As executed
This Agreement is dated 2 July, 1999
BY AND BETWEEN
EMISPHERE TECHNOLOGIES, INC.,
a corporation incorporated under the laws of the State of Delaware, USA, having
its executive offices at 765 Old Saw Mill River Road, Tarrytown, NY 10591, USA
as more fully described in the definition of "Emisphere" contained in the
definition section.
AND
ELAN CORPORATION, PLC.,
an Irish company of Lincoln House, Lincoln Place, Dublin 2, Ireland as more
fully described in the definition of "Elan" contained in the definition section.
LICENSE AGREEMENT
[* * *] = This provision is subject to a request for confidential treatment.
TABLE OF CONTENTS
Page No.
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CLAUSE 1. DEFINITIONS..................................................1
CLAUSE 2. GRANT OF RIGHTS..............................................6
CLAUSE 3. IMPROVEMENTS.................................................8
CLAUSE 4. INTELLECTUAL PROPERTY RIGHTS.................................8
CLAUSE 5. FINANCIAL PROVISIONS.........................................8
CLAUSE 6. RIGHT OF AUDIT AND INSPECTION...............................11
CLAUSE 7. PATENTS.....................................................11
CLAUSE 8. CONFIDENTIAL INFORMATION....................................12
CLAUSE 9. TERM OF AGREEMENT...........................................14
CLAUSE 10. WARRANTIES AND INDEMNITIES..................................16
CLAUSE 11. REGULATORY APPROVALS .......................................17
CLAUSE 12. EXPLOITATION................................................18
CLAUSE 13. INSURANCE...................................................18
CLAUSE 14. IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE................18
CLAUSE 15. SETTLEMENT OF DISPUTES; PROPER LAW..........................18
CLAUSE 16. ASSIGNMENT..................................................19
CLAUSE 17. NOTICES.....................................................19
CLAUSE 18. MISCELLANEOUS CLAUSES.......................................20
i
WHEREAS
Emisphere desires to enter into this Agreement with Elan so as to obtain a
non-exclusive licence of the Elan Patent and the Elan Know-How for the Field to
package, import, use, offer for sale and sell the Product(s) in the Territory.
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 other entity controlling,
controlled or under the common control of
Emisphere or Elan, 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 or if not meeting the
preceding criteria, the power to direct or cause the
direction of management and strategic decisions of
that corporation or other entity;
"Agreement" means this agreement (which expression shall be
deemed to include the Recitals, the Schedules and
Appendices hereto);
"Carriers" means the agents SNAC and SNAD only
that are used to facilitate
transport through membranes,
including oral, nasal, buccal,
intraocular, sublingual,
subcutaneous, intramuscular and
pulmonary delivery of the Compounds.
"Compounds" means Heparin and/or Heparinoids;
"Effective Date" means the date of signing of this Agreement by the
parties.
"Elan" means Elan Corporation, plc, and its
successors and permitted assigns,
but excluding its Affiliates save as
specifically included in any
provision of this Agreement.
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"Elan Know-How" means only the specific know-how
which is disclosed in the Elan
Patent, whether or not covered
by any patent, copyright, design
patent, trademark, trade secret or
other industrial or any intellectual
property rights.
For the avoidance of doubt, Elan
Know-How shall not include:
(i) any improvements to the
Elan Know-How invented,
created, conceived or
developed by Elan or its
Affiliates or by any third
party on their behalf;
(ii) any know-how other than the
Elan Know-How owned,
licensed or controlled by
Elan or its Affiliates on
the Effective Date or
subsequent to the Effective
Date;
(iii) any know-how owned by or licensed to
Affiliates of Elan including, without
limitation, [* * *] which
incorporates, inter alia, [* * *].
"Elan Patent" means [* * *] filed by Elan on [* * *] and
[* * *] filed by Elan on [* * *].
For the avoidance of doubt, the Elan
Patent shall not include:
(i) any improvements to the
Elan Patent invented,
created, conceived or
developed by Elan or its
Affiliates or by any third
party on their behalf;
(ii) any patent(s) other than
the Elan Patent owned,
licensed or controlled by
Elan or its Affiliates on
the Effective Date or
subsequent to the Effective
Date;
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(iii) any patent owned by or licensed to Affiliates
of Elan including, without limitation, [* * *]
which incorporates, inter alia, [* * *].
"Emisphere" means Emisphere Technologies, Inc., its Affiliates,
successors and permitted assigns;
"Field" means the research, development and optimisation
of the Compounds solely utilising the Carriers, or
a combination of the Carriers, for all medical
ailments or indications whatever the mode of
administration, as well as the manufacture, use,
promotion, distribution, marketing and sale of the
Product(s);
"FDA" means the United States Food and Drug
Administration or any successors or agency the
approval of which is necessary to market a product
in the United States of America or any other
relevant regulatory authority the approval of which
is necessary to market a product in any other
country of the Territory;
"Heparin" means naturally occurring forms of Heparin,
including Heparin USP, BP and EP as well as
smaller molecular fractions thereof;
"Heparinoids" means various sulphated polysaccharides that have
anti-coagulant activity resembling that of Heparin;
"INDA" means any Investigational New Drug
Application in relation to any
Product(s) filed by Emisphere with
the FDA or a similar application
filed in another jurisdiction;
"In Market" means the sale of any Product(s) by
Emisphere or its Affiliates, or
where applicable by a permitted
sub-licensee, to an unaffiliated
third party such as a wholesaler,
distributor, managed care
organisation, hospital or pharmacy
and the like and
3
shall exclude the transfer pricing of the Product(s)
by Emisphere to an Affiliate or a permitted sub-
licensee;
"NDA" means any New Drug Application in relation to any
Product(s) filed by Emisphere with the FDA or a
similar application filed in another jurisdiction;
"Net Revenues" means any proceeds or other amounts received by
Emisphere in relation to Product(s) including, inter
alia, license royalties and excluding Net Sales, and
proceeds or other amounts received for research and
development and clinical trials [* * *].
"Net Sales" means:
(i) in the case of any Product(s) sold by Emisphere
In Market, that sum determined by deducting
from the aggregate gross In Market sales
proceeds billed for the Product(s) by
Emisphere, [* * *] together with deductions in
accordance with [* * *] US GAAP, subject to a
deduction in respect of uncollectible accounts
(up to a cumulative maximum of [* * *]), and
less ordinary and customary trade discounts and
commissions, excise taxes, withholding tax,
other consumption taxes, and credits or
allowances actually granted on account of
rejection or return of the Product(s);
(ii) where Emisphere does not sell In Market (in
whole), that sum determined by deducting from
the aggregate royalties on sales of any
Product(s) received by Emisphere from a
permitted sublicensee, [* * *]
4
together with deductions in accordance with
[* * *] US GAAP, subject to a deduction in
respect of uncollectible accounts (up to a
cumulative maximum of [* * *]), and less
ordinary and customary trade discounts and
commissions, excise taxes, withholding tax,
other consumption taxes, and credits or
allowances actually granted on account of
rejection or return of the Product(s).
[* * *]
Net Revenues" [* * *]
[* * *]
Net Revenues" [* * *]
[* * *]
Net Revenues" [* * *]
"Product(s)" means oral dosage forms of the
Compound(s) in conjunction with the
Carriers, or a combination of the
Carriers, [* * *]
"Product Manufacturing
Cost" shall mean the costs to Emisphere
directly related to the manufacture
of any Product, calculated in
accordance with the provisions of
Schedule 1.
"SNAC" means Sodium N-[8-(2-hydroxybenzoyl)amino]
caprylate, its free acid, esters thereof and
other pharmaceutically accepted salt forms
thereof;
5
"SNAD" means Sodium N-[10-(2-hydroxybenzoyl)amino]
decanoate, its free acid, esters thereof and
other pharmaceutically accepted salt forms
thereof;
"Technological Competitor" shall mean a company, corporation or person
having a substantial part of its business,
research, development and/or manufacturing in
the drug delivery area of the pharmaceutical
industry.
"Termination Agreement" means the Termination Agreement of even date
herewith between Elan, Emisphere and Ebbisham
Limited.
"Territory" means all the countries of the world; and
"United States Dollars" means the lawful currency for the time being
and "US$" of the United States of America.
1.2 In this Agreement
1.2.1 The singular includes the plural and vice versa, the
masculine includes the feminine and vice versa.
1.2.2 Any reference to a Clause or Schedule shall, unless
otherwise specifically provided, be 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.
2. GRANT OF RIGHTS
2.1 Subject to the terms of this Agreement, Elan hereby grants
to Emisphere and Emisphere hereby accepts for the term of
this Agreement a non-exclusive license of the Elan Patent
and the Elan Know-How solely in the Field to package,
import, use, offer for sale and sell Product(s) in the
Territory.
2.2 All proprietary rights and rights of ownership with respect
to the Elan Patent and the Elan Know-How shall at all times
remain solely with Elan. Emisphere shall not have any rights
to use the Elan Patent or the Elan Know-How other than
insofar as they relate directly to the Field and are
expressly granted herein.
6
2.3 For the avoidance of doubt and subject only to the
non-exclusive license granted to Emisphere hereunder [* * *]
of the Termination Agreement, the parties hereby acknowledge
and agree that, following the Effective Date, Elan (and each
of its Affiliates) shall be free to license, sub-license,
commercialize in any way and otherwise use all of its
patents, know-how and other intellectual property rights in
relation to or in connection with all and any applications
and uses, including for the avoidance of doubt, in relation
to the Compounds, or otherwise, whether alone or in
conjunction with any third party.
2.4 Sub-licensing by Emisphere:
2.4.1 Emisphere shall be entitled, subject to the prior
written consent of Elan which shall not be
unreasonably withheld or delayed, to grant
sub-licences of the Elan Patent and the Elan
Know-How solely in the Field to package, import,
use, offer for sale and sell Product(s) in one or
more countries of the Territory, provided that
Emisphere shall not grant a sub-licence to a
Technological Competitor of Elan.
2.4.2 Any sub-licence granted hereunder shall be in the
same terms mutatis mutandis as the terms of this
Agreement insofar as they are applicable, but
excluding the right to grant a sub-licence.
2.4.3 For the avoidance of doubt, Emisphere shall use its
reasonable endeavours to ensure that Elan shall have
the same rights of audit and inspection vis-a-vis a
sub-licensee, as Elan has pursuant to this Agreement
concerning Emisphere.
2.4.4 Emisphere shall be liable to Elan for all acts and
omissions of any sub-licensee as though such acts
and omissions were by Emisphere and Emisphere shall
provide the indemnity to Elan outlined in Clause 10.
2.4.5 Where a sub-licence has been granted under Clause
2.4.1, such sub-licence shall automatically
terminate if this Agreement terminates for the
country or countries covered by the sub- licence.
2.4.6 For the avoidance of doubt the parties agree that
any sub-licence granted pursuant to this Clause 2.4
shall not be capable of surviving the termination of
this Agreement.
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3. IMPROVEMENTS
3.1 Emisphere shall have no right hereunder or otherwise to any
improvements to the Elan Patent and/or the Elan Know-How
invented, created, conceived or developed by Elan or its
Affiliates, or by any third party on their behalf.
3.2 Elan shall remain the sole and exclusive owner of any
improvements to the Elan Patent and/or the Elan Know-How
invented, created, conceived or developed by Elan or its
Affiliates, or by any third party on their behalf at any
time.
4. INTELLECTUAL PROPERTY RIGHTS
Elan shall remain the sole and exclusive owner of the Elan Patent and
the Elan Know-How.
5. FINANCIAL PROVISIONS
5.1 Licence Royalty:
In consideration of the licence of the Elan Patent granted
to Emisphere under this Agreement, Emisphere shall pay to
Elan a non-refundable license royalty of [* * *] upon
execution of the Agreement by both parties, receipt of which
is hereby acknowledged by Elan.
5.2 Royalties on [* * *] Net Revenues:
In consideration of the licence of the Elan Patent to
Emisphere hereunder, the royalties payable by Emisphere to
Elan on [* * *] Net Revenues, in respect of Product(s), for
the term of this Agreement, shall be as follows:
5.2.1 subject to Clause 5.2.2, [* * *] of
[* * *];
5.2.2 royalties shall be payable by Emisphere to Elan on
[* * *] pursuant to the provisions of Clause 5.2.1
subject to the following conditions:
8
(1) the parties agree that any [* * *] Net
Revenues shall be deemed to be [* * *]
Net Revenues solely for the purpose of
determining whether the [* * *];
(2) for the avoidance of doubt, where the
[* * *], shall not be subject to the
payment by Emisphere to Elan of royalties
pursuant to Clause 5.2.1;
(3) for the avoidance of doubt, the parties
acknowledge that a determination that the
[* * *] by a [* * *] Product [* * *], and
all [* * *] (whether in respect of one or
[* * *]) shall be subject to the payment
by Emisphere to Elan of royalties
pursuant to Clause 5.2.1 [* * *].
5.3 Royalties on [* * *] Net Revenues and Net Sales:
In consideration of the licence of the Elan Patent to
Emisphere hereunder, the royalties payable by
Emisphere to Elan on [* * *] Net Revenues and Net
Sales in respect of Product(s), for the term of this
Agreement, shall be as follows:
5.3.1 subject to Clause 5.3.2, [* * *] of [* * *] Net
Revenues and [* * *] of Net Sales;
5.3.2 the [* * *] royalties which shall be payable by
Emisphere to Elan on the [* * *] of [* * *] Net
Revenues and Net Sales [* * *] of the Agreement
shall be [* * *].
5.4 Payment of royalties shall be made [* * *] within thirty
[* * *] after the expiry of the [* * *]. 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 Emisphere. In addition, the
report
9
shall clearly show the Net Revenues and Net Sales for the
months of the [* * *] for which payment is being
made on a country by country basis. In the event that no
royalty is due to Elan for any [* * *] period, the senior
financial officer shall so report.
5.5 Emisphere shall maintain and keep clear, detailed, complete,
accurate and separate records so:
5.5.1 as to enable any royalties on Net Revenues and Net
Sales which shall have accrued hereunder to be
determined; and
5.5.2 that any deductions made in arriving at the Net
Revenues and Net Sales can be determined.
5.6 All payments due hereunder shall be made in United States
Dollars. Payments due on Net Revenues and Net Sales 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 Emisphere is being made.
5.7 Subject to the provisions of this Agreement, Emisphere shall
pay all royalties at full rate.
5.8 If, at any time, legal restrictions in the Territory prevent
the prompt payment of running royalties or any portion
thereof, the parties shall meet to discuss suitable and
reasonable alternative methods of reimbursing Elan the
amount of such running royalties. In the event that
Emisphere is prevented from making any payment under this
Agreement by virtue of the statutes, laws, codes or
government regulations of the country from which the payment
is to be made, then such payments may be paid by depositing
them in the currency in which they accrue to Elan's account
in a bank acceptable to Elan in the country the currency of
which is involved or as otherwise agreed by the parties.
5.9 Elan and Emisphere agree to co-operate in all respects
necessary to take advantage of any double taxation
agreements or similar agreements as may, from time to time,
be available.
5.10 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 Emisphere after deduction
of the appropriate withholding tax, in which
10
event the parties shall co-operate to obtain the appropriate
tax clearance as soon as is practicable. On receipt of such
clearance, Emisphere shall forthwith procure that the amount
so withheld is paid to Elan.
5.11 Method of calculation of royalties and fees:
The parties acknowledge and agree that the methods for
calculating the royalties and fees hereunder are for the
purposes of the convenience of the parties, are freely
chosen and not coerced.
6. RIGHT OF AUDIT AND INSPECTION
6.1 Not more than once in each calendar year, Emisphere shall
permit an internationally-recognised independent firm of
Chartered Accountants upon reasonable notice and at any
reasonable time during normal business hours to have access
to inspect and audit the accounts and records of Emisphere
relating to the calculation of the royalty payments on Net
Revenues and Net Sales submitted to Elan. Any such
inspection of Emisphere'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 year 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 Emisphere. 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
Emisphere, Elan shall promptly reimburse Emisphere the
surplus.
6.2 In the event of any unresolved dispute regarding any alleged
deficiency or overpayment of royalty payments hereunder, the
matter will be referred to [* * *] for a resolution of such
dispute. Any decision by the [* * *] shall be [* * *] on the
parties.
7. PATENTS
7.1 Elan, at its expense, shall [* * *] to maintain in force any
[* * *] issued letters patent within the Elan Patent that
relate to the Field. Elan shall have the right in its
discretion to control such maintenance provided that
Emisphere at its request shall be provided with copies of
documents relating to such maintenance.
7.2 Elan and Emisphere shall promptly inform each other in
writing of any alleged infringement of any patents within
the Elan Patent by a third
11
party of which it becomes aware and provide the other with
any available evidence of such infringement insofar as such
infringements relate solely to the Field.
7.3 Elan shall have the right to prosecute at its own expense
and for its own benefit any infringements of the Elan Patent
including any infringements that relate solely to the Field.
At Elan's request and expense, Emisphere shall co-operate
with such action. Should Elan decide not to pursue such
infringers insofar as such infringements relate solely to
the Field, within a reasonable period but in any event
within 20 days after receiving written notice of such
alleged infringement, Emisphere may in its discretion
initiate such proceedings in its own name at its expense and
for its own benefit and at Emisphere's request and expense,
Elan shall cooperate with such action.
8. CONFIDENTIAL INFORMATION
8.1 The parties acknowledge that it may be necessary, from time
to time, solely for the purposes of each party performing
this Agreement, to disclose to each other confidential and
proprietary information ("Confidential Information").
8.2 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
under this Agreement and for no other purpose.
8.3 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 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, 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.
8.4 Any breach of this Clause 8 by any of the persons informed
by one of the parties is considered a breach by the party
itself.
12
Confidential Information shall not be deemed to include:
(i) information that is in the public domain;
(ii) is in the possession of the recipient at the time of
disclosure;
(iii) information which is independently developed by a
party;
(iv) information that becomes available to a party on a
non- confidential basis from a third party who is
under no confidentiality obligations to the party
disclosing Confidential Information
8.5 If any party or any of its representatives or Affiliates
becomes legally compelled (by deposition, interrogatory,
request for documents, subpoena, civil investigative demand
or similar process) to disclose any of the other party's
Confidential Information, such party shall provide the other
party with prompt prior written notice and may disclose that
portion of the other party's Confidential Information that
is legally required and shall [* * *] obtain (and shall
cooperate with the other party's efforts to obtain)
assurance that confidential treatment will be accorded the
other party's Confidential Information.
If either party is required by law to make any public
disclosure, including any public filings required to be made
under the rules or regulations of the U.S. Securities and
Exchange Commission, the Nasdaq Stock Market or other
national securities exchange, otherwise prohibited by this
Agreement, such party shall provide the other party with
prompt prior written notice and may disclose that portion of
the other party's Confidential Information that is legally
required and shall [* * *] obtain (and shall cooperate with
the other party's efforts to obtain) assurance that
confidential treatment will be accorded the other party's
Confidential Information.
8.6 The parties agree that the obligations of this Clause 8 are
necessary and reasonable in order to protect the parties'
respective businesses, and each party expressly agrees that
monetary damages would 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 will 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
obtain injunctive relief against the threatened breach of
the provisions of this Clause 8, or a continuation of any
such breach by the other party, specific performance and
other equitable relief to redress
13
such breach together with its damages and reasonable counsel
fees and expenses to enforce its rights hereunder, without
the necessity of proving actual or express damages.
8.7 Subject only to the specific exceptions set forth in this
Clause 8 and Clause 8.4 of the Termination Agreement, none
of the parties shall disclose the existence of this
Agreement or the other agreements entered into by the
parties on the Effective Date, the subject matter hereof nor
originate any publicity, new release or other public
announcement, written or oral without the written consent of
the other parties.
9. TERM OF AGREEMENT
9.1 Subject to the rights of earlier termination set out in
Clauses 9.3 and 9.4, this Agreement commences as of the
Effective Date and expires [* * *] on the [* * *]:
9.1.1 [* * *] years starting from the date of the [* * *]
the Product [* * *]; or
9.1.2 the last to expire patent included in the Elan
Patent.
9.2 At the end of the term as specified in Clause 9.1 above (the
"Initial Period"), the Agreement may continue for an
additional period or periods of [* * *] if both parties so
agree in writing.
9.3 In addition to the rights of early or premature termination
provided for elsewhere in this Agreement, in the event that
any of the terms or provisions hereof are incurably breached
by either party, the non-breaching party may immediately
terminate this Agreement by written notice.
Subject to the other provisions of this Agreement, in the
event of any other breach, the non-breaching party may
terminate this Agreement by giving written notice to the
breaching party that this Agreement will terminate on the
[* * *] day from notice unless cure is sooner effected. If
the breaching party has proposed a course of action to
rectify the breach and is acting in good faith to rectify
same but has not cured the breach by the [* * *] day, the
said period shall be extended by such period as is
reasonably necessary to enable the breach to be cured.
9.4 If at any time during the term of this Agreement, an "Event
of Bankruptcy" (as defined below) relating to Emisphere
occurs, Elan shall
14
have, in addition to all other legal and equitable rights
and remedies available hereunder, the option to terminate
this Agreement upon [* * *] written notice, given within
[* * *] days following the date that Elan becomes aware of
the Event of Bankruptcy.
As used in this Clause 9.4, the term "Event of Bankruptcy"
shall mean:
9.4.1 the appointment of a liquidator, receiver,
administrator, examiner, trustee or similar officer
of either party or over all or a substantial part of
its assets under the law of any applicable
jurisdiction, including without limit, the United
States of America; or
9.4.2 an application or petition for bankruptcy, corporate
re-organisation, composition, administration,
examination, arrangement or any other procedure
similar to any of the foregoing under the law of any
applicable jurisdiction, including without limit,
the United States of America, is filed, and is not
discharged within [* * *], or if either
party applies for or consents to the appointment of
a receiver, administrator, examiner or similar
officer of it or of all or a material part of its
assets, rights or revenues or the assets and/or the
business of either party are for any reason seized,
confiscated or condemned.
9.5 Upon exercise of those rights of termination as specified in
Clause 9.1 to Clause 9.4 inclusive 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.
9.6 Upon expiration or termination of the Agreement:
9.6.1 any sums that were due from Emisphere to Elan on Net
Revenues or 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 [* * *] 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;
9.6.2 all confidentiality provisions set out herein shall
remain in full force and effect;
9.6.3 all responsibilities and warranties shall insofar as
are appropriate remain in full force and effect;
15
9.6.4 the rights of inspection and audit set out in Clause
6 shall continue in force for a period of one year;
9.6.5 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 expiration or termination, Emisphere
may not thereafter use in the Territory or in such
particular country or countries in the Territory, as
the case may be, (a) the Elan Patent; and/or (b) any
Elan Know-How that remains confidential or otherwise
proprietary to Elan.
10. WARRANTIES AND INDEMNITIES
10.1 Emisphere shall assume the sole and entire responsibility
and shall indemnify and save harmless Elan and its
Affiliates from:
10.1.1 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 the manufacture,
transport, packaging, storage, handling,
distribution, marketing, advertising, promotion or
sale of the Product(s) by Emisphere, or any of its
Affiliates or any third party on behalf of
Emisphere;
10.1.2 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 infringement
by the Product(s) of the intellectual property
rights of any third party.
10.2 With reference to Clause 2, Emisphere shall indemnify and
hold harmless Elan and its Affiliates to the extent that any
claims, damages, liabilities, claims, costs or expenses
arise out of any such acts or omissions of any sub-licensee.
10.3 As a condition of obtaining an indemnity in the
circumstances set out above, Elan (and/or the relevant
Affiliate) shall:
10.3.1 fully and promptly notify Emisphere of any claim or
proceeding, or threatened claim or proceeding;
10.3.2 permit Emisphere to take full care and control of
such claim or proceeding;
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10.3.3 reasonably co-operate in the investigation and
defence of such claim or proceeding;
10.3.4 not compromise or otherwise settle any such claim or
proceeding without the prior written consent of
Emisphere, which consent shall not be unreasonably
withheld, conditioned or delayed; and
10.3.5 take all reasonable steps to mitigate any loss or
liability in respect of any such claim or
proceeding.
10.4 ELAN IS GRANTING THE LICENSE HEREUNDER ON AN "AS
IS" BASIS WITHOUT REPRESENTATION OR WARRANTY
WHETHER EXPRESS OR IMPLIED (FROM ELAN OR ANY OF
ITS AFFILIATES), INCLUDING WARRANTIES OF MERCHANT
ABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR
INFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH
WARRANTIES ARE EXPRESSLY DISCLAIMED.
WITHOUT PREJUDICE TO THE PROVISIONS OF CLAUSE 10.1 AND 10.2
HEREOF AND ANY OTHER EXPRESS REPRESEN TATIONS, WARRANTIES,
INDEMNITIES OR OBLIGATIONS OF EMISPHERE HEREUNDER, EMISPHERE
HEREBY DISCLAIMS ANY AND ALL IMPLIED REPRESENTATIONS OR
WARRANTIES.
10.5 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT, ELAN (AND ITS AFFILIATES) AND
EMISPHERE 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 CONSEQUENTIAL OR 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.
11. REGULATORY APPROVALS
11.1 For the avoidance of doubt, Emisphere shall have full
responsibility for its dealings with the FDA relating to the
Product(s) and Elan shall have no responsibility of any
nature relating thereto.
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11.2 Any and all INDAs and other applications for regulatory
approval filed hereunder for the Product(s) shall remain the
property of Emisphere.
11.3 For the avoidance of doubt, the costs and expenses of any
filings and proceedings made by Emisphere to the FDA,
including post approval studies required by the FDA in
respect of the Product(s), and to maintain the FDA approval
relating thereto, shall be paid by Emisphere.
12. EXPLOITATION
12.1 Emisphere will be solely responsible for ensuring that the
manufacture, promotion, distribution, marketing and sale of
the product(s) within each country of the Territory is in
strict accordance with all the legal and regulatory
requirements of each country of the Territory.
12.2 All advertising, promotional materials and marketing costs
needed to exploit the product(s) are to be paid by
Emisphere.
13. INSURANCE
Emisphere shall maintain adequate comprehensive general liability
insurance, including product liability insurance, on the Product(s)
manufactured and/or sold by Emisphere that incorporate intellectual
property licensed by Elan to Emisphere hereunder (or by a third party
on its behalf).
14. IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE
14.1 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 or
non availability of raw materials, but any such delay or
failure shall be remedied by such party as soon as
practicable.
15. SETTLEMENT OF DISPUTES; PROPER LAW
15.1 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.
In the event that such negotiations do not result in a
mutually acceptable resolution, the parties agree to
consider other dispute resolution mechanisms including
mediation. In the event that the parties fail to agree on a
mutually acceptable dispute resolution
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mechanism, any such dispute shall be finally settled by the
courts of competent jurisdiction. The parties hereby submit
to the jurisdiction of the state and Federal courts located
in the state of New York and the courts of Ireland and the
parties hereby waive any and all defences of improper venue
or that the forum is inconvenient.
15.2 This Agreement shall be governed by and construed in
accordance with the laws of Ireland.
16. ASSIGNMENT
16.1 This Agreement may not be assigned by either party without
the prior written consent of the other, which consent shall
not be unreasonably withheld, conditioned or delayed, save
that either party may assign this Agreement to any Affiliate
without such consent, and that Elan may assign this
Agreement to [* * *] without such prior written consent;
provided that such assignment does not have any adverse tax
consequences on the other party.
Elan and Emisphere will discuss any assignment by either
party to an Affiliate prior to its implementation in order
to avoid or reduce any additional tax liability to the other
party resulting solely from different tax law provisions
applying after such assignment to an Affiliate. For the
purpose hereof, an additional tax liability shall be deemed
to have occurred if either party would be subject to a
higher net tax on payments made hereunder after taking into
account any applicable tax treaty and available tax credits
than such party was subject to before the proposed
assignment.
17. NOTICES
17.1 Any notice to be given under this Agreement shall be sent in
writing in English by registered airmail or telefaxed to the
following addresses:
If to Emisphere:
Emisphere Limited
765 Old Saw Mill River Road
Tarrytown, NY 10591
Attention: Chief Financial Officer
Telephone: 001 914 785 4763
Telefax: 001 914 593 8292
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If to Elan:
Elan Corporation plc
Lincoln House
Lincoln Place
Dublin 2
Ireland
Attention: Vice President, General Counsel, Elan
Pharmaceutical Technologies
Telephone: 353 1 7094301
Telefax : 353 1 7094124
or to such other address(es) and telefax numbers as may from
time to time be notified by either party to the other
hereunder.
17.2 Any notice sent by mail shall be deemed to have been
delivered within seven (7) working days after despatch and
any notice sent by telex or telefax shall be deemed to have
been delivered within twenty four (24) hours after the time
of the despatch. Notice of change of address shall be
effective upon receipt.
18. MISCELLANEOUS CLAUSES
18.1 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.
18.2 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.
18.3 The parties shall use their respective reasonable endeavours
to ensure that the parties and any necessary 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 third party to carry out the provisions
of this Agreement.
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18.4 This Agreement shall be binding upon and enure to the
benefit of the parties hereto, their successors and
permitted assigns and sub-licenses.
18.5 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.
18.6 No amendment, modification or addition hereto shall be
effective or binding on either party unless set forth in
writing and executed by a duly authorised representative of
each party.
18.7 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.
18.8 Each of the parties undertakes to do all things reasonably
within its power which are necessary or desirable to give
effect to the spirit and intent of this Agreement.
18.9 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.
18.10 Nothing contained in this Agreement is intended or is to be
construed to constitute Elan and Emisphere as partners, or
Elan as an employee of Emisphere, or Emisphere 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 third party.
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IN WITNESS of which the parties have executed this Agreement.
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SCHEDULE 1
PRODUCT MANUFACTURING COST
The following costs are manufacturing costs which are prepared by [* * *] in
accordance with generally accepted accounting principles consistently applied.
The following expenses are included in manufacturing costs:
1. Direct Materials
Materials used in the manufacturing process that are traced directly to the
completed product and include:
Inert raw materials or excipients
Active substances/ingredients
Packaging components such as bottles, caps, labels, etc.
2. Direct Labour
The cost of employees engaged in production activities which are directly
identifiable with product costs. Direct Labour cost includes:
Base pay, overtime, vacation and holidays, illness, personal with pay
and shift differential.
Cost of employee fringe benefits such as health and life insurance,
payroll taxes, welfare, pension and profit sharing.
3. Indirect Manufacturing Costs
Costs which are ultimately allocated to product based on standard labour hours
of the operating departments. These costs include:
Costs of Direct Labour - employees not utilised for the manufacturing
of product such as training, downtime and general duties.
Indirect Materials - supplies and chemicals which are used in the
manufacturing process and are not assigned to specific products but are
included in manufacturing overhead costs. Includes supplies which are
either common to several products or for which direct assignment to
products is not practical.
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Utilities - expenses incurred for fuel, electricity and water in
providing power for production and other plant equipment.
Maintenance and repairs - amount of expense incurred in-house or
purchased to provide services for plant maintenance and repairs of
facilities and equipment.
Depreciation - of plant (being manufacturing and laboratory premises
and buildings and the service, maintenance and renovation thereof) on
the basis of a 20 year life and equipment (being handling, storage,
manufacturing, processing and testing machinery and equipment) on the
basis of a 7 to 10 year life utilising the straight-line method of
calculation.
Insurance - cost of comprehensive and other insurance necessary for the
safeguard of manufacturing plant and equipment, and business
interruption.
Taxes - expense incurred for taxes on real and personal property
(manufacturing site, buildings, and the fixed assets of equipment,
furniture and fixtures, etc.). If manufacturing site includes other
operations (marketing, research, etc.), taxes are allocated on the
basis of total real and personal property.
4. Quality Assurance Costs
Direct labour and indirect costs for Quality Assurance departments
testing and approving materials used in manufacturing and completed
manufacturing batches and finished products. This includes all
manufacturing in-process testing and testing of finished materials.
Excluded from product costs are QA costs related to research and
development testing and testing which is allocated back to appropriate
manufacturing sites.
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SIGNED BY
/s/ Seamus Mulligan
- ----------------------------------
For and on behalf of
ELAN CORPORATION, PLC.
in the presence of:
- ----------------------------------
SIGNED BY
/s/ Charles Abdalian
- ----------------------------------
For and on behalf of
EMISPHERE TECHNOLOGIES, INC.
in the presence of:
- ----------------------------------
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