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EXHIBIT 10.2
NOTE: CERTAIN PORTIONS OF THE EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN SEPARATELY FILED
WITH THE COMMISSION
This Agreement is made the 14th day of April 1997
BY AND BETWEEN
ELAN CORPORATION plc
An Irish company, of Xxxxxxxxx, Xxxxxxx, Xx. Xxxxxxxxx, Xxxxxxx
AND
IOMED, Inc.
A Corporation organized and existing under the laws of the State of Utah,
having an office at 3385 West 1820 South, Salt Xxxx Xxxx, XX 00000, Xxxxxx
Xxxxxx of America.
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WHEREAS
-- ELAN is beneficially entitled to the use of various patents, including the
ELAN IONTOPHORETIC PATENT RIGHTS, which have been granted or are pending
under the International Convention in relation to the development and
production of iontophoretic transdermal devices and drug specific dosage
forms for pharmaceutical devices, products and processes, and
-- ELAN is knowledgeable in the development of iontophoretic transdermal
devices and drug specific dosage forms and has developed a unique range
of device and delivery systems designed to provide improved devices and
formulations of medicaments, and
-- IOMED is desirous of entering into a licensing agreement with ELAN to,
further develop, manufacture and have manufactured in accordance with the
terms of this Agreement and to market, sell and distribute the PRODUCTS
in the TERRITORY without infringing any of the ELAN IONTOPHORETIC
INTELLECTUAL PROPERTY rights held by ELAN, and
-- ELAN is prepared to license the ELAN IONTOPHORETIC PATENT RIGHTS in the
TERRITORY to IOMED.
NOW IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE I: DEFINITIONS
1.1. In the present Agreement and any further agreements based thereon between
the Parties hereto, the following definitions shall prevail:
1. ADDITIONAL TERM shall have the meaning set forth in Article VIII,
Paragraph 2.
2. AFFILIATE shall mean any corporation or entity controlling,
controlled by or under the common control of ELAN or IOMED as the
case may be. For the purpose of this paragraph, "control" shall
mean the direct or indirect ownership of at least fifty percent
(50%) of the outstanding 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.
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3. Agreement shall mean this agreement.
4. ****
5. ****
6. ****
7. ASSETS shall mean those items of tangible property being transferred
by ELAN to IOMED the details of which are set out in Appendix A.
8. cGCP, cGLP and cGMP shall mean current Good Clinical Practices,
current Good Laboratory Practices and current Good Manufacturing
Practices respectively.
9. CONFIDENTIAL INFORMATION shall mean information, material or data
relating to the FIELD not generally known to the public,
CONFIDENTIAL INFORMATION in tangible form disclosed hereunder shall
be marked as "Confidential" at the time it is delivered to the
receiving Party. CONFIDENTIAL INFORMATION disclosed orally shall be
identified as confidential or proprietary when disclosed and such
disclosure of CONFIDENTIAL INFORMATION shall be confirmed in writing
within thirty (30) days by the disclosing Party.
10. DDS shall mean Drug Delivery Systems, Inc.
11. DDS AGREEMENT shall mean the license agreement entered into between
IOMED and DDS on the EFFECTIVE DATE.
12. DDS IONTOPHORETIC PATENT RIGHTS shall have the meaning as defined in
Article I of the agreement being entered into by IOMED and Drug
Delivery Systems, Inc. on the EFFECTIVE DATE.
13. EFFECTIVE DATE shall mean the 14th day of April 1997.
14. ELAN shall mean Elan Corporation plc and any of its AFFILIATES.
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15. ELAN EXCLUDED TECHNOLOGY shall mean all intellectual property
including, without limitation any inventions, discoveries, material
and data whether or not protectable by patents, trade secrets,
trademark or copyright in relation *****.
16. ELAN IONTOPHORETIC INTELLECTUAL PROPERTY shall mean the ELAN
IONTOPHORETIC PATENT RIGHTS and/or the ELAN IONTOPHORETIC KNOW-HOW.
00 XXXX XXXXXXXXXXXXX KOW-HOW shall mean all scientific or-technical
knowledge, information or expertise developed, produced, created or
acquired by or on behalf of ELAN which is not generally known to the
public, or to be developed by ELAN during the term of this
Agreement, relating to the FIELD, whether or not covered by any
patent, copyright, design, trademark or other industrial or
intellectual property rights as further set forth in Appendix B.
For the avoidance of doubt ELAN IONTOPHORETIC KNOW-HOW shall exclude
the ELAN EXCLUDED TECHNOLOGY.
18. ELAN IONTOPHORETIC PATENT RIGHTS shall mean all granted patents and
pending patent applications owned by, or licensed by ELAN, the
current status of which is set forth in Appendix C. ELAN
IONTOPHORETIC PATENT RIGHTS shall also include all continuations,
continuations-in-part, divisionals, re-issues and re-examinations of
such patents and patent applications and any patents issuing thereon
and extensions of any patents licensed hereunder and all foreign
counterparts thereto. ELAN IONTOPHORETIC PATENT RIGHTS shall
further include any patents or Patent applications covering any
improved PRODUCTS or methods of making or using the PRODUCTS
invented by ELAN during the term of this Agreement pursuant to such
research and development if any conducted by ELAN pursuant to
Article III Paragraph 1.
19. 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.
20. FDA shall mean the United States Food and Drug Administration or any
other successor agency, whose approval is necessary to market the
PRODUCTS in the United States of America and its foreign equivalents
in such other countries of the TERRITORY where IOMED intends to
obtain regulatory approval.
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21. FIELD shall mean ****.
22. IOMED shall mean IOMED, Inc. and any of its AFFILIATES, including
DERMION Inc.
22. IOMED KNOW-HOW shall mean all scientific or technical knowledge,
information or expertise developed, produced, created or acquired by
or on behalf of IOMED which is not generally known to the public, or
developed by or on behalf of IOMED during the term of this
Agreement, relating to the PRODUCTS, excluding ELAN IONTOPHORETIC
KNOW-HOW, whether or not covered by any patent, copyright, design,
trademark or other industrial or intellectual property rights.
23. IOMED PATENT RIGHTS shall mean all granted patents and pending
patent applications owned or licensed by IOMED relating to the
FIELD, excluding ELAN IONTOPHORETIC PATENT RIGHTS and DDS PATENT
RIGHTS. IOMED PATENT RIGHTS shall also include all continuations,
continuations-in-part, divisionals, re-issues and re-examinations of
such patents and patent applications and any patents issuing thereon
and extensions thereof and all foreign counterparts thereto. IOMED
PATENT RIGHTS shall further include any patents or patent
applications covering any improved methods of making or using the
PRODUCTS invented or acquired by IOMED during the term of this
Agreement.
24. IND shall mean one or more investigational new drug applications
filed by ELAN or to be filed by IOMED with the FDA.
26. NET REVENUES shall mean:
26.1. ****:
26.1.1. ****
26.1.2. ****
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26.1.3. ****
****; and
26.2. ****;
26.2.1 ****;
26.2.2. ****;
26.2.3. ****;
26.2.4. ****; and
26.2.5. ****.
****.
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****.
****.
****.
27. NDA shall mean one or more of the New Drug Applications which IOMED
shall file, including any supplements or amendments thereto and
510(k)s which IOMED may file, for the PRODUCTS with the FDA.
28. OFFERING PARTY shall mean ****.
29. Party shall mean IOMED or ELAN, as the case may be, "Parties" shall
mean IOMED and XXXX.
00. PRODUCT(S) shall mean all devices or any parts thereof developed,
manufactured or sold by or on behalf of IOMED within the FIELD,
****.
31. RESEARCH AND DEVELOPMENT COST shall mean in the case of research
and development being conducted by or on behalf of ELAN for IOMED
pursuant to Article III Paragraph 1, the fully allocated costs
thereof calculated in accordance with generally accepted Irish
accounting principles consistently applied. 32. TERM shall have the
meaning set forth in Article VIII Paragraph 1.
33. TERRITORY means all of the countries of the world.
34. $ shall mean United States Dollars.
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1.2 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 Article or Appendix shall unless otherwise
specified provided, be to an Article or Appendix of this Agreement.
1.2.3 the headings of this Agreement are for case reference only and shall
not affect its construction or interpretation.
ARTICLE II: THE LICENSE
1.1. ELAN shall remain proprietor of all the ELAN IONTOPHORETIC INTELLECTUAL
PROPERTY but hereby grants to IOMED for the term of the Agreement an
exclusive (including as to ELAN) license in the TERRITORY, with the right
to grant sublicenses pursuant to and in accordance with the provisions of
Article II Paragraph 2, to research develop, manufacture, have
manufactured for IOMED (or its permitted sublicenses), use, sell and
otherwise commercialize the ELAN IONTOPHORETIC INTELLECTUAL PROPERTY and
the PRODUCTS in the FIELD under the terms and conditions set out herein.
The exclusive nature of the licenses granted by ELAN are subject to
**** as set out in Appendix C. ELAN's license to IOMED shall specifically
exclude ELAN EXCLUDED TECHNOLOGY.
1.2. Subject to earlier termination of the Agreement pursuant to Article VIII,
at the end of the ADDITIONAL TERM the rights granted by ELAN to IOMED
pursuant to Paragraph 1.1 above shall be exclusive, paid-up and
irrevocable.
2.1. IOMED may sublicense rights which incorporate the ELAN IONTOPHORETIC
INTELLECTUAL PROPERTY ****, without the prior written consent of ELAN.
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2.2. Any sublicense other than permitted by paragraph 2.1. above, ****, shall
require the prior written consent of ELAN, which may be withheld in the
sole discretion of ELAN.
2.3. No sublicense granted by IOMED pursuant to Article II Paragraph 2 shall
authorize or permit the sublicense to grant further sublicenses ****.
IOMED shall use its reasonable endeavors to ensure that ELAN shall have
the same rights of audit and inspection vis a vis the sublicensee as ELAN
has pursuant to this Agreement concerning IOMED.
2.4. Insofar as the obligations owed by IOMED to ELAN are concerned, IOMED
shall remain responsible for all acts and omissions of any sublicenses as
if such acts and omissions were by IOMED; provided that no such acts or
omissions of such sublicensee will constitute a material breach by IOMED
for the purpose of Article VIII Paragraph 3. In the event that ELAN
terminates the Agreement pursuant to the provisions of Article VIII
Paragraph 3, due to the default of IOMED, then ELAN shall, with IOMED's
consent and assistance, notify each sublicensee appointed pursuant to
Article II Paragraphs 2.1. and 2.2. of its termination. If any
sublicensee elects to notify ELAN that it requires the continuation of the
licenses granted to IOMED pursuant to this Agreement, ELAN shall promptly
enter into good faith negotiations with sublicensee to establish a direct
contractual nexus between ELAN and such sublicensee. Such contractual
nexus shall, subject to ELAN's reasonable discretion, be on commercially
reasonable terms and shall to the extent practicable be on terms no less
favorable to the sublicensee than the terms of such sublicensees'
agreement with IOMED, and shall provide that the sublicensee shall take
over the applicable obligations owed by IOMED to ELAN pursuant to this
Agreement. Sales of PRODUCTS and other consideration payable to such a
sublicensee in relation to the PRODUCTS shall constitute NET REVENUES for
the purpose of calculating the sums payable by the sublicensee to ELAN.
****.
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3. It is contemplated that the physical transfer of the ELAN IONTOPHORETIC
KNOW-HOW to be licensed under this Agreement and the furnishing of copies
of relevant patent documentation regarding the ELAN IONTOPHORETIC PATENT
RIGHTS shall be completed within six months of the EFFECTIVE DATE. ELAN
shall, at its expense, provide all reasonable assistance within such
six-month period to IOMED to facilitate such transfer, provided, that in
the event that IOMED's requirements relating to such transfer are in
excess of the Parties' current reasonable, good faith, expectations, the
Parties shall negotiate in good faith reimbursement of ELAN's
out-of-pocket expenses. Any dispute under this Paragraph 3 shall be
resolved by referring such dispute to an arbitrator pursuant to the
provisions of Article IX Paragraph 14.
4. Insofar as the exercise by IOMED and its permitted sublicensees of the
ELAN IONTOPHORETIC INTELLECTUAL PROPERTY rights is concerned, and to the
extent permitted pursuant to its contractual obligations to ****, ELAN
agrees that during the TERM and the ADDITIONAL TERM ELAN shall not cite or
otherwise rely upon the patents licensed by ELAN from **** pursuant to the
**** AGREEMENT, or developed jointly by ELAN and **** pursuant to the ****
AGREEMENT, against IOMED or IOMED's sublicensees and ELAN shall use its
commercially reasonable endeavors to ensure that ELAN's sublicensees of
the **** TECHNOLOGY shall be bound in similar fashion. ELAN shall be
entitled to disclose such CONFIDENTIAL INFORMATION as ELAN considers
reasonably necessary in using such commercially reasonable endeavors to
potential sublicensees under obligations of confidentiality. As of the
date hereof (I) ELAN has no such sublicensees and (II) to the knowledge of
ELAN, there are currently no grounds to cite such patents and there are no
express provisions of the **** AGREEMENT requiring ELAN to cite such
patents,
5. IOMED shall xxxx or have marked the patent number an all PRODUCTS, or
otherwise reasonably communicate to the trade concerning the existence of
any ELAN IONTOPHORETIC PATENT RIGHTS for the countries within the
TERRITORY in such a manner as to ensure compliance with, and
enforceability under, applicable laws.
Performance by IOMED
6. IOMED shall use commercially reasonable efforts consistent with its
financial resources and capital constraints, to research, develop,
register, market and promote the PRODUCTS and to exploit the ELAN
IONTOPHORETIC INTELLECTUAL PROPERTY in the major markets of the TERRITORY.
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7. **** IOMED shall report on the ongoing sales performance of the PRODUCTS,
and the exploitation of the ELAN IONTOPHORETIC INTELLECTUAL PROPERTY in
the TERRITORY, ****. For the avoidance of doubt, the Parties agree that
all information furnished to ELAN pursuant to this Paragraph shall
constitute CONFIDENTIAL INFORMATION for the purposes of this Agreement.
8. ****.
9. ELAN and IOMED shall, if requested by IOMED, for a ninety (90) day period
from and after the EFFECTIVE DATE (the "Negotiation Period"), negotiate in
good faith, as described below, an exclusive world-wide sublicense to
IOMED to the rights to make, research, develop, use, promote, distribute,
market and sell the Device (as defined in the AQI AGREEMENT) pursuant to
and in accordance with the provisions of such agreement and subject to
the provisions of any product-specific sublicense agreements entered into
by ELAN, including the agreement referred to in Article II Paragraph 10.
During the Negotiation Period, the Parties shall negotiate in good faith
the terms of a sublicense. It is agreed that this paragraph creates no
legal obligation upon either Party to conclude the sublicense agreement,
but merely evidences an intention on the part of both Parties to proceed
in good faith and with proper due diligence in the negotiation and
preparation of the sublicense agreement if so requested by the IOMED.
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10. ****.
11. In consideration for the sum of ****, ELAN shall transfer title only to
the ASSETS which are relevant to the IONTOPHORETIC INTELLECTUAL PROPERTY
(but for the avoidance of doubt shall not include the time or employment
of any employees), as set forth on Appendix A hereto. ELAN shall deliver
the ASSETS EX WORKS the appropriate ELAN facilities, to IOMED, and/or any
party designated by IOMED, in proper packaging so as to permit safe
storage and transport. It is contemplated that the physical transfer of
the ASSETS shall be completed within **** of the EFFECTIVE DATE. ****.
ELAN shall not transfer title to the ELAN IONTOPHORETIC INTELLECTUAL
PROPERTY.
12. Insofar as the obligations of ELAN set out in this Agreement concerning
the **** AGREEMENT is concerned, ELAN hereby confirms that ****, a wholly
owned subsidiary and AFFILIATE of ELAN which is a contracting party to the
**** AGREEMENT, is aware of the terms of this Agreement and consents to
such obligations as ELAN is undertaking in this Agreement as relate to the
**** AGREEMENT being undertaken by ELAN on its behalf, including the
obligations set forth in Article II Paragraphs 9 and 10.
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13. IOMED hereby confirms that it intends to manufacture or procure the
manufacture of the PRODUCTS in a manner which fully complies with all
applicable statutes, ordinances and regulations of the United States of
America and other countries with respect to the manufacture of the
PRODUCTS including, but not limited to, the U.S. Federal Food, Drug and
Cosmetic Act and regulations thereunder, eGLP, cGCP and cGMP.
ARTICLE III: DEVELOPMMNT OF THE PRODUCTS
1. IOMED shall be responsible for the cost of the further development,
registration, manufacture and marketing of the PRODUCTS. The Parties
shall each negotiate in good faith the extent to which ELAN shall provide
research and development services to IOMED. In the event that ELAN
provides such services, such services shall be reimbursed by IOMED ****
ARTICLE IV: FINANCIAL PROVISIONS
1. License Royalties
1. In consideration of the rights and license granted to IOMED to the ELAN
IONTOPHORETIC PATENT RIGHTS by virtue of this Agreement, IOMED shall pay
to ELAN, the sum of (****) United States Dollars (****) in cash by wire
transfer due upon execution of this Agreement and payable within two
business days of the EFFECTIVE DATE.
2. Royalty on NET REVENUES
2.1. In consideration of the license of the ELAN IONTOPHORETIC PATENT RIGHTS to
IOMED, and subject to the provisions of Article IV Paragraphs 2.2. and
2.3, the royalty payable by IOMED to ELAN shall be **** percent (****%) on
NET REVENUES generated on or after the EFFECTIVE DATE.
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2.2. In further consideration of the license of the ELAN IONTOPHORETIC PATENT
RIGHTS to IOMED, subject to the proviso in this Paragraph 2.2, ELAN shall
not be entitled to a royalty on NET REVENUES, whether generated on or
after 1st July 1997 or otherwise, (a) in connection with PRODUCTS whose
primary purpose is for inducing local anaesthesia and/or (b) in
connection with PRODUCTS for treating local acute inflammatory
conditions, whether or not such products are currently marketed, or in
development and including improvements thereto; provided that on a
country by country basis if the research, development, manufacture or
commercialisation of such PRODUCTS would infringe the ELAN IONTOPHORETIC
PATENT RIGHTS and/or the DDS IONTOPHORETIC PATENT RIGHTS (but for the
granting of the licenses by ELAN pursuant to Article II Paragraph 1.1.
and the licenses granted by DDS pursuant to the DDS AGREEMENT) the
royalty payable by IOMED to ELAN shall be three per cent (3%) of NET
REVENUES generated on or after 1st July 1997. IOMED shall not be required
to pay a royalty to ELAN of NET REVENUES on commercialisation of the
products listed in Appendix D hereto which, the Parties acknowledge, are
presently-marketed products of IOMED. In the event of any dispute
relating to the foregoing provisions of this Paragraph, the Parties shall
cause such dispute to be arbitrated before an experienced patent
attorney. In such event the procedure set forth in Article VIII Paragraph
14 shall to the extent practicable apply to the conduct of such
arbitration.
2.3. In the event that the Parties conclude a sublicense to or for the AQI
TECHNOLOGY as set out in Article II Paragraph 9,then notwithstanding any
other provisions of the terms of such sublicense to be agreed between the
Parties, including the license royalty, IOMED shall pay to Elan
International Services Limited, or such other AFFILIATE as currently
holds the applicable rights pursuant to the AQI AGREEMENT, a royalty of
seven and one half per cent (7.5%) of the NET REVENUES derived by IOMED
from the third party referred to in Article II Paragraph 10 for a term to
be agreed.
2.4. IOMED shall not discriminate in its commercialization strategy and pricing
policy as between the PRODUCTS referred to in Article IV Paragraphs 2.1.
and 2.2.
2.5. The Parties agree that when IOMED provides free samples of PRODUCT to
promote the further sale of PRODUCTS, such provision of free samples
shall not generate any royalty payments to ELAN by IOMED, its and/or
sublicensees; provided however, that such sampling is specifically
designed to promote sales of PRODUCT and is no less favorable to ELAN
than IOMED's standard sampling practice for similar products.
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Royalty Payments, Reports and Records
3.1. Within forty five (45) days of the end of each quarter, IOMED shall notify
ELAN of the NET REVENUES of each of the PRODUCTS and arising from the
exploitation of the ELAN IONTOPHORETIC INTELLECTUAL PROPERTY and/or the
IOMED PATENT RIGHTS and/or the IOMED KNOW-HOW, for that preceding quarter.
Payments shown by each calendar quarter report to have accrued shall be
due on the date such report is due. All payments due hereunder shall be
made to the designated bank account of ELAN in accordance with such timely
written instructions as ELAN shall from time to time provide.
3.2. IOMED shall keep and shall cause its AFFILIATES and sublicensees to keep
true and accurate records of sales of PRODUCTS, other transactions giving
rise to NET REVENUS, and the royalties payable to ELAN under Article IV
hereof and shall deliver to ELAN a written statement thereof within forty
five (45) days following the and of each calendar quarter (or any past
thereof in the first or last calendar quarter of this Agreement) for such
calendar quarter. Said written statements shall set forth (I) for each
PRODUCT on ****, the calculation of NET REVENUES from gross revenues
during that calendar quarter, the applicable percentage royalty rates, and
a computation of such royalties due and (II) such details of the
transactions arising from the exploitation of the ELAN IONTOPHORETIC
INTELLECTUAL PROPERTY and/or the IOMED PATENT RIGHTS and/or the IOMED
KNOW-HOW as are relevant to the calculation of NET REVENUES (the "Royalty
Statement").
3.3. AU payments due hereunder shall be made in United States Dollars.
Payments due on NET REVENUES received in a currency other than United
States Dollars shall first be calculated in the foreign currency and then
converted to United States Dollars on the basis of the average of the
exchange rates in effect for the purchase of United States Dollars with
such foreign currency quoted in the Wall Street Journal (or comparable
publication if not quoted in the Wall Street Journal) with respect to the
currency of the country or origin of such payment for the last business
day of each month for which the payment is being made.
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3.4. ELAN shall have the right to have access, on reasonable notice, to IOMED's
or IOMED's sublicensee's financial documentation and records during
reasonable business hours for the purpose of verifying the royalties
payable as provided in this Agreement for the two preceding years. This
right may not be exercised more than once in any calendar year, and once a
calendar year is audited it may not be reaudited. For the avoidance of
doubt, the Parties agree that all information furnished to ELAN pursuant
to this Paragraph shall constitute CONFIDENTIAL INFORMATION for the
purposes of this Agreement.
Any adjustment required by such inspection shall be made within thirty
(30) days of the agreement of the Parties or, if not agreed, upon the
determination of an arbitrator to whom any dispute under this Paragraph
shall be submitted to arbitration pursuant to Article IX Paragraph 14. If
the adjustment payable to ELAN is greater than ****, then the cost to ELAN
for the inspection and if applicable the arbitration she be paid by IOMED.
In addition, IOMED shall pay interest to ELAN at **** (applicable as of
the date on which payment should have been made pursuant to Article IV
Paragraph 3.3.), from the date on which payment should have been made
pursuant to Article IV paragraph 3.3. until the date of payment.
ARTICLE V: REGISTRATION OF THE PRODUCTS
1. During the TERM and the ADDITIONAL TERM, IOMED shall be responsible for
filing and prosecuting all NDAs and other applications for regulatory
approvals. ELAN shall transfer the INDs held by it in relation to the
PRODUCTS. IOMED or its sublicensees shall file the NDAs with the FDA and
will use its reasonable efforts in prosecuting said NDA to approval.
IOMED shall thereafter maintain at its own cost the NDAs with the FDA for
the term of this Agreement. Subject to IOMED's reasonable discretion
IOMED hereby agrees to provide to ELAN at ELAN's own cost access to such
NDAs as ELAN reasonably requests. ****. For the avoidance of doubt,
the parties agree that all information furnished to ELAN pursuant to this
Paragraph shall Institute CONFIDENTIAL INFORMATION for the purposes of
this Agreement.
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2. It is hereby acknowledged that there are inherent uncertainties involved
in the development and registration of pharmaceutical products with the
FDA or any other regulatory body in the TERRITORY insofar as obtaining
approval is concerned and such uncertainties form part of the business
risk involved in undertaking the form of commercial collaboration as set
forth in this Agreement.
ARTICLE VI: REPRESENTATIONS, WARRANTIES
1. ELAN represents to IOMED the following:
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, and is in compliance with
all applicable laws, rules, regulations or orders relating to its
business and assets;
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 other organic documents,
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;
1.3 ELAN is not in material default of its memorandum and articles of
association or similar organic documents, 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; and
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1.4 ****.
2. IOMED represents to ELAN the following:
2.1. IOMED is duly and validly existing in good standing in the
jurisdiction of its incorporation and each other jurisdiction in
which the conduct of its business requires such qualification, and
IOMED is in compliance with all applicable laws, rules, regulations
or orders relating to its business and assets;
2.2. IOMED 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 and constitutes
the legal and valid obligations of IOMED and is enforceable against
IOMED in accordance with its terms; and the execution, delivery and
performance of this Agreement and the transactions contemplated
hereby will not violate or result in a default under or creation of
lien or encumbrance under IOMED's certificate of incorporation,
by-laws or other organic documents, any material agreement or
instrument binding upon or affecting IOMED or its properties or
assets or any applicable laws, rules, regulations or orders
affecting IOMED or its properties or assets;
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2.3. IOMED is not in default of its charter or by-laws, any applicable
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 letter agreement and the
transactions contemplated hereby will not result in any such
violation.
2.4. IOMED represents and warrants that it has not granted any option,
license, right or interest to any third party which would conflict
with the terms of this Agreement.
2.5. In the event that a claim or proceeding is brought against ELAN by a
third party alleging that the manufacture of the PRODUCTS, or the
sale, distribution or use of the PRODUCTS in the TERRITORY
infringes any adversely held patent or any other intellectual
property, ELAN shall promptly advise IOMED of such threat or suit.
IOMED 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 IOMED. At its option, IOMED may
elect to take over the conduct of such proceedings from ELAN with
counsel of IOMED's choice. In such event IOMED 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.
ARTICLE VII PATENTS
1. Title to all inventions and other ELAN IONTOPHORETIC INTELLECTUAL
PROPERTY created or developed solely by employees of ELAN shall be owned
by ELAN. Title to all inventions and other intellectual property created
or developed solely by IOMED employees shall be owned by IOMED. Title to
all inventions and other intellectual property created or developed
jointly by employees of IOMED and ELAN pursuant to research and
development conducted by ELAN and IOMED pursuant to Article III shall be
jointly owned by ELAN and IOMED. The Parties agree that such inventions
invented after the EFFECTIVE DATE shall not result in any additional
royalties being paid by IOMED pursuant to Article IV or extend the TERM
of this Agreement.
2. The Parties agree that the following provisions of Article VII Paragraph
2. shall apply as regards the filing, prosecution and Maintenance of the
ELAN IONTOPHORETIC PATENT RIGHTS:
20
2.1. IOMED at its expense shall be responsible to secure the grant of the
ELAN IONTOPHORETIC PATENT RIGHTS and to file patent applications
covering any improvements, to prosecute and defend such applications
against independent third party oppositions; and upon grant of any
letters patent covering such invention, to maintain such letters
patent in force. IOMED at its expense shall have the right to control
such filing, prosecution, defence and maintenance; provided however
ELAN shall be provided with copies of all substantive documents
relating to such filing, prosecution and defence in sufficient time to
review such documents and comment thereon prior to any deadline for
filing the same, if desired by ELAN. IOMED shall be entitled to
determine the patent filing strategy. ELAN shall execute all
documents, forms and declarations and otherwise co-operate fully to
enable IOMED to seek and obtain the broadest protection afforded by
the patent laws of the countries within the TERRITORY, whether during
the TERM of this Agreement or thereafter. For the avoidance of doubt,
the Parties agree that all information furnished to ELAN pursuant to
this Paragraph shall constitute CONFIDENTIAL INFORMATION for the
purposes of this Agreement.
2.2. If IOMED does not intend to make an application for patents or
continue prosecution of a pending application in respect of the ELAN
IONTOPHORETIC INTELLECTUAL PROPERTY in any or some (specifying which
countries of the TERRITORY, or fails within six (6) months of
disclosure under Article VII Paragraph 2.1. to make application in
one or more countries of the TERRITORY, ELAN shall have the option
and the right to apply for patents or other intellectual property
protection in respect thereof (in the countries where IOMED has not
applied). If IOMED does not intend to continue prosecution of a
pending application in any country of the TERRITORY, IOMED shall
promptly inform ELAN of such a decision and no later than in
sufficient time for ELAN to continue such prosecution. For the
avoidance of doubt, the Parties agree that such patents as are
obtained by ELAN pursuant to this Paragraph shall constitute ELAN
IONTOPHORETIC PATENT RIGHTS.
2.3 ELAN shall use its commercially reasonable endeavours to ensure that
the inventors of the ELAN IONTOPHORETIC PATENT RIGHTS shall be
reasonably available to IOMED to deal with queries, and complete and
execute documents, relating to the filing, prosecution and defence of
the ELAN IONTOPHORETIC PATENT RIGHTS.
21
EXHIBIT 10.2
2.4. IOMED shall not abandon an ELAN IONTOPHORETIC PATENT RIGHT without the
prior written consent of ELAN, which shall not be unreasonably withheld. In
the event that the Parties agree that IOMED may abandon such an ELAN
IONTOPHORETIC PATENT RIGHT, ELAN shall have the right to take over the
prosecution and maintenance of such ELAN IONTOPHORETIC PATENT RIGHTS, which
rights shall no longer form a part of and be covered by the licenses
granted by ELAN pursuant to this Agreement.
3. IOMED 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 IONTOPHORETIC PATENT RIGHTS and provide such other with any
available evidence of infringement.
4. During the TERM and the ADDITIONAL TERM, IOMED shall have the right to
pursue at its own expense and for its own benefit any such infringements of
the ELAN IONTOPHORETIC PATENT RIGHTS and/or the IOMED PATENT RIGHTS. ELAN
shall agree to be named as a necessary party in an action brought by and
fully financed by IOMED and will reasonably co-operate with such action.
Any expenses borne by ELAN shall be reimbursed by IOMED. Any recovery
remaining after the deduction by IOMED of the reasonable expenses
(including attorney's fees and expenses) incurred in relation to such an
infringement proceeding shall constitute NET REVENUES for the purpose of
this Agreement. Should IOMED decide not to pursue such infringers of the
ELAN IONTOPHORETIC PATENT RIGHTS, ELAN may do so at its expense and for its
own benefit, and IOMED will reasonably co-operate with such action. Any
expenses borne by IOMED in co-operating with such action shall be
reimbursed by ELAN.
ARTICLE VIII: TERM AND TERMINATION
1. This Agreement is concluded for a period commencing as of the date of this
Agreement and shall expire on a country by country basis fifteen (15) years
starting from the EFFECTIVE DATE, or for the life of the last to expire patent
included in the ELAN IONTOPHORETIC PATENT RIGHTS and the DDS IONTOPHORETIC
PATENT RIGHTS which are used in the exploitation of the PRODUCTS, whichever is
longer ("xxx XXXX"). From and after the tenth year of the TERM, in the event
that IOMED reasonably believes that there are ELAN IONTOPHORETIC PATENT
RIGHT(s) that are not used in connection with the exploitation of the PRODUCTS,
IOMED shall provide written notice thereof to ELAN, setting forth in reasonable
detail its reasons therefor.
Elan and IOMED shall thereupon each in good faith attempt to make a joint
determination of whether IOMED's conclusion is correct or if such ELAN
IONTOPHORETIC PATENT RIGHT(S) are in fact used in connection with such
exploitation; if the Parties are unable to agree upon such joint determination
within 90 days of such notice from IOMED, either party shall have the right to
have such matter arbitrated. Such arbitration shall be conducted before an
independent patent attorney reasonably selected by the Parties, or on such
other basis as shall be mutually reasonably agreeable, pursuant to the
provisions of Article IX Paragraph 14.
22
2. In addition, for a period of five years commencing upon the expiration of
the TERM ("the ADDITIONAL TERM"), the licenses granted by ELAN pursuant to
Article II shall continue, provided, that the royalties payable during the
ADDITIONAL TERM to ELAN referred to in Article IV shall be fifty percent
(50%) of the amount otherwise payable during the TERM; thereafter, IOMED
shall have an exclusive paid-up royalty-free license to the ELAN
IONTROPHORETIC KNOW-HOW.
3. In addition to the rights of early or premature termination provided for
elsewhere in this Agreement, in the event that any of the term or
provisions hereof are incurably breached by either Party, the
non-breaching Party may immediately terminate this Agreement by written
notice. An incurable breach shall be committed when either Party is
dissolved, liquidated, discontinued, becomes insolvent or when any
proceeding is filed or commenced by either Party under bankruptcy,
insolvency or debtor relief laws (and not dismissed within ninety (90)
days). Subject to the other provisions of this Agreement in the event of
any other material breach, the non-breaching Party may terminate this
Agreement by the giving of written notice to the breaching Party that this
Agreement will terminate on the ninetieth (90th) day from notice unless
cure is sooner effected. If the breaching Party has proposed a course of
action to rectify the breach and is acting in good faith to rectify same
but has not cured the breach by the ninetieth (90th) day, the said period
shall be extended by such period as is reasonably necessary to permit the
breach to be rectified. In the event that a Party is entitled to
terminate this Agreement, such Party shall also be entitled to terminate
the DDS AGREEMENT. Furthermore in the event that a Party is entitled to
terminate the DDS AGREEMENT, such Party shall also be entitled to
terminate this Agreement. In the event that the breaching Party disputes
the validity of the of the right of the non-breaching Party to terminate
the Agreement pursuant to this Paragraph, either Party may refer the
dispute to an arbitrator pursuant to the provisions of Article IX
Paragraph 14. Pending the determination of the arbitrator, neither Party
may regard the Agreement as having been terminated and in particular shall
not allege or claim to any third party that the Agreement has been
terminated pursuant to this Paragraph.
23
4. In the event that IOMED elects to proceed against ELAN for damages in
circumstances where IOMED would have been entitled to terminate the
Agreement pursuant to Article IX Paragraph 3 and IOMED obtains a final
order for damages from a court of competent jurisdiction which is not
subject of further appeal, IOMED may offset the said order for damages
against sums otherwise due to ELAN pursuant to Article IV until recovery
of the said judgment.
5. Upon termination of the Agreement:
5.1. any sums that were due from IOMED to ELAN prior to the exercise of
the right to terminate this Agreement shall be paid in full within
sixty (60) days of termination of this Agreement;
5.2. all confidentiality provisions (other than the obligations set out
in Article IX Paragraph 1.1, as they effect ELAN in the event of
termination of this Agreement by ELAN pursuant to Article VIII
Paragraph 3 due to the breach by IOMED) set out in this Agreement
shall remain in full force and effect for a period of five years;
5.3. all responsibilities and warranties shall insofar are appropriate
remain in full force and effect;
5.4. the rights of inspection and audit shall continue in force for the
period referred to in the relevant provisions of this Agreement;
5.5 termination of this Agreement for any reason shall not release any
Party hereto from any liability which, at the time of such
termination has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude
either party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this
Agreement;
5.6 in the event of termination of this Agreement by ELAN or IOMED
pursuant to Article VIII Paragraph 3, IOMED and ELAN shall promptly
return to the other Party all CONFIDENTIAL INFORMATION received from
the other Party (except one copy of which may be retained for
archival purposes);
24
5.7 in the event this Agreement is terminated by ELAN or IOMED pursuant
to Article VIII Paragraph 3, IOMED and its sublicensees shall have
the right for a period of **** from termination to sell or
otherwise dispose of the stock of any PRODUCTS then on hand, which
such sale shall be subject to Article IV and the other applicable
terms of this Agreement. The foregoing provisions of this Paragraph
shall be subject to the Provisions of such agreement or agreements
as ELAN and one or more sublicensees conclude pursuant to Article II
Paragraph 2.4;
5.8 in the event this Agreement is terminated by ELAN or IOMED pursuant
to Article VIII Paragraph 3, the licenses granted by ELAN to IOMED
shall terminate and ELAN shall thenceforth be entitled to exploit
the ELAN INTELLECTUAL PROPERTY together with any improvements made
by IOMED to the ELAN INTELLECTUAL PROPERTY; provided that the
foregoing provision shall be subject to the provisions of Article II
Paragraph 2.4. and any agreements entered into pursuant to the said
Paragraph, and
5.9. Articles I, Article II Paragraph 2.4, Article VI, Article VII
Paragraph 1, Article VIII and Article IX (other than Paragraph 3
thereof) shall survive the termination or expiration of this
Agreement for any reason.
ARTICLE IX: SUNDRY CLAUSES
1. Secrecy
1.1. Each of the parties agrees, during the TERM and the ADDITIONAL TERM, to
hold in confidence and not disclose to any third parties, including any of
the OFFERING PARTIES, except to the extent required by applicable law or
administrative or judicial process, the ELAN IONTOPHORETIC INTELLECTUAL
PROPERTY or the contents or nature thereof, provided, that the foregoing
covenant shall not be applicable to ELAN in the event that the foregoing
covenant shall not be applicable to ELAN in the event that IOMED (i)
abandons or (ii) ceases to develop or commercialize (and provides notice
thereof to ELAN) any such ELAN IONTOPHORETIC INTELLECTUAL PROPERTY and
ELAN determines subsequently to develop products or technologies based on
such ELAN IONTOPHORETIC INTELLECTUAL PROPERTY, irrespective of whether it
is reduced to patent.
25
Each Party may make such disclosure to its directors, officers and agents
and, in the case of IOMED, its potential and actual sublicensees and other
parties to whom such disclosure is appropriate to enable IOMED to conduct
its regular business (each of whom shall be bound by IOMED's disclosure
agreements), who shall be informed of such confidentiality obligation and
for whose breach the disclosing party shall be responsible.
1.2. Subject to the provisions of Paragraph 1. 1., any 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 ELAN IONTOPHORETIC INTELLECTUAL
PROPERTY or the PRODUCTS that has been or will be communicated or
delivered by ELAN to IOMED, and any information from time to time
communicated or delivered by IOMED to ELAN, including without limitation,
trade secrets, business methods, and cost, supplier, manufacturing and
customer information, shall be treated by IOMED and ELAN, respectively, as
CONFIDENTIAL INFORMATION, and shall not be disclosed or revealed to any
third Party whatsoever or used in any manner except as expressly provided
for herein; provided, however, that such CONFIDENTIAL INFORMATION shall
not be subject to the restrictions and prohibitions set forth in this
section to the extent that such CONFIDENTIAL INFORMATION:
1.2.1. 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
information; or
1.2.2. was known to the Party receiving such information prior to the
receipt of such information by such Party, whether received before
or after the date of this Agreement; or
1.2.3. is obtained by the Party receiving such information from a third
party not subject to a requirement of confidentiality with respect
to such information; or
1.2.4. is required to be disclosed pursuant to: (A) any order of a court
having jurisdiction and power to order such information to be
released or made public; or (B) other requirement of law, provided
that if the receiving Party becomes legally required to disclose
any CONFIDENTIAL INFORMATION, the receiving Party shall give the
disclosing Party prompt notice of such fact so that the disclosing
Party may obtain a protective order or other appropriate remedy
concerning any such disclosure.
26
The receiving Party shall fully cooperate with the disclosing
Party in connection with the disclosing Party's efforts to obtain
any such order or other remedy. If any such order or other remedy
does not fully preclude disclosure, the receiving Party shall make
such disclosure only to the extent that such disclosure is legally
required; or
1.2.5. is independently developed by or for the Party by persons not
having access to the CONFIDENTIAL INFORMATION of the other Party.
1.3. Each Party shall take all such precautions as it normally takes with its
own CONFIDENTIAL INFORMATION to prevent any improper disclosure of such
CONFIDENTIAL INFORMATION to any third Party, provided however, that such
CONFIDENTIAL INFORMATION may be disclosed within the limits required to
obtain any authorization from the FDA or any other United States of
America or foreign 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.
1.4. IOMED agrees that it will not use, directly or indirectly, any ELAN
IONTOPHORETIC INTELLECTUAL PROPERTY, or other CONFIDENTIAL INFORMATION
disclosed to IOMED or obtained from ELAN pursuant to this Agreement, other
than as expressly provided herein. ELAN agrees that it will not use,
directly or indirectly, any IOMED KNOW-HOW, IOMED PATENT RIGHTS or other
CONFIDENTIAL INFORMATION disclosed to ELAN or obtained from IOMED pursuant
to this Agreement, other than as expressly provided herein.
1.5 IOMED and ELAN will not publicize the existence of this Agreement in any
way without the prior written consent of the other 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.
2. Assignments/Subcontracting
IOMED may not assign (other than by operation of law in the event of an
acquisition of IOMED, or a merger or similar transaction, subject to the
provisions as set forth in Article IX Paragraph 3) the rights licensed by
ELAN under Article II without the prior written consent of ELAN, which may
be withheld in ELAN's sole discretion. ELAN shall be entitled to assign
its rights and obligations to an AFFILIATE.
27
ELAN may not assign to an unaffiliated third party (other than by
operation of law in the event of an acquisition of ELAN, or a merger or
similar transaction) its rights under this Agreement without the prior
written consent of IOMED, which may be withheld in IOMED's sole
discretion.
3. Certain Changes of Control.
In the event that an OFFERING PARTY makes or signifies its intention of
make a bona fide offer which would result in such a party owning,
directly or indirectly, more than fifteen per cent (15%) of IOMED's
voting stock, on a fully-diulted basis, or otherwise controlling the
IOMED's Board of Directors, or otherwise obtains substantial contractual
rights pursuant to an agreement with IOMED to the ELAN IONTOPHORETIC
INTELLECTUAL PROPERTY (as reasonably determined by ELAN) (each, a
"Control Transaction"), IOMED shall (x) not accept such offer until it
shall have complied with the remaining provision of this Paragraph
without ELAN's consent (in its sole discretion) and (y) advise the
appropriate OFFERING PARTY that, in lieu of IOMED accepting such offer,
such OFFERING PARTY should make a separate offer with respect to that
portion of IOMED's business that relates to the FIELD, and not to the
remaining portion of IOMED's business. ELAN shall have a period of thirty
(30) days to conduct appropriate due diligence and to determine whether
it desires to match an offer made by an OFFERING PARTY with respect to
that portion of IOMED's business that relates to the FIELD, (including
the same economic, payment and other terms); it being understood that
IOMED shall make available to ELAN reasonable and sufficient information
to enable ELAN to conduct such due diligence.
In the event that ELAN determines to make such offer, IOMED shall accept
ELAN's offer and expeditiously consummate such transaction with ELAN.
Notwithstanding the foregoing, in the event that an OFFERING PARTY
consummates a Control Transaction without the consent of the IOMED's
Board of Directors (as such Board is comprised at the time such
transaction is first publicly announced or commenced) (including without
limitation, in connection with a tender offer or offers or proxy
solicitation), ELAN shall have the right in its sole discretion, to
terminate the licences granted by ELAN pursuant to this Agreement,
without payment or penalty to IOMED.
4. Parties bound
This Agreement shall be binding upon and enure for the benefit of Parties
hereto, their successors and permitted assigns.
28
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, (i) such provision will be deemed amended
to conform to applicable laws so as to be valid and enforceable or, if it
cannot be so amended without materially altering the intention of the
Parties, it will be deleted, with effect from the date of such agreement
or such earlier date as the Parties may agree, and (ii) the validity,
legality and enforceability of the remaining provisions of this Agreement
shall not be impaired or affected in any way.
6. Force Majeure
Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results from
cause beyond its reasonable control, including, without limitation, acts
of God, fires, strikes, acts of war, or intervention of a Government
Authority, non-availability of raw materials, but any such delay or
failure shall be remedied by such Party as soon as practicable.
7. Relationship of the Parties
Nothing contained in this Agreement is intended or is to be construed to
constitute ELAN and IOMED as partners or joint venturers or either Party
as an employee of the other. Neither Party hereto shall have any express
or implied right or authority to assume or create any obligations on
behalf of or in the name of the other Party or to bind the other Party to
any contract, agreement or undertaking with any third party
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
authorized representative of both Parties.
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
right arising under this Agreement.
29
10. Headlines
The section headings contained in this Agreement are included for
convenience only and form no part of the agreement between the Parties.
Save as otherwise provided herein, references to articles, paragraphs,
clauses and appendices are up to those contained in this Agreement.
11. 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.
12. Applicable Law
This Agreement (a) shall be governed by and construed in accordance with
the internal laws of the State of New York, without regard to principles
of conflicts of law, and subject to those provisions where the Parties
have conflicts of law expressly agreed to submit a dispute to arbitration,
each party consents to the exclusive jurisdiction of any Federal or state
court sitting in the County, City and State of New York over any dispute
arising from this Agreement.
13. Notice
13.1. Any notice to be given under this Agreement shall be sent in writing
in English by registered airmail or telefaxed to:
ELAN at
Elan Corporation plc.
Xxxxxxxxx, Xxxxxxx,
Xx. Xxxxxxxxx,
Xxxxxxx.
Attention: President Elan Pharmaceutical
Technologies, a division of Elan Corporation
plc
Telephone: 000 000 00000
Telefax: 353 902 92427
30
IOMED at
IOMED, Inc.
0000 Xxxx 0000 Xxxxx,
Xxxx Xxxx Xxxx, XX 00000,
Xxxxxx Xxxxxx of America
Attention: President and Chief Executive Officer
Telephone: 0-000-000-0000
Telefax: 0-000-000-0000
or to such other addresses) and telefax numbers as may from time to
time be notified by either Party to the other hereunder.
13.2. Any notice sent by mail shall be deemed to have been delivered
within seven (7) working days after dispatch and any notice sent by
telefax shall be deemed to have been delivered within twenty four
(24) hours of the time of the dispatch. Notice of change of address
shall be effective upon receipt provided that such date of receipt
must be a business day for the Party to whom the notice is
delivered.
14. Arbitration
Any dispute under this Agreement which is not settled by mutual consent
and which is the subject of an arbitration clause shall be finally settled
by binding arbitration conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association by an arbitrator
appointed in accordance with said rules. The arbitration shall be held in
New York, New York and the arbitrator shall be to the extent practicable
experienced as to the subject matter of the dispute such as an independent
expert in pharmaceutical product development and marketing (including
clinical development and regulatory affairs) or an independent patent
attorney as the case may be. The arbitrator shall determine what
discovery will be permitted, consistent with the goal of limiting the cost
and time which the Parties must expend for discovery; provided the
arbitrator shall permit such discovery as he deems necessary to permit an
equitable resolution of the dispute. Any written evidence originally in a
language other than English shall be submitted in English translation
accompanied by the original or a true copy thereof. The costs of the
arbitration, including administrative and arbitrator's fees, shall be
shared equally by the Parties and each Party shall bear its own costs and
attorneys' and witness' fees incurred in connection with the arbitration,
provided that the prevailing Party may be awarded the reasonable costs and
fees incurred in connection with the arbitration at the discretion of the
arbitrator.
31
A disputed performance or suspended performance pending the resolution of
the arbitration must be completed within thirty (30) days following the
final decision of the arbitrators or such other reasonable period as the
arbitrators determine in a written opinion. Any arbitration subject to
this Paragraph 14 shall be completed within one (1) year from the filing
of notice of a request for such arbitration. The arbitration proceedings
and the decision shall not be made public without the joint consent of the
Parties and each Party shall maintain the confidentiality of such
proceedings and decision unless (a) otherwise permitted by the other Party
or (b) otherwise required by the applicable law in which case the
provisions of Article IX Paragraph 1.2.4. shall be applicable. The
Parties agree that the decision shall be the sole, exclusive and binding
remedy between them regarding any and all disputes, controversies, claims
and counterclaims presented to the arbitrators. Application may be made to
any court having jurisdiction over the Party (or its assets) against whom
the decision is rendered for a judicial recognition of the decision and an
order of enforcement.
15. Withholding
Any income or other taxes which IOMED is required by law to pay or
withhold on behalf of ELAN with respect to royalties and any other moneys
payable to ELAN under this Agreement shall be deducted from the amount of
such royalties and moneys due. IOMED shall furnish ELAN with proof of
such payments. Any such tax required to be paid or withheld shall be an
expense of and borne solely by ELAN. IOMED shall promptly provide ELAN
with a certificate or other documentary evidence to enable ELAN to support
a claim for a refund or a foreign tax credit with respect to any such tax
so withheld or deducted by IOMED. Both 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 IOMED to make such payments to ELAN without any deduction or
withholding.
16. Indemnity
16.1. ELAN shall indemnify, defend and hold harmless IOMED from all actions,
losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys' fees) to which IOMED is or may become subject
insofar as they arise out of or are alleged or claimed to arise out of any
breach by ELAN of any of its obligations under this Agreement or
warranties of ELAN.
32
16.2. IOMED shall indemnify, defend and hold harmless ELAN from all actions,
losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys' fees) to which ELAN is or may become subject
insofar as they arise out of or are alleged or claimed to arise out of
any breach by IOMED of any of its obligations under this Agreement or
warranties of IOMED. IOMED shall assume the sole and entire
responsibility and shall indemnify and save harmless ELAN from any and
all claims, liabilities, expenses, including reasonable attorney's fees,
responsibilities and damages by reason of any claim, proceedings, action,
liability or injury arising out of any defect in the PRODUCTS, including
the manufacture, transport, packaging, storage, handling, distribution,
marketing or sale of the PRODUCTS by IOMED.
16.3. As a condition of obtaining an indemnity in the circumstances set out
above, the Party seeking an indemnity shall:
16.3.1 fully and promptly notify the other Party of any claim or
proceeding, or threatened claim or proceeding;
16.3.2. permit the indemnifying Party to take full care and control of
such claim or proceeding;
16.3.3. assist in the investigation and defence of such claim or
proceeding;
16.3.4. not compromise or otherwise settle any such claim or proceeding
without the prior written consent of the other Party, which
consent shall not be unreasonably withheld; and
16.3.5. take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceeding.
16.4. Notwithstanding anything to the contrary in this Agreement, ELAN and IOMED
shall not be liable to the other by reason of any representation or
warranty, condition or other term or any duty of common law, or under the
express terms of this Agreement for any consequential or incidental loss
or damage (whether for loss of profit or otherwise) and whether occasioned
by the negligence of the respective Parties, their employees or agents or
otherwise.
33
17. Entire Agreement
This Agreement including its Appendices, together with the DDS AGREEMENT,
the Note Purchase and Warrant Agreement and Registration Right Agreement
being entered into between Elan International Services Limited, Elan
International Management Limited and IOMED the Promissory Note and Secured
Promissory Note being issued by IOMED to Elan International management
Limited and the further documents referred to therein, each of which are
being executed of even date herewith, set forth the entire agreement and
understanding of the Parties with respect to the subject matter hereof,
and supersedes all prior discussions agreements and writings in relating
thereto, including the letter of agreement of 31st March 1997.
18. Counterparts
This Agreement may be executed in two counterparts, each of which shall be
deemed an original and which together shall constitute one instrument.
IN WITNESS THEREOF the Parties hereto have executed this Agreement in duplicate.
Executed by IOMED on ____ April, 1997
By: ______________________________
Name: ____________________________
Title: ___________________________
Executed by ELAN _____ April, 1997
By: ______________________________
Name: ____________________________
Title: ___________________________
34
APPENDIX A
ASSETS
****
Summary of Design Assets for mechanical and electronic elements for PANODERM
Clinical Device
Tangible
* Industrial design
* Specifications for components and electronic elements for all other
components for which ELAN has specifications.
* Tooling
* Know how for gluing *******
* Source and supply of connector
Pre-Production Design
Tangible
* Industrial design
* Specifications for components and electronic elements and for all other
components for which ELAN has specifications.
* Plan for miniaturisation of components
* Design for purpose built connector
* Design for full water resistant connector between patch and control housing
* Full exploration of all possible concepts for mass production with
particular emphasis on use of flex circuit and printed electrodes (note:
these designs have been explored fully with supplier and would be suitable
for **** *** ********* *** ********** ******
Materials - stock in hand in Athlone
* Materials for the manufacture of *** ********* ****** including: active
and counters electrodes - ************* ******** and ******, up to four
different suppliers (including ******** electrodes) - several thousands of
pairs
* Pre-formed patches - *************** ** ****
* Batteries - several hundred
* Other materials, e.g., adhesive, sachets, etc.
35
***** ********** ****** * ******
Product drawing file
Assembled units - 100 (approx.)
Semi assembled - 100 (approx.)
Components except for PCBs for 1,000 units (approx.)
Three test benches exclusive for PANODERM
Assembly tools
00
XXXXXXXX X
XXXX XXXXXXXXXXXXX KNOW-HOW
*** ********* ******
Summary of Design Assets for mechanical and electronic elements for PANODERM
Clinical Device
Intangible
* Supplier relationships including quality audits, etc.
* Source of parts
Pre-Production Design
Intangible
* Supplier relationships, including quality audits
* Source of all parts
* Source of potential production suppliers for all parts
*********** ***** ****** * ******
Intangible Assets
* Drug candidate screening, in vitro/animal/human - knowledge of
pre-requisites for iontophoretic delivery
* Clinical experience - full reports, IND filings
* Scientific credibility and recognition
* Publications/presentations and patent
* Regulatory filings
* Component candidate screening (e.g., hydrogels, adhesives, plastics,
conductive elements, drug containment elements, batteries, etc.)
With respect to the foregoing:
Copies of relevant notebooks
Copies of technical, summary and other market reports
37
APPENDIX C
ELAN IONTOPHORETIC PATENT RIGHTS
38
DOCKET FAMILY: 1805
[ELAN LOGO] Art = Panoderm
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COUNTRY/ ASSIGNEE/ APPLICATION NO./ PUBLICATION NUMBER/ PATENT NUMBER/
DOCKET NO. PATENTEE FILING DATE PUBLICATION DATE PATENT ISSUE DATE
------------------------------------------------------------------------------------------------------
SOUTH AFRICA ELAN CORPORATION,* 90/10260 90/10280
00.0000.XX PLC DECEMBER 20, 1990 OCTOBER 30, 1991
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ITALY ELAN CORPORATION,* 22412A/90 1244030
00.0000.XX PLC DECEMBER 16, 1990 JUNE 28, 1994
------------------------------------------------------------------------------------------------------
ISRAEL ELAN CORPORATION,* 96735 98735
00.0000.XX PLC DECEMBER 28, 1990 OCTOBER 1, 1995
------------------------------------------------------------------------------------------------------
IRELAND ELAN CORPORATION,* 4813/90 63598
00.0000X.XX PLC DECEMBER 20, 1990 APRIL 26, 1995
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IRELAND ELAN CORPORATION,* 364/90 62025
00.0000.XX PLC JUNE 29, 1990 DECEMBER 2, 1994
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UNITED KINGDOM ELAN CORPORATION,* 9027883.3 2239803
00.0000.XX PLC DECEMBER 20, 1990 AUGUST 3, 1994
---------
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PANODERM ISSUED PATENTS
INTELLECTUAL PROPERTY DEPARTMENT March 3, 1997
ELAN PHARMACEUTICAL RESEARCH CORPORATION 2:49:59 PM
39
DOCKET FAMILY: 1805
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SWITZERLAND ELAN CORPORATION,* 04145/90.9 684725 G 684725
00.0000.XX PLC DECEMBER 20, 1990 DECEMBER 15, 1994 JUNE 15, 1995
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AUSTRALIA ELAN CORPORATION,* 68330/90 652,135 652135
00.0000.XX PLC DECEMBER 20, 1990 AUGUST 16, 1994 DECEMBER 6, 1994
------------------------------------------------------------------------------------------------------
* Subject to the joint ownership interest held by ASULAB S.A. and/or SMH Swiss
Corporation for Microelectronics and Watchmaking Industries Ltd.
PANODERM ISSUED PATENTS
INTELLECTUAL PROPERTY DEPARTMENT March 3, 1997
ELAN PHARMACEUTICAL RESEARCH CORPORATION 2:49:59 PM
40
DOCKET FAMILY: 1807
[ELAN LOGO] ART = PANODERM
DRUG DELIVERY DEVICE
I.E.C.D.
COUNTRY/ ASSIGNEE/ APPLICATION NO./ PUBLICATION NUMBER/ PATENT NUMBER/
DOCET NO. PATENTEE FILING DATE PUBLICATION DATA PATENT ISSUE DATA
----------------------------------------------------------------------------------------------------------
SOUTH AFRICA ELAN CORPORATION, 92/8689 92/8689
00.0000.XX PLC NOVEMBER 11, 1992 JULY 28, 1992
----------------------------------------------------------------------------------------------------------
UNITED STATES ELAN CORPORATION, 08/244,094 5,633,995
00.0000.XX PLC MAY 13, 1994 JULY 9, 1996
----------------------------------------------------------------------------------------------------------
NEW ZEALAND ELAN CORPORATION, 245091 1378 245091
00.0000.XX PLC NOVEMBER 11, 1992 MARCH 25, 1994 AUGUST 10, 1994
----------------------------------------------------------------------------------------------------------
IRELAND ELAN CORPORATION, 2798/92 66757
00.0000.XX PLC NOVEMBER 10, 1992 JUNE 21, 1995
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IRELAND ELAN CORPORATION, 3941/91 68767
00.0000.XX PLC NOVEMBER 13, 1991 JUNE 21, 1993
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AUSTRALIA ELAN CORPORATION, 29099/92 664214
00.0000.XX PLC MAY 28, 1994 MARCH 19, 1996
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INTELLECTUAL PROPERTY DEPARTMENT MARCH 3, 1997
ELAN PHARMACEUTICAL RESEARCH CORPORATION PANODERM ISSUED PATENTS 2:51:20 PM
41
DOCKET FAMILY: EMT 6
[ELAN LOGO] ART = PANODERM
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COUNTRY/ ASSIGNEE/ APPLICATION NO./ PUBLICATION NUMBER/ PATENT NUMBER/
DOCKET NO. PATENTEE FILING DATE PUBLICATION DATA PATENT ISSUE DATA
----------------------------------------------------------------------------------------------------------
SOUTH AFRICA EMT 91/9794 91/9794
91.EMT 0.XX DECEMBER 12, 0000 XXXXXX 00, 0000
----------------------------------------------------------------------------------------------------------
XXXXXX XXXXXX EMT 07/627,104 5,158,591
90.EMT 0.XX DECEMBER 13, 1900 OCTOBER 20, 1992
----------------------------------------------------------------------------------------------------------
TAIWAN EMT 60109555 199,665 60732
91.EMT 8.TI DECEMBER 5, 1991 FEBRUARY 11, 1993 JUNE 1, 1993
----------------------------------------------------------------------------------------------------------
NEW ZEALAND EMT 2406875 240675 240875
91.EMT 0.XX DECEMBER 5, 1991 APRIL 27, 1994 AUGUST 16, 1994
----------------------------------------------------------------------------------------------------------
EPO EMT 92901285.6 516,763 516,763
92.EMT 6.EP DECEMBER 13, 1991 DECEMBER 9, 1992
----------------------------------------------------------------------------------------------------------
AUSTRALIA EMT 90587191 91/90, 587 642112
94.EMT 6.AU PLC DECEMBER 13, 1991 JULY 8, 1982 FEBRUARY 1, 1994
----------------------------------------------------------------------------------------------------------
ER, AUSTRIA, BELGIUM, FRANCE, GERMAN, GREAT BRITAIN, GREECE, ITALY, XXXXX 0, 0000
XXXXXXXXXX, XXXXXXXXXXX, SPAIN, SWEDEN, SWITZERLAND & XXXXXXXXXXXX 3:11:21 PM
INTELLECTUAL PROPERTY DEPARTMENT
ELAN PHARMACEUTICAL RESEARCH CORPORATION PANODERM ISSUED PATENTS
42
Docket Family: EMT 8
[ELAN LOGO]
Art = Panoderm
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Country/ Assignee/ Application No./ Publication Number/ Patent Number/
Docket No. Patentee Filing Date Publication Date Patent Issue Date
--------------------------------------------------------------------------------------------
UNITED STATES 07/759,006 5,356,632
91.EMT 0.XX EMT September 12, 1991 October 18, 1994
EPO 92630083.1 532,451 532451
92.EMT 8.EP(14) EMT September 10, 1991 March 17, 1993 January 17, 1996
EP(14) Austria, Belgium, Denmark, France, Germany, Great Britain, Greece,
Ireland, Italy, Netherlands, Portugal, Spain, Sweden, Switzerland &
Liechtenstein
PANODERM ISSUED PATENTS
Intellectual Property Department March 3, 1997
Elan Pharmaceutical Research Corporation 3:14:49PM
43
Docket Family: EMT 9
[ELAN LOGO]
Art = Panoderm
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Country/ Assignee/ Application No./ Publication Number/ Patent Number/
Docket No. Patentee Filing Date Publication Date Patent Issue Date
------------------------------------------------------------------------------------------------------
United States EMT 08/077,146 5380272
93.EMT 0X0.XX June 16, 1993 January, 16, 1995
PANODERM ISSUED PATENTS
Intellectual Property Department March 3, 1997
Elan Pharmaceutical Research Corporation 3:16:23 PM
44
PROPRIETARY & CONFIDENTIAL INFORMATION
SUMMARY OF ELAN'S PENDING PATENT APPLICATIONS
FOR IONTOPHORETIC TECHNOLOGY
45
PROPRIETARY & CONFIDENTIAL INFORMATION
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46
[ELAN LOGO]
APPENDIX D
IOMED CURRENT PRODUCTS
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