1
EXECUTION COPY EXHIBIT 10.10
CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH
RESPECT TO THE PORTIONS
OF THIS EXHIBIT AS
INDICATED HEREIN.
Dated 11th June, 1999
ELAN PHARMACEUTICAL TECHNOLOGIES
A DIVISION OF ELAN CORPORATION, PLC
AND
ELAN PHARMA INTERNATIONAL LIMITED
AND
MINIMED INC.
LICENCE AND MANUFACTURING AGREEMENT
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CONTENTS
CLAUSE 1 PRELIMINARY
CLAUSE 2 APPOINTMENT & LICENCE
CLAUSE 3 INTELLECTUAL PROPERTY
CLAUSE 4 PROJECT TEAM AND PROJECT MANAGEMENT
CLAUSE 5 TECHNOLOGY TRANSFER
CLAUSE 6 FACILITY, EQUIPMENT & COMPONENTS
CLAUSE 7 REGISTRATION OF THE CONTINUOUS SYSTEM
CLAUSE 8 MANUFACTURE & SUPPLY OF THE CONTINUOUS SYSTEM
CLAUSE 9 CHANGE IN SPECIFICATIONS / MANUFACTURING PROCESS
CLAUSE 10 FINANCIAL PROVISIONS
CLAUSE 11 PAYMENTS, REPORTS AND AUDITS
CLAUSE 12 DURATION AND TERMINATION
CLAUSE 13 CONSEQUENCES OF TERMINATION
CLAUSE 14 WARRANTY AND INDEMNITY
CLAUSE 15 CUSTOMER COMPLAINTS AND CONTINUOUS SYSTEM RECALL
CLAUSE 16 MISCELLANEOUS PROVISIONS
SCHEDULE 1 ELAN PATENTS
SCHEDULE 2 SYSTEM SPECIFICATIONS
SCHEDULE 3 PACKAGING SPECIFICATIONS
SCHEDULE 4 PROJECT
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SCHEDULE 5 ROYALTIES
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THIS AGREEMENT is made on 11th June, 1999.
BETWEEN:
(1) ELAN PHARMACEUTICAL TECHNOLOGIES, a division of Elan Corporation, plc, a
company incorporated in Ireland having its registered office at Lincoln
House, Lincoln Place, Dublin 2, Ireland;
(2) ELAN PHARMA INTERNATIONAL LIMITED, a company incorporated in Ireland
having its registered office at WIL House, Shannon Business Park,
Shannon, Co. Clare, Ireland; and
(3) MINIMED INC., a company incorporated under the laws of the State of
Delaware having its principal place of business at 12744 San Fernando
Road, Sylmar, California CA 91342, United States of America.
RECITALS:
A. ELAN is beneficially entitled to the use of various patents, including
the ELAN PATENTS, which have been granted or are pending under the
International Convention in relation to the development and production
of subcutaneous micro-infusion pump devices, methods of drug delivery
using such devices and drug specific dosage forms for pharmaceutical
products, devices and processes.
B. ELAN has developed the CONTINUOUS SYSTEM and has entered into, or
intends to enter into, agreements to supply the CONTINUOUS SYSTEM to
LICENSEES;
C. MINIMED is knowledgeable in the manufacture of pump devices for
pharmaceutical use and maintains the FACILITY for the manufacture of
such devices; and
D. ELAN wishes to appoint MINIMED as the exclusive manufacturer and
packager of the CONTINUOUS SYSTEM for ELAN and to grant MINIMED a
licence of the ELAN INTELLECTUAL PROPERTY for such purpose and MINIMED
is willing to accept such appointment in accordance with the terms
hereof.
NOW IT IS HEREBY AGREED AS FOLLOWS:
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CLAUSE 1 - PRELIMINARY
1.1 DEFINITIONS: In this Agreement unless the context otherwise requires:
AFFILIATE shall mean any corporation or entity controlling or controlled
or under common control with MINIMED or ELAN, as the case may be. For
the purposes of this Agreement, "control" shall mean the direct or
indirect ownership of more than 50% of the issued voting shares or other
voting rights of the subject entity to elect directors, or if not
meeting the preceding criteria, any entity owned or controlled by or
owning or controlling at the maximum control or ownership right
permitted in the country where such entity exists.
BASAL AND BOLUS SYSTEM shall mean ELAN's ambulatory subcutaneous
infusion drug delivery system for direct attachment to the body of a
patient, which is capable of delivering factory pre-programmed
continuous amounts combined with incremental amounts of drug upon
activation either manually or automatically as disclosed and described
in the ELAN PATENTS set forth in Schedule 1.
CFR shall mean the US Code of Federal Regulations 21, as amended from
time to time.
cGCP, cGMP and cGLP shall mean current Good Clinical Practice, current
Good Manufacturing Practice and current Good Laboratory Practices,
respectively, as defined in the FFDCA.
CONTINUOUS SYSTEM shall mean ELAN's ambulatory subcutaneous infusion
drug delivery system for direct attachment to the body of a patient,
having a flexible diaphragm drug reservoir which is capable of
delivering factory pre-programmed continuous amounts of drug upon
activation as disclosed and described in the ELAN PATENTS set forth in
Schedule 1 attached hereto.
CONTINUOUS SYSTEM SPECIFICATIONS shall mean the specifications for the
CONTINUOUS SYSTEM set as of the EFFECTIVE DATE by ELAN and attached as
Schedule 3, as well as such other specifications as may be fixed in
accordance with Clause 9.
CUMULATIVE SALES shall mean (i) the total sum of all sales of the
CONTINUOUS SYSTEM by MINIMED to ELAN pursuant to this Agreement from the
EFFECTIVE DATE plus (ii) the total sum of all units of CONTINUOUS SYSTEM
which are manufactured by MINIMED for MINIMED, its AFFILIATES or
permitted sub-licensees for sale pursuant to the LICENCE AGREEMENT or
such other license agreements as MINIMED and ELAN may subsequently enter
into.
DEVICE REGULATORY APPLICATION shall mean applications for marketing
approval for the SYSTEM with a pharmaceutical compound, but not for the
SYSTEM
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alone, which ELAN or its LICENSEES will file with the RHA in any country
of the TERRITORY, including any supplements or amendments thereto.
DEVICE REGULATORY APPROVAL shall mean the final approval by the RHA to
market a the SYSTEM with a pharmaceutical compound, but not the SYSTEM
alone, in any country of the TERRITORY, including pricing and
reimbursement approval and any other approval which is required to
launch the SYSTEM with the pharmaceutical compound in the normal course
of business.
EFFECTIVE DATE shall mean 11th June, 1999.
ELAN shall mean Elan Pharmaceutical Technologies, a division of Elan
Corporation, plc, Elan Pharmaceutical International Limited and any of
their AFFILIATES.
ELAN BACKGROUND TECHNOLOGY shall mean ELAN PATENTS, and/or ELAN KNOW
HOW. Notwithstanding anything contained in this Agreement to the
contrary, ELAN BACKGROUND TECHNOLOGY shall consist of ELAN KNOW-HOW, and
ELAN PATENTS controlled by Elan Corporation plc doing business as Elan
Pharmaceutical Technologies, and shall exclude (a) inventions, patents
and know-how owned, licensed or controlled by AFFILIATES of Elan
Corporation, plc (other than Elan Pharmaceutical Technologies),
including, without limitation, Elan Pharmaceuticals Inc., Athena
Neurosciences, Inc., Carnrick Laboratories, Targon Corporation and
Neurex Corporation, and (b) the Nanosystems Technology (as defined in
Clause 4.2 of the MANUFACTURING AGREEMENT).
ELAN IMPROVEMENTS shall mean any and all improvements or enhancements,
patentable or otherwise, that have been conceived, created, developed
and/or otherwise invented solely by ELAN or jointly by at least one
employee of ELAN and at least one employee of MINIMED, and which can be
usefully applied to the SYSTEM, including the manufacture thereof,
except for (i) improvements relating exclusively to the COMPOUND (as
defined in the LICENCE AGREEMENT), (ii) any improvements that are
subject to contractual obligations of ELAN to third parties or (iii)
improvements or enhancements based on MINIMED BACKGROUND INFUSION SYSTEM
TECHNOLOGY made solely by MINIMED. If the inclusion of an ELAN
IMPROVEMENT is restricted or limited by a third party agreement, ELAN
shall use reasonable commercial efforts to exclude or where applicable
minimize any such restriction or limitation;
ELAN KNOW-HOW shall mean all knowledge, information, trade secrets, data
and expertise which is not generally known to the public, owned by ELAN,
or to which ELAN has rights under the terms of a licence or licences in
force on the EFFECTIVE DATE, or developed or to be developed before or
during the TERM, which permit(s) disclosure of same to MINIMED, relating
to the SYSTEM, whether or not covered by any patent, copyright, design
patent, trademark, trade secret or other industrial or any intellectual
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property rights.
ELAN PATENTS shall mean the patents and patent applications as set forth
in Schedule 1, that are owned or licensed by or on behalf of ELAN. ELAN
PATENTS shall also include all extensions, continuations,
continuations-in-part, divisionals, patents-of-additions,
re-examinations, re-issues, supplementary protection certificates and
foreign counterparts of such patents and patent applications and any
patents issuing thereon and extensions of any patents licensed
hereunder.
ENFORCEMENT PROCEEDINGS shall mean the proceedings referred to in Clause
3.4.2.
EX WORKS shall have the meaning as such term is defined in the ICC
Incoterms, 1990, International Rules for the Interpretation of Trade
Terms, ICC Publication No. 460.
FACILITY shall mean the plant and facilities of MINIMED located at
Sylmar or MINIMED's future corporate headquarters at the North Campus
section of California State University, Northridge or such other site as
MINIMED may reasonably determine in the discharge of its obligations and
the exercise of its rights hereunder, provided however, that MINIMED
shall discuss the use of any such other site with ELAN in advance and
require the prior written consent of ELAN (to the extent such move would
result in an increase in the MANUFACTURING COST), which consent shall
not be unreasonably withheld or delayed.
FFDCA shall mean the US Federal Food, Drug and Cosmetic Act of 1934, and
the regulations promulgated thereunder, as may be amended from time to
time.
INITIAL PERIOD shall mean the initial period of this Agreement, as more
fully described in Clause 12.
LICENCE AGREEMENT shall mean the Development and License Agreement of
even date entered into between ELAN and MINIMED.
LICENSEE(S) shall mean any unaffiliated independent third party who has
concluded, or who subsequently concludes, a binding agreement with ELAN
or its AFFILIATES for the commercialisation of the CONTINUOUS SYSTEM,
including MINIMED pursuant to the LICENCE AGREEMENT.
MANAGEMENT TEAM shall mean the group to be established pursuant to
Clause 4.
MANUFACTURING COST shall mean MINIMED's direct cost of manufacturing and
packaging the CONTINUOUS SYSTEM which shall be determined on the basis
of direct materials and supplies, labour, quality control/quality
assurance and overhead and attributable general administrative costs
which are calculated in accordance with generally
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accepted accounting principles.
MATERIALS shall mean any components, parts or materials which are
required to manufacture the CONTINUOUS SYSTEM.
MINIMED shall mean MiniMed Inc. and any of its AFFILIATES.
MINIMED BACKGROUND INFUSION SYSTEM KNOW-HOW shall mean all knowledge,
information, trade secrets, data and expertise which is not generally
known to the public, owned or licensed by MINIMED prior to the EFFECTIVE
DATE or independently developed by MINIMED, relating to infusion
systems, whether or not covered by any patent, copyright, design,
trademark or other industrial or intellectual property rights.
MINIMED BACKGROUND INFUSION SYSTEM PATENTS shall mean all patents and
patent applications that are owned by, or licensed to MINIMED prior to
the EFFECTIVE DATE or independently developed by MINIMED, relating to
infusion systems but excluding any MINIMED SYSTEM IMPROVEMENTS. MINIMED
PATENTS shall also include all extensions, continuations,
continuations-in-part, divisionals, patents-of-additions,
re-examinations, re-issues, supplementary protection certificates and
foreign counterparts of such patents and patent applications and any
patents issuing thereon and extensions of any patents licensed
hereunder.
MINIMED BACKGROUND INFUSION SYSTEM TECHNOLOGY shall mean MINIMED
BACKGROUND INFUSION SYSTEM PATENTS and MINIMED BACKGROUND INFUSION
SYSTEM KNOW HOW conceived prior to the EFFECTIVE DATE or independently
developed by MINIMED. For purposes of clarity, the parties acknowledge
that MINIMED SYSTEM IMPROVEMENTS shall not constitute MINIMED BACKGROUND
INFUSION SYSTEM TECHNOLOGY hereunder.
MINIMED SYSTEM IMPROVEMENTS shall mean any and all improvements or
enhancements, patentable or otherwise, that have been conceived,
created, developed and/or otherwise invented solely by MINIMED, which
can be usefully applied to the SYSTEM and which is based upon ELAN
BACKGROUND TECHNOLOGY and/or ELAN IMPROVEMENTS. For purposes of clarity,
the parties acknowledge that (i) MINIMED COMPOUND IMPROVEMENTS (as
defined in the LICENCE AGREEMENT), and (ii) any such improvements or
enhancements that are based on MINIMED BACKGROUND INFUSION SYSTEM
TECHNOLOGY made solely by MINIMED do not constitute MINIMED SYSTEM
IMPROVEMENTS hereunder.
PACKAGING SPECIFICATIONS shall mean the packaging specifications for the
CONTINUOUS SYSTEM mutually agreeable to ELAN and MINIMED and which shall
be attached from time to time as Schedule 3.
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Party shall mean MINIMED or ELAN as the case may be. Parties shall mean
MINIMED and ELAN.
PRODUCTION COMMENCEMENT DATE shall mean the effective date of completion
of Confidential portion omitted and filed separately with the
Commission.
PROJECT shall mean all activity in order to transfer the ELAN
INTELLECTUAL PROPERTY to MINIMED and successfully manufacture the
CONTINUOUS SYSTEM for the purpose of this Agreement, in accordance with
the plan to be drawn up by the PROJECT TEAM and which shall be attached
as Schedule 4, and may be amended from time to time by the agreement of
the parties.
PROJECT TEAM shall mean the group to be established pursuant to Clause
4.
RHA shall mean any relevant government health authority (or successor
agency thereof) in any country of the TERRITORY whose approval is
necessary to manufacture the CONTINUOUS SYSTEM in the relevant country
of the TERRITORY.
TECHNOLOGICAL COMPETITOR shall mean, with respect to ELAN, a
pharmaceutical company or corporation having a substantial or primary
part of its business in research, development and manufacturing of oral,
transdermal or device drug delivery systems and which licenses such drug
delivery systems to third parties for the development of pharmaceutical
products. TECHNOLOGICAL COMPETITOR shall mean, with respect to MINIMED,
a company or corporation having a substantial or primary part of its
business in research, development and manufacturing, or distributing,
devices or products (a) for the infusion or injection of insulin or
insulin analogues or (b) for the measurement of glucose in the treatment
of diabetes.
TECHNOLOGY SUPPORT COST shall mean (a) in the case of ELAN, the
technology support cost which is the sum total of all support and
assistance provided to MINIMED in connection with the transfer of the
ELAN INTELLECTUAL PROPERTY to MINIMED for manufacture of the CONTINUOUS
SYSTEM including direct labour, direct materials and supplies, variable
labour, overhead and attributable administration, quality control,
quality assurance and other costs such as insurance and freight costs,
whether incurred by ELAN, its agents or any
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sub-contractor of ELAN, and shall be incurred in accordance with a
budget established by the PROJECT TEAM; such costs to be calculated in
accordance with generally accepted accounting principles, or (b) in the
case of MINIMED, the sum total of costs incurred by MINIMED for
development performed by MINIMED, as mutually agreed by the Parties,
including direct labour, direct materials and supplies, variable labour,
overhead and attributable administration, quality control, quality
assurance and other costs such as insurance and freight costs, whether
incurred by MINIMED, its agents or any sub-contractor of MINIMED, and
shall be incurred in accordance with a budget established by the PROJECT
TEAM; such costs to be calculated in accordance with generally accepted
accounting principles.
TERM shall mean the term of this Agreement, as set out in Clause 12.
TERRITORY shall mean all of the countries of the world.
WASTE shall mean all rejects or waste materials relating to the
manufacture or packaging of the CONTINUOUS SYSTEM, including but not
limited to, chemical wastes, rejected excess or unusable MATERIALS,
CONTINUOUS SYSTEMS, containers, packaging materials or labels, and
previously used or discarded protective clothing.
$ shall mean United States Dollars.
"US" or "USA" shall mean the United States of America.
1.2 INTERPRETATION: In this Agreement:
1.2.1 the singular includes the plural and vice versa, the masculine
includes the feminine and vice versa and references to natural
persons include corporate bodies, partnerships and vice versa.
1.2.2 any reference to a Clause or Schedule, unless otherwise
specifically provided, shall be respectively to a Clause or
Schedule of this Agreement.
1.2.3 the headings of this Agreement are for ease of reference only
and shall not affect its construction or interpretation.
CLAUSE 2 - APPOINTMENT & LICENCE
2.1 APPOINTMENT OF MINIMED
2.1.1. Subject to the terms of this Agreement and in particular, Clause
2.1.2, ELAN hereby appoints MINIMED as the exclusive
manufacturer and packager of the CONTINUOUS SYSTEM for ELAN and
for ELAN's LICENSEES for direct sale in the TERRITORY for the
TERM.
2.1.2. MINIMED's appointment as exclusive manufacturer of the
CONTINUOUS SYSTEM pursuant to Clause 2.1.1 shall be subject to
the following limitations:
(1) ELAN shall retain the right to manufacture supplies of
the
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CONTINUOUS SYSTEM for development, clinical, commercial
or other purposes for ELAN or ELAN's LICENSEES from the
EFFECTIVE DATE until the Production Commencement Date
(or such later date, up to the time MINIMED has
established a fully automated production line in
accordance with Clause 6.3, as is reasonably necessary
for ELAN to meet the requirements of its LICENSEES), and
solely for development purposes thereafter;
(2) Prior to the execution of this Agreement, ELAN has
entered into an agreement which grants a third party an
exclusive option to acquire an exclusive license for
world-wide rights to manufacture, use and sell the
CONTINUOUS SYSTEM for pain management ("Option
Agreement"). MINIMED's appointment as exclusive
manufacturer of the CONTINUOUS SYSTEM shall be subject
to this Option Agreement. In the event that said third
party does not exercise the Option Agreement or notifies
ELAN that it does not wish to manufacture the CONTINUOUS
SYSTEM for pain management, MINIMED shall automatically
be appointed, and MINIMED shall automatically be deemed
to accept such appointment, as the manufacturer of the
CONTINUOUS SYSTEM for pain management pursuant to the
terms of this Agreement;
(3) (i) Subject to the terms of this Clause 2.1.2. (3), ELAN
hereby grants to MINIMED an option to also become the
exclusive manufacturer of the BASAL AND BOLUS SYSTEM in
addition to the CONTINUOUS SYSTEM (the "BB Option"), on
the same terms and conditions mutatis mutandis as the
terms of this Agreement insofar as they are applicable.
(ii) Subject to paragraphs (iii) and (iv) herein,
MINIMED may exercise the BB Option by written notice
thereof to ELAN at any time within 60 days of MINIMED
acquiring the license rights to the BASAL AND BOLUS
SYSTEM pursuant to the terms of the LICENSE AGREEMENT.
(iii) The BB Option may be exercised by MINIMED only in
conjunction with its acquisition of a licence to the
BASAL AND BOLUS SYSTEM pursuant to the LICENSE
AGREEMENT. In the event that MINIMED's option to acquire
such licence to the BASAL AND BOLUS SYSTEM pursuant to
Clause 2.2. of the LICENCE AGREEMENT expires, the BB
Option shall automatically terminate forthwith and
paragraph (iv) as set out below shall have no force or
effect.
(iv) Confidential portion omitted and filed separately
with the Commission.
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(v) For the avoidance of doubt, in no event shall
MINIMED's exercise of, or failure to exercise, the BB
Option set out herein in any way affect MINIMED's
appointment as the manufacturer of the CONTINUOUS SYSTEM
pursuant to this Agreement.
(4) Except as expressly set forth herein and in the LICENSE
AGREEMENT relative to the CONTINUOUS SYSTEM and the
BASAL AND BOLUS SYSTEM, MINIMED shall have no rights,
manufacturing or otherwise, to any other devices which
are owned, licensed or otherwise controlled by ELAN.
2.2 LICENSE OF ELAN INTELLECTUAL PROPERTY
Subject to the terms of this Agreement, ELAN hereby grants to MINIMED
and MINIMED hereby accepts for the TERM a non-exclusive licence to the
ELAN BACKGROUND TECHNOLOGY and ELAN IMPROVEMENTS to exclusively
manufacture and package the CONTINUOUS SYSTEM for ELAN and ELAN's
LICENSEES as provided herein.
CLAUSE 3 - INTELLECTUAL PROPERTY
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3.1. OWNERSHIP OF ELAN PATENT RIGHTS/KNOW-HOW:
3.1.1. ELAN shall remain the sole owner of the ELAN BACKGROUND
TECHNOLOGY.
3.1.2 ELAN shall remain the sole owner of the ELAN IMPROVEMENTS. Any
ELAN IMPROVEMENTS which are made jointly by at least one
employee of ELAN and at least one employee of MINIMED shall be
assigned to ELAN by MINIMED at ELAN's request.
3.1.3. ELAN hereby grants to MINIMED an irrevocable non-exclusive
perpetual royalty-free license to such ELAN IMPROVEMENTS as are
made jointly by at least one employee of ELAN and at least one
employee of MINIMED; provided however, that any such use shall
be subject to the restrictions set forth in Clause 3.1.3. of the
LICENSE AGREEMENT.
3.1.4 ELAN shall be entitled to use the ELAN BACKGROUND TECHNOLOGY and
ELAN IMPROVEMENTS, and all technical and clinical data,
generated by ELAN pursuant to this Agreement in connection with
ELAN's commercial arrangements.
3.2 OWNERSHIP OF MINIMED PATENT RIGHTS/KNOW-HOW:
3.2.1. MINIMED shall remain the sole owner of all MINIMED BACKGROUND
INFUSION SYSTEM TECHNOLOGY and MINIMED SYSTEM IMPROVEMENTS.
3.2.2. MINIMED hereby grants to ELAN an irrevocable non-exclusive
perpetual royalty-free license to all MINIMED SYSTEM
IMPROVEMENTS for use in the TERRITORY.
3.2.3. In the event that MINIMED wishes to incorporate any MINIMED
BACKGROUND INFUSION SYSTEM TECHNOLOGY in the SYSTEM, MINIMED
shall provide full details of any such MINIMED BACKGROUND
INFUSION SYSTEM TECHNOLOGY to ELAN in writing for review. ELAN
shall have the option, at its sole discretion, to determine
whether to include such MINIMED BACKGROUND INFUSION SYSTEM
TECHNOLOGY in the SYSTEM, which decision shall be considered
with the PROJECT TEAM. In the event that ELAN is agreeable to
including such MINIMED BACKGROUND INFUSION SYSTEM TECHNOLOGY in
the SYSTEM, ELAN and MINIMED shall enter into discussions in
good faith as to the terms upon which such MINIMED BACKGROUND
INFUSION SYSTEM TECHNOLOGY shall be licensed to ELAN.
3.3 FILING AND MAINTENANCE OF PATENTS:
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3.3.1. ELAN will be entitled, at its own expense, to file and prosecute
ELAN PATENTS and patentable ELAN IMPROVEMENTS made solely by
ELAN; to determine the patent filing strategy in relation to
same at its sole discretion; to assert and defend the foregoing
patent applications against third party oppositions; and upon
grant of any letters patent, to maintain such letters patent in
force subject to the following conditions:
(1) ELAN shall promptly notify MINIMED in writing in
relation to the existence of ELAN improvements, or any
other intellectual property rights which may be relevant
to this Agreement and upon request by MINIMED, ELAN
shall provide MINIMED with copies of any documents
relating to the ELAN improvements or other intellectual
property rights in question.
(2) ELAN shall promptly notify MINIMED in writing of any
patent applications filed by ELAN under this Clause
3.3.1 and upon request by MINIMED shall provide copies
to MINIMED to such patent applications and any patents
issuing thereon, to the extent reasonably required in
order for MINIMED to fulfil its obligations under this
Agreement;
3.3.2. Elan shall inform MiniMed in a timely fashion of its intent to
seek patent protection on an Elan Improvement developed jointly
between Elan and MiniMed. At MiniMed's request, Elan shall
cooperate with MiniMed's patent counsel to seek concurrent
patent protection for such an Elan Improvement as it relates to
the System. The parties will cooperate to seek such concurrent
protection so that neither party shall be the owner of any
patent, application or publication that may be used as prior art
against the other, or otherwise be a bar to the other in
obtaining patent protection for such improvement as it relates
to such Elan Improvements.
3.3.3. If ELAN does not intend to make an application for patents or
continue prosecution of a pending application in respect of, or
continue to maintain the ELAN PATENTS or ELAN IMPROVEMENTS in
any or some countries of the TERRITORY, MINIMED will be entitled
to file, prosecute and maintain patent applications and patents
in respect thereof, at its own expense, in accordance with the
following terms:-
(1) MINIMED shall consult with ELAN on a regular basis in
relation to the status of its activities under this
Clause 3.3.3;
(2) ELAN shall execute all documents, forms and
declarations, provide all necessary information and
data, and do all such things as shall be necessary to
enable MINIMED to exercise the foregoing right;
(3) MINIMED shall promptly notify ELAN in writing of any
patent applications filed by MINIMED hereunder and shall
provide all
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reasonable access to ELAN to such patent applications
and any patents issuing thereon.
3.3.4 MINIMED shall inform ELAN in a timely fashion of its intent to
seek patent protection on a MINIMED SYSTEM Improvement developed
solely by MiniMed. At ELAN's request, MINIMED shall cooperate
with ELAN's patent counsel to seek concurrent patent protection
for a MINIMED SYSTEM IMPROVEMENT as it relates to the System and
such an improvement as it relates to ELAN's developments. The
parties will cooperate to seek such concurrent protection so
that neither party shall be the owner of any patent, application
or publication that may be used as prior art against the other,
or otherwise be a bar to the other in obtaining patent
protection for such improvement as it relates to the MINIMED
SYSTEM Improvements.
3.3.5 If MINIMED does not intend to make an application for patents or
continue prosecution of a pending application in respect of, or
continue to maintain the MINIMED SYSTEM IMPROVEMENTS in any or
some countries of the TERRITORY, ELAN will be entitled to file,
prosecute and maintain patent applications and patents in
respect thereof, at its own expense, in accordance with the
following terms:-
(1) ELAN shall consult with MINIMED on a regular basis in
relation to the status of its activities under this
Clause 3.3.5;
(2) MINIMED shall execute all documents, forms and
declarations, provide all necessary information and
data, and do all such things as shall be necessary to
enable ELAN to exercise the foregoing right;
(3) ELAN shall promptly notify MINIMED in writing of any
patent applications filed by ELAN hereunder and shall
provide all reasonable access to MINIMED to such patent
applications and any patents issuing thereon.
3.4 ENFORCEMENT
3.4.1 MINIMED and ELAN shall promptly inform the other in writing of
any alleged infringement of which it shall become aware by a
third party of any patents within the ELAN PATENTS or ELAN
IMPROVEMENTS and provide such other with any available evidence
of infringement.
3.4.2 ELAN, at its option, shall be entitled to institute any
administrative, judicial or other proceeding to prevent or stop
any infringement or unauthorised use ("ENFORCEMENT PROCEEDINGS")
of the ELAN BACKGROUND TECHNOLOGY or ELAN IMPROVEMENTS.
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3.4.3. MINIMED agrees to provide all reasonable co-operation and
assistance to ELAN in relation to any such ENFORCEMENT
PROCEEDINGS and agrees to be named as a party in any ENFORCEMENT
PROCEEDINGS, as necessary, instituted by ELAN hereunder. ELAN
shall reimburse MINIMED its reasonable costs and expense for
co-operating with ELAN hereunder.
3.4.4 MINIMED, at its option, shall be entitled to institute
ENFORCEMENT PROCEEDINGS in respect of any infringement or
unauthorised use of the MINIMED SYSTEM IMPROVEMENTS or MINIMED
INFUSION SYSTEM BACKGROUND TECHNOLOGY at its own expense and for
its own benefit. ELAN agrees to provide all reasonable
co-operation and assistance to MINIMED in relation to any such
ENFORCEMENT PROCEEDINGS and agrees to be named as a party in any
ENFORCEMENT PROCEEDINGS, as necessary, instituted by MINIMED
hereunder.
3.4.5 In the event that the intellectual property owner does not want
to institute ENFORCEMENT PROCEEDINGS, then the other Party may
enforce such rights at its own expense. The intellectual
property owner shall cooperate with the enforcing Party and
provide all reasonable assistance in relation to any such
ENFORCEMENT PROCEEDINGS. The enforcing Party must seek written
approval from the intellectual property owner, which may not be
unreasonably withheld, prior to taking action and must keep the
intellectual property owner informed of the action and may not
enter into any settlement agreement without the intellectual
property owner's consent, which may not be unreasonably
withheld. Any reasonable fees and costs borne by the
intellectual property owner shall be reimbursed by the enforcing
Party. In the event that MINIMED decides to enforce the ELAN
BACKGROUND TECHNOLOGY or ELAN IMPROVEMENTS in accordance with
this paragraph, any recovery remaining after the deduction of
reasonable expenses (including attorney's fees and expenses)
incurred in relation to such ENFORCEMENT PROCEEDINGS shall
constitute NSP for the purpose of the LICENCE AGREEMENT and
MINIMED shall make the appropriate payment to ELAN pursuant to
Clause 11.3 of such agreement. In the event that the LICENCE
AGREEMENT is terminated, MINIMED shall make such payment to ELAN
mutatis mutandis with the provisions of such agreement.
3.5 DEFENCE
3.5.1 In the event that a claim or proceeding is brought against
MINIMED by a third party alleging that the method of
manufacture, manufacture, sale, use or offer for sale of the
CONTINUOUS SYSTEM as claimed in the ELAN PATENTS, infringes the
patent rights of such a third party in the
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TERRITORY, MINIMED shall promptly advise ELAN of such threat or
suit.
3.5.2. Confidential portion omitted and filed separately with the
Commission.
3.5.3. Confidential portion omitted and filed separately with the
Commission.
3.5.4 Confidential portion omitted and filed separately with the
Commission.
Page 17 of 47
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3.5.5. Neither Party shall have any liability to the other party
whatsoever or howsoever arising for any losses incurred as a
result of MINIMED having to cease selling the CONTINUOUS SYSTEM
or having to defer the launch of selling any product containing
the CONTINUOUS SYSTEM.
3.5.6. In the event that a claim or proceeding is brought against ELAN
by a third party alleging that the manufacture, offer for sale,
sale, distribution or use of the SYSTEM infringes any adversely
held patent or involves the unauthorised use of any other
intellectual property, ELAN shall promptly advise MINIMED of
such threat or suit. Subject to ELAN's obligations pursuant to
the provisions of Clause 3.5.2, Clause 3.5.3 and Clause 3.5.4,
MINIMED shall indemnify ELAN against such a claim; provided that
ELAN shall not acknowledge to the third party or to any other
person the validity of the patent rights of such a third party
and shall not compromise or settle any claim or proceedings
relating thereto without the written consent of MINIMED, which
shall not be unreasonably withheld or delayed. At its option,
MINIMED may elect to take over the conduct of such proceedings
from ELAN with counsel of MINIMED's choice. In such event
MINIMED shall keep ELAN advised of all material developments in
the said proceedings and shall not settle or compromise such
proceedings without the consent of ELAN which shall not be
unreasonably withheld or delayed.
3.5.7. In the event that a claim or proceeding is brought against ELAN
by a third party alleging that the manufacture, offer for sale,
sale, distribution or use of the SYSTEM infringes any adversely
held patent or involves the unauthorised use of any other
intellectual property, the provisions of either Clause 3.5 of
this Agreement or Clause 3.5 of the LICENCE AGREEMENT shall
apply; provided however, that in no event shall MINIMED be
entitled to rely upon the provisions of both agreements.
CLAUSE 4 - PROJECT TEAM AND MANAGEMENT TEAM
4.1 It is recognised by the Parties that a significant resource shall be
required from each Party to successfully accomplish the transfer of the
ELAN KNOW-HOW and the manufacture of the CONTINUOUS SYSTEM, particularly
in the co-ordination of logistics, finalisation of various
specifications, supply and packaging configurations, shipping and
handling procedures etc. and for this purpose, the Parties will
establish a PROJECT TEAM within 30 days of the EFFECTIVE DATE.
4.2 The PROJECT TEAM shall consist of a chief representative from each Party
together with such additional business and development personnel from
each Party who are
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19
appropriately skilled and knowledgeable in relation to the appropriate
stage of the PROJECT and who are deemed necessary to accomplish the work
of the PROJECT. The PROJECT TEAM shall have an appropriate number of
members from each of the Parties and the total size of the PROJECT TEAM
shall be agreed from time to time between the Parties.
4.3. Unless otherwise agreed by the Parties, the PROJECT TEAM shall meet
monthly or at such other intervals as the PROJECT TEAM determines, such
meetings to continue until such time as may be agreed. The PROJECT TEAM
may meet in person or by means of such telephone, video or other
communication facilities as permit all members of the PROJECT TEAM to
communicate with each other simultaneously and instantaneously. If the
PROJECT TEAM decides to meet in person, such meetings shall be held
alternatively at the offices of MINIMED and ELAN or as otherwise agreed
by the Parties. Meetings shall be co-chaired by the chief
representatives of the Parties. At and between meetings of the PROJECT
TEAM, each Party shall keep the other fully and regularly informed as to
its progress with its respective obligations.
4.4 The Parties shall also establish a MANAGEMENT TEAM which shall consist
of a senior executive of Elan Pharmaceutical Technologies and a senior
executive of MINIMED. The MANAGEMENT TEAM shall have responsibility for
supervising the PROJECT TEAM and shall act as the liaison between the
Parties during the manufacture of the CONTINUOUS SYSTEM by MINIMED on
behalf of ELAN. Unless otherwise agreed by the Parties, the MANAGEMENT
TEAM shall meet at least bimonthly. Such meeting may be held in person
or by means of such telephone, video or other communication facilities
as permit all members of the MANAGEMENT TEAM to communicate with each
other simultaneously and instantaneously.
4.5. In the event of a dispute between the project managers of each Party on
the PROJECT TEAM, the project managers shall refer the dispute to the
MANAGEMENT TEAM , who shall discuss the matter and attempt to reach an
amicable solution. In the event that the MANAGEMENT TEAM cannot resolve
the dispute amicably, the said officers shall refer the dispute to the
Chairmen of ELAN and MINIMED who shall discuss the matter and attempt to
reach an amicable solution. The provisions of this Clause 4.5. shall be
without prejudice to the Parties' other rights and remedies.
4.6. The Chief Executive Officers of ELAN and MINIMED shall, if they are
unable to resolve a dispute or difference when it is referred to them
under Clause 4.5, refer the matter to an independent expert who is
knowledgeable of the medical device/drug delivery industry (the
"Expert"). The Expert shall be selected by the Chairmen. The Expert
shall be selected having regard to his suitability to determine the
particular dispute or difference on which he is being requested to
determine. Unless otherwise agreed between the Chief Executive Officers,
the following rules shall apply to the appointment of the Expert. The
fees of the Expert shall be shared equally between the Parties in
dispute. The Expert shall be entitled to inspect and examine all
documentation and any other material which he may
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consider to be relevant to the dispute. He shall afford each Party a
reasonable opportunity (in writing or orally) of stating reasons in
support of such contentions as each Party may wish to make relative to
the matters under consideration. The Expert shall give notice in writing
of his determination to the Parties within such time as may be
stipulated in his terms of appointment or in the absence of such
stipulation as soon as practicable. The Parties shall request that the
Expert in any event complete and deliver his findings within four (4)
weeks from the reference of the dispute or difference to him. Any
determination by the Expert of a dispute or difference shall not be
final and binding on the Parties.
4.7. The PROJECT TEAM and MANAGEMENT TEAM shall not have the authority to
amend or vary any of the terms of this Agreement unless in accordance
with the provisions of Clause 16.8.
CLAUSE 5 - TECHNOLOGY TRANSFER
5.1. The PROJECT TEAM shall submit a formal technology transfer procedure for
approval by the MANAGEMENT COMMITTEE before 1st August 1999 which shall
provide for completion of Section I of the technology transfer by * .
This procedure will formally state the responsibilities and duties of
each Party during the transfer process and shall be divided into two
sections:
5.1.1 Section I of the Technology Transfer
This section of the technology transfer shall contain a plan to
provide that the FACILITY has the capacity, on or before * , to
manufacture in routine production a minimum capacity of * units
of the CONTINUOUS SYSTEM per calendar month ;
5.1.2 Section II of the Technology Transfer
This section of the technology transfer shall contain (i) plans
for the establishment of a semi automated / improved manual
production line; and (ii) plans for the establishment of a fully
automated production line at the FACILITY.
This procedure should include the principles of cGMP and current
industry practise as it relates to "process transfer" and validation.
This procedure will be supplemented by technical agreements and all
appropriate documents and practises to ensure an effective and orderly
transfer of the ELAN KNOW-HOW to MINIMED.
5.2 As soon as possible following the execution of this Agreement, ELAN
shall provide to MINIMED, unless it has already done so prior to the
execution of this Agreement, a
- --------
* Confidential portion omitted and filed separately with the Commission
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package of information regarding the CONTINUOUS SYSTEM. The foregoing
data shall include, but shall not be limited to:- engineering and
processing plans and drawings for the CONTINUOUS SYSTEM, the CONTINUOUS
SYSTEM SPECIFICATIONS, design data for tooling, vendor information
design data for test fixtures and a copy of the test software.
5.3 As soon as possible following the execution of this Agreement and at a
mutually convenient date, unless it has already done so prior to the
execution of this Agreement, ELAN shall receive MINIMED's technical
staff in its premises to observe ELAN in the working up and use of the
ELAN KNOW-HOW to manufacture the CONTINUOUS SYSTEM.
5.4. For the period commencing on the EFFECTIVE DATE and expiring on * , ELAN
shall provide, without charge, reasonable technical support and
assistance to MINIMED in connection with implementing the transfer of
the ELAN KNOW-HOW to MINIMED, provided however, that such support and
assistance shall be limited to making employees of ELAN, in such number
as is mutually agreed upon by ELAN and MINIMED, available to MINIMED at
mutually agreeable times and places during normal business hours. Except
for the costs associated with making available such employees to
MINIMED, ELAN shall not be required to incur any additional expenditure
in connection with the transfer of the ELAN KNOW-HOW to MINIMED. During
such period up to 31st March 2000, ELAN shall continue to work on
improving the ability to manufacture the CONTINUOUS SYSTEM on a fully
automated production line, provided however, that the amount of
expenditure, whether internal or external, to be incurred by ELAN in
performing such work shall be within the sole discretion of ELAN. The
PROJECT TEAM shall establish the extent, if any, to which ELAN shall
provide further technical support and assistance to MINIMED as and from
* . In the event that ELAN provides such additional services, ELAN's
charges for this work shall be on the basis set out in Clause 10.2.
5.5. MINIMED shall be responsible, at its expense, for all activities
associated with preparing
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* Confidential portion omitted and filed separately with the Commission
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22
the FACILITY for the manufacture of the CONTINUOUS SYSTEM, ordering,
installing and validating the EQUIPMENT, and locating and approving
suppliers for the MATERIALS. Consistent with Clause 5.4, ELAN shall
reasonably cooperate with MINIMED in connection with such activities.
5.6. MINIMED and ELAN hereby confirm that each shall undertake its respective
part of the PROJECT as a collaborative effort and that the provisions of
this Agreement requires that each Party diligently carries out those
tasks assigned to it under the PROJECT and as otherwise agreed during
the course of the PROJECT. Each Party shall co-operate with the other in
good faith particularly with respect to unknown problems or
contingencies and shall perform its obligations in good faith and in a
commercially reasonable, diligent and workmanlike manner.
CLAUSE 6 - FACILITY, EQUIPMENT & MATERIALS
6.1 MINIMED shall be responsible at its sole expense, for furnishing all
operations, labour, supervision, equipment, tools, machinery, MATERIALS
and facilities necessary to manufacture and package the CONTINUOUS
SYSTEM at the FACILITY in accordance with the CONTINUOUS SYSTEM
SPECIFICATIONS, PACKAGING SPECIFICATIONS and REGULATORY APPROVALS
including but not limited to:
6.1.1. designing, ordering, installing and validating all equipment,
machinery and tooling necessary to establish the manual and
fully automated production lines for the manufacture of the
CONTINUOUS SYSTEM, subject to and in accordance with Clauses 6.2
and 6.3;
6.1.2. qualifying, ordering, receiving, approving and storing, in
suitable facilities free from contamination, all of the
MATERIALS which are necessary to manufacture the CONTINUOUS
SYSTEM;
6.1.3. qualifying, ordering, receiving, approving and storing, in
suitable facilities free from contamination, all of the
packaging materials required for the packaging of the CONTINUOUS
SYSTEM;
6.1.4. maintaining all manufacturing and quality systems, procedures
and records in accordance with cGMP and cGLP and the REGULATORY
APPROVALS;
6.1.5. analysing for quality control, storing and packaging the
CONTINUOUS SYSTEM in accordance with the PACKAGING
SPECIFICATIONS; and
6.1.6. handling, storing and treating and/or disposing of any WASTE
generated in connection with the services provided by MINIMED to
ELAN pursuant
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to this Agreement.
For the avoidance of doubt, all equipment, machinery and tooling which
is furnished by MINIMED at its sole expense pursuant to this Clause 6
shall be the property of MINIMED.
6.2 MINIMED undertakes that it shall exercise all commercially reasonable
efforts to establish and validate, on or before the PRODUCTION
COMMENCEMENT DATE, a manual production line at the FACILITY which has
the capacity to manufacture in routine production a minimum of * units
of the CONTINUOUS SYSTEM per calendar month which are in accordance with
the CONTINUOUS SYSTEM SPECIFICATIONS. Thereafter, MINIMED undertakes
that it shall exercise commercially reasonable efforts to enable
production capacities at the levels and in accordance with the schedule
set forth below:
Months From
PRODUCTION COMMENCEMENT DATE Units per Month
* *
* *
Confidential portion omitted and filed separately with the Commission.
6.3 MINIMED undertakes that it shall * to establish and validate a fully
automated production line at the FACILITY to enable production
capacities of the CONTINUOUS SYSTEM in accordance with the CONTINUOUS
SYSTEM SPECIFICATIONS at the levels and in accordance with the schedule
set forth below:
Months From Completion of
Section II of Technology Transfer Units per Month
--------------------------------- ---------------
* *
* *
* *
The PROJECT TEAM shall agree upon a date for completion of Section II of
the technology transfer. Such validation of the fully automated
production line shall be performed in accordance with the instructions
of the PROJECT TEAM. MINIMED shall construct the fully automated
production line for the
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* Confidential portion omitted and filed separately with the Commission
Page 23 of 47
24
CONTINUOUS SYSTEM in a cost efficient manner which will allow such
production line to be expanded to satisfy, in a commercially reasonable
fashion, any increased capacity requirements for the CONTINUOUS SYSTEM.
Notwithstanding anything to the contrary contained herein, it is
acknowledged and agreed that production of a new medical device
technology and the technology transfer contemplated by Clause 5 of this
Agreement each involve inherent risks in terms of outcomes and timing,
and the obligation of MINIMED hereunder shall be expressly limited to a
covenant to exercise commercially reasonable efforts in connection
therewith. Pursuant to Clause 2.1.2.(1), until such time MIMIMED has
established the fully automated production line in accordance with this
paragraph, ELAN shall be free to manufacture such amounts of the
CONTINUOUS SYSTEM as may be required by ELAN or its LICENSEES in excess
of the amount which MINIMED has the capacity to manufacture and supply
to ELAN.
6.4 MINIMED shall regularly consult with ELAN at meetings of the PROJECT
TEAM and MANAGEMENT TEAM and otherwise, regarding all activities being
undertaken by MINIMED in preparation for the manufacture and packaging
of the CONTINUOUS SYSTEM pursuant to this Agreement including
establishing the manual and fully automated production lines and
identifying vendors for the MATERIALS. When reasonably requested,
MINIMED shall furnish ELAN with a report outlining the status of such
activities including but not limited to the projected completion dates
for the manual and fully automated production lines. MINIMED shall also
permit ELAN, or the ELAN members of the PROJECT TEAM, at mutually
agreeable times and intervals and at ELAN's sole cost and expense, to
attend at the FACILITY to observe the establishment of the manual and
fully automated production lines.
6.5 MINIMED shall be responsible for, and shall ensure that, all of the
suppliers of equipment, tools, machinery and MATERIALS shall hold all
necessary licenses and registrations appropriate and necessary for the
inclusion of such MATERIALS in the CONTINUOUS SYSTEM. MINIMED shall keep
ELAN fully informed of the identity of such suppliers, which information
shall be deemed to be confidential information hereunder for the TERM of
this Agreement and shall not be disclosed by ELAN to its LICENSEES or
other third parties except as is required in order to obtain any DEVICE
REGULATORY APPROVALS or by any laws, rules or regulations. MINIMED shall
be liable to ELAN for any defective MATERIALS which may be included in
the CONTINUOUS SYSTEM.
6.6 MINIMED warrants that it shall only use equipment, tools, machinery and
MATERIALS in the manufacture of the CONTINUOUS SYSTEM which are in
accordance with the CONTINUOUS SYSTEM SPECIFICATIONS and PACKAGING
SPECIFICATIONS for the CONTINUOUS SYSTEM and all applicable laws, rules
and regulations.
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6.7. In the event that any MATERIALS are required by ELAN in connection with
the development and commercialisation of the CONTINUOUS SYSTEM and/or
the BASAL AND BOLUS SYSTEM, MINIMED acknowledges that it shall sell such
MATERIALS directly to ELAN, to the extent MINIMED has such MATERIALS in
inventory. Such MATERIALS shall be charged by MINIMED to ELAN at cost,
plus any direct or indirect costs reasonably incurred in MINIMED's
procurement of such MATERIALS.
CLAUSE 7 - REGISTRATION OF THE FACILITY AND CONTINUOUS SYSTEM
7.1 ELAN and its LICENSEES shall be responsible, at their expense, for
filing and maintaining all DEVICE REGULATORY APPLICATIONS and DEVICE
REGULATORY APPROVALS for the CONTINUOUS SYSTEM. MINIMED shall provide
all reasonable assistance to, and shall co-operate with, ELAN and its
LICENSEES in filing and maintaining all DEVICE REGULATORY APPLICATIONS
and DEVICE REGULATORY APPROVALS for the CONTINUOUS SYSTEM including
providing any data or other information concerning the manufacture and
packaging of the CONTINUOUS SYSTEM which is available to MINIMED.
7.2 MINIMED shall be responsible, at its expense, for filing and maintaining
all licenses and registrations necessary for the manufacture and
packaging of the CONTINUOUS SYSTEM at the FACILITY. MINIMED shall
procure that ELAN and its LICENSEES shall have the right to refer free
of charge to any licenses and registrations of MINIMED (other than the
associated direct costs of ELAN and its LICENSEES) as may be necessary
for the purpose of obtaining REGULATORY APPROVALS from time to time.
7.3 MINIMED shall permit RHAs to inspect the FACILITY where the CONTINUOUS
SYSTEM are manufactured, packaged or stored to the extent required by
any laws, rules or regulations in order to secure any DEVICE REGULATORY
APPROVALS for the CONTINUOUS SYSTEM. If any RHA conducts or gives notice
to MINIMED of its intent to conduct an inspection at the FACILITY or
take any regulatory action with respect to the CONTINUOUS SYSTEM,
MINIMED will promptly give notice thereof to ELAN. ELAN acknowledges
that ELAN may not direct the manner in which MINIMED fulfils its
obligations to permit inspection by RHAs. MINIMED shall provide ELAN
with copies of any documentation resulting from such audit with no
deletions within 5 days after receipt to the extent such documentation
relates to the CONTINUOUS SYSTEM.
7.4 MINIMED shall only conduct such technical analysis, studies or tests on
the CONTINUOUS SYSTEM as is reasonably necessary for the purpose of
MINIMED fulfilling its obligations under this Agreement.
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CLAUSE 8 - MANUFACTURE AND SUPPLY OF THE CONTINUOUS SYSTEM
8.1 Save as otherwise provided in this Agreement and in particular Clause
2.1.2, MINIMED shall be the sole and exclusive manufacturer and supplier
of the CONTINUOUS SYSTEM to ELAN in the TERRITORY and ELAN will purchase
the CONTINUOUS SYSTEM exclusively from MINIMED in the TERRITORY.
8.2 The CONTINUOUS SYSTEM shall be supplied to ELAN by MINIMED in sterile
form encased in an outer carton in final packaged form or in other such
form as may be agreed by the Parties during the PROJECT. MINIMED shall
deliver the CONTINUOUS SYSTEM to ELAN and/or any party designated by
ELAN in proper packaging in accordance with the PACKAGING SPECIFICATIONS
so as to permit safe storage and transport and to maintain the
sterilisation of the CONTINUOUS SYSTEM.
8.3 Subject to the production capacity limitations set forth in Clause 6.2
of this Agreement, MINIMED shall deliver the CONTINUOUS SYSTEM to ELAN
within 90 days of the receipt of a firm purchase order therefor (120
days in the case of LAUNCH STOCKS). MINIMED represents and warrants that
each shipment of CONTINUOUS SYSTEM shall conform to the CONTINUOUS
SYSTEM SPECIFICATIONS. ELAN and its LICENSEES shall be entitled to rely
upon such representation and warranty without the necessity of
additional testing. Notwithstanding the foregoing, routine testing
protocols will be established and implemented as contemplated by Clause
8.7 hereof.
8.4 Prior to the commencement of commercial manufacture of the CONTINUOUS
SYSTEM, ELAN shall provide a rolling 18 months forecast for the period
beginning on the first day of the relevant calendar month. The format of
such 18 months forecasts shall be comprised of a 12 monthly forecast
together with 2 quarterly forecasts. The first calendar quarter of such
18 months forecast shall be a binding purchase commitment of ELAN. In
addition to the obligation of ELAN regarding rolling 18 month forecasts
outlined herein, ELAN shall provide MINIMED with rolling 3 years'
forecasts on 1 August of each year of this Agreement.
The PROJECT TEAM shall agree upon a minimum batch for each form of the
CONTINUOUS SYSTEM which shall be manufactured by MINIMED for ELAN
pursuant to the terms of this Agreement.
8.5. Subject to the production capacity limitations set forth in Clause 6.2
of this Agreement. MINIMED warrants that during the term of this
Agreement, MINIMED shall provide and/or maintain sufficient capacity at
the FACILITY to be able supply ELAN with such amounts of the CONTINUOUS
SYSTEM as may be forecasted by ELAN for the first calendar quarter of
each rolling 18 month forecast which is provided by ELAN pursuant to the
terms of Clause 8.4. MINIMED will use commercially reasonable efforts to
fulfil ELAN's requirements in excess of such forecasted amounts, but
shall not be obliged to meet such requirements if it is not
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27
reasonably practicable to do so provided that MINIMED shall supply the
CONTINUOUS SYSTEM so ordered but not immediately available as soon
thereafter as reasonably practicable.
Subject to the agreement of the PROJECT TEAM, the calendar quarterly
forecasts (other than for LAUNCH STOCKS) shall not increase or decrease
from one quarter to the next by more than 25% in terms of volume of the
CONTINUOUS SYSTEM ordered. Notwithstanding the foregoing, MINIMED will
use its reasonable efforts to fulfil ELAN's requirements in excess of
forecasted amounts, but shall not be obliged to meet such requirements
if it is not reasonably practicable to do so provided that MINIMED shall
supply the units of CONTINUOUS SYSTEM so ordered but not immediately
available as soon thereafter as reasonably practicable.
8.6 Save as otherwise agreed between the Parties, delivery of consignments
of CONTINUOUS SYSTEM shall be effected to ELAN or ELAN's designee by
MINIMED EX-WORKS the FACILITY. Risk of loss of or damage to any
consignment of the CONTINUOUS SYSTEM shall pass to ELAN or it's designee
when each such consignment of the CONTINUOUS SYSTEM is loaded onto the
vehicle of ELAN or ELAN's designee's agent on which it is to be
despatched from the FACILITY. ELAN or it's designee shall fully insure
or procure the insurance of all consignments of the CONTINUOUS SYSTEM
from the time when risk passes as aforesaid and shall produce the
supporting insurance when requested by MINIMED.
8.7 All claims for failure of any delivery of the CONTINUOUS SYSTEM to
conform in all material respects to CONTINUOUS SYSTEM SPECIFICATIONS
under Clause 8 shall be made by ELAN to MINIMED in writing as soon as
possible but in any event within 45 days following delivery except in
the case of latent defects. Claims for latent defects, which could not
have been reasonably discovered during the routine testing protocol (to
be agreed by ELAN and MINIMED), shall be made by ELAN to MINIMED in
writing as soon as possible but in any event within 60 days of
discovery. Failure to make timely claims in the manner prescribed shall
constitute acceptance of the delivery. Where possible, ELAN shall return
the defective CONTINUOUS SYSTEM to MINIMED, in such amount as is agreed
by the parties, in support of any claim pursuant to this Clause 8.7.
8.8. MINIMED represents and warrants that each shipment of CONTINUOUS SYSTEM
shall comply with the CONTINUOUS SYSTEM SPECIFICATIONS. In the event of
a failure to comply with the CONTINUOUS SYSTEM SPECIFICATIONS, MINIMED
shall bear sole responsibility for all direct costs reasonably incurred
by ELAN or ELAN's LICENSEES in relation to any testing, handling,
processing, packaging, destruction or return of the defective CONTINUOUS
SYSTEM including any WASTE.
8.9 Any CONTINUOUS SYSTEM which has been delivered and which has been shown
within the period designated in Clause 8.7 not to conform to the
CONTINUOUS
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SYSTEM SPECIFICATIONS, shall be replaced at MINIMED's cost within 90
days of the receipt of notice thereof by MINIMED of the failed
CONTINUOUS SYSTEM, provided that such failure is the responsibility of
MINIMED pursuant to Clause 8.8.
8.10 In the event of an unresolved dispute as to conformity of the CONTINUOUS
SYSTEM with CONTINUOUS SYSTEM SPECIFICATIONS, the Parties shall within
30 days appoint an independent first class laboratory to undertake the
relevant testing and its findings shall be conclusive and binding upon
the Parties. All costs relating to this process shall be borne solely by
the unsuccessful Party.
8.11 The Parties shall negotiate in good faith to conclude a detailed
technical agreement(s) regulating the Parties' respective obligations
from a technical and quality perspective for the supply of the
CONTINUOUS SYSTEM by MINIMED to ELAN or ELAN's LICENSEES.
8.12. Subject to Section 16.6 hereof, in the event that (i) MINIMED fails to
supply a shipment of the CONTINUOUS SYSTEM which has been ordered by
ELAN for a period exceeding * days from the receipt of a firm purchase
order or (ii) there are delays in filling each of * successive orders
which delays cumulatively exceed * days when each delay is measured
beginning on the * day from receipt of the corresponding firm purchase
order or (iii) there is a shortfall * successive orders delivered by
MINIMED which on a cumulative basis, exceeds * % of the total amount of
said * orders, then MINIMED shall promptly notify ELAN in writing of the
cause of the failure, delay or shortfall in supply of the CONTINUOUS
SYSTEM. If MINIMED has not remedied the failure, delay or shortfall
within a period of * days of such notice, ELAN shall for so long as such
conditions exist, be entitled to at ELAN's option to either suspend
MINIMED's appointment as an exclusive manufacturer pursuant to Clause
2.1. and ELAN may manufacture itself or appoint an alternative
manufacturer of the CONTINUOUS SYSTEM. In such event MINIMED shall
without charge:
8.12.1. provide ELAN (or ELAN's designee) with any technical data
necessary for the carrying of this into effect, which
information or data shall be deemed to be confidential
information hereunder. To this end, MINIMED shall impart to ELAN
the documentation constituting the required material support,
more particularly practical performance advice, shop practice,
specifications as to materials to be used and control methods;
and
8.12.2. assist ELAN for the working up and use of the ELAN BACKGROUND
TECHNOLOGY and ELAN IMPROVEMENTS, the machinery tools and
equipment necessary to manufacture the
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* Confidential portion omitted and filed separately with the Commission
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CONTINUOUS SYSTEM as well as for the training of ELAN's
personnel. For this purpose, MINIMED shall receive ELAN's
scientific staff in its premises for periods the term of which
shall be decided by common consent.
In the event of such a transfer of manufacture the parties shall agree
on a reasonable period of time within which said transfer is to be made
and MINIMED shall continue to supply ELAN with the CONTINUOUS SYSTEM
until such transfer is fully effected so that ELAN's supply of the
CONTINUOUS SYSTEM shall be continuous and uninterrupted until ELAN or
ELAN's designee receives all necessary regulatory approvals.
When MINIMED has remedied the situation that prevented MINIMED from
satisfying ELAN's requirements and is once again able to fulfil its
obligations to supply the CONTINUOUS SYSTEM as provided for in this
Agreement, ELAN shall cease manufacturing the CONTINUOUS SYSTEM or
purchasing the CONTINUOUS SYSTEM from an alternative manufacturer and
shall resume purchasing the CONTINUOUS SYSTEM from MINIMED pursuant to
the terms of this Agreement; provided that
(i) in the event that ELAN is manufacturing the CONTINUOUS SYSTEM
itself, ELAN shall be entitled to continue manufacturing the
CONTINUOUS SYSTEM for the period necessary so as to enable ELAN
to recoup those costs expended by ELAN in establishing its
manufacturing capability for the CONTINUOUS SYSTEM plus * %.
(ii) in the event that ELAN has appointed an alternative manufacturer
of the CONTINUOUS SYSTEM, ELAN shall be entitled to purchase the
CONTINUOUS SYSTEM from such alternative manufacturer for so long
as ELAN has contracted to purchase the CONTINUOUS SYSTEM from
such party. ELAN shall use reasonable endeavours to limit the
term of such appointment of a third party as an alternative
manufacturer of the CONTINUOUS SYSTEM.
In the event that at any stage of this Agreement, MINIMED is unable to
manufacture the CONTINUOUS SYSTEM for a continuous period in excess of 6
months, ELAN shall be entitled to terminate this Agreement in accordance
with the provisions of Clause 13.
8.13 In the event of any failure, inability or delay by MINIMED in supplying
the CONTINUOUS SYSTEM pursuant to this Agreement (and notwithstanding
that ELAN may have suspended or terminated MINIMED's appointment as the
exclusive manufacturer of the CONTINUOUS SYSTEM in accordance with
Clause 8.12) MINIMED shall be liable to ELAN and ELAN's LICENSEES in
damages for the direct
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* Confidential portion omitted and filed separately with the Commission
Page 29 of 47
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losses sustained as a result of any such failure, inability or delay in
supplying CONTINUOUS SYSTEM; provided, however, that MINIMED shall not
be liable to ELAN and ELAN's LICENSEES for any such losses if the
failure, inability or delay in supplying CONTINUOUS SYSTEM is the result
of an event of force majeure pursuant to Clause 16.6 of this Agreement.
8.14. In the event of any shortfall or delay in the manufacture or supply of
the CONTINUOUS SYSTEM by MINIMED, MINIMED shall treat all outstanding
orders for the CONTINUOUS SYSTEM in a pro rata and equitable manner. In
no event shall MINIMIED favour itself or any of its AFFILIATES or
permitted sub-licensees in fulfilling any orders which may be
outstanding for the CONTINUOUS SYSTEM.
8.15 Notwithstanding the foregoing provisions, the Parties recognise that the
CONTINUOUS SYSTEM shall be supplied by ELAN to ELAN's LICENSEES for
commercial sale in the TERRITORY. Accordingly, in the event that the
above provisions are not agreeable to such LICENSEES, ELAN and MINIMED
undertake to enter into negotiations in good faith to discuss
appropriate amendments to the provisions of Clause 9.
CLAUSE 9 - CHANGE IN SPECIFICATIONS / MANUFACTURING PROCESS
9.1. MINIMED shall not amend or change:
(i) the CONTINUOUS SYSTEM SPECIFICATIONS, PACKAGING SPECIFICATIONS,
or
(ii) the manufacturing and/or packaging procedures for the CONTINUOUS
SYSTEM in any way which would affect the design, form, fit,
function or safety of the CONTINUOUS SYSTEM,
unless such amendment or change has been approved in advance in writing
by ELAN, which approval shall not unreasonably be withheld. Any other
changes shall be communicated by MINIMED to ELAN in writing on a
quarterly basis.
9.2. ELAN shall be entitled at any time during the term of this Agreement to
amend or change the CONTINUOUS SYSTEM SPECIFICATIONS and/or the
PACKAGING SPECIFICATIONS to accommodate the requests of ELAN's LICENSEES
for the CONTINUOUS SYSTEM and MINIMED shall be obliged to comply with
any such amendments or changes. ELAN shall consult with MINIMED in
advance of any such amendments or changes. In such event, MINIMED shall
be entitled to a change in the price of such model for CONTINUOUS
SYSTEM, and ELAN shall reimburse MINIMED for any resultant WASTE in
inventory resulting therefrom to the extent that such inventory was
specifically required and ordered by MINIMED in accordance with
forecasts furnished by ELAN pursuant to Clause 8. Subject to ELAN's
commitment to commercialise the CONTINUOUS SYSTEM,
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ELAN shall use all reasonable efforts in its dealing with LICENSEES to
minimise any material changes to the CONTINUOUS SYSTEM SPECIFICATIONS
and PACKAGING SPECIFICATIONS. MINIMED shall not be required to make any
such amendment or changes to the extent they require a material capital
expenditure by MINIMED as determined by the PROJECT TEAM. In the event
such a modification is agreed upon by MINIMED and effected hereunder,
MINIMED may increase the price of the CONTINUOUS SYSTEM by an
incremental amount that will amortize said capital cost over the
remaining orders for the CONTINUOUS SYSTEM, as modified. In the event
that such a modification is not agreed upon by MINIMED, ELAN shall have
the option, at its sole discretion, to
(i) appoint an alternative manufacturer of the CONTINUOUS SYSTEM
which contains such amendments or changes solely for such
LICENSEES which request such modifications, and Clause 2.1 of
the Agreement shall be amended accordingly; or
(ii) to discharge itself or through its LICENSEES, such material
capital charge, on terms to be agreed in good faith, and in such
event, MINIMED shall be obliged to comply with any such
amendment or change to the CONTINUOUS SYSTEM SPECIFICATIONS
and/or the PACKAGING SPECIFICATIONS.
9.3. Any change or amendment pursuant to this Clause 9 in the CONTINUOUS
SYSTEM SPECIFICATIONS and/or the PACKAGING SPECIFICATIONS of the
CONTINUOUS SYSTEM which is to be commercialised by MINIMED pursuant to
the LICENSE AGREEMENT shall require MINIMED's prior consent, which shall
not be unreasonably withheld or delayed.
CLAUSE 10 - FINANCIAL PROVISIONS
10.1 LICENCE ROYALTIES:
10.1.1 In consideration of the licence of the ELAN PATENTS granted to
MINIMED under this Agreement, MINIMED shall pay to ELAN the
non-refundable amounts as set forth in Schedule 5.
Each of the milestone payments which are payable by MINIMED to
ELAN pursuant to this Section shall be paid by MINIMED to ELAN
within 30 days of the achievement of the relevant milestone.
10.2 DEVELOPMENT ROYALTIES:
10.2.1. In the event that work or technical assistance beyond that
provided for in Clause 5.4 ("Additional Work") is requested by
MINIMED, MINIMED shall
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reimburse ELAN in respect of the cost of such Additional Work
requested by MINIMED or required pursuant to the terms of this
Agreement provided that:-
(i) ELAN's charges for such work shall be ELAN's TECHNOLOGY
SUPPORT COST plus * %; and
(ii) payment for all Additional Work carried out by ELAN
hereunder shall be invoiced by ELAN to MINIMED at the
end of each calendar quarter. Payment shall be effected
in US Dollars within 30 days of the date of receipt of
the relevant invoice.
10.2.2 In the event that ELAN requests MINIMED in writing to perform
work or provide technical assistance on modifying the CONTINUOUS
SYSTEM for manufacture on an automated production line, and
MINIMED is agreeable to performing such work or providing such
assistance, the Parties shall agree upon a detailed plan and
budget in advance of MINIMED commencing such work or assistance.
ELAN shall reimburse MINIMED in respect of the cost of such work
or assistance requested by ELAN at MINIMED's TECHNOLOGY SUPPORT
COST plus * %. Such amounts shall be invoiced by MINIMED to ELAN
at the end of each calendar quarter. Payment shall be effected
in US Dollars within 30 days of the date of receipt of the
relevant invoice.
10.3 PRICE OF CONTINUOUS SYSTEM:
10.3.1. The price of the CONTINUOUS SYSTEM to be charged by MINIMED to
ELAN shall be as set forth in Schedule 5.
10.3.2 At the end of each quarter, MINIMED shall retrospectively
determine the exact amount of MANUFACTURING COST for the
preceding calendar quarter month period and provide supporting
details and evidence to ELAN and if necessary, there shall be a
payment either by MINIMED to ELAN or by ELAN to MINIMED to
adjust to such exact MANUFACTURING COST.
10.3.3. Payment for all CONTINUOUS SYSTEM delivered from the FACILITY to
ELAN shall be effected in U.S. Dollars ($) within 30 days of the
date of the delivery of the CONTINUOUS SYSTEM EX WORKS the
FACILITY.
CLAUSE 11 - PAYMENTS, REPORTS AND AUDITS
11.1 MINIMED shall keep true and accurate records of the MANUFACTURING COST
including but not limited all costs included in calculating the
MANUFACTURING COST
- --------
* Confidential portion omitted and filed separately with the Commission
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and the methods used in calculating such costs. MINIMED shall deliver to
ELAN a written statement ("the STATEMENT") thereof within 30 days
following the end of each calendar quarter, (or any part thereof in the
first or last calendar quarter of this Agreement) for such calendar
quarter. The STATEMENT shall outline in detail the MANUFACTURING COST
during that calendar quarter. The Parties' financial officers shall
agree upon the precise format of the STATEMENT.
11.2 Any income or other taxes which either Party is required by law to pay
or withhold on behalf of the other Party with respect any monies payable
to such Party under this Agreement shall be deducted from the amount of
such monies due. The paying Party shall furnish the receiving Party with
proof of such payments. Any such tax required to be paid or withheld
shall be an expense of and borne solely by the receiving Party. The
paying Party shall promptly provide the receiving Party with a
certificate or other documentary evidence, if available, to enable the
receiving Party to support a claim for a refund or a foreign tax credit
with respect to any such tax so withheld or deducted by the paying
Party. The Parties will reasonably cooperate in completing and filing
documents required under the provisions of any applicable tax treaty or
under any other applicable law, in order to enable the paying Party to
make such payments to the receiving Party without any deduction or
withholding.
11.3 All payments due hereunder shall be made to the designated bank account
of the receiving Party in accordance with such timely written
instructions as the receiving Party shall from time to time provide.
11.4 The paying Party shall pay interest to the receiving Party at the Prime
Rate publicly announced by Morgan Guaranty Trust Company of New York at
its principal office on the date (or next to occur business day, if such
date is not a business day) on which payment should have been made
pursuant to the applicable provisions of this Agreement plus 5%, or to
the extent permissible by law, on all late payments under this Agreement
applicable from the date on which payment should have been made pursuant
to the applicable provisions of this Agreement until the date of
payment.
11.5 For the 180 day period following the close of each calendar year of the
Agreement, MINIMED and ELAN will, in the event that the other Party
reasonably requests such access, provide each other's independent
certified accountants (reasonably acceptable to the other Party) with
access, during regular business hours and subject to the confidentiality
provisions as contained in this Agreement, to such Party's books and
records relating to the CONTINUOUS SYSTEM, solely for the purpose of
verifying the accuracy and reasonable composition of the calculations
hereunder for the calendar year then ended.
11.6 In the event of a discovery of a discrepancy which exceeds 5% of the
amount due or charged by a Party for any period, the cost of such
accountants shall be borne by the audited Party; otherwise, such cost
shall be borne by the auditing
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Party.
11.7 MINIMED shall make (and where relevant shall procure that MINIMED's
subcontractor shall make) that portion of the FACILITY where the
CONTINUOUS SYSTEM is manufactured, tested or stored, including all
record and reference samples relating to the CONTINUOUS SYSTEM available
for inspection by ELAN, ELAN's LICENSEES or by the relevant governmental
or regulatory authority. The investigation shall be limited to
determining whether there is compliance with cGMP and other requirements
of applicable law.
CLAUSE 12 - DURATION AND TERMINATION
12.1 This Agreement shall be deemed to have come into force on the EFFECTIVE
DATE and, subject to the rights of termination outlined in this Clause
12 will expire on the 12th anniversary of the date of the first launch
of the CONTINUOUS SYSTEM in the TERRITORY ("the INITIAL PERIOD").
12.2 At the end of the TERM, the Agreement shall continue automatically for
rolling 2 year periods thereafter, unless the Agreement has been
terminated by either of the Parties by serving 2 years' written notice
on the other 2 years immediately prior to the end of the INITIAL PERIOD
or any additional 2 year period provided for herein.
12.3 In addition to the rights of termination provided for elsewhere in this
Agreement, either Party will be entitled forthwith to terminate this
Agreement by written notice to the other Party if:
12.3.1 that other Party commits any material breach of any of the
provisions of this Agreement, and in the case of a breach
capable of remedy, fails to remedy the same within 90 days after
receipt of a written notice giving full particulars of the
material breach and requiring it to be remedied;
12.3.2 that other Party goes into liquidation (except for the purposes
of amalgamation or reconstruction and in such manner that the
company resulting therefrom effectively agrees to be bound by or
assume the obligations imposed on that other Party under this
Agreement);
12.3.3 an encumbrancer takes possession or a receiver is appointed over
any of the property or assets of that other Party;
12.3.4 any proceedings are filed or commenced by that other Party under
bankruptcy, insolvency or debtor relief laws or anything
analogous to any of the foregoing under the laws of any
jurisdiction occurs in relation to that other Party;
12.4 For the purposes of Clause 12.3.1, a breach will be considered capable
of
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remedy if the Party in breach can comply with the provision in question
in all respects other than as to the time of performance (provided that
time of performance is not of the essence).
12.5 In further addition to the rights and termination provided for elsewhere
in this Agreement, ELAN shall be entitled to terminate this Agreement at
any stage without notice in the event that:-
12.5.1 any applicable RHA, state or local regulatory approvals, laws,
ordinances or regulations, present or future, for the FACILITY
are amended, suspended or revoked, and as a result, the FACILITY
ceases to be suitable for the manufacture and packaging of the
CONTINUOUS SYSTEM and same is not cured within 90 days of such
event. In the event of any dispute between the Parties as to the
suitability of the FACILITY as a result of any such amendment,
suspension or revocation, the Parties shall refer the matter an
Expert in accordance with Clause 4.6;
12.5.2. MINIMED fails to establish and validate in so far as is
reasonably possible to "approvable" regulatory status in the US,
the manual and fully automated production lines for the
manufacture of the CONTINUOUS SYSTEM within * months of the
dates designated in Clauses 6.2. and 6.3 respectively;
12.5.3 the LICENCE AGREEMENT is terminated by ELAN in accordance with
the terms set out therein; or
12.5.4 a TECHNOLOGICAL COMPETITOR of a Party or a company with a
directly competing product acquires * % or more of the other
Party's voting stock or where * % or more of such company's
voting stock is acquired by a Party hereto.
CLAUSE 13 - CONSEQUENCES OF TERMINATION
13.1 Upon exercise of those rights of termination specified in Clauses 12 or
elsewhere in this Agreement, this Agreement shall, subject to the
provisions of the Agreement which survive the termination of the
Agreement, automatically terminate forthwith and be of no further legal
force or effect.
13.2 Upon termination of the Agreement by either Party, the following shall
be the consequences:-
13.2.1 any sums that were due from one Party to the other Party under
the
- --------
* Confidential portion omitted and filed separately with the Commission
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provisions of this Agreement prior to the exercise of the right
to terminate this Agreement as set forth herein shall be paid in
full within 30 days of termination of this Agreement and such
receiving Party shall not be liable to repay to the paying Party
any amount of money paid or payable by such paying Party to the
receiving Party up to the date of the termination of this
Agreement;
13.2.2 all confidentiality provisions set out herein shall remain in
full force and effect for a period of * years from the date of
termination of this Agreement;
13.2.3. all documents or data containing ELAN KNOW-HOW or confidential
information of ELAN including any electronic file, note,
extract, analysis or any other way of representing or recording
and recalling information which contains, reflects or is derived
from ELAN KNOW-HOW or confidential information, shall be
promptly returned by MINIMED to ELAN;
13.2.4 all responsibilities and warranties shall insofar as they are
appropriate remain in full force and effect;
13.2.5 the rights of inspection and audit shall continue in force for
the period referred to in the relevant provisions of this
Agreement;
13.2.6 MINIMED shall provide at MINIMED's fully allocated cost plus *
%, for a reasonable period which shall be decided by common
consent, all reasonable assistance to ELAN (or ELAN's designee)
in the working up and use of the ELAN INTELLECTUAL PROPERTY and
the specifications and plans for the tools, machinery and
equipment necessary to manufacture the CONTINUOUS SYSTEM as well
as for the training of ELAN's personnel, provided however, that
where termination is due to the default of MINIMED, such
assistance shall be provided without charge. For this purpose,
MINIMED shall receive ELAN's staff in its premises for periods
the term of which shall be decided by common consent. For the
avoidance of doubt, in no event shall Clause 13.2.2 or Clause
16.1 restrict ELAN's use of the specifications and plans for the
tools, machinery and equipment furnished pursuant to this
paragraph or any information which may have been disclosed to
ELAN pursuant to Clause 6.
CLAUSE 14 - WARRANTY AND INDEMNITY
14.1 ELAN represents and warrant to MINIMED as follows:
- --------
* Confidential portion omitted and filed separately with the Commission
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14.1.1 ELAN is duly and validly existing in the jurisdiction of its
incorporation and each other jurisdiction in which the conduct
of its business requires such qualification (except where such
failure to so qualify shall not have a material adverse affect
on the business and assets of ELAN), and is in material
compliance with all applicable laws, rules, regulations or
orders relating to its business and assets;
14.1.2 ELAN has full corporate authority to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby; this Agreement has been duly executed and delivered by
ELAN and constitutes the legal and valid obligations of ELAN and
is enforceable against ELAN in accordance with its terms and the
execution, delivery and performance of this Agreement and the
transactions contemplated hereby and will not violate or result
in a default under or creation of lien or encumbrance under
ELAN's memorandum and articles of association or any material
agreement or instrument binding upon or affecting ELAN or its
properties or assets or any applicable laws, rules, regulations
or orders affecting ELAN or its properties or assets;
14.1.3 ELAN is not in material default of its memorandum and articles
of association, any applicable material laws or regulations or
any material contract or agreement binding upon or affecting it
or its properties or assets and the execution, delivery and
performance of this Agreement and the transactions contemplated
hereby will not result in any such violation;
14.1.4 ELAN represents and warrants that the execution of this
Agreement will not breach or in any way be inconsistent with the
terms and conditions of any licence, contract, understanding or
agreement, whether express, implied, written or oral between
ELAN and any third party.
14.2 MINIMED represents and warrants to ELAN as follows:
14.2.1 MINIMED is duly and validly existing in the jurisdiction of its
incorporation and each other jurisdiction in which the conduct
of its business requires such qualification (except where such
failure to so qualify shall not have a material adverse affect
on the business and assets of MINIMED), and is in material
compliance with all applicable laws, rules, regulations or
orders relating to its business and assets;
14.2.2 MINIMED has full corporate authority to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby; this Agreement has been duly executed and delivered by
MINIMED and constitutes the legal and valid obligations of
MINIMED and is enforceable
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against MINIMED in accordance with its terms and the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby and will not violate or result in a default
under or creation of lien or encumbrance under MINIMED's bylaws
and certificate of association or any material agreement or
instrument binding upon or affecting MINIMED or its properties
or assets or any applicable laws, rules, regulations or orders
affecting MINIMED or its properties or assets;
14.2.3 MINIMED is not in material default of its bylaws and certificate
of association, any applicable material laws or regulations or
any material contract or agreement binding upon or affecting it
or its properties or assets and the execution, delivery and
performance of this Agreement and the transactions contemplated
hereby will not result in any such violation;
14.2.4 MINIMED represents and warrants that the execution of this
Agreement will not breach or in any way be inconsistent with the
terms and conditions of any licence, contract, understanding or
agreement, whether express, implied, written or oral between
MINIMED and any third party;
14.2.5 MINIMED represents and warrants that MINIMED is in material
compliance with all Environmental Law and is not subject to any
material liability under any Environmental Law with respect to
the FACILITY. For the purpose of this Agreement, "Environmental
Law" shall mean the common law and any applicable Federal, State
and local laws or regulations, codes, ordinances or rules
relating to pollution or protection of public health or the
environment, including without limitation ambient air, indoor
air, surface water, ground water, landsurface or subsurface.
14.2.6 MINIMED will maintain in effect all governmental permits,
licenses, orders, applications and approvals required of it and
make all filings and notifications required of it regarding the
manufacture of the CONTINUOUS SYSTEM and the generation,
storage, treatment, transport, distribution, possession,
handling and disposal of any WASTE;
14.2.7 MINIMED represents and warrants that MINIMED and its employees
have never been (i) debarred or (ii) convicted of a crime for
which a person can be debarred under the provisions of Section
306(a) or 306(b) of the Generic Drug Enforcement Act of 1992.
MINIMED agrees that it shall immediately notify ELAN in the
event that it becomes debarred or receives notice of action or
threat of action with respect to debarment during the terms of
this Agreement.
14.3. MINIMED further represents and warrants that, MINIMED shall manufacture
and package the CONTINUOUS SYSTEM in accordance with the
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instructions furnished by ELAN to MINIMED, which are reasonably
acceptable to MINIMED, the REGULATORY APPLICATION and any granted
REGULATORY APPROVALS. and all applicable regulations and requirements of
the RHAs in the TERRITORY including the then cGMP regulations which
apply to the manufacture and supply of the CONTINUOUS SYSTEM.
14.4 MINIMED shall indemnify, defend and hold harmless ELAN against any and
all claims, damages, losses, liabilities, costs or expenses (including
reasonable attorney's fees) to which ELAN is or may become subject
insofar as they arise or are alleged or claimed to arise from (i) the
manufacture or packaging of the CONTINUOUS SYSTEM, but only to the
extent that such claim results from the negligent act or omission of
MINIMED or its agents or employees in the manufacture and packaging of
the CONTINUOUS SYSTEM or (ii) any breach by the MINIMED of any of its
obligations or warranties under this Agreement.
14.5 ELAN shall indemnify, defend and hold harmless MINIMED from all actions,
losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys' fees) to which MINIMED is or may become liable
insofar as they arise (i) out of any breach by ELAN of any of its
obligations or warranties under this Agreement, or (ii) solely from any
claim relating to any compound (except for the COMPOUND in the LICENCE
AGREEMENT) which is delivered by the CONTINUOUS SYSTEM.
14.6 As a condition of obtaining an indemnity in the circumstances set out in
Clauses 14.4 and 14.5, the Party seeking an indemnity shall:
14.6.1 fully and promptly notify the other Party of any claim or
proceedings, or threatened claim or proceedings;
14.6.2 permit the indemnifying Party to take full control of such claim
or proceedings;
14.6.3 assist in the investigation and defence of such claim or
proceedings;
14.6.4 not compromise or otherwise settle any such claim or proceedings
without the prior written consent of the other Party, which
consent shall not be unreasonably withheld; and
14.6.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceedings.
14.7 Notwithstanding anything to the contrary in this Agreement, MINIMED and
ELAN 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 (including but in no event limited
to Clause 14.7), 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 including any
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product recall.
14.8 Each Party shall maintain comprehensive general liability insurance,
including product liability insurance on the CONTINUOUS SYSTEM in such
prudent amount as shall be determined by the PROJECT TEAM. Each Party
shall provide the other Party with a certificate from the insurance
company verifying the above and undertakes to notify such Party directly
at least 30 days prior to the expiration or termination of such
coverage. ELAN shall ensure that its LICENSEES also maintain adequate
comprehensive general liability insurance, including product liability
insurance on any products containing the CONTINUOUS SYSTEM which such
LICENSEES market in the TERRITORY.
CLAUSE 15 - CUSTOMER COMPLAINTS AND CONTINUOUS SYSTEM RECALL
15.1 ELAN shall notify MINIMED promptly:-
15.1.1 of any complaints from third parties reported to ELAN involving
any serious and unexpected adverse device events or incident
reports resulting from the use of the CONTINUOUS SYSTEM; and
15.1.2 of any potential recall of the CONTINUOUS SYSTEM by any
governmental authority.
The PROJECT TEAM shall establish a procedure for formal customer
complaints and adverse event handling and reporting.
15.2 ELAN or its LICENSEES shall be responsible, at ELAN or its LICENSEES'
cost, for maintaining and filing any reports regarding the CONTINUOUS
SYSTEM with the RHA in any country of the TERRITORY including but not
limited to all formal adverse event handling reports, and post marketing
reports.
15.3 In the event of any recall of any of the CONTINUOUS SYSTEM, as suggested
or requested by any governmental authority:
15.3.1 ELAN or its LICENSEE shall perform the recall of such CONTINUOUS
SYSTEM in the TERRITORY and save as provided in Clause 15.3.2,
in all events the recall costs shall be borne by ELAN or its
LICENSEE.
15.3.2 If the recall arises from MINIMED's negligent acts or omissions
in manufacturing such CONTINUOUS SYSTEM, the recall costs shall
be borne by MINIMED provided that ELAN or its LICENSEES could
not have reasonably discovered the said act(s) or omission(s)
prior to the sale of such CONTINUOUS SYSTEM by following the
testing protocol to be agreed by ELAN or its LICENSEE, and
MINIMED.
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In the event that MINIMED should bear the costs of any recall
hereunder, MINIMED shall be entitled but not obliged to take
over and perform the recall of the CONTINUOUS SYSTEM described
in Clause 15.3.1 and ELAN shall provide MINIMED at no cost with
all such reasonable assistance as may be required by MINIMED.
CLAUSE 16 - MISCELLANEOUS PROVISIONS
16.1 SECRECY:
16.1.1 Any information, whether written or oral (oral information shall
be reduced to writing within one month by the Party giving the
oral information and the written form shall be furnished to the
other Party) pertaining to the CONTINUOUS SYSTEM that has been
or will be communicated or delivered by MINIMED to ELAN, or by
ELAN to MINIMED, including, without limitation, trade secrets,
business methods, and cost, supplier, manufacturing and customer
information, shall be treated by ELAN and MINIMED, respectively,
as confidential information, disclosed to employees who are
bound by obligations of confidentiality only on a need-to-know
basis, and shall not be disclosed or revealed to any third party
whatsoever or used in any manner except as expressly provided
for herein; provided, however, that such confidential
information shall not be subject to the restrictions and
prohibitions set forth herein to the extent that such
confidential information:-
(1) is available to the public in public literature or
otherwise, or after disclosure by one Party to the other
becomes public knowledge through no default of the Party
receiving such confidential information; or
(2) was known to the Party receiving such confidential
information prior to the receipt of such confidential
information by such Party, whether received before or
after the date of this Agreement; or
(3) is obtained by the Party receiving such confidential
information from a third Party not subject to a
requirement of confidentiality with respect to such
confidential information;
or
(4) is required to be disclosed pursuant to: (A) any order
of a court having competent jurisdiction and power to
order such information to be released or made public; or
(B) any lawful action of a
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governmental or regulatory agency provided that each
Party shall notify the other in writing of any
disclosure of information required hereunder prior to
such disclosure; or
(5) is proven by documentary evidence to have been
independently discovered, after the date of this
Agreement, by the Party receiving such confidential
information without the aid, application or use of
confidential information.
16.1.2 Each Party shall take in relation to the confidential
information of the other Party all such precautions as it
normally takes with its own confidential information to prevent
any improper disclosure of such confidential information to any
third party; provided, however, that such confidential
information may be disclosed within the limits required to
obtain any authorisation from the applicable RHA or any
governmental or regulatory agency or, with the prior written
consent of the other Party, which shall not be unreasonably
withheld, or as may otherwise be required in connection with the
purposes of this Agreement.
16.1.3.The Party receiving confidential information undertakes that any
further confidential information which may come to the knowledge
of the receiving Party as a result of any visits, inclusive of
the form, materials and design of the various elements of any
relevant plant and equipment which may be seen at such
establishments as well as the plant as a whole, the methods of
operation thereof and the various applications thereof, shall be
kept strictly confidential, and shall be deemed to be
confidential information which is protected by the terms of this
Agreement.
16.1.4 Each of the Parties agrees that it will not use, directly or
indirectly, any know-how of the other Party (MINIMED KNOW-HOW or
ELAN KNOW-HOW, as the case may be), or other confidential
information disclosed to it by the other Party or obtained by it
from the other Party pursuant to this Agreement, other than as
expressly provided herein.
16.1.5 Neither Party will publicise the existence of this Agreement in
any way without the prior written consent of the other Party
subject to the disclosure requirements of applicable laws and
regulations. In the event that either Party wishes to make an
announcement concerning the Agreement, that Party will seek the
consent of the other Party. The terms of any such announcement
shall be agreed in good faith. ELAN and MINIMED shall also
co-operate in good faith with respect to any stock exchange
filings, public announcements or filings with the United States
Securities and Exchange Commission which may be necessary upon
or following execution of this Agreement.
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16.2 ASSIGNMENTS/ SUB-CONTRACTING:
16.2.1. This Agreement may not be assigned by either Party without the
prior written consent of the other Party, save that either Party
may assign this Agreement in whole or in part and delegate its
duties hereunder to its AFFILIATE or AFFILIATES without such
consent provided that such assignment or delegation has no
material adverse tax implications for the other Party. Each
party shall be responsible for the acts and/or omissions of its
respective AFFILIATES.
16.2.2. MINIMED shall have the right to subcontract any portion of the
manufacturing of the CONTINUOUS SYSTEM to a third party with the
prior written consent of ELAN, which consent shall not be
unreasonably withheld or delayed, save that in no event shall
MINIMED be entitled to assign or subcontract any activities to a
TECHNOLOGICAL COMPETITOR of ELAN. MINIMED shall be liable to
ELAN for all acts and omissions of any permitted sub-contractor
as though such acts and omissions were by MINIMED.
16.3 NON-SOLICITATION
Each Party agrees that, for the TERM of this Agreement and for a period
of two year after the date of termination of this Agreement, it will
not, directly or indirectly, solicit for employment any employees of the
other Party or any of its AFFILIATES who became known to it as a result
of this Agreement; provided, however, that any such solicitation shall
not be deemed a breach of this Agreement if (i) the personnel who
perform such solicitation have no knowledge of this Agreement and (ii)
none of the soliciting Party's personnel who are aware of this Agreement
have actual advance knowledge of such solicitation. The term "solicit
for employment" shall not be deemed to include general solicitations of
employment not specifically directed towards employees of a Party or any
of its AFFILIATES.
16.4 PARTIES BOUND:
This Agreement shall be binding upon and enure for the benefit of
Parties hereto, their successors and permitted assigns.
16.5 SEVERABILITY:
If any provision in this Agreement is agreed by the Parties to be, or is
deemed to be, or becomes invalid, illegal, void or unenforceable under
any law that is applicable hereto:-
16.5.1 such provision will be deemed amended to conform to applicable
laws so
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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
16.5.2 the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected
in any way.
16.6 FORCE MAJEURE:
16.6.1. 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, earthquakes,
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.
16.6.2 If either Party is prevented or delayed in the performance of
any of its obligations under this Agreement by force majeure,
that Party shall forthwith serve notice in writing on the other
party specifying the nature and extent of the circumstances
giving rise to force majeure, and shall subject to service of
such notice and to Clause 16.6.4 have no liability in respect of
the performance of such of its obligations as are prevented by
the force majeure events during the continuation of such events,
and for such time after they cease as is necessary for that
Party, using all reasonable endeavours, to recommence its
affected operations in order for it to perform its obligations.
16.6.3 If either Party is prevented from performance of its obligations
for a continuous period in excess of 180 days , the other Party
may terminate this Agreement forthwith on service of written
notice upon the Party so prevented, in which case neither party
shall have any liability to the other except that rights and
liabilities which accrued prior to such termination shall
continue to subsist.
16.6.4 The Party claiming to be prevented or delayed in the performance
of any of its obligations under this Agreement by reason of
force majeure shall use reasonable endeavours to bring the force
majeure event to a close or to find a solution by which the
Agreement may be performed despite the continuance of the force
majeure event.
16.7 RELATIONSHIP OF THE PARTIES:
Nothing contained in this Agreement is intended or is to be construed to
constitute MINIMED and ELAN as partners or members of a joint venture or
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either Party as an employee of the other. Neither Party hereto shall
have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other Party or to bind
the other Party to any contract, agreement or undertaking with any third
party.
16.8 AMENDMENTS:
No amendment, modification or addition hereto shall be effective or
binding on either Party unless set forth in writing and executed by a
duly authorised representative of both Parties.
16.9 WAIVER:
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any future breach or failure to perform or of
any other right arising under this Agreement.
16.10 NO EFFECT ON OTHER AGREEMENTS:
No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement
between the Parties unless specifically referred to, and solely to the
extent provided, in any such other agreement.
16.11 GOVERNING LAW AND JURISDICTION:
This Agreement shall be governed by the laws of the State of New York,
without regard to principles of conflicts of law. Each of the parties
hereby irrevocably submits to the jurisdiction of any New York State or
United States Federal court sitting in the County, City and State of New
York over any action or proceeding arising out of or relating to this
Agreement, and each hereby waives the defence of an inconvenient forum
for the maintenance of such an action.
16.12 NOTICE:
16.12.1 Any notice to be given under this Agreement shall be sent in
writing in English by registered airmail or telecopied to:
Elan Pharmaceutical Technologies at
Elan Corporation, plc.
Lincoln House
Lincoln Place
Dublin 2
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Ireland.
Attention: Vice-President & General Counsel,
Elan Pharmaceutical Technologies
Telephone: 353 1 7094000
Telefax : 353 1 7094124
Elan Pharma International Limited at
Elan Pharma International Limited
WIL House
Shannon Business Park
Shannon
Co. Clare
Ireland.
Attention: Company Secretary
Telephone: 353 61 363533
Telefax: 353 61 362010
MINIMED at
MiniMed Inc.
12744 San Fernando Road
Sylmar
California 91342
United States of America
Attention: Senior Vice President and General Counsel
Telephone: 818 362 5958
Telefax: 818 367 1460
or to such other address(es) and telecopier numbers as may from
time to time be notified by either Party to the other hereunder.
16.12.2 Any notice sent by mail shall be deemed to have been delivered
within 7 working days after despatch and any notice sent by
telex or telecopy shall be deemed to have been delivered within
24 hours of the time of the despatch. Notice of change of
address shall be effective upon receipt.
16.13 FURTHER ASSURANCE CLAUSE
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Upon request, ELAN and MINIMED shall (and shall procure that any other
necessary parties shall) execute and do all such documents, acts and
things as may reasonably be required subsequent to the signing of this
Agreement for assuring to or vesting in the other party the full benefit
of the terms hereof.
IN WITNESS of which the Parties have executed this Agreement.
Executed by ELAN PHARMACEUTICAL TECHNOLOGIES on 11th June, 1999
By : /s/ LARRY A. STERNSON
------------------------------
Name: Larry A. Sternson
------------------------------
Title: President
------------------------------
Executed by ELAN PHARMA INTERNATIONAL LIMITED on 11th June, 1999
By : /s/ DAVID HURLEY
------------------------------
Name: David Hurley
------------------------------
Title: Director
------------------------------
Executed by MINIMED INC. on 11th June, 1999
By: /s/ TERRANCE H. GREGG
-------------------------------
Name: Terrance H. Gregg
Title: President and Chief Operating Officer
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