 10. SCHEIN 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 PRODUCTS
sold, marketing, selling and distribution expenses allocated to the
PRODUCT and a computation of the sums due to
* redacted pursuant to confidential treatment request
Page 24 of 43
ELAN. The Parties' financial officers shall agree upon the precise format
of the STATEMENT.
11.2. Any income or other taxes which SCHEIN 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. SCHEIN 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. SCHEIN 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 SCHEIN. The Parties
will reasonably cooperate in completing and filing documents required
under the provisions of any applicable tax treaty or under any other
applicable law, in order to enable SCHEIN to make such payments to ELAN
without any deduction or withholding.
11.3 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.
11.4. Where 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 8.1, SCHEIN 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
PRODUCTS in their respective market segments.
11.5 For the 90 day period following the close of each calendar year of the
Agreement, ELAN and SCHEIN 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.
11.6 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.
Page 25 of 43
11.7 During normal business hours and provided reasonable notice has been
furnished by SCHEIN, 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 SCHEIN's duly qualified person 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 12 - DURATION AND TERMINATION
12.1 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 12
will expire on a PRODUCT by PRODUCT basis:-
12.1.1 on the 15th anniversary of the date of FIRST COMMERCIAL SALE of
the PRODUCT in the TERRITORY; or
12.1.2 upon the expiration of the life of the last to expire patent
included in the ELAN PATENT RIGHTS for such PRODUCT in the
TERRITORY
whichever date is later to occur ("the INITIAL PERIOD").
12.2 At the end of the INITIAL PERIOD, the Agreement shall continue on a
PRODUCT by PRODUCT basis automatically for rolling 2 year periods
thereafter, unless the Agreement has been terminated by either of the
Parties by serving 1 years' written notice on the other immediately prior
to the end of the INITIAL PERIOD or any additional 2 year period provided
for herein.
12.3 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:
12.3.1 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
12.3.2 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
Page 26 of 43
12.3.3 an encumbrancer takes possession or a receiver is appointed over
any of the property or assets of that other Party; or
12.3.4 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
12.3.5 the other Party falls 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
12.3.6 on a PRODUCT by PRODUCT basis an award is made against ELAN and/or
SCHEIN 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 SCHEIN.
12.4 In further addition to the rights and termination provided for elsewhere
in this Agreement, ELAN shall be entitled to terminate the license
granted to SCHEIN on a PRODUCT by PRODUCT basis under this Agreement for
the TERRITORY in the event that:-
12.4.1 SCHEIN fails to effect any one of the commercial launches required
by Clause 8.8 in accordance with the provisions thereof; or
12.4.2 SCHEIN notifies ELAN in writing that it does not wish to
commercialize the PRODUCT in the TERRITORY.
12.4.3 a TECHNOLOGICAL COMPETITOR of ELAN or a company with a directly
competing product acquires *** or more of SCHEIN's voting stock or
where *** or more of such company's voting stock is acquired by
SCHEIN or
12.4.4 the net price payable to ELAN (that is the price of PRODUCT and
the percentage of PROFIT) is less than ************* **** **** ***
for a period of one year; or
12.4.5 if the innovator for such PRODUCT acquires more than *** of
SCHEIN'S voting stock.
12.5 In further addition to the rights and termination provided for elsewhere
in this Agreement, SCHEIN shall be entitled to terminate the Agreement on
a PRODUCT by PRODUCT basis for the TERRITORY in the event that: -
* redacted pursuant to confidential treatment request
Page 27 of 43
12.5.1 ELAN fails to file the REGULATORY FILING for such PRODUCT within 2
years of the date of this Agreement (as extended by the Patent
Determination Date) 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
12.5.2 ELAN has submitted fraudulent filings to the FDA or has failed to
cure noncompliance notices from FDA; or
12.5.3 ELAN is unable to ship PRODUCT for a period of more than 3 months
during a given calendar year and SCHEIN has elected not to obtain
an alternative source of supply; or
12.5.4 the share of the NET PROFITS payable to SCHEIN is less than *** **
*** ************* **** for the said PRODUCT for a period of one
year.
12.7 Upon exercise of those rights of termination specified in this Clause 12
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.
12.8 Upon termination of the Agreement by either Party, or upon termination by
ELAN of a license for a particular PRODUCT, the following shall be the
consequences relating to the particular PRODUCT.
12.8.1 subject to the provisions of Clause 10.3.3 and 10.3.4 any sums
that were due from SCHEIN to ELAN under the provisions of Clause
10 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 Agreement and ELAN shall not
be liable to repay to SCHEIN any amount of money paid or payable
by SCHEIN to ELAN up to the date of the termination of this
Agreement;
12.8.2 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;
12.8.3 all responsibilities and warranties shall insofar are appropriate
remain in full force and effect;
12.8.4 the rights of inspection and audit shall continue in force for the
period referred to in the relevant provisions of this Agreement;
12.8.5 ELAN shall be entitled to research, develop and commercialize the
PRODUCT for its own benefit in the TERRITORY subject to subsection
(ii) of Clause 12.8.7;
* redacted pursuant to confidential treatment request
Page 28 of 43
12.8.6 SCHEIN 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 10 and the other applicable terms of
this AGREEMENT.
12.8.7 If the Agreement is terminated by SCHEIN due to a breach or
default of ELAN and the applicable PRODUCT has obtained FDA
APPROVAL, then (i) **** ***** ******** *** ** ******* *** ****
****** ****** ******* ****** ********** ** *** *******
*************** *** *********** ** *** ********* *** **** *******
or (ii) in the alternative, ELAN shall in consideration for a
royalty of *** of NET PROFITS:
12.8.7.1 at the option of SCHEIN grant to SCHEIN a production
license in the TERRITORY so that SCHEIN may manufacture
the relevant PRODUCT without infringing any of ELAN's
patent and/or any other intellectual property rights.
SCHEIN may sub-license the said production license to one
sub-licensee which is not a competitor of ELAN in the
drug formulation and/or product delivery business. Any
such licence shall apply only in regard to the relevant
PRODUCT as well as to the applications of technology
derived from the ELAN PATENT RIGHTS related to its use
with such PRODUCT;
12.8.7.2 provide SCHEIN with any technical data necessary for the
carrying of this into effect. To this end, ELAN shall
impart to SCHEIN the documentation constituting the
required material support, including, without limitation,
practical performance advice, shop practice,
specifications as to materials to be used and control
methods,
12.8.7.3 assist SCHEIN for the working up and use of the
technology necessary to manufacture the relevant PRODUCT
as well as for the training of SCHEIN's personnel. For
this purpose, ELAN shall receive SCHEIN's scientific
staff in its premises for periods the term of which shall
be decided by common consent;
12.8.7.4 the provisions of Clause 10.5 of this Agreement
regulating the payment of royalties shall apply.
12.8.8 On a PRODUCT by PRODUCT basis, in the event that SCHEIN should
market any SCHEIN COMPETING PRODUCT in the TERRRITORY during the
term of this Agreement, ELAN shall be entitled to terminate the
agreement.
12.9 ELAN shall be entitled to use the ELAN PATENT RIGHTS and ELAN KNOW-HOW,
and all technical and clinical data whether generated by ELAN or SCHEIN
pursuant to this Agreement in the TERRITORY following termination of this
Agreement unless termination of
* redacted pursuant to confidential treatment request
Page 29 of 43
this Agreement is due to Elan's breach of its representations, warranties and/or
obligations hereunder, and Schein elects subsection (ii) of Clause 12.8.7.
CLAUSE 13 - WARRANTY AND INDEMNITY
13.1 ELAN represents and warrants as follows;
13.1.1 Except as set forth in this Clause 13. 1. 1, that it has the sole,
exclusive and unencumbered right to grant the licenses and
rights herein granted to SCHEIN, and that it has not granted any
option, licence, right or interest in or to the ELAN PATENT RIGHTS
or 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 SCHEIN
under this Agreement will not breach or in any way be
inconsistent with the terms and conditions of any licence,
contract, understanding or agreement, whether express, implied,
written or oral between ELAN and any third party;
**** ******* ****** **** ********* ******* ****** ** ***
********** **** *** ******* **** * ********** ********* ** ***
******* ****** ** *************** *********** ** *** **********
*** ******* ******** ******** *** ***** ***** ******** ***** ****
**** ******* **** **** *** ********* **** **** ****** ****** **
**** **** *** ********* ** **** ********** ** *** ****** *** *****
***** ******** *** *** ** ********* ****** *** ***********
********* ** *** ********* ******** ****** ** **** **** *** ****
******* **** *** ****** **** ********* * ********** ** **** *****
********* *** ******* ** ****** ** *** *************** ***********
********
13.1.2 the PRODUCT supplied by ELAN to SCHEIN under this Agreement will
conform to the PRODUCT SPECIFICATIONS and regulations governing
the conduct of clinical trials and stability requirements;
13.1.3 the PRODUCT sold by ELAN to SCHEIN 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,
13,1.4.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;
13.1.5.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.
* redacted pursuant to confidential treatment request
Page 30 of 43
13.2 SCHEIN represents and warrants as follows;
13.2.1.SCHEIN 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 licence,
contract, understanding or agreement, whether express, implied,
written or oral between SCHEIN and any third party;
13.2.2.SCHEIN 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;
13.3. Each of ELAN and SCHEIN represents and warrants to the other that:
13.3.1.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
13.3.2.Each of ELAN and SCHEIN 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.
13.5. Except as expressly stated in this Clause 13, 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.
13.6 Indemnification
---------------
13.6.1 Elan shall indemnify and hold Schein 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 Schein with respect to any claim, action, suit,
proceeding, loss, liability, damage or expense to the extent
arising from or related to Schein's breach of its representations,
warranties, covenants or other obligations hereunder, or
information supplied by Schein to Elan or contained in regulatory
filings or correspondence prepared or delivered by Schein.
Page 31 of 43
13.6.2 Schein 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 Schein's negligent acts or
omission or breach of its representations, warranties, covenants
or other obligations hereunder, provided, however that Schein
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 Schein' or
contained in regulatory filings or correspondence prepared or
delivered by Elan.
13.6.3 This Clause 13 and the obligations contained herein shall survive
termination of this Agreement, whether pursuant to Clause 12
hereof, by expiration of the Term, or otherwise.
13.7 As a condition of obtaining an indemnity in the circumstances set out in
Clauses 13.6, the Party seeking an indemnity shall:
13.7.1 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 13 except to the extent that it is
actually prejudiced;
13.7.2 permit the indemnifying Party to take full control of such claim
or proceedings;
13.7.3 assist in the investigation and defense of such claim or
proceedings;
13.7.4 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
13.7.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceedings.
13.9 Notwithstanding anything to the contrary in this Agreement, ELAN and
SCHEIN 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.
Page 32 of 43
CLAUSE 14 - CUSTOMER COMPLAINTS, PRODUCT RECALL AND INSURANCE
14.1 SCHEIN shall notify ELAN promptly of any complaints from third parties
reported to SCHEIN involving any serious and unexpected adverse
reactions resulting from the use of the PRODUCTS in the TERRITORY. ELAN
shall notify SCHEIN promptly of any complaints from third parties
reported to ELAN involving any serious and unexpected adverse reactions
resulting from the use of the PRODUCTS outside of the TERRITORY.
14.2 SCHEIN and ELAN shall establish a procedure for formal adverse event
handling and reporting. This procedure will be included as Schedule 4 to
the Agreement at a later date. It is envisaged that SCHEIN shall be
responsible for furnishing post-marketing reports to the FDA and other
relevant regulatory agencies and where applicable, ELAN will be
responsible for furnishing such reports to the FDA. SCHEIN 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 PRODUCTS.
14.3 Subject to and without in any way limiting the or altering ELAN's
statutory duties and obligations as the holder of the ANDA, ELAN shall
consult with SCHEIN when reviewing whether or not to perform a recall of
PRODUCT and if so, the extent and method of such recall in the TERRITORY
14.4 In the event of any recall of the PRODUCTS, as suggested or requested by
any governmental authority;
14.4.1 SCHEIN shall perform the recall of the PRODUCT in the
TERRITORY
14.4.2 If the recall arises from SCHEIN's acts or omissions in the
manufacturing, packaging (where applicable), or the
transportation, storage, distribution, marketing or sale of the
PRODUCTS, the recall costs shall be borne by SCHEIN.
14.4.3 If the recall arises from ELAN's acts or omissions in the
manufacturing and packaging of the PRODUCTS, 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
SCHEIN shall provide ELAN at no cost with all such reasonable
assistance as may be required by ELAN.
14.4.4 If the recall arises from any other reason than set out above, the
recall costs shall be borne by ELAN and SCHEIN in proportion to
the percentage of PROFIT allocated to the Parties for such
PRODUCT.
14.4.5 Neither Party shall be liable to the other Party or to any third
party for consequential or incidental damages which may arise as a
result of the recall of the PRODUCT.
Page 33 of 43
14.5 SCHEIN and ELAN shall each maintain in force, during the INITIAL PERIOD,
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 15 - MISCELLANEOUS PROVISIONS
15.1 Secrecy:
-------
15.1.1 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 SCHEIN, or by SCHEIN to ELAN,
including, without limitation, trade secrets, business methods,
and cost, supplier, manufacturing and customer information, shall
be treated by SCHEIN 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:
(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
(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
(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
(4) is required to be disclosed pursuant to: (A) any order of a
court having I 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
(5) is independently discovered by the receiving party without
the aid or application of the confidential information.
Page 34 of 43
15.1.2 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.
15.1.3 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.
15.1.4 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
PRODUCTS as having been developed and manufactured by ELAN.
15.2 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 SCHEIN may assign this Agreement to an
AFFILIATE without such consent provided that such assignment has no
adverse tax implications for the other Party 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.
15.3 Parties bound:
-------------
This Agreement shall be binding upon and inure for the benefit of Parties
hereto, their successors and permitted assigns.
15.4 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:-
15.4.1 such provision will be deemed amended to conform to applicable
laws so as to be valid
Page 35 of 43
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
15.4.2 the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected in
any way.
15.5 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.
15.6 Relationship of the Parties:
---------------------------
Nothing contained in this Agreement is intended or is to be construed to
constitute ELAN and SCHEIN 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.
15.7 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.
15.8 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.
15.9 No effect on other agreements:
-----------------------------
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.
15.10 Applicable Law and Jurisdiction:
-------------------------------
This Agreement shall be governed by and construed in accordance with the
laws of the
Page 36 of 43
State of New York without regard to principles of conflicts of law. [review the
Uniform Agreement] 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.
15.11 Notice:
------
15.11.1 Any notice to be given under this Agreement registered airmail or
telecopied to:
ELAN at
ELAN Corporation, p1c.
Lincoln House
Lincoln Place
Dublin 2
Ireland
Attention: Vice-President & General Counsel,
ELAN Pharmaceutical Technologies
Telephone:353 1 7094000
Telefax :353 1 6624960
SCHEIN at
100 Campus Drive
Florham Park,
New Jersey 07932
United States of America
Attention: Senior Vice President and General Counsel
Telephone: 1 973 593 5960
Telefax: 1 973 593 5820
or to such other address(es) and telecopier numbers as may from
time to time be notified by either party to the other hereunder.
Page 37 of 43
15.12.2 Any notice sent by 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.
15.13 Hart-Scott-Rodino Filing
------------------------
The parties will prepare and make appropriate 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.) ("the Act") as
soon as reasonably practicable. The parties agree to cooperate in the
antitrust clearance process and to furnish promptly to the FTC and the
Antitrust Division of the Department of Justice any additional
information reasonably requested by them in connection with such filings.
This Agreement shall bind Elan and Schein upon execution but the
provisions of this Agreement (other than this subparagraph) shall not
become effective until the waiting period provided by the Act shall have
terminated or shall have expired without any action by any government
agency or challenge to the termination.
In the event the expiration of the waiting period does not occur within
three (3) months after the date first written above, the parties shall
revert to their status prior to signing this Agreement, and Schein shall
have no obligation pay the licence fee at Clause 10.2.1 or otherwise.
Page 38 of 43
IN WITNESS of which the Parties have executed this Agreement.
Executed by SCHEIN on March 31, 1998
By: /s/ Paul Kleutshen
-----------------------
Name: Paul Kleutshen
-----------------------
Title: Sr. V.P., Strategic Development
-----------------------
Executed by ELAN on March 31, 1998
By: /s/ Seamus Mulligan
-----------------------
Name: Seamus Mulligan
-----------------------
Title: President - EPT.
-----------------------
Page 39 of 43
SCHEDULE 1
NORMAL DOSAGE FORM
******** ****** ********* ****** * ** *** ** *** ** ********
******** ****** ******** ****** ***** **** *** ***** ****** *****
******** ******** * **** *** ***** ****** *****
********** *********** ********* ******* ** ** *** ** ***** *****
***** ****** * ** *** ** *** *** *******
* redacted pursuant to confidential treatment request
Page 40 of 43
SCHEDULE 2
PATENT RIGHTS
Page 41 of 43
SCHEDULE 3
PRODUCT DEVELOPMENT PROJECTS ACTIVITIES
Page 42 of 43
SCHEDULE 4
COMPLAINT HANDLING PROCEDURE
Page 43 of 43