CERTAIN PORTIONS HAVE BEEN OMITTED BASED ON
A REQUEST FOR CONFIDENTIAL TREATMENT;
OMITTED PORTIONS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
LICENSE AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
SHEFFIELD PHARMACEUTICAL, INC.
A Delaware Corporation
AND
SYSTEMIC PULMONARY DELIVERY, LTD.
A Bermuda Company
AND
ELAN CORPORATION, plc
An Irish Company
This Agreement is made the 30th day of June 1998
TABLE OF CONTENTS
1. ARTICLE I : DEFINITIONS..................................................1
2. ARTICLE II : THE LICENSE................................................6
3. ARTICLE III: WARRANTY AND INDEMNITY.....................................8
4. ARTICLE IV: PATENTS...................................................12
5A. ARTICLE VIII(A): REGARDING THE SHEFFIELD INTELLECTUAL PROPERTY.........14
5. ARTICLE V: MISCELLANEOUS CLAUSES.......................................15
LICENSE AND DEVELOPMENT Agreement, dated June 30, 1998, by and between Sheffield
Pharmaceutical, Inc., a Delaware corporation ("Sheffield"), Systemic Pulmonary
Delivery, Ltd., a Bermuda corporation ("Newco") and Elan Corporation plc., an
Irish corporation ("Elan").
RECITALS
--------
X. Xxxxxxxxx owns, controls and/or has rights in and to the
Sheffield Intellectual Property (capitalized terms used herein are defined
below), and
B. Elan is beneficially entitled to the use of various
patents, including the Elan Patent Rights, which have been granted or are
pending under the International Convention in relation to the development and
production of drug delivery devices and processes, and
C. Elan has agreed to enter into the Elan License Agreement
provided that Sheffield and Newco enter into this Agreement, and
D. Newco is entering into this Agreement with Sheffield
pursuant to which Newco shall have the right to manufacture and to market the
Products in the Territory, and
X. Xxxxxxxxx is prepared to license the Sheffield
Intellectual Property in the Territory to Newco.
NOW THEREFORE, The Parties agree as follows:
1. ARTICLE I: DEFINITIONS
-----------------------
1.1. In the present Agreement and any further agreements based
thereon between the Parties hereto, the following definitions shall apply:
"Affiliate" shall mean any corporation or entity controlling,
controlled by or under the common control of Sheffield, Newco
or Elan, as the case may be. For the purpose of this
Agreement, "control" shall mean the direct or indirect
ownership of at least twenty-five (25%) percent 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.
"Agreement" shall mean this agreement (which expression shall
be deemed to include the Recitals and Appendices hereto).
2
"cGCP", "cGLP" and "cGMP" shall mean current Good Clinical
Practices, current Good Laboratory Practices and current Good
Manufacturing Practices respectively.
"Confidential Information" shall have the meaning set forth
in Article 5.1 below.
"Definitive Documents" shall mean this Agreement, the Elan
License Agreement, the Newco/Sheffield License Agreement, and
any other documents or agreements executed in connection with
the transactions contemplated hereunder and thereunder.
"Effective Date" shall mean June 30, 1998.
"Elan" shall mean Elan Corporation, plc and any of its
Affiliates.
"Elan License Agreement" shall mean the License and
Development Agreement, dated even date herewith, among Elan,
Newco and Sheffield pursuant to which, among other things,
Elan is licensing to Newco the Elan Know-How and the Elan
Patent Rights in accordance with the terms and conditions of
said agreement.
"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.
"Field" shall mean the Systemic Pulmonary Field.
"Joint Intellectual Property" shall mean the Joint Know-How
and/or the Joint Patent Rights.
"Joint Know-How" shall mean all knowledge, information and
expertise developed by at least two of the three Parties
during the Term relating to the Field and in accordance with
the Project whether or not covered by any patent, copyright,
design, trademark or other industrial or intellectual
property rights.
"Joint Patent Rights" shall mean any patent and patent
applications created, developed, conceived or otherwise
invented by at least two of the three Parties pursuant to the
Agreement, relating to the Field, and in accordance with the
Project. Joint Patent Rights shall also include extensions,
continuations, continuations-in-part, divisionals, patents of
additions, reexaminations, 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.
2
"Marketing Authorization" shall mean the procurement of
registrations and permits required by applicable government
authorities in a country in the Territory for the marketing,
sale, and distribution of a Product in such country.
"MSI Delivery System"shall mean Sheffield's multi dose
nebulizer comprising a device and dosator that generally
conforms to the specifications in Annex 2 to the Siemens
Supply Agreement for use with medicines for the systemic
treatment of diseases, and improvements thereto, excluding
the use of medicines for humans in treating respiratory
disease and/or other lung disease, which exclusion includes,
but is not limited to, the use of anti-infectives.
"Newco" shall mean Systemic Pulmonary Delivery, Ltd. and any
of its Affiliates.
"Newco Intellectual Property" shall mean the Newco Know-How
and/or the Newco Patent Rights.
"Newco Know-How" shall mean all knowledge, information, trade
secrets, data and expertise, or from time to time, developed,
invented or otherwise acquired by or on behalf of Newco
during the Term, including without limitation, the ADDS
Technology, the Trademark, Newco Project Know-How, and
clinical data and test results, whether or not covered by any
patent, copyright, design, trademark or other industrial or
intellectual property rights.
"Newco/Sheffield License Agreement" shall mean the License
Agreement, dated even date herewith, among Newco, Sheffield
and Elan pursuant to, among other things, Newco is
sublicensing certain intellectual property rights and
know-how to Sheffield in accordance with the terms and
conditions of said agreement.
"Newco Patent Rights" shall mean all patents and patent
applications owned or to be owned by, or licensed or to be
licensed by Newco. Newco Patent Rights shall also include all
extensions, continuations, continuations-in-part,
divisionals, patents in addition, reexaminations, 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. Newco Patent Rights shall further include
any patents or patent applications covering any improved
Products or improved methods of making or using the Products
invented or acquired by Newco during the Term (and shall for
the avoidance of doubt include the Newco Project Patent
Rights and such patent and patent applications relating to
the ADDS Technology).
"Newco Project Know-How" shall mean all knowledge,
information, trade secrets, data and expertise which is owned
or to be developed by or on behalf of Newco in connection
with the Project relating to the Products, including clinical
data, whether or not covered by any patent, copyright,
design, trademark or other industrial or intellectual
property rights.
"Newco Project Patent Rights" shall mean any patents or
patent applications covering any improved Products or methods
of making or using the Products, invented or acquired by or
on behalf of Newco in connection with the Project.
"Party" shall mean Newco, Sheffield or Elan as the case may
be. "Parties" shall mean any two of Newco, Sheffield and
Elan.
"Plan" shall mean the business plan and program of
development agreed to by the Parties and attached to the Elan
License Agreement as Appendix B, with respect to the
research, development, prosecution and commercialization of
the Products.
"Products" shall mean all devices and products or any parts
or components thereof (including, without limitation, any and
all compounds and/or drug products delivered with, by and/or
via the Products) that are used, developed, manufactured,
offered for sale and/or sold by or on behalf of Newco and/or
its permitted sublicensees, and that utilize, incorporate,
apply and/or are based on the Sheffield Intellectual
Property, the Newco Intellectual Property, and/or the Elan
Intellectual Property.
"Project" shall mean all activity as undertaken by Elan,
Sheffield and Newco in order to develop the Products in
accordance with the Plan.
"Sheffield" shall mean Sheffield Pharmaceutical, Inc., a
Delaware corporation.
"Sheffield Intellectual Property" shall mean the Sheffield
Know-How and/or the Sheffield Patent Rights.
"Sheffield Know-How" shall mean all knowledge, information,
trade secrets, data and expertise relating to the Systemic
Pulmonary Field, other than compounds, that is possessed by
Sheffield, or from time to time, developed or invented (but
not acquired) by or on behalf of Sheffield during the Term
relating to the Systemic Pulmonary Field for use with
medicines for the systemic treatment of diseases (but
excluding the use of medicines for humans in treating
respiratory disease and/or other lung disease, including, but
not limited to, the use of anti-infectives), including,
without limitation, clinical data, the MSI Delivery System
and the Sheffield Project Know-How, whether or not covered by
any patent, copyright, design, trademark or other industrial
or intellectual property rights.
"Sheffield Patent Rights" shall mean all patents and patent
applications related to the Systemic Pulmonary Field, other
than compounds, owned by or licensed by or on behalf, of
Sheffield, which patents as of the Effective Date are set
forth on Appendix A, attached hereto. Sheffield Patent Rights
shall also include all extensions, continuations,
continuations-in-part, divisionals, patents of addition,
re-issues, re-examinations supplementary protection
certificates and foreign
4
counterparts of such patents and patent applications and any
patents issuing thereon and extensions of any patents
licensed hereunder (and shall for the avoidance of doubt
include patents and patent applications relating to the MSI
Delivery System and the Sheffield Patent Project Rights).
"Sheffield Project Know-How" shall mean all knowledge,
information, trade secrets, data and expertise which is
possessed or developed by or on behalf of Sheffield in
connection with the Project relating to the Field for use
with medicines for the systemic treatment of diseases (but
excluding the use of medicines for humans in treating
respiratory disease and/or other lung disease including, but
not limited to, the use of anti-infectives), including, but
not limited to, clinical data, whether or not covered by any
patent, copyright, design, trademark or other industrial or
intellectual property rights.
"Sheffield Project Patent Rights" shall mean any patents or
patent applications covering any improved Products or methods
of making or using the Products, invented or acquired by or
on behalf of Sheffield in connection with the Project during
the Term.
"Siemens" shall mean Siemens Aktiengesellschaft, a company
organized under the laws of Germany.
"Siemens License Agreement" shall mean the License Agreement,
dated February 21, 1997, between Sheffield and Siemens.
"Siemens Supply Agreement" shall mean the Basic Supply
Agreement dated March 21, 1997, between Sheffield and
Siemens.
"Steering Committee" shall have the meaning set forth in the
Newco Development Agreement, dated even date herewith,
between Sheffield and EIS.
"Systemic Pulmonary Field" shall mean the practice of
delivering therapeutic entities via the lung, with the
primary intention of making them systemically available.
"Term" shall have the meaning set forth in Article 5.5 below.
"Territory" shall mean all of the countries of the world.
"Topical Pulmonary Field" shall mean the practice of
delivering respiratory therapeutic entities via the lung with
the primary intention of making them available for local
respiratory therapeutic effect on the lung.
"Trademark" shall mean the trademark(s) as may be selected by
Newco which has been or may be registered by Newco in one or
more countries in the Territory.
5
"$" shall mean United States Dollars.
The following terms shall have the meanings set forth in the
Elan License Agreement: Elan Improvements, Elan Intellectual
Property, Elan Know-How, and Elan Patent Rights.
1.2. Interpretation. In this Agreement, the following shall apply:
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 an Article or Appendix shall,
unless otherwise specifically provided, be to a Article or Appendix of this
Agreement; and
1.2.3. the headings of this Agreement are for ease of
reference only and shall not affect its construction or interpretation.
2. ARTICLE II : THE LICENSE
-------------------------
2.1. Subject to the terms and conditions of this Agreement and
the rights of Elan under the Definitive Documents, Sheffield hereby grants to
Newco for the Term, and Newco hereby accepts, an exclusive, royalty free,
sublicense of the Sheffield Intellectual Property for the Territory to develop,
make, have made, manufacture, have manufactured, package, use, import, export,
promote, distribute, market, offer for sale, and sell the Products in the Field
in the Territory. Elan shall have the right to cause Newco to enforce Newco's
rights against Sheffield hereunder.
2.1.1. Except for an assignment or sublicense to Elan in
accordance with this Agreement and the Definitive Documents, Newco may not
assign or sublicense the licenses and rights granted to it herein without the
prior written approval of Sheffield and Elan, which approval may be withheld for
any reason whatsoever. Subject to Elan's rights under the Definitive Documents,
Sheffield shall be entitled to use the Sheffield Intellectual Property and all
technical and clinical data or improvements thereto in connection with (i)
Sheffield's commercial arrangements for the Products in any country that ceases
to be a part of the Territory, or in relation to the Products in a country in
the Territory in the event of the expiration or sooner termination of this
Agreement, or (ii) Sheffield's commercial arrangements for products outside of
the Field. Such commercial arrangements referred to in the immediately preceding
sentence shall include the right to research, develop, manufacture, sell,
license or otherwise market the Products. Notwithstanding anything contained
herein to the contrary, during the Term (and for a period of two (2) years
thereafter if Elan acquires 100% of Newco's Common Stock within five (5) years
from the Effective Date), Sheffield shall not directly or indirectly compete
with Newco in the Field, and Sheffield shall not participate in the ownership,
management, operation or control of, or act in any advisory, expert or other
capacity for, any entity or individual that competes with Newco
7
in the Field; provided, however, that upon Elan's acquisition of at least 100%
of Newco's Common Stock, Sheffield shall have the right to compete with Newco in
the Field with products that are not based on or utilize the Elan Intellectual
Property, the Newco Intellectual Property, the Sheffield Intellectual Property,
and/or the Joint Intellectual Property.
2.2. Notwithstanding anything contained in this Agreement to the
contrary, Newco may without the prior approval of Sheffield, enter into an
agreement with Elan to manufacture, package, use, import, export, promote,
distribute, market, offer for sale, and sell all Products (including products
that utilize, incorporate, apply and/or are based on the Sheffield Intellectual
Property) on such terms as Newco and Elan shall mutually agree.
2.3. Newco shall market the Products in the Territory under a
Trademark, which Trademark will be owned by Newco subject to the terms and
conditions of this Agreement. 2.4. Sheffield hereby grants to Newco during the
Term a non-exclusive royalty free license in the Territory, solely for use in
connection with the sale of the Products, to use Sheffield's trademark or
trademarks, on the following terms:
2.4.1. Newco shall as soon as it becomes aware of any
infringement give to Sheffield in writing full particulars of any use or
proposed use by any other person, firm or company of a trade name or trademark
or promotional or advertising activity which may constitute infringement.
2.4.2. If Newco becomes aware that any other person, firm or
company alleges that such trademark is invalid or that the use of such trademark
infringes any rights of another party or that the trademark is otherwise
attacked, Newco shall immediately give to Sheffield full particulars in writing
thereof and shall make no comment or admission to any third party in respect
thereof.
2.4.3. Sheffield shall have the right to conduct all
proceedings relating to such trademark and shall in its sole discretion decide
what action, if any, to take in respect of any infringement or alleged
infringement of such trademark or any other claim or counter-claim brought or
threatened in respect of the use or registration of such trademark. Any such
proceedings shall be conducted at Sheffield's expense and for its own benefit.
2.4.4. Nothing contained in this Agreement shall grant to
Newco any right, title, or interest in or to such trademark, whether or not
specifically recognized or perfected under applicable laws. At no time during or
after the Term shall Newco challenge or assist others to challenge any such
trademark or the registration thereof or attempt to register any trademarks,
marks, or trade names confusingly similar to any such trademark. All displays of
any such trademark that Newco intends to adopt shall first be submitted to
Sheffield for approval (which shall not be unreasonably withheld) of design,
color, and other details, or shall be exact copies of those used by Sheffield.
In addition, Newco shall fully comply with all reasonable guidelines, if any,
communicated by Sheffield concerning the use of any such trademark as well as
all rules and regulations of such use throughout the Territory.
7
2.5. When packaged, and to the extent permitted by law, a product
label shall include an acknowledgement that the Product is made under license
from Sheffield. Such acknowledgement shall take into consideration regulatory
requirements and Newco's reasonable commercial requirements. Newco shall
wherever possible give due acknowledgement and recognition to Sheffield in all
printed promotional and other material regarding the Product such as stating
that the Product is under license from Sheffield and that the applicable
Sheffield technology has been applied to the Products. Newco shall consult with
and obtain the written approval of Sheffield as to the format and content of the
promotional and other material insofar as it relates to a description of, or
other reference to, the application of the Sheffield Intellectual Property, such
approval not to be unreasonably withheld or delayed. The further consent of
Sheffield shall not be required where the format and content of such materials
is substantively similar as the materials previously furnished to and approved
in writing by Sheffield.
2.6. Newco shall cause the Products that relate to the MSI
Delivery System to be labled in accordance with any obligation by Sheffield in
the Siemens License Agreement and in accordance with applicable laws and
regulations, including without limitation, 00 Xxxxxx Xxxxxx Code Section 287, as
the same may be amended from time to time.
3. ARTICLE III: WARRANTY AND INDEMNITY.
-------------------------------------
3.1. Sheffield represents , warrants and covenants to Newco and
Elan as follows:
3.1.1. Sheffield 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 Sheffield), and is in compliance with all applicable laws, rules,
regulations or orders relating to its business and assets;
3.1.2. Sheffield 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 Sheffield and constitutes
the legal and valid obligations of Sheffield and is enforceable against
Sheffield 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
Sheffield's memorandum and articles of association or any material agreement or
instrument binding upon or affecting Sheffield or its properties or assets or
any applicable laws, rules, regulations or orders affecting Sheffield or its
properties or assets;
3.1.3. Sheffield 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;
8
3.1.4. As of the Effective Date, Sheffield is the sole and
exclusive owner or licensee of, or controls all right, title and interest to the
Sheffield Patent Rights; and to Sheffield's knowledge and belief, Sheffield is
the sole owner or licensee of the Sheffield Know-How. Sheffield has the right to
grant the licenses and sublicenses granted herein. The Sheffield Patent Rights,
and to Sheffield's knowledge and belief, the Sheffield Know-How, are free and
clear of any lien, encumbrances, security interest or restriction on the license
granted herein. Sheffield will not grant during the Term, any right, license or
interest in and to the Sheffield Intellectual Property, or any portion thereof,
inconsistent with the license and sublicense granted herein; and to the best of
Sheffield's knowledge there are no pending or threatened adverse actions, suits,
investigations, claims or proceedings brought by one or more third parties
related to the Sheffield Intellectual Property as of Effective Date;
3.1.5. The Products that are developed, manufactured,
transported, stored, handled, packaged, marketed, promoted, distributed, offered
for sale and/or sold by Sheffield shall be in accordance with all applicable
regulations and requirements of the FDA and foreign regulatory authorities
including, without limitation, cGCP, cGLP, cGMP regulations with respect
thereto. The Products shall not be adulterated or misbranded as defined by the
Federal Food, Drug and Cosmetic Act (or applicable foreign law) and shall not be
a product which would violate any section of such Act if introduced in
interstate commerce;
3.1.6. Sheffield is fully cognizant of all applicable
statutes, ordinances and regulations of the United States of America and
countries in the Territory 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 and similar statutes in countries outside of the United
States, and cGMPs. To the extent that Sheffield manufactures or procures the
manufacture of the Products, such manufacture or procurement shall be in
conformity with the Marketing Authorizations and in a manner which fully
complies with all United States of America and foreign statutes, ordinances,
regulations and practices;
3.1.7. Sheffield 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 license, contract, understanding or agreement, whether
express, implied, written or oral between Sheffield and any third party,
including without limitation, the Siemens License Agreement;
3.1.8. Sheffield and Siemens are parties to the Siemens
License Agreement pursuant to which, among other things, Siemens is licensing to
Sheffield, with the right to sublicense, a license for the manufacture,
distribution and sale the MSI Delivery System. The Siemens License Agreement is
valid and in full force and effect and will continue to be valid and in full
force and effect upon completion of the transactions contemplated by the
Definitive Documents without any modifications. There are no existing or claimed
defaults by any party under the Siemens License Agreement and no event, act or
omission has occurred which (with or without notice, lapse of time or the
happening or occurrence of any other event) would result in a default under the
Siemens License Agreement. Sheffield shall comply with all of its obligations
under the Xxxxxx'x License Agreement and shall promptly notify Elan and Newco of
any breach or event of default thereunder; and
9
3.1.9. EXCEPT AS SET FORTH IN THIS ARTICLE 3.1, SHEFFIELD IS
GRANTING THE SUBLICENSES HEREUNDER ON AN "AS IS" BASIS WITHOUT RECOURSE,
REPRESENTATION OR WARRANTY WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR INFRINGEMENT OF THIRD
PARTY RIGHTS, AND ALL SUCH WARRANTIES ARE EXPRESSLY DISCLAIMED.
3.2. Newco represents and warrants to Elan and Sheffield the
following:
3.2.1. Newco 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 (except where such
failure to so qualify shall not have a material adverse affect on the business
and assets of Newco), and Newco is in compliance with all applicable laws,
rules, regulations or orders relating to its business and assets;
3.2.2. Newco 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 Newco and is enforceable against Newco 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 Newco's certificate of
incorporation, by-laws or other organic documents, any material agreement or
instrument binding upon or affecting Newco, or its properties or assets or any
applicable laws, rules, regulations or orders affecting Newco, or its properties
or assets;
3.2.3. Newco 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 Agreement and the transactions contemplated hereby will not
result in any such violation;
3.2.4. Newco has not granted any option, license, right or
interest to any third party which would conflict with the terms of this
Agreement;
3.2.5. The Products that are be developed, manufactured,
transported, stored, handled, packaged, marketed, promoted, distributed, offered
for sale and/or sold by Newco shall be in accordance with all applicable
regulations and requirements of the FDA and foreign regulatory authorities
including, without limitation, cGCP, cGLP, cGMP regulations relating thereto.
The Products shall not be adulterated or misbranded as defined by the Federal
Food, Drug and Cosmetic Act (or applicable foreign law) and shall not be a
product which would violate any section of such Act if introduced in interstate
commerce; and
3.2.6. Newco is fully cognizant of all applicable statutes,
ordinances and regulations of the United States of America and countries in the
Territory with respect to the manufacture of the Products including, but not
limited to, the U.S. Federal Food, Drug and
10
Cosmetic Act and regulations thereunder and similar statutes in countries
outside of the United States, and cGMPs. To the extent that Newco manufactures
or procures the manufacture of the Products, such manufacture or procurement
shall be in conformity with the Marketing Authorizations and in a manner which
fully complies with all United States of America and foreign statutes,
ordinances, regulations and practices.
3.3. Elan represents and warrants to Newco and Sheffield the
following:
3.3.1. Elan 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 (except where such failure
to so qualify shall not have a material adverse affect on the business and
assets of Elan), and Elan is in compliance with all applicable laws, rules,
regulations or orders relating to its business and assets;
3.3.2. 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 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 will not violate or result in a default under
or creation of lien or encumbrance under Elan's certificate of incorporation,
by-laws 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;
3.3.3. Elan 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 Agreement and the transactions contemplated hereby will not
result in any such violation.
3.4. Sheffield shall indemnify, defend and hold harmless Newco,
Elan and their respective officers, directors, employees and agents from all
actions, losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys' fees) due to third party claims to which Newco or Elan is
or may become subject insofar as they arise out of or are alleged or claimed to
arise out of (i) any breach by Sheffield of any of its obligations under this
Agreement, (ii) any breach of a representation or warranty of Sheffield made in
this Agreement, and (iii) any activities conducted by Sheffield in connection
with the Project, except to the extent due to the negligence or willful
misconduct of Newco or Elan.
3.5. Newco shall indemnify, defend and hold harmless Sheffield
and Elan and their respective officers, directors, employees and agents from all
actions, losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys' fees) due to third party claims to which Sheffield or Elan
is or may become subject insofar as they arise out of or are alleged or claimed
to arise out of (i) any breach by Newco of any of its obligations under this
Agreement, (ii) any breach of any representation or warranty of Newco made in
this Agreement, (iii) any activities conducted by Newco in connection with the
Project, except to the extent due to the
11
negligence or willful misconduct of Sheffield or Elan (which negligence or
willful misconduct of Sheffield or Elan, as the case may be, shall not affect
the obligations of Newco to the other party hereunder), and (iv) third party
claims to which Sheffield or Elan is or may become subject insofar as they arise
out of or are alleged or claimed to arise out of the development, manufacture,
transport, packaging, storage, handling, distribution, promotion, marketing,
offer for sale or sale of the Products, including any product liability claim or
any claim relating to any recall of a Product.
3.6. As a condition of obtaining an indemnity in the
circumstances set out above or elsewhere in the Agreement, the Party seeking an
indemnity shall:
3.6.1. fully and promptly notify the other Party of any
claim or proceeding, or threatened claim or proceeding;
3.6.2. permit the indemnifying Party to take full care and
control of such claim or proceeding;
3.6.3. reasonably assist in the investigation and defense of
such claim or proceeding;
3.6.4. 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 take all reasonable steps to mitigate
any loss or liability in respect of any such claim or proceeding.
3.7. Notwithstanding anything to the contrary in this Agreement,
Elan, Sheffield and Newco shall not be liable to the other for any punitive,
consequential or incidental loss or damage (whether for loss of profit or
otherwise) by reason of any representation or warranty, condition or other term
or any duty of common law, or under the express or implied terms of this
Agreement, and whether occasioned by the negligence of the respective Parties,
their employees or agents or otherwise.
4. ARTICLE IV: PATENTS
--------------------
4.1. Title: Subject to the terms and conditions of this Agreement,
title to the various inventions and intellectual property are set forth below as
follows:
(i) title to all inventions and other intellectual
property made solely by employees of Elan in connection with the Project shall
be owned by Elan;
(ii) title to all inventions and other intellectual
property made solely by Newco in connection with the Project shall be owned by
Newco;
(iii) title to all inventions and other intellectual
property made solely by Sheffield in connection with the Project, other than set
forth in Article 7.1(v) below, shall be
12
owned by Newco including, without limitation, any such inventions or
intellectual property relating to the ADDS Technology;
(iv) title to all inventions and other intellectual
property made jointly by Elan and Newco in connection with the Project shall be
owned by Newco;
(v) title to all inventions and other intellectual
property made solely by Sheffield employees or jointly by Newco and Sheffield
employees relating to the MSI Delivery System shall be owned by Sheffield; and
(vi) all other inventions and other intellectual
property made between Sheffield and Newco employees in connection with the
Project shall be owned by Newco, including, without limitation, any such
inventions or intellectual property relating to the ADDS Technology.
4.2. Filing and Prosecution of Patents
---------------------------------
4.2.1. Each Party shall timely inform the other in writing
of any improvement or development made by such Party relating, respectively, to
the Elan Intellectual Property, the Sheffield Intellectual Property, and/or the
Newco Intellectual Property so that any patent protection that may be available
for any such improvement or development is not compromised.
4.2.2. Newco shall prepare, prosecute and maintain all
patents applications and issued patents relating to the inventions, improvements
and other intellectual property set forth in paragraphs (ii), (iii), (iv) and
(vi) in Article 7.1. With respect to such preparation, prosecution and
maintenance activities, Newco shall timely inform Sheffield of the status of
such activity if such inventions have application in the Topical Pulmonary
Field. In the event Newco shall decide not to seek patent protection for any
such intellectual property, Elan shall have the option to take control of such
prosecution. In the event that Elan shall determine, in good faith, that any
patents applications and issued patents relating to the inventions, improvements
and other intellectual property set forth in paragraphs (ii), (iii), (iv) and
(vi) in Article 7.1 predominantly relates to an area other than the Field, Elan
shall have the option to take control of the preparation, prosecution and
maintenance of patent protection directed to such intellectual property. In the
event that Elan does not exercise such right, Newco shall have the option to
take responsibility for the preparation, prosecution and maintenance of patent
protection directed to such intellectual property.
4.2.3. Sheffield shall prepare, prosecute and maintain all
patents applications and issued patents relating to paragraph (v) in section 7.1
with respect to such preparation, prosecution and maintenance activities.
4.3. Enforcement of Intellectual Property Rights; Third party
infringement
------------------------------------------------------------
4.3.1. Newco and Sheffield shall promptly inform the other
in writing of any alleged infringement or unauthorized use of which it shall
become aware by a third party of Sheffield Intellectual Property, Newco
Intellectual Property, the Elan Intellectual Property and/or Joint Intellectual
Property and provide such other with any available evidence of such unauthorized
activity.
14
4.3.2. During the Term, Newco shall have the right to pursue
at its own expense any enforcement activities of the Sheffield Intellectual
Property and/or the Newco Intellectual Property and/or the Joint Intellectual
Property within the Field. Sheffield shall agree to be named as a necessary
party in an action brought by and fully financed by Newco and will reasonably
co-operate with such action. Newco shall reimburse any out of pocket expenses
borne by Sheffield. Should Newco decide not to enforce the Sheffield
Intellectual Property and/or the Newco Intellectual Property and/or the Joint
Intellectual Property within the Field, Sheffield may do so at its expense and
for its own benefit, and Newco will reasonably co-operate with such action. Any
actual out of pocket expenses borne by Newco in cooperating with such action
shall be reimbursed by Sheffield.
4.3.3. Notwithstanding anything contained in Article 4.3.2
to the contrary, in the event that a third party is believed to be infringing
any intellectual property right relating to the MSI Delivery System, then at the
request of Newco, Sheffield shall, at Sheffield's discretion, take such
reasonable and necessary actions to remove such infringing activity or, in the
alternative, Sheffield shall promptly grant to Newco the right to pursue any
enforcement activities of the intellectual property relating to the MSI Delivery
System.
4.4. Infringement of third party patents
-----------------------------------
4.4.1. In the event that a claim or proceedings are brought
against Newco by a third party alleging that the manufacture, use, offer for
sale, sale or other activity relating to the Products constitute an unauthorized
use of an intellectual property right owned by such a third party in the
Territory, Newco shall promptly advise Sheffield of such threat or suit.
4.4.2. Newco shall indemnify, defend and hold Sheffield and
Elan harmless against all actions, losses, claims, demands, damages, costs and
liabilities (including reasonable attorneys fees) relating directly or
indirectly to all such claims or proceedings referred to in this Article 4.4;
provided that Sheffield or Elan shall not acknowledge to the third party or to
any other person the validity of any claims of such a third party, and shall not
compromise or settle any claim or proceedings relating thereto without the prior
written consent of Newco, not to be unreasonably withheld or delayed.
5A. ARTICLE V(A): REGARDING THE SHEFFIELD INTELLECTUAL PROPERTY
-----------------------------------------------------------
5A.1 Conformance With Siemens Agreements
-----------------------------------
The Parties acknowledge that those Sheffield rights in and to the
Sheffield Intellectual Property which are derived from the Siemens Supply
Agreement and the Siemens License Agreement, are therefore subject to all the
terms and conditions thereof. It is the Parties' express intent that the grant
by Sheffield of any such rights be consistent with the terms and conditions
thereof and Sheffield's obligations thereunder.
5A.2 After Acquired Know How
-----------------------
14
If Sheffield acquires the rights to additional know how or patents in
the Systemic Pulmonary Field after the execution of this Agreement, it agrees to
negotiate in good faith with Elan and Newco a license or sublicense, as
appropriate, of such know how and patents to Newco for use in the Systemic
Pulmonary Field.
5. ARTICLE V: MISCELLANEOUS CLAUSES
---------------------------------
5.1. Secrecy
-------
5.1.1. Any information, whether written or oral (provided
that oral information shall be reduced to writing within one month by the party
giving the oral information and the written form shall be furnished to the other
party) pertaining to the Product that has been or will be communicated or
delivered by any Party to the other, including, without limitation, trade
secrets, business methods, and cost, supplier, manufacturing and customer
information (collectively, "Confidential Information"), shall be treated by
Newco, Sheffield 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 Article to the extent that such Confidential
Information:
(A) 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
(B) 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 Effective
Date; or
(C) 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
(D) 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) any lawful action of a
governmental or regulatory agency.
5.1.2. Each Party shall take all such precautions with
Confidential Information disclosed to it by the other Party as it normally takes
with its own confidential information to prevent any improper disclosure of the
Confidential Information disclosed to it by the other
15
Party 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.
5.1.3. Notwithstanding the above, each Party hereto may use
or disclose Confidential Information disclosed to it by the other Party to the
extent such use or disclosure is reasonably necessary in filing or prosecuting
patent applications, prosecuting or defending litigation, complying with
applicable governmental regulations or otherwise submitting information to tax
or other governmental authorities, conducting clinical trials, or making a
permitted sub-license or otherwise exercising its rights hereunder, provided
that if a Party is required to make any such disclosure of the other party's
Confidential Information, other than pursuant to a confidentiality agreement, it
will given reasonable advance notice to the latter Party of such disclosure and,
except to the extent inappropriate in the case of patent applications, will use
its best efforts to secure confidential treatment of such information prior to
its disclosure (whether through protective orders or otherwise).
5.1.4. Each Party agrees that it will not use, directly or
indirectly, any Confidential Information disclosed by the other Party pursuant
to this Agreement, other than as expressly provided herein.
5.1.5. Newco and Sheffield 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. The
Parties agree that promptly following the execution of this Agreement they shall
issue an agreed press release which will not disclose the terms of this
Agreement. In the event that one of the Parties wishes to make an announcement
concerning the Agreement, that Party will seek the consent of the other Parties.
The terms of any such announcement shall be agreed in good faith.
5.2. Conflict. IN THE EVENT OF ANY INCONSISTENCY OR CONFLICT
BETWEEN THE PROVISIONS OF THE ELAN LICENCE AGREEMENT ON THE ONE HAND, AND THE
PROVISIONS OF THIS AGREEMENT AND THE NEWCO/SHEFFIELD LICENSE AGREEMENT ON THE
OTHER HAND, THE TERMS OF THE ELAN LICENSE AGREEMENT SHALL GOVERN AND CONTROL IN
ALL RESPECTS.
5.3. Parties bound. This Agreement shall be binding upon and
inure for the benefit of Parties hereto, their successors and permitted assigns.
5.4. Severability. If any provision in this Agreement is agreed
by the Parties to be, or is deemed to be, or becomes invalid, illegal, void or
unenforceable under any law that is applicable hereto, (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
16
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.
5.5. Duration and Termination
------------------------
5.5.1. Subject to the other provisions of Article 5.5, this
Agreement shall remain in full force and effect on a Product by Product and
country by country basis, for a period commencing as of the Effective Date and
expiring [text omitted] years from the date of the first commercial sale of such
Product in such country in the Territory, or [text omitted], whichever is longer
(the "Term"). Promptly following the signing of this Agreement, Sheffield will
use its best and diligent efforts to extend the term of the Siemens License
Agreement and its rights thereunder, including, without limitation, the
exclusive license granted to Sheffield in and to the Sheffield Intellectual
Property, for an initial period of at least fifteen years from the date thereof.
Upon Sheffield's obtaining such extension, it promptly shall so notify Newco and
Elan in writing, specifying the period and territories covered by such
extension. The Term shall be automatically extended for a period equal to any
such extension of such rights of Sheffield under the Siemens License Agreement
at no additional cost to Newco and Elan.
5.5.2. In addition to the rights of early or premature
termination provided for elsewhere in this Agreement, the term of this Agreement
may be terminated immediately upon written notice of termination given by:
(A) the non-defaulting party in the event
that the other party shall: (1) commit
a material breach or default under a
Definitive Document, which breach or
default shall not be remedied within
sixty (60) days after the receipt of
written notice thereof by the party in
breach or default; or (2) have made a
material misrepresentation of any
representation or warranty contained
herein or any Definitive Document; or
(B) Elan on the one hand, and Sheffield
and Newco on the other hand, if Elan,
Sheffield or Newco (on an individual
basis), as the case may be, shall at
any time be Insolvent, dissolved,
liquidated, discontinued, or when any
proceeding is filed or commenced by
either Party under bankruptcy,
insolvency or debtor relief laws. For
purposes of this Agreement,
"Insolvent" shall mean (1) the sum of
a Party's debts exceeds its assets,
(2) a Party is unable, or has reason
to believe it is unable, to pay its
debts as such debts mature, or (3) a
Party does not have sufficient capital
with which to conduct its business.
5.5.3. Upon exercise of those rights of termination as set
forth in this Agreement with respect to any country or countries or the entire
Agreement as the case may be, this Agreement shall, subject to the other
provisions of the Agreement, automatically terminate forthwith in the applicable
country or countries or the entire Agreement as the case may be, and be of no
further legal force or effect.
5.5.4. Upon termination of this Agreement:
17
(A) all confidentiality provisions set out
herein shall remain in full force and
effect for a period of five (5) years;
(B) all representations, warranties, and
indemnities shall survive the
termination of this agreement and
shall remain in full force and effect;
(C) 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;
(D) except as is necessary to enable Elan
to exercise the licenses to be granted
by Newco and/or Sheffield to Elan
under this Agreement, upon any
termination of this Agreement, Newco,
Sheffield 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);
(E) in the event this Agreement is
terminated for any reason, Newco shall
have the right for a period of six (6)
months from termination to sell or
otherwise dispose of the stock of any
Product then on hand, which such sale
shall be subject to applicable terms
of this Agreement;
(F) At Elan's option, except for the
termination of this Agreement due to
the Insolvency of Elan, or unless the
Elan License Agreement is terminated
due to the breach by Elan beyond any
cure or grace period in accordance
with the terms thereof, the Sheffield
Intellectual Property and all of the
rights granted to Newco hereunder
shall immediately be deemed to have
been assigned and transferred to Elan,
and Sheffield shall take such actions,
without cost to Elan, to sublicense to
Xxxx Xxxxxxxxx'x rights under the
Siemens License Agreement to secure
for Elan the benefits of such
agreement.
(G) The following Articles shall survive
the termination or expiration of this
Agreement for any reason: Article 1,
Article 2.1.1, Article 3, Article 4
and Article 5.
18
5.6. 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 causes beyond its reasonable control, including, without
limitation, acts of God, fires, strikes, acts of war, or intervention of a
Government Authority, non availability of raw materials, but any such delay or
failure shall be remedied by such Party as soon as practicable.
5.7. Relationship of the Parties. Nothing contained in this
Agreement is intended or is to be construed to constitute Elan, Newco and
Sheffield 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.
5.8. Amendments. No amendment, modification or addition hereto
shall be effective or binding on any Party unless set forth in writing and
executed by a duly authorized representative of all Parties.
5.9. 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.
5.10. 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.
5.11. Applicable Law. This Agreement is construed under and ruled
by the laws of the State of New York. For the purpose of this Agreement the
Parties submit to the personal jurisdiction of the United States District Court
for the State of New York. The Parties each further irrevocably consent to the
service of any complaint, summons, notice or other process by delivery thereof
to it by any manner in which notices may be given pursuant to this Agreement.
5.12. Notices. Any notice to be given under this Agreement shall
be sent in writing in English by registered airmail or faxed to:
- ELAN at
Elan Corporation plc.
Xxxxxxx Xxxxx,
Xxxxxxx Xxxxx,
Xxxxxx 0, Xxxxxxx.
19
Attention: President, Elan Pharmaceutical Technologies,
a division of Elan Corporation plc
Telefax : 353 1 662 4960
- Newco at
Systemic Pulmonary Delivery, Ltd.
c/o Elan International Services, Ltd.
000 Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxx XX00
Bermuda
Attention: Chief Executive Officer
- Sheffield at
Sheffield Pharmaceuticals, Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Atttention: Chairman
and
Sheffield Pharmaceutical, Inc.
000 Xxxxx Xxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telefax: (000) 000-0000
with a copy to
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 000000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
20
and
Fitzpatrick, Cella, Xxxxxx & Xxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Telefax: (000) 000-0000
or to such other address(es) and telefax numbers as may from
time to time be notified by either Party to the other
hereunder.
If a notice is sent by Sheffield to Newco or Newco to Sheffield
pursuant to any agreements relating to the transactions contemplated hereunder,
then Sheffield or Newco, as the case may be, shall send a copy of such notice to
Elan in accordance with the provisions of this Article.
Any notice sent by registered air-mail shall be deemed to have been
delivered within seven (7) working days after dispatch and any notice sent by
telefax (with confirmed answer back) 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.
5.13. No Implied Rights. No rights or licenses are granted or
deemed granted hereunder or in connection herewith, other than those rights
expressly granted in this Agreement.
5.14. Further Assurances. At any time or from time to time on and
after Effective Date, each party shall at the request of the other (i) deliver
such records, data or other documents consistent with the provisions of this
Agreement, (ii) execute, and deliver or cause to be delivered, all such
consents, documents or further instruments of transfer or license, and (iii)
take or cause to be taken all such actions, as the other Party may reasonably
deem necessary or desirable in order for it to obtain the full benefits of this
Agreement and the transactions contemplated hereby.
5.15. Entire Agreement . This Agreement including its Appendices,
together with the Definitive Documents, sets 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 June 3, 1998.
21
5.16. 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.
SYSTEMIC PULMONARY DELIVERY, LTD
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chairman
SHEFFIELD PHARMACEUTICAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chairman
ELAN CORPORATION, PLC
By: /s/ Xxxxxx Xxxxx
--------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
22
APPENDIX A
SHEFFIELD PATENT RIGHTS
[TEXT OMITTED]
APPENDIX B
PLAN
[TEXT OMITTED]
