EXHIBIT 10.23
CONFIDENTIAL TREATMENT HAS BEEN SOUGHT FOR
PORTIONS OF THIS EXHIBIT PURSUANT TO RULE 24B-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
THIS AGREEMENT is made the 21 October, 1998
BY AND BETWEEN
ELAN CORPORATION, PLC
An Irish company, of Lincoln House, Lincoln Place, Dublin 2, Ireland
ENDOREX CORPORATION
A Delaware corporation of Lake Bluff, Illinois, USA
ENDOREX NEWCO, LTD.
A Bermudan corporation, of Clarendon House, 2 Church St, Hamilton, Bermuda
AND
ELAN MEDICAL TECHNOLOGIES LIMITED
An Irish company, of Monksland, Athlone, Co. Westmeath, Ireland
LICENSE AGREEMENT
TABLE OF CONTENTS
CLAUSE NO. CLAUSE
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1 Definitions
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2 Grant of Rights
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3 Third Party Technology/Substitute Compound
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4 Improvements
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5 Intellectual Property Rights
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6 Exploitation of Licensed Technology
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7 Financial Provisions
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8 Right of Audit and Inspection
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9 Patents
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10 Confidential Information
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11 Trademarks
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12 Term and Termination
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13 Warranties/Indemnities
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14 Insurance
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15 Impossibility of Performance - Force Majeure
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16 Settlement of Disputes; Proper Law
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17 Assignment
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18 Notices
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19 Miscellaneous Clauses
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i
WHEREAS
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A. Elan is knowledgeable in the discovery, research, development, manufacture
and marketing of pharmaceutical formulations and devices capable of
delivering drugs, including the Medipad System. Elan owns or has licensed
the Elan Technology either itself or through EMT (defined below). Elan also
owns and uses certain trademarks in connection with the manufacture,
marketing and sale of the Medipad System, including the Elan Trademarks.
Elan Medical Technologies Ltd. is a wholly owned Subsidiary of Elan.
B. Endorex has proprietary know-how and expertise relating to, inter alia, the
research, development and commercialization of pharmaceutical formulations
capable of delivering drugs.
C. Elan and Endorex have agreed to co-operate in the establishment and
management of the Company, the business of which will be to research and
develop certain Elan Royalty Products incorporating the technologies
developed and/or to be developed by Elan and to commercialize such Elan
Royalty Products throughout the world.
D. Simultaneously herewith, Elan and Endorex are entering into the Development
Agreement for the purpose of recording the terms and conditions of the
joint venture and to regulate their relationship with each other and
certain aspects of the affairs of and their dealings with the Company.
E. The Company desires to enter into this Agreement with Elan so as to (a)
permit the Company to utilize the Elan Patents, the Elan Know-How and the
Elan Trademark in the research, development, manufacture, distribution and
sale of the Elan Royalty Products in the Field and (b) to permit Elan to
utilise the Company Technology in connection with (i) Elan's research and
development work on behalf of the Company and (ii) Elan's manufacturing and
supplying the Company or its designee(s) with the Elan Royalty Products.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS
1.1. In this present Agreement, including the Recitals, Schedules and
Appendices, the following definitions shall prevail unless the
context otherwise requires:
"AFFILIATE" means any corporation or entity other than the Company
controlling, controlled or under the common control of
Elan or the Company as the case may be. For the purpose
of this definition "control" shall mean direct or
indirect ownership of fifty percent (50%) or more of
the stock or shares entitled to vote for the election
of directors.
"AGREEMENT" means this agreement (which expression shall be deemed
to include the Recitals, the Schedules and Appendices
hereto).
"COMPETITION" means on [****] The determination that Competition
exists in any country in any calendar quarter shall be
deemed conclusive if a mutually agreed reputable
organization such as IMS has made such determination
based on its conduct of a market share study in such
country during such calendar quarter, provided the
existence of such level of sales of competing products
may also be established by other reasonable evidence.
Once a determination is made that Competition exists
for the Elan Royalty Product in any country, such
determination shall be made again by the Parties each
calendar quarter for so long as the Elan Royalty
Product is marketed in that country.
"COMPANY" means Endorex Newco, Ltd.
"COMPANY means (i) the [****] compounds made, invented,
COMPOUND(S)" acquired, developed or licensed by the Company and,
(ii) if applicable, any Substitute Compound.
"COMPANY means all Know-How, knowledge, information, trade
KNOW-HOW" secrets, data (including all clinical data) and
expertise which is not generally known to the public,
developed, acquired or licensed by the Company or to be
developed, acquired or licensed by the Company before
or during the Term relating to the Company Compounds
(but excluding any such knowledge, information, trade
secrets, data and expertise insofar as the same relates
to the Medipad System), whether or not covered by any
patent, copyright, design, trademark or other
industrial or intellectual property rights.
"COMPANY PATENTS" means all granted patents and patent applications owned
by, or licensed by the Company relating to the Company
Compounds (but excluding any granted patents and patent
applications relating to the Medipad System). Company
Patents shall also include all continuations,
continuations-in-part, divisionals, re-issues and re-
examinations of such patents and patent applications
and any patents issuing thereon and extensions of any
patents licensed hereunder and all foreign counterparts
thereto. Company Patent Rights shall further include
any patents or patent applications covering any
improvements to the Company Compounds or manufacture or
use thereof by the Company during the term of this
Agreement.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
2
"COMPANY means the Company Patents, the Company Know-How and/or
TECHNOLOGY" the Intellectual Property Rights in the Third Party
Technology, the Substitute Compound and the Substitute
Product which are made, invented, acquired, developed
or licensed by the Company, but for the avoidance of
doubt excluding any technology relating to the Medipad
System.
"COMPANY means the Subscription and Stockholders' Agreement of
SUBSCRIPTION Endorex Newco, Ltd., made by and between EIS, Endorex
AGREEMENT" and the Company as of the date hereof.
"DEVELOPMENT means the Joint Development and Operating Agreement
AGREEMENT" of even date entered into between, Elan, EIS, Endorex
and the Company.
"EFFECTIVE DATE" means the date hereof.
"EIS" means Elan International Services, Ltd.
"ELAN" means Elan Corporation, plc (Elan is acting through its
division Elan Pharmaceutical Technologies).
"ELAN KNOW-HOW" means all Know-How, knowledge, information, designs and
expertise owned, developed or otherwise possessed by
Elan or to be owned, developed, or otherwise possessed
by Elan and/or EMT during the Term relating
specifically to the Medipad System, whether in
conjunction with a pharmaceutical compound(s) or
otherwise (but excluding any such knowledge,
information and expertise insofar as the same relates
specifically to the Company Compounds), whether or not
covered by any patent, copyright, design right,
trademark, trade secrets or other industrial or
Intellectual Property Rights. Elan Know-How shall
exclude the Acquired Technology defined in Clause 4.3.
"ELAN PATENTS" means all granted patents and pending patent
applications owned by, or licensed or developed by Elan
and/or EMT relating to the Medipad System, the current
status of which is set forth in Schedule 1 and any
other Intellectual Property Rights owned by, licensed
or developed by Elan and/or EMT relating to the Medipad
System. Elan Patent shall also include all
continuations, continuations-in-part, divisionals, re-
issues and re-examinations of such patents and patent
applications and any patents issuing thereon and
extensions of any patents licensed hereunder and all
foreign counterparts thereto. Elan Patents shall
further include any design rights, patents or patent
3
applications and any other Intellectual Property Rights
owned by, licensed or developed by Elan and/or EMT
relating to the Medipad System covering any
improvements to the Medipad System or methods of making
or using the Medipad System, made, invented or
developed by Elan and/or EMT during the term of this
Agreement. Elan Patents shall exclude the Acquired
Technology defined in Clause 4.3.
"ELAN ROYALTY means a Medipad(TM) System based on, using and/or
PRODUCT" incorporating the Elan Technology and containing a
Company Compound, and, if applicable, any Substitute
Product.
"ELAN TECHNOLOGY" means the Elan Patents and/or the Elan Know-How.
For the avoidance of doubt, (i)Elan Technology shall
include any patents and/or any know-how owned, licensed
or controlled by EMT, NanoSystems and Sano Corporation
relating specifically to the Medipad System but shall
exclude any patents and/or any know-how [****] or
[****] including, but not limited to, [****] and (ii)
Elan Technology shall exclude the Acquired Technology
defined in Clause 4.3.
"ELAN TRADEMARKS" means the trademark "Medipad(TM)" and the trademark
"Elan(R)", the current status of which are set forth in
Schedule 2.
"EMT" means Elan Medical Technologies Ltd.
"ENDOREX" means Endorex Corporation.
"EXPERT" shall have the meaning assigned to such term in Clause
15 of the Development Agreement.
"EXCHANGE RIGHT" has the meaning as defined in the Development
Agreement.
"FIELD" means the research, development, and commercialization
of
(i) [****] or
(ii) the Substitute Compounds.
"INDEPENDENT means any person other than the Company, Elan, Endorex
THIRD PARTY" or any of their respective Affiliates.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
4
"INITIAL FUNDING" has the meaning as such term is defined in the Company
Subscription Agreement.
"IN-MARKET" means [****] (or where applicable by [****] to an
[****] such as a [****] and shall exclude [****].
"INTELLECTUAL shall mean Patents, copyrights, design rights,
PROPERTY RIGHTS" trademarks, trade secrets, database rights, know-how
and any other applicable intellectual property rights.
"KNOW-HOW" means all trade secrets, confidential scientific,
technical and medical information and expertise,
technical data and marketing information, studies and
data including, but not limited to, unpatented
inventions, discoveries, designs, theories, plans,
ideas (whether or not reduced to practice).
"MANAGEMENT means the management committee appointed by the
COMMITTEE" directors of the Company pursuant to the Development
Agreement.
"MEDIPAD SYSTEM" means Elan's ambulatory, subcutaneous, micro-infusion
pump device and related technology.
"NANO" OR means NanoSystems L.L.C.
"NANOSYSTEMS"
"NET SALES" means [****].
"PANEL" shall have the meaning assigned to such term in Clause
15 of the Development Agreement.
"PARTIES" means Elan, Endorex and the Company.
"PATENTS" means all and any patents, and any applications
therefor in the Territory (including any and all
divisions, continuations, continuations-in-part,
extensions, additions or reissues thereto or thereof).
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, or
other entity of whatever nature.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
5
"PLAN" shall have the meaning as such term is defined in the
Development Agreement.
"PROJECT" means all activity as undertaken by Elan, Endorex,
and/or the Company in order to develop the Elan Royalty
Products in accordance with the Plan.
"RELEVANT EVENT" has the meaning set forth in Clause 12.
"REGULATORY means any regulatory application or any other
APPLICATION" application for marketing approval for an Elan Royalty
Product, but not the Medipad System alone, which the
Company will file in any country of the Territory,
including any supplements or amendments thereto.
"REGULATORY means the final approval to market an Elan Royalty
APPROVAL" Product, but not the Medipad System alone, in any
country of the Territory, including pricing and
reimbursement approval and any other approval which is
required to launch the Elan Royalty Product in the
normal course of business.
"RESEARCH AND means the program of research and development work
DEVELOPMENT being conducted or to be conducted for and on behalf
PROGRAM of the Company which have been devised by the R&D
Committee and approved by the Management Committee;
"R&D COMMITTEE" shall have the meaning as such term is defined in the
Development Agreement.
"RHA" means any relevant government health authority (or
successor agency thereof) in any country of the
Territory whose approval is necessary to market an Elan
Royalty Product in the relevant country of the
Territory.
"SANO" OR "SANO means Elan Transdermal Technologies, Inc, formerly Sano
CORPORATION" Corporation.
"SUBSIDIARY" of any Person means any other Person, (i) of which (or
in which) greater than 50% of (A) the outstanding
capital stock having ordinary voting power to elect a
majority of the board of directors of such second
Person, if a corporation, (B) the interest in the
capital or profits of such second Person, if a
partnership or other entity, or (C) the beneficial
interest of such trust or estate, if a trust or estate,
is at the time directly or indirectly owned by such
first Person, by such first Person and one or more
other Subsidiaries of such first Person, or by one or
more other Subsidiaries of such first Person; (ii)
which is otherwise effectively controlled by such first
Person or any
6
other Subsidiary of such first Person, pursuant to
contract, arrangement, understanding or otherwise; or
(iii) or any other corporation, association or other
business entity that is required by GAAP to be combined
or consolidated with such Person.
"SUBSISTING" means valid, enforceable and unexpired.
"SUBSTITUTE means the substitute compound described in Clause 3.
COMPOUND"
"SUBSTITUTE means a Medipad System based on, using and/or
PRODUCT" incorporating the Elan Technology and/or the Company
Technology and containing a Substitute Compound,
including but not limited to patents and know-how that
may be acquired by or on behalf of the Company.
"TECHNOLOGIES" means collectively, the Company Technology and the Elan
Technology.
"TERM" shall mean the term of this Agreement, as set out in
Clause 12.
"TERRITORY" means [****].
"THIRD PARTY means the technology of Independent Third Parties
TECHNOLOGY" described in Clause 3.
"TECHNOLOGICAL means a Type I Technological Competitor or a Type II
COMPETITOR" Technological Competitor.
"TYPE I means [****].
TECHNOLOGICAL
COMPETITOR"
"TYPE II shall mean [****].
TECHNOLOGICAL
COMPETITOR"
"UNITED STATES means the lawful currency for the time being of the
DOLLAR", "US$" United States of America.
AND "$"
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
7
1.2. Words importing the singular shall include the plural and vice versa.
1.3. Unless the context otherwise requires, reference to a recital,
article, paragraph, provision, clause or schedule is to a recital,
article, paragraph, provision, clause or schedule of or to this
Agreement.
1.4. Reference to a statute or statutory provision includes a reference to
it as from time to time amended, extended or re-enacted.
1.5. The headings in this Agreement are inserted for convenience only and
do not affect its construction.
1.6. Unless the context or subject otherwise requires, references to words
in one gender include references to the other genders.
1.7. References to "include" or "including" shall be construed as examples
only, and in no way be read as limiting.
2. GRANT OF RIGHTS
2.1. Subject to the terms of this Agreement, under all of the existing and
future Elan Patents and Elan Technology, Elan and EMT hereby grant to
the Company for the Term an exclusive licence to the Elan Technology
for all research, development, and commercial purposes solely in the
Field, but not beyond the Field.
All proprietary rights and rights of ownership with respect to the
Elan Technology shall at all times remain solely with Elan or EMT, or
where applicable with Elan's licensor.
2.2. Subject to any restriction in any licenses or other agreements
pursuant to which Elan licenses any of the Elan Trademarks, Elan
hereby grants the Company for the Term a non-exclusive, royalty-free,
fully paid-up license (or, if applicable, sublicense) to use the Elan
Trademarks on the terms set forth in Clause 11 upon or in relation to
the promotion, marketing, advertising, sale or offering for sale of
the Elan Royalty Products.
The Company shall be obliged to use the Elan Trademarks to
acknowledge the incorporation of the Medipad System in the Elan
Royalty Products in a manner to be mutually agreed by the parties.
2.3. Subject to the terms of this Agreement, the Company hereby grants to
Elan for the Term a non-exclusive, royalty-free fully paid-up license
to use the Company Technology and the Third Party Technology insofar
as is necessary, in each case, solely to permit Elan to perform its
obligations pursuant to the Development Agreement for the benefit of
the Company, including, without limitation, (a) conducting research
and development pursuant to the Project, and (b) developing,
manufacturing and supplying the Elan Royalty Products and any other
chemical or formulation components. All rights of ownership with
respect to the Company Technology shall at all times remain solely
with the Company.
8
2.4. The Company shall not be permitted to sublicense any of the rights
granted to the Company by Elan pursuant to this Agreement without the
prior written consent of Elan, which consent will not be unreasonably
withheld or delayed; provided that such reasonableness standard in
the case of Elan shall not be applicable in the case of a proposed
sublicense to any Technological Competitor and the terms of any sub-
licence to which Elan consents hereunder will require the prior
approval in writing of Elan. Insofar as the obligations owed by the
Company to Elan are concerned, the Company shall remain responsible
for all acts and omissions of any sub-licensee, as if they were by
the Company. In the event of a termination of this Agreement due to a
breach by the Company, Elan shall have the right but not the
obligation to assume any such sub-license.
2.5. Subject to the other provisions of this Agreement, [****] (a) for or
on behalf of the Company, or (b) with the Company's prior written
consent.
For the avoidance of doubt the parties confirm that [****].
2.6. Notwithstanding anything to the contrary in this Agreement, Elan
shall have the right, outside of the Field, and subject to Clause
2.5, to fully exploit and grant licenses and sublicenses with respect
to the Elan Technology and improvements to the Elan Technology that
may be developed by Elan, Endorex or the Company or jointly by any
combination of Elan, Endorex or the Company pursuant to the Project.
2.7. Elan shall also provide all reasonable assistance to the Company in
delivering and enabling the Company to utilize the Company's license
to the Elan Technology.
2.8. EMT acknowledges and agrees to be bound by the terms of this
Agreement, including but not limited to the licenses granted
hereunder and the provisions of Clause 2.5.
3. THIRD PARTY TECHNOLOGY/SUBSTITUTE COMPOUND
3.1. The Company will use its reasonable endeavours to acquire within 90
days of the Effective Date (by outright acquisition or license)
rights related to a third party's [****] technology and any
intellectual property related thereto (collectively, the "THIRD PARTY
TECHNOLOGY"), upon terms and conditions approved by Elan, utilizing a
mutually agreed portion of the proceeds of the Initial Funding.
3.2. In the event that notwithstanding its reasonable endeavours, the
[****] the Company shall have [****] ("THE SUBSTITUTE COMPOUND").
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
9
In the event that the Company exercises the foregoing option, the
Parties shall negotiate in good faith such amendments as are required
to this Agreement, such as amending the provisions regulating non-
competition.
4. IMPROVEMENTS/ACQUIRED TECHNOLOGY
4.1. Except to the extent prohibited by any undertaking given to any
Independent Third Party (provided that after the Effective Date each
Party shall use all commercially reasonably efforts to exclude or
minimise the extent of any such limitations or restrictions), the
licenses to the Elan Technology granted by Elan and EMT pursuant to
Clause 2 shall include any and all future improvements or
modifications made, invented or developed by Elan or EMT relating to
the Elan Technology and all Patents and other Intellectual Property
Rights relating thereto provided that this Clause 4.1 shall not
include any Acquired Technology as defined in Clause 4.3.
4.2. If Elan and/or EMT develops any improvements during the Term, Elan
and/or EMT shall communicate to the Company such improvements and
shall promptly inform the Company of such improvements so as to
effectively enable the Company to fully utilise the improvements for
the life of this Agreement. Such improvements shall automatically
become part of the Elan Know-How or Elan Patents (as the case may be)
and shall be subject to the provisions of this Agreement including
the license provisions set forth in Clause 2.1 hereof. The Company
shall not have any right to use such improvements outside the Field.
4.3. Subject to pre-existing contractual constraints, in the event that
[****] proposes to [****] after the Effective Date [****] after the
Effective Date pursuant to an agreement existing prior to the
Effective Date [****] shall, for so long as it remains a stockholder
of the Company, or may at its election, if it is no longer a
stockholder of the Company, [****] such details as are required to
[****] Subject to pre-existing contractual constraints, [****] shall
have an [****] (the "FIRST RIGHT OF NEGOTIATION"). [****] shall on
disclosing the details referred to above promptly and [****] in good
faith with [****] as regards the application of the [****] for a
period of [****] unless [****] gives [****] in question. The terms
for the [****] shall be upon [****] to be mutually agreed in good
faith, including terms covering the [****] in respect of such [****].
4.4. In the event that the Company elects not to [****] (or subsequently
discontinues the [****] shall thereafter be entitled to seek to enter
into an agreement with the [****] the said [****] within the [****].
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
10
5. INTELLECTUAL PROPERTY RIGHTS
5.1. All Intellectual Property Rights relating to the Elan Technology
shall be the property of, and held by Elan.
Title to all [****], whether [****] pursuant to the Project or
otherwise, or [****] a [****] pursuant to the Project shall be owned
by [****].
5.2. All Intellectual Property Rights relating to the Company Technology
shall be the property of, and held by, the Company.
Title to all [****] whether [****] pursuant to the Project or
otherwise, or [****] or a [****] pursuant to the Project but
specifically [****] shall be owned [****].
6. EXPLOITATION OF LICENSED TECHNOLOGY
6.1. Except as provided for in this Agreement, the Company's obligations
to exploit the Elan Technology shall be regulated by Clause 9 of the
Development Agreement. The Parties recognize that the Company's
obligations to commercialize the Elan Technology are subject to Elan
first obtaining regulatory approval in the United States for the
Medipad System.
6.2. The Company will diligently pursue the [****] as provided in the
Plan.
The Company shall exert its reasonable efforts to commercialise the
Elan Royalty Product in each country of the Territory consistent with
the market potential for the Elan Royalty Product in each country of
the Territory determined in a commercially reasonable manner and with
a view to achieving maximum benefit to the Parties.
6.3. The Company will be solely responsible for ensuring that the
manufacture, promotion, distribution, marketing and sale of the Elan
Royalty Products within each country of the Territory is in strict
accordance with all the legal and regulatory requirements of each
country of the Territory.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
11
6.4. All advertising, promotional materials and marketing costs needed to
exploit the Elan Royalty Products are to be paid for by the Company.
Any packaging for the Elan Royalty Products shall contain information
to the effect that the Elan Royalty Product has been developed by
Elan in conjunction the Company and is to be agreed upon by Elan in
advance. Such acknowledgement shall take into consideration
regulatory requirements and the Company's reasonable commercial
requirements. The Company shall submit copies of all forms of trade
package cartons and labels and other printed materials to Elan for
approval before commercial sale of the Elan Royalty Product
commences. If a change in such materials from that initially approved
which would require regulatory approval or filing or any other
material change is proposed, all such package cartons and labels and
printed materials shall be resubmitted for approval before commercial
use thereof. It shall be presumed that Elan approved of such use
unless Elan provides written notice of disapproval of such use to the
Company within ten (10) business days of delivery of such materials
to Elan, such approval not to be unreasonably withheld. The further
consent of Elan shall not be required where the format and content of
such materials is substantively similar as the materials previously
furnished to and approved by Elan.
7. FINANCIAL PROVISIONS
7.1. In consideration of the rights and licences in respect of the Elan
Patents granted to the Company pursuant to this Agreement, the
Company shall pay the following amounts to Elan in the manner and on
the dates set forth below:
7.1.1. $10,000,000 upon execution of the Agreement by the Parties,
the receipt and adequacy of which is hereby acknowledged;
7.1.2. [****]
7.1.3. [****]
provided that in the case of the payments described in Clauses 7.1.2
-------------
and 7.1.3:
(1) in the event that the Company has not entered into a licence
agreement with a third party in respect of an Elan Royalty
Product on the date the payment becomes payable hereunder,
Elan shall permit the Company to defer actual payment until a
licence agreement has been executed by the Company and a third
party in respect of an Elan Royalty Product and the payment
shall be paid by the Company to Elan within 30 days of receipt
by the Company of income from the third party under such
licence agreement;
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
12
(2) in the event that the Company has entered into a licence
agreement with a third party in respect of an Elan Royalty
Product on the date the payment becomes payable hereunder, but
the income received by the Company from the third party under
the licence agreement on that date is not sufficient to
discharge in full the payment due to Elan, the Company shall
apply the full amount of all income received from the third
party under the licence agreement in partial discharge of the
payment due to Elan and the Company shall pay to Elan the
balance of the payment from any further sums received by the
Company from one or more third parties, whatever the nature of
the sum received.
7.2. In consideration of the rights and licences in respect of the Elan
Patents granted to the Company pursuant to this Agreement, the
royalty payable by the Company to Elan shall be as follows:
7.2.1. [****]
7.2.2. [****]
provided that
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(1) the Company shall be obliged to pay royalties to Elan in respect
of Net Sales in each country of the Territory at the applicable
royalty rate set out above notwithstanding that there is no
Subsisting patent claim covering the Elan Royalty Product in any
such country where there is no Competition in the country
concerned;
(2) in the event that there is no Subsisting patent claim covering
the Elan Royalty Product in any country of the Territory and
there is Competition in the country concerned, the royalty
payable by the Company to Elan in the circumstances set out in
Clause 7.2.1 shall be reduced to [****] of Net Sales, or the
royalty payable by the Company to Elan in the circumstances set
out Clause 7.2.2, as applicable, shall be reduced to [****] of
Net Sales.
7.3. Elan shall supply, or procure the supply of, Elan Royalty Products
to the Company at [****] In advance of the first launch of an Elan
Royalty Product, the Parties shall negotiate in good faith a supply
agreement on pharmaceutical industry standard terms, including
provisions as to product quality and supply.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
13
7.4. In the event that Elan shall cease to be a shareholder of the
Company, the Parties shall negotiate in good faith such amendments to
the Agreement as are equitable and applicable having regard to the
fact that Elan no longer has any representation on the Board of
Directors of the Company or the Management Committee and will no
longer be providing support or funding to the Company provided that
such negotiations shall not apply to the existence of the Agreement.
7.5. Payment of royalties shall be made quarterly within forty-five (45)
days after the expiry of the calendar quarter. The method of payment
shall be by way of wire transfer to an account specified by Elan.
Each payment made to Elan shall be accompanied by a written report,
prepared and signed by a senior financial officer of the Company. In
addition the report shall clearly show the Net Sales for the months
of the calendar quarter for which payment is being made on a country
by country basis. In the event that no royalty is due to Elan for any
calendar quarter, the senior financial officer shall so report. In
addition to the written reports accompanying each payment, the
Company shall notify Elan, within thirty (30) days of the end of each
calendar quarter, of the Net Sales of the Elan Royalty Product(s) for
that preceding quarter on a country by country basis.
7.6. The Company shall maintain and keep clear, detailed, complete,
accurate and separate records so:
7.6.1. as to enable any royalties on Net Sales of a Elan Royalty
Product which shall have accrued hereunder to be determined;
and
7.6.2. that any deductions made in arriving at the Net Sales of a
Elan Royalty Product can be determined.
7.7. All payments due hereunder shall be made in United States Dollars.
Payments due on Net Sales of the Elan Royalty Product made in a
currency other than United States Dollars shall first be calculated
in the foreign currency and then converted to United States Dollars
on the basis of the exchange rate in effect for the purchase of
United States Dollars with such foreign currency quoted in the Wall
Street Journal (or comparable publication if not quoted in the Wall
Street Journal) with respect to the currency of the country of origin
of such payment for the day prior to the date on which the payment by
the Company is being made.
7.8. Subject to the provisions of Clauses 7.10 of this Agreement, the
Company shall pay all royalties at the rates specified in this Clause
7.
7.9. Elan and the Company agree to co-operate in all respects reasonably
necessary to take advantage of any double taxation agreements or
similar agreements as may, from time to time, be available.
7.10. Any taxes payable by Elan on any payment made to Elan pursuant to
this Agreement shall be for the account of Elan. If so required by
applicable law any payment made pursuant to this Agreement shall be
made by the Company after deduction of the appropriate withholding
tax in which event the Company shall
14
co-operate to the extent reasonably necessary to obtain the
appropriate tax credits as soon as is practicable. In the event of a
credit, the Company shall forthwith forward copies of the credit
documentation to Elan.
8. RIGHT OF AUDIT AND INSPECTION
8.1. [****] the Company shall permit Elan or its duly authorised
representatives upon reasonable notice and at any reasonable time
during normal business hours to have access to inspect and audit the
accounts and records of the Company and any other book, record,
voucher, receipt or invoice relating to the calculation of the
royalty payments on Net Sales submitted to Elan and to the accuracy
of the reports which accompanied them. Any such inspection of the
Company's records shall be at the expense of Elan, except that if any
such inspection reveals a deficiency in the amount of the running
royalty actually paid to Elan hereunder in any calendar quarter of
[****] or more of the amount of any running royalty actually due to
Elan hereunder, then the expense of such inspection shall be borne
solely by the Company. Any amount of deficiency shall be paid
promptly to Elan. If such inspection reveals a surplus in the amount
of running royalty actually paid to Elan by the Company, Elan shall
promptly inform the Company of the existence of such surplus and
shall reimburse the Company the surplus. The Company shall maintain
the foregoing records for a period of at least five (5) years
following the end of the calendar year to which they pertain.
8.2. In the event of any unresolved dispute regarding any alleged
deficiency or overpayment of royalty payments hereunder, the matter
will be referred to an independent firm of chartered accountants for
a resolution of such dispute mutually acceptable to both parties. Any
decision by the said firm of chartered accountants shall be binding
on the Parties.
9. PATENTS
9.1. The Company shall permanently mark or otherwise cause any Independent
Third Party to permanently mark all Elan Royalty Products with the
patent number(s) in respect of the Elan Patents or otherwise provide
notice of the existence of the Elan Patents for each country in the
Territory where sales of the Elan Royalty Products are being made in
a manner compliant with the applicable laws of such country and in
such manner as Elan may reasonably request in writing prior to the
sale or commercial use thereof.
9.2. Elan shall be obliged to disclose promptly to the Company inventions
and discoveries made by or on behalf of Elan relating to the Medipad
System and any patentable inventions and discoveries within the Elan
Technology which relate to the Field.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
15
9.3. The following provisions shall apply to patent filing, prosecution
and maintenance:
9.3.1. Elan, [****] shall have the right but shall not be obligated
(a) to secure the grant of any patent from applications
within the Elan Technology except those that relate
exclusively outside the Field; (b) to file and prosecute
patent applications on patentable inventions and discoveries
within the Elan Technology except those that relate
exclusively outside the Field and patentable improvements
developed by or on behalf of Elan; (c) to defend all such
applications against Independent Third Party oppositions and
interferences; and/or (d) to maintain in force any issued
letters patent within the Elan Technology except those that
relate exclusively outside the Field (including any letters
patent that may issue covering any improvements). Elan shall
have the sole right in its reasonable business discretion to
control such filing, prosecution, defence and maintenance;
provided however, that the Company shall be provided with
copies of all documents relating to such filing, prosecution,
defence, and maintenance in sufficient time to review such
documents and comment thereon prior to filing of such
documents.
9.3.2. The Company shall have the right, but not the obligation, in
the circumstances set out in Clauses 9.3.2(1), (2) and (3)
below, [****] to file and prosecute patent application(s)
described in Clause 9.3.1 in Elan's name and on Elan's
behalf, and Elan upon written request from the Company shall
execute all documents, forms and declarations and to do all
things as shall be reasonably necessary to enable the Company
to exercise such option and right:
(1) Elan elects that it does not intend to file patent
applications on patentable inventions and discoveries
within the Elan Technology except those that relate
exclusively outside the Field or patentable improvements
developed by or on behalf of Elan in one or more
countries in the Territory. Elan shall make such
election and so notify the Company in writing at least 2
months prior to the expiration of any applicable time
bar or other deadline.
(2) Elan fails to file such an application within a
reasonable period of time. Elan shall inform the Company
of any applicable time bar or other deadline for each
patentable invention at least 2 months prior to the
expiration of such applicable time bar or other
deadline.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
16
(3) Elan elects or fails to maintain or prosecute further
any such pending application or issued patent then Elan
shall so notify the Company in writing no less than 2
months prior to the expiration of any applicable due
date or time bar, and after receipt of such notice.
9.3.3. In relation to the Company Technology, the Company, [****]
shall have the right but shall not be obligated (a) to secure
the grant of any patent from applications within the Company
Technology; (b) to file and prosecute patent applications on
patentable inventions and discoveries within the Company
Technology; (c) to defend all such applications against
Independent Third Party oppositions or interferences; and (d)
to maintain in force any issued letters patent within the
Company Technology (including any patents that issue on
patentable inventions and discoveries within the Company
Technology).
The Company shall have the right to control such filing,
prosecution, defence and maintenance; provided however, Elan
shall be provided with copies of all documents relating to
such filing, prosecution, defence, and maintenance in
sufficient time to review such documents and comment thereon
prior to filing of such documents.
9.3.4. In the event that the Company (i) elects that it does not
intend to file patent applications on patentable inventions
and discoveries within the Company Technology, (ii) fails to
file such an application within a reasonable period of time
or, (iii) elects or fails to maintain or prosecute further
any such pending application or issued patent then the
Company shall so notify Elan in writing no less than 2 months
prior to the expiration of any applicable due date or time
bar, and after receipt of such notice, Elan shall, insofar as
it is necessary, have the right, but not the obligation
[****] to file and prosecute such patent application(s) in
the Company's name and on the Company's behalf and the
Company upon written request from Elan shall execute all
documents, forms and declarations and to do all things as
shall be reasonably necessary to enable Elan to exercise such
option and right.
9.4. Elan and the Company shall promptly inform the other in writing of
any alleged infringement of any Elan Patents within the Elan
Technology that relate to the Field or the Company Technology or any
alleged misappropriation of trade secrets within the Elan Know-How
that relate to the Field or the Company Know-How by an Independent
Third Party of which it becomes aware and provide the other with any
available evidence of such infringement or misappropriation.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
17
9.4.1. Except as provided in Clause 11.6, during the Term, the
Company shall have the right but not the obligation to bring
suit or otherwise take action [****] and for its own benefit
any such alleged infringements of the Elan Patents or
misappropriation of the Elan Know-How, insofar as such
infringements or misappropriation relate to the Field or the
sale, importation, manufacture or use of an infusion device
for a compound within the Field.
In the event that the Company takes such action, the Company
shall do so [****]. At the Company's request, Elan will co-
operate with such action insofar as the action relates to the
Field or the sale, importation, manufacture or use of an
infusion device for a compound within the Field [****] for
the purpose of this Agreement and prior to commencing, or at
an early stage in the proceedings, the Company and Elan shall
agree upon [****].
The Company shall keep Elan fully informed of the
infringement or misappropriation action and may not enter
into any settlement agreement or make any formal written
admissions in the course of such actions relating to the Elan
Technology without Elan's prior written consent.
Should the Company decide not to pursue such infringers,
within a reasonable period but in any event within [****]
after receiving written notice of such alleged infringement
or misappropriation or (ii) [****] before the time limit, if
any, set forth in the appropriate laws and regulations for
the filing of such actions, including FDA regulations, to the
extent applicable, whichever comes first, or if such alleged
infringement or misappropriation does not relate to the
Field, Elan may in its discretion initiate such proceedings
in its own name, [****] and at Elan's request, the Company
will co-operate with such action at Elan's sole cost and
expense.
In the alternative, the Parties may agree to institute such
proceedings in their joint names and shall reach agreement as
to the [****] Independent Third Party. If the infringement of
the Elan Patents affects the Field as well as other products
being developed or commercialised by Elan or its commercial
partners outside the Field, the Parties shall agree as to the
manner in which the proceedings should be instituted and
shall reach agreement as to the [****] Independent Third
Party.
9.4.2. During the Term, the Company shall have the sole right but
not the obligation to bring suit or otherwise take action
against any alleged infringement of the Company Patents or
misappropriation of the Company Know-How.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
18
9.5. In the event that a claim or proceedings is brought against the
Company by an Independent Third Party alleging that the sale,
distribution or use of the Elan Royalty Product in the Territory
solely because of the Company's use of the Elan Technology infringes
the patent rights of such an Independent Third Party, the Company
shall promptly advise Elan of such threat or suit.
The Company shall not acknowledge in writing to the Independent Third
Party or to any other person the validity of the patent rights of
such Independent Third Party and shall not compromise or settle any
claim or proceedings or make any formal written admissions in the
course of proceedings relating thereto without the prior written
consent of Elan. At its option, Elan may elect to take over the
conduct of such proceedings from the Company at Elan's expense.
9.6. (a) Elan and/or EMT shall have no liability to the Company whatsoever
or howsoever arising from any losses incurred by the Company as a
result of having to cease selling Elan Royalty Product or having to
defer the launch of selling Elan Royalty Product as a result of any
infringement proceedings ("Loss of ERP Sales"), [****].
(b) Further, Elan and/or EMT shall have no liability for any enhanced
damages awarded as a result of any wilful infringement on the part of
the Company.
(c) The liability of Elan and/or EMT to the Company shall not be
limited in respect of any third party claim against the Company
(including a claim for loss of profits or other consequential damages
by the relevant third party included in such claim), including any
suits or other proceedings by the relevant third party against the
Company arising from such third party claim (and including reasonable
attorney's fees and expenses), to the extent that such third party
claim arises or results from, or constitutes a breach by Elan and/or
EMT of any of the representations or warranties set forth in Clause
13.4. and provided that the Company has complied with the provisions
of Clause 13.8.
10. CONFIDENTIAL INFORMATION
10.1. The Parties acknowledge that it may be necessary, from time to time,
to disclose to each other confidential and/or proprietary
information, including without limitation, the Technologies,
improvements, Know-How and the Patents relating thereto, inventions,
works of authorship, trade secrets, specifications, designs, data,
know-how and other information relating to the Field, the terms of
this Agreement and the Development Agreement, the Elan Royalty
Products, processes and services, or the business of the disclosing
Party ("CONFIDENTIAL INFORMATION").
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
19
Confidential Information shall be deemed not to include:
(i) information that is in the public domain;
(ii) information which is made public by the disclosing Party;
(iii) information which is independently developed by a Party without
the aid or application of the Confidential Information;
(iv) information that is published or otherwise becomes part of the
public domain without any disclosure by a Party, or on the part
of a Party's directors, officers, agents, representatives or
employees;
(v) information that becomes available to a Party on a non-
confidential basis, whether directly or indirectly, from a
source other than a Party, which source, to the best of the
Party's knowledge, did not acquire this information on a
confidential basis; or
(vi) information which the receiving Party is required to disclose
pursuant to:
(A) a valid order of a court or other governmental body or any
political subdivision thereof or otherwise required by law;
or
(B) other requirement of law; provided that if the receiving
Party becomes legally required to disclose any confidential
information, the receiving Party shall give the disclosing
Party prompt notice of such fact so that the disclosing
Party may obtain a protective order or other appropriate
remedy concerning any such disclosure. The receiving Party
shall fully co-operate with the disclosing Party in
connection with the disclosing Party's efforts to obtain
any such order or other remedy. If any such order or other
remedy does not fully preclude disclosure, the receiving
Party shall make such disclosure only to the extent that
such disclosure is legally required.
10.2. Any Confidential Information revealed by a Party to another Party
shall be used by the receiving Party exclusively for the purposes of
fulfilling the receiving Party's obligations and rights under this
Agreement and the Development Agreement and for no other purpose.
10.3. Each Party agrees to disclose Confidential Information of another
Party only to those employees, representatives and agents requiring
knowledge thereof in connection with their duties directly related
to the fulfilling of the Party's obligations and rights under this
Agreement. Each Party further agrees to inform all such employees,
representatives and agents of the terms and provisions of this
Agreement and their duties hereunder and to obtain their consent
hereto as a condition of receiving Confidential Information. Each
Party agrees that it will exercise the same degree of care, but in
no event less than a reasonable degree,
20
and protection to preserve the proprietary and confidential nature
of the Confidential Information disclosed by a Party, as the
receiving Party would exercise to preserve its own proprietary and
Confidential Information. Each Party agrees that it will, upon
request of a Party, return all documents and any copies thereof
containing Confidential Information belonging to or disclosed by,
such Party.
10.4. Notwithstanding the above, each Party may use or disclose
Confidential Information disclosed to it by another Party to the
extent such use or disclosure is reasonably necessary in filing or
prosecuting patent applications, prosecuting or defending
litigation, complying with patent applications, prosecuting or
defending litigation, complying with applicable governmental
regulations or otherwise submitting information to tax or other
governmental authorities, conducting clinical trials, or making a
permitted sub-license or otherwise exercising its rights hereunder,
provided that if a Party is required to make any such disclosure of
the other Party's Confidential Information, other than pursuant to a
confidentiality agreement, such Party shall inform the other Party,
allow the other Party to participate in the process and generally
limit disclosure to the greatest extent possible and seek
confidential treatment or a protective order.
10.5. The provisions relating to confidentiality in this Clause 10 shall
remain in effect during the Term, and for a period of [****]
following the expiration or earlier termination of this Agreement.
10.6. The Parties agree that the obligations of this Clause 10 are
necessary and reasonable in order to protect the Parties' respective
businesses, and each Party expressly agrees that monetary damages
may be inadequate to compensate a Party for any breach by the other
Party of its covenants and agreements set forth herein. Accordingly,
the Parties agree and acknowledge that any such violation or
threatened violation may cause irreparable injury to a Party and
that, in addition to any other remedies that may be available, in
law and equity or otherwise, any Party shall be entitled to seek
injunctive relief against the threatened breach of the provisions of
this Clause 10, or a continuation of any such breach by the other
Party, specific performance and other equitable relief to redress
such breach together with its damages and reasonable counsel fees
and expenses to enforce its rights hereunder.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
21
11. TRADEMARKS
11.1. The Company undertakes that all Elan Royalty Products and all
materials utilised in connection with the provision, marketing,
distribution, advertising and/or marketing thereof that bear or
incorporate the Elan Trademark shall be of a consistent and high
standard of quality, commensurate with the prestige of the Elan
Trademark and that its use of the Elan Trademark shall conform to
such reasonable standards as Elan shall from time to time specify.
The Company shall co-operate fully with the reasonable instructions
of Elan with respect to the maintenance of such standards.
11.2. The Company shall:
11.2.1. with reference to Clause 2.2, be obliged to use the Elan
Trademarks in each country of the Territory to acknowledge
the incorporation of the Medipad System in the Elan Royalty
Products in a manner to be mutually agreed by the parties
and provide proof of use of the Elan Trademarks if
requested by Elan;
11.2.2. use the Elan Trademarks strictly in compliance with any
applicable trademark and other laws and regulations and to
use such legends, markings and notices in connection
therewith as are required by law or otherwise reasonably
required by Elan to protect Elan's rights therein;
11.2.3. do nothing to mislead the public as to the nature or
quality of any Elan Royalty Product on which the Elan
Trademarks are affixed nor use it on advertising or display
materials which are unethical, immoral or offensive to good
taste;
11.2.4. at Elan's reasonable request, supply samples of the Elan
Royalty Products and any materials utilized in connection
with the distribution, advertising and/or marketing thereof
that bear or incorporate the Elan Trademarks for inspection
by Elan;
11.2.5. not adopt or seek to register any trademark, design or logo
confusingly similar to the Elan Trademarks without Elan's
prior written consent; and
11.2.6. promptly notify Elan in writing if any alleged infringement
or unauthorized use of the Elan Trademarks comes to the
Company's attention.
11.3. The Company undertakes to use the Elan Trademarks in relation only
to the Elan Royalty Products (or materials for advertising and
promotion thereof), and in accordance with any reasonable
specifications and directions given by Elan from time to time. In
particular, but without limitation, the Company agrees to state on
the Elan Royalty Products or materials for the advertising or
promotion thereof that the Elan Trademarks are used under license
from Elan.
22
11.4. The Company shall take no action which could prejudice the validity,
re-registration or reputation of the Elan Trademarks or which could
impair the reputation, business standing or prestige of Elan.
11.5. Elan shall remain the owner of the Elan Trademarks and the goodwill
associated with the same and the Company agrees not to assert any
ownership interest in the Elan Trademarks or the goodwill associated
therewith.
11.6. Elan shall have the exclusive right to take such action in respect
of the registration, defence, infringement and maintenance of the
Elan Trademarks as Elan in its reasonable business judgement deems
appropriate. The Company shall provide all such assistance and co-
operation, including the furnishing of documents and information and
the execution of registered user documentation or the like, as may
be required to give effect to any action as may be taken, or
required to be taken, by Elan. In taking any such action, Elan shall
consider the legitimate commercial interests of the Company.
11.7. New trademarks used in relation to the Elan Technology and all
registrations thereof and applications therefor shall be owned and
registered by Elan and shall constitute Elan Trademarks.
12. TERM AND TERMINATION
12.1. This Agreement is concluded for a period commencing as of the
Effective Date and expiring on a Elan Royalty Product by Elan
Royalty Product basis and on a country by country basis on the later
to occur of :
12.1.1. 15 years starting from the date of execution hereof; and
12.1.2. the date of expiration of the last to expire patent included
in the Elan Patents that claims such Elan Royalty Product;
(the "TERM").
12.2. If this Agreement is not earlier terminated in accordance with this
Clause 12, at the end of the Term for each country of the Territory,
the Company shall have a paid-up non-exclusive licence to the Elan
Technology for the Field in such country and the parties shall
negotiate in good faith as to which of the terms of this Agreement
shall continue in full force and effect, should the Company wish to
continue to have rights hereunder, provided that the parties agree
that Clauses 7.1, 7.2, 12.3.2, 12.4 and 12.5 shall not continue in
force or effect.
12.3.1. For the purpose of this Clause 11.3, a "RELEVANT EVENT" is
committed by Elan or the Company if:
(i) it commits a material breach of one of its material obligations
under this Agreement and fails to remedy such breach within 60
days of being specifically required in writing to do so by the
other Party; provided, however, that if the breaching Party has
proposed a course of action to rectify the breach and is acting
in good faith and with due diligence to
23
rectify same but has not cured the breach by the 60th day, such
rectifying period shall be extended by an amount of time as is
reasonably necessary to permit the breach to be rectified;
(ii) it ceases, wholly or substantially, to carry on its business,
other than for the purpose of a reorganization, without the prior
written consent of Elan in the case of the Company, or the
Company in the case of Elan (such consent not to be unreasonably
withheld);
(iii) the voluntary appointment of a liquidator, receiver,
administrator, examiner, trustee or similar officer over all or
substantially all of its assets under the laws of its state or
country of incorporation; or
(iv) an application or petition for bankruptcy, corporate
reorganization, composition, administration, examination,
arrangement or any other procedure similar to any of the
foregoing under the laws of its state or country of
incorporation, is filed, and is not discharged within 90 days.
12.3.2. If Elan commits a Relevant Event, the Company shall have in
addition to all other legal and equitable rights and remedies
hereunder, the right to terminate this Agreement upon 30 days'
written notice; provided, that such written notice be given
within 60 days following the date that the Company becomes aware
of the Relevant Event.
If the Company commits a Relevant Event, Elan shall have in
addition to all other legal and equitable rights and remedies
hereunder, the right to terminate this Agreement upon 30 days'
written notice; provided, that such written notice be given
within 60 days following the date that Elan becomes aware of the
Relevant Event.
12.4. In the event that a [****] shall, directly or indirectly[****] or
otherwise [****] shall be entitled to forthwith [****] to [****].
12.5. Upon a termination coming into effect after an exercise of those
rights of termination as specified in this Clause 12 or elsewhere
within the Agreement, this Agreement shall, subject to the other
provisions of the Agreement, automatically terminate forthwith and
be of no further legal force or effect.
12.6. Upon termination of the Agreement (but not for an expiration, for
which Clause 12.2 shall apply)
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
24
12.6.1. except as expressly provided for under Clause 12.6.2 all
rights, licenses and sublicenses granted in and pursuant to
this Agreement shall cease for the Territory or for such
particular country or countries in the Territory (as the case
may be). Following such termination, the Company may not
thereafter, except as expressly provided for in Clause
12.6.2, use in the Territory or in such particular country or
countries in the Territory (as the case may be) (a) any
Subsisting Elan Patents and improvements, (b) any Elan Know-
How that remains confidential or otherwise proprietary to
Elan, and/or (c) any Elan Trademark; and
12.6.2. the Company shall promptly make an accounting to Elan of the
inventory of the Elan Royalty Product which it has in the
Territory or for such particular country or countries in the
Territory (as the case may be), if any, as of the date of
such termination and the Company shall thereafter have the
right for a period of six (6) months after said termination
to sell such inventory of the Elan Royalty Product in the
Territory or in such particular country or countries in the
Territory (as the case may be) or, if appropriate and legally
permissible, to transport such inventory of Elan Royalty
Product for sale in another country or countries in the
Territory within such six month period; provided that the Net
Sales thereof shall be subject to the royalty provisions of
Clause 7 and so payable to Elan. Thereafter, any remaining
inventory of Elan Royalty Product shall be disposed of by
mutual agreement of the Parties in accordance with regulatory
requirements.
12.7. Upon expiration or termination of the Agreement:
12.7.1. any sums that were due from the Company to Elan on Net
Sales in the Territory or in such particular country or
countries in the Territory (as the case may be) prior to
the expiration or termination of this Agreement as set
forth herein shall be paid in full within 60 days of the
expiration or termination of this Agreement for the
Territory or for such particular country or countries in
the Territory (as the case may be);
12.7.2. all confidentiality provisions set out herein shall remain
in full force and effect;
12.7.3. the rights of inspection and audit set out in Clause 8
shall continue in force for a period of one year;
12.7.4. Elan shall retain all rights to the Elan Technology and
improvements to the Elan Technology;
12.7.5. the Company shall retain all rights to the Company
Technology and improvements to the Company Technology;
12.7.6. rights of permitted third party sublicensees in and to the
Elan Technology and the Company Technology shall survive
the termination of the license;
25
and Endorex and Elan shall in good faith agree upon the
form most advantageous to Elan and Endorex in which the
rights of the sublicensor under any such sublicenses are to
be held (which form may include continuation of the Company
solely as the holder of such licenses or assignment of such
rights to a third party or parties, including an assignment
to both Elan and Endorex).
12.7.7. the Company shall promptly make an accounting to Elan of
the inventory of the Elan Royalty Product which it has in
the Territory or for such particular country or countries
in the Territory (as the case may be), if any, as of the
date of such termination and the Company shall thereafter
have the right for a period of six (6) months after said
expiration or termination to sell such inventory of the
Elan Royalty Product in the Territory or in such particular
country or countries in the Territory (as the case may be)
or, if appropriate and legally permissible, to transport
such inventory of Elan Royalty Product for sale in another
country or countries in the Territory within such six month
period; provided that the Net Sales thereof shall be
subject to the royalty provisions of Clause 7 and so
payable to Elan. Thereafter, any remaining inventory of
Elan Royalty Product shall be disposed of by mutual
agreement of the Parties in accordance with regulatory
requirements.
13. WARRANTIES/INDEMNITIES
13.1. Elan and EMT represents and warrants to the Company that to their
respective best knowledge, after reasonable investigations:-
13.1.1. Elan and EMT have the right to grant the licenses and
rights granted herein;
13.1.2. Schedule 1 contains a summary of the primary pending patent
applications and issued patents comprising the Elan Patents
existing as of the Effective Date;
13.1.3. there are no agreements between Elan, EMT, NanoSystems or
Sano and any Independent Third Parties that conflict with
the rights granted by Elan in or pursuant to this
Agreement,
13.2. Elan represents and warrants to the Company that the Elan Patents
listed in Schedule 1 are solely owned by Elan or EMT and are free
and clear of encumbrances and liens.
13.3. The Company represents and warrants to Elan that it has the sole,
exclusive and unencumbered right to grant the licenses and rights
herein granted to Elan and that it has not granted any option,
license, right or interest in or to the Company Technology to any
Independent Third Party which would conflict with the rights granted
by this Agreement.
26
13.4. Elan represents and warrants to the Company as of the date of the
Effective Date:-
13.4.1. [****];
13.4.2. [****]; and
13.4.3. [****].
13.5. In addition to any other indemnifications provided for herein, Elan
shall indemnify and hold harmless the Company and its Affiliates and
their respective employees, agents, partners, officers and directors
from and against any claims, losses, liabilities or damages
(including reasonable attorney's fees and expenses) incurred or
sustained by the Company arising out of or in connection with any
breach of any representation, covenant, warranty or obligation by
Elan or EMT hereunder.
13.6. In addition to any other indemnifications provided for herein, the
Company shall indemnify and hold harmless Elan and its Affiliates
and their respective employees, agents, partners, officers and
directors from and against any claims, losses, liabilities or
damages (including reasonable attorney's fees and expenses) incurred
or sustained by Elan arising out of or in connection with any breach
of any representation, covenant, warranty or obligation by the
Company hereunder.
13.7. The Company shall assume the sole and entire responsibility and
shall indemnify and save harmless Elan from any and all claims,
liabilities, expenses, including reasonable attorney's fees,
responsibilities and damages by reason of any claim, proceedings,
action, liability or injury arising out of any faults of the Elan
Royalty Products resulting from the transport, packaging, storage,
handling, distribution, marketing or sale of the Elan Royalty
Products by the Company, to the extent that it was caused by the
negligence or wrongful acts or omissions on the part of the Company.
13.8. As a condition of obtaining an indemnity in the circumstances set
out above, the Party seeking an indemnity shall:
13.8.1. fully and promptly notify the other Party of any claim or
proceeding, or threatened claim or proceeding;
13.8.2. permit the indemnifying Party to take full care and control
of such claim or proceeding;
13.8.3. co-operate in the investigation and defence of such claim
or proceeding;
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
27
13.8.4. not compromise or otherwise settle any such claim or
proceeding or make any formal written admission in the course
of proceedings without the prior written consent of the other
Party, which consent shall not be unreasonably withheld
conditioned or delayed; and
13.8.5. take all reasonable steps to mitigate any loss or liability
in respect of any such claim or proceeding.
13.9. [****] NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT,
NONE OF THE PARTIES SHALL BE LIABLE TO THE OTHERS BY REASON OF ANY
REPRESENTATION OR WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF
COMMON LAW, OR UNDER THE TERMS OF THIS AGREEMENT, FOR ANY
CONSEQUENTIAL, INDIRECT OR INCIDENTAL LOSS OR DAMAGE (WHETHER FOR
LOSS OF PROFIT OR OTHERWISE) AND WHETHER OCCASIONED BY THE
NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR EMPLOYEES OR AGENTS OR
OTHERWISE.
14. INSURANCE
14.1. Elan shall maintain comprehensive general liability insurance,
including product liability insurance on the Elan Royalty Products
manufactured and/or sold by Elan in such prudent amount as shall be
determined by the Management Committee. Elan shall provide the
Company with a certificate from the insurance company verifying the
above and undertakes to notify the Company directly at least 30 days
prior to the expiration or termination of such coverage. Elan shall
also provide the Company with a vendor's certificate substantially
in a form to be agreed between the Parties.
14.2. The Company shall maintain comprehensive general liability
insurance, including product liability insurance on Elan Royalty
Products manufactured and/or sold by the Company that incorporate
intellectual property licensed hereunder by Elan in such prudent
amount as shall be determined by the Management Committee. The
Company shall provide Elan with a certificate from the insurance
company verifying the above and undertakes to notify Elan 30 days
prior to the expiration or termination of such coverage.
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
28
15. IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE
15.1. 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.
16. SETTLEMENT OF DISPUTES; PROPER LAW
16.1. The Parties will attempt in good faith to resolve any dispute
arising out of or relating to this Agreement promptly by negotiation
between executives of the Parties, failing which the Parties shall
invoke the dispute resolution provisions set forth in Clause 15 of
the Development Agreement.
16.2. This Agreement shall be governed by and construed in accordance with
the laws of New York and subject to the provisions of Clause 16.1,
the Parties agree to submit to the jurisdiction of the courts of New
York for the resolution of disputes hereunder, which the Parties
have not otherwise agreed should be subject to the binding
determination of an Expert or Panel, pursuant to the terms of this
Agreement.
17. ASSIGNMENT
17.1. This Agreement may not be assigned by either Party without the prior
written consent of the other, which consent in relation to the
proposed assignment to an Affiliate of Elan or the Company, as the
case may be, shall not be unreasonably withheld, conditioned or
delayed.
18. NOTICES
18.1. Any notice to be given under this Agreement shall be sent in writing
in English by registered mail, airmail, reputable courier or
recorded delivery post, or telecopied (with a confirmation copy
promptly sent by mail) to:
if to Elan: Elan Corporation, plc
Lincoln House
Lincoln Place
Dublin 2, Ireland
Telecopier: 353 1 662 4960
Attention: Vice President & General Counsel
Elan Pharmaceutical Technologies
with a copy to: Brock Fensterstock Silverstein & McAuliffe LLC
153 East 53rd Street
56th Floor
New York, New York 10022
29
Telecopier: 1 212 371 5500
Attention: David Robbins
if to the Company: Endorex Newco, Ltd.
Clarendon House
2 Church Street
Hamilton, Bermuda
Telecopier: 001 441 292 4720
Attention: Chairman
with a copy to: Brobeck, Phleger & Harrison LLP
1633 Broadway
47th Floor
New York, New York 10019
Telecopier: 1 212 586 7878
Attention: Nigel Howard
if to the Endorex: Endorex Corporation
900 Lake Shore Drive
Lake Bluff, Illinois 60044
Telecopier: 001 847 604 8570
Attention: President
with a copy to: Brobeck, Phleger & Harrison LLP
1633 Broadway
47th Floor
New York, New York 10019
Telecopier: 1 212 586 7878
Attention: Nigel Howard
if to Elan: Elan Medical Technologies Ltd.
Monksland
Athlone
Co. Westmeath, Ireland
Telecopier: 353 1 662 4960
Attention: Vice President & General Counsel
Elan Pharmaceutical Technologies
with a copy to: Brock Fensterstock Silverstein & McAuliffe LLC
153 East 53rd Street
56th Floor
New York, New York 10022
Telecopier: 1 212 371 5500
Attention: David Robbins
or to such other address(es) as may from time to time be notified by
any Party to the others hereunder.
30
18.2. Any notice sent by mail shall be deemed to have been delivered
within 7 working days after dispatch, any notice sent by reputable
courier shall be deemed to have been delivered within 2 working days
after dispatch and any notice sent by telecopy shall be deemed to
have been delivered within 24 hours of the time of the dispatch.
Notices of change of address shall be effective upon receipt.
19. MISCELLANEOUS CLAUSES
19.1. 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 other breach or
failure to perform or of any other right arising under this
Agreement.
19.2. 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, (i) 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 (ii) the validity, legality and
enforceability of the remaining provisions of this Agreement shall
not be impaired or affected in any way.
19.3. The Parties shall use their respective reasonable endeavors to
ensure that the Parties and any necessary Independent Third Party
shall do, execute and perform all such further deeds, documents,
assurances, acts and things as any of the Parties hereto may
reasonably require by notice in writing to the other Party or such
Independent Third Party to carry out the provisions of this
Agreement.
19.4. This Agreement shall be binding upon and enure to the benefit of the
Parties hereto, their successors and permitted assigns and sub-
licensees.
19.5. 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. In the event of a
conflict between the provisions of this Agreement and the provisions
of the Development Agreement, the terms of the Development Agreement
shall prevail unless this Agreement specifically provides otherwise.
19.6. 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 each Party.
19.7. This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all
of which when taken together shall constitute this Agreement.
31
19.8. Each of the Parties undertake to do all things reasonably within its
power which are necessary or desirable to give effect to the spirit
and intent of this Agreement.
19.9. Each of the Parties hereby acknowledges that in entering into this
Agreement it has not relied on any representation or warranty save
as expressly set out herein or in any document referred to herein.
19.10. Nothing contained in this Agreement is intended or is to be
construed to constitute Elan and the Company as partners, or Elan as
an employee of the Company, or the Company as an employee of Elan.
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 Independent Third Party.
32
IN WITNESS THEREOF the Parties hereto have executed this License Agreement in
quadruplicate.
SIGNED BY
For and on behalf of
ELAN CORPORATION, PLC
/s/ Liam Daniel
SIGNED BY
For and on behalf of
ELAN MEDICAL TECHNOLOGIES LTD.
/s/ Liam Daniel
SIGNED BY
For and on behalf of
ENDOREX CORPORATION
/s/ Michael S. Rosen
President and Chief Executive Officer
SIGNED BY
For and on behalf of
ENDOREX NEWCO, LTD.
/s/ Michael S. Rosen
Chairman
33
SCHEDULE 1
ELAN PATENTS
See attached
MEDIPAD(R) SYSTEM PATENT PORTFOLIO
INTRADERMAL DRUG DELIVERY DEVICE [****]
COUNTRY FILED SERIAL NO. STATUS
Australia 11/17/1994 10763/95 Issued
[****]
New Zealand 11/17/1994 276485 Issued
South Africa 11/18/1994 94/9185 Issued
Taiwan 11/15/1994 83110594 Issued
United States 01/18/1994 08/183,482 Issued
[****]
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
MEDICAMENT DELIVERY DEVICE [****]
(VIAL ON BOARD AND NEEDLE ON THE PERIPHERY)
COUNTRY FILED SERIAL NO. STATUS
[****]
Ireland 09/11/1995 950702 Issued
[****]
South Africa 09/05/1996 96/7502 Issued
[****]
United States 09/11/1996 60/003,673 Expired
09/06/1996 5,814,020 Issued
[****]
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
MEDICAMENT CONVERSION SYSTEM [****]
LYOPHILIZED DRUG SYSTEM I
COUNTRY FILED SERIAL NO. STATUS
[****]
South Africa 09/07/1995 96/7444 Issued
[****]
United States 09/07/1995 60/003,559 Expired
09/06/1996 08/709,486 Pending
[****]
- --------------------------------------------------------------------------------
CARTRIDGE-BASED DRUG DELIVERY DEVICE[****]
(BOLUS MEDIPAD I)
COUNTRY FILED SERIAL NO. STATUS
[****]
South Africa 12/10/1996 96/10374 Issued
Taiwan 02/11/1997 86101675 Issued
[****]
_____________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
DELIVERY NEEDLE [****]
COUNTRY FILED SERIAL NO. STATUS
[****]
South Africa 06/09/1997 97/5065 Issued
Taiwan 07/19/1997 86110263 Published
United States 06/13/1996 60/019,714 Expired[****]
WIPO 06/04/1997 PCT/IE97/00041 Published
(Australia, Brazil, Canada, China, Czech Republic, Hungary, Israel, Norway, New
Zealand, Poland, Russian Federation, Ukraine, United States of America, EP)
[****]
_______________
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
SCHEDULE 2
ELAN TRADEMARKS
See attached
MEDIPAD(R) AND ELAN TRADEMARK PORTFOLIO
ELAN & LOGO
- -----------------------------------------------------------------------------------------------------------
COUNTRY REG./APPL. NO. REG./FILING DATE STATUS INTL. CLASS(ES)
- -----------------------------------------------------------------------------------------------------------
Denmark VA 00147 1994 01/05/94 Pending 5,10
- -----------------------------------------------------------------------------------------------------------
Finland 140765 11/20/95 Registered 5,10
- -----------------------------------------------------------------------------------------------------------
France 92400967 01/13/1992 Registered 10,5
- -----------------------------------------------------------------------------------------------------------
Ireland 128883 08/18/1988 Registered 5
- -----------------------------------------------------------------------------------------------------------
Italy 684515 07/25/1996 Registered 10, 29, 30
5
- -----------------------------------------------------------------------------------------------------------
Japan 4095230 12/19/1997 Registered 5
- -----------------------------------------------------------------------------------------------------------
Norway 179263 01/23/1997 Registered 10, 5
- -----------------------------------------------------------------------------------------------------------
Sweden 326479 03/06/1990 Registered 05, 10
- -----------------------------------------------------------------------------------------------------------
Switzerland 408317 03/23/1993 Registered 5
- -----------------------------------------------------------------------------------------------------------
United States 1,645,769 05/28/1991 Registered 5
- -----------------------------------------------------------------------------------------------------------
ELAN LOGO
- -----------------------------------------------------------------------------------------------------------
COUNTRY REG./APPL. NO. REG./FILING DATE STATUS INTL. CLASS(ES)
- -----------------------------------------------------------------------------------------------------------
Denmark VR 02/593 1994 04/22/1994 Registered 10, 5
- -----------------------------------------------------------------------------------------------------------
Ireland 128884 08/18/1998 Registered 5
- -----------------------------------------------------------------------------------------------------------
Switzerland (B) 404.111 01/18/1993 Registered 10,5
Switzerland (A) 404.110 01/18/1993 Registered 10,5
- -----------------------------------------------------------------------------------------------------------
United States 1,644,210 05/14/1991 Registered 5
- -----------------------------------------------------------------------------------------------------------
MEDIPAD
- -----------------------------------------------------------------------------------------------------------
COUNTRY REG./APPL. NO. REG./FILING DATE STATUS INTL. CLASS(ES)
- -----------------------------------------------------------------------------------------------------------
Ireland (A) 163887 11/23/1994 Registered 5
Ireland (B) 163886 11/23/1994 Registered 10
- -----------------------------------------------------------------------------------------------------------
United Kingdom 2003655 09/05/1997 Registered 10, 5
- -----------------------------------------------------------------------------------------------------------
United States 2,183,377 08/25/1998 Registered 10
- -----------------------------------------------------------------------------------------------------------
SCHEDULE 3
TYPE II TECHNOLOGICAL COMPETITOR
[****]
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.