Exhibit 1.7
LICENSE AGREEMENT
BETWEEN
DEPOMED, INC.
AND
DEPOMED DEVELOPMENT, LTD.
AND
ELAN CORPORATION, PLC.
THE SYMBOL "[**]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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TABLE OF CONTENTS
1 DEFINITIONS
2 DEPOMED LICENSE TO NEWCO
3 INTELLECTUAL PROPERTY
4 [**]
5 FINANCIAL PROVISIONS
6 RIGHT OF INSPECTION AND AUDIT
7 REPRESENTATIONS AND WARRANTIES
8 TERM AND TERMINATION
9 CONFIDENTIAL INFORMATION
10 GOVERNING LAW AND JURISDICTION
11 IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE
12 ASSIGNMENT
13 NOTICES
14 MISCELLANEOUS
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THIS AGREEMENT made this 21 January, 2000
between:
(1) Depomed, Inc., a corporation duly incorporated and validly existing under
the laws of California and having its principal place of business at 000
Xxxxxxxx Xxxxx, Xxxxxx Xxxx, XX 00000-0000, Xxxxxx Xxxxxx of America.
(2) Depomed Development, Ltd., a private limited company incorporated under the
laws of Bermuda and having its registered office at Xxxxxxxxx Xxxxx, 0
Xxxxxx Xx., Xxxxxxxx, Xxxxxxx ("Xxxxx"); and
(3) Elan Corporation, Plc, a public limited company incorporated under the laws
of Ireland, and having its registered office at Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxx 0, Xxxxxxx.
RECITALS:
---------
A. Simultaneously herewith, Elan, Depomed, EIS, and Newco are entering into
the JDOA for the purpose of recording the terms and conditions of the joint
venture and of regulating their relationship with each other and certain
aspects of the affairs of, and their dealings with Newco.
B. Newco desires to enter into this Agreement with Depomed so as to permit
Newco to utilize the Depomed Intellectual Property in making, having made,
importing, using, offering for sale and selling the Products in certain
fields in the Territory.
C. Simultaneously herewith Newco and Elan are entering into the Elan License
Agreement relating to Newco's use of the Elan Intellectual Property.
1 DEFINITIONS
1.1 In this Agreement unless the context otherwise requires:
"Affiliate" of any Person (in the case of a legal entity) shall mean any
other Person controlling, controlled or under the common control of such
first Person, as the case may be. For the purpose of this definition,
"control" shall mean direct or indirect ownership of fifty percent (50%) or
more of the stock or shares entitled to vote for the election of directors
in the case of a corporation and, in the case of a non-corporate entity,
the power to direct or cause the direction of management and policies.
Newco is not an Affiliate of Elan, EIS, EPIL or Depomed.
"Agreement" shall mean this license agreement (which expression shall be
deemed to include the Recitals and Schedules hereto).
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"Business Plan" shall have the meaning, as such term is defined in the
JDOA.
"Compound" shall, subject to Clause 2.3 of the JDOA, mean [**].
"Confidential Information" shall have the meaning, as such term is defined
in Clause 9.
"Definitive Documents" shall mean the definitive agreements relating to the
transaction including finance, stock purchase, research and license
agreements.
"Depomed" shall mean Depomed Inc. and its Affiliates.
"Depomed Intellectual Property" shall mean the Depomed Know-How, the
Depomed Patents and the Depomed Improvements.
"Depomed Know-How" shall, subject to Clause 4.2, mean any and all rights
owned, licensed to or controlled by Depomed on the Effective Date to any
discovery or invention (whether patentable or not) and owned, licensed to
or controlled by Depomed on the Effective Date to any know-how, substances,
data, techniques, processes, systems, formulations and designs relating to
the Depomed Technology.
"Depomed License" shall have the meaning set forth in Clause 2.1.
"Depomed Patents" shall, subject to Clause 4.2, mean any and all rights
under any and all patents applications and/or patents, now existing,
currently pending or hereafter filed or obtained by Depomed on inventions
conceived or reduced to practice on or before the Effective Date relating
to the Depomed Technology as set forth in Schedule 1, and any foreign
counterparts thereof and all divisionals, continuations, continuations-in-
part, patents of addition, supplementary protection certificates, any
foreign counterparts thereof and all patents issuing on, any of the
foregoing, together with all registrations, reissues, re-examinations or
extensions thereof.
"Depomed Technology" shall mean the Depomed technology directly related to:
(i) a solid oral dosage form which swells in the gastric cavity, remains
therein for an extended period of time in order to release drug
dispersed therein at a pre-defined rate from the stomach; and
(ii) [**].
"Depomed Improvements" shall mean improvements relating to the Depomed
Patents and/or the Depomed Know-How, developed (i) by Depomed whether or
not pursuant to the Project, (ii) by Newco or Elan or by an independent
third party (under
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contract with Newco) pursuant to the Project, and/or (iii) jointly by any
combination of Depomed, Elan or Newco pursuant to the Project, except as
limited by agreements with independent third parties.
Subject to independent third party agreements, Depomed Improvements shall
constitute part of Depomed Intellectual Property and shall, upon
development, be included in the license of the Depomed Intellectual
Property pursuant to Clause 2 of the Depomed License Agreement solely for
the purposes set forth therein. If the inclusion of a Depomed Improvement
in the license of Depomed Intellectual Property is restricted or limited by
an independent third party agreement, Depomed shall use reasonable
commercial efforts to exclude or minimize any such restriction or
limitation.
"Depomed Trademark(s)" shall mean one or more trademarks, trade names, or
service marks that are owned or licensed by or on behalf of Depomed which
Depomed may nominate and approve in writing from time to time for use in
connection with the sale or promotion of the Products by Newco.
"Effective Date" shall mean the date of this Agreement.
"EIS" shall mean Elan International Services, Ltd., Bermuda exempted
limited liability company having its registered office at Xxxxxxxxx Xxxxx,
0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx.
"Elan" shall mean Elan Corp and EPIL.
"Elan Corp" shall mean Elan Corporation, Plc. and Affiliates of Elan
Corporation, Plc. within the division of Elan Corporation, Plc. carrying on
business as Elan Pharmaceutical Technologies but shall not include
Affiliates (present or future) of Elan Corporation Plc within the division
of Elan Corporation, Plc carrying on business as Elan Pharmaceuticals which
incorporates, inter alia, Targon Corporation, Athena Neurosciences, Inc.,
Elan Pharmaceuticals, Inc., Elan Diagnostics, Carnrick Laboratories, and
Elan Europe Limited.
"Elan Intellectual Property" shall have the meaning as such term is defined
in the Elan License Agreement.
"Elan Know-How" shall have the meaning as such term is defined in the Elan
License Agreement.
"Elan Licenses" shall mean have the meaning as such term is defined in the
Elan License Agreement.
"Elan License Agreement" shall mean that certain license agreement, of even
date herewith, entered into between Elan and Newco.
"Elan Patents" shall have the meaning as such term is defined in the Elan
License
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Agreement.
"Elan Improvements" shall have the meaning as such term is defined in the
Elan License Agreement.
"EPIL" shall mean Elan Pharma International Limited and Affiliates of Elan
Corporation, Plc. within the division of Elan Corporation, Plc. carrying on
business as Elan Pharmaceutical Technologies but shall not include
Affiliates (present or future) of Elan Corporation Plc within the division
of Elan Corporation, Plc carrying on business as Elan Pharmaceuticals which
incorporates, inter alia, Targon Corporation, Athena Neurosciences, Inc.,
Elan Pharmaceuticals, Inc., Elan Diagnostics, Carnrick Laboratories, and
Elan Europe Limited.
"[**] Field" shall mean [**].
"[**] Product" shall mean [**].
"Fields" shall mean the [**] Field, the [**] Field and the [**] Field.
"Financial Year" shall mean each year commencing on 1 January (or in the
case of the first Financial Year, the Effective Date) and expiring on 31
December of each year.
"[**] Field" shall mean [**].
"[**] Product" shall mean [**].
"JDOA" shall mean that certain subscription, joint development and
operating agreement, of even date herewith, by and between Depomed, Elan,
EIS and Newco.
"Licensed Technologies" shall mean the Depomed Intellectual Property and
the Elan Intellectual Property.
"Licenses" shall mean the Depomed License and the Elan License.
"Management Committee" shall have the meaning, as such term is defined in
the JDOA.
"Newco Intellectual Property" shall mean all rights to patents, know-how
and other intellectual property arising out of the conduct of the Project
by any person, including any technology acquired by Newco from a third
party, that does not constitute Elan Intellectual Property or Depomed
Intellectual Property.
"Newco Patents" shall mean any and all patents now existing, currently
pending or hereafter filed or obtained relating to the Newco Intellectual
Property, and any foreign
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counterparts thereof and all divisionals, continuations, continuations-in-
part, , patents of addition, supplementary protection certificates, any
foreign counterparts thereof and all patents issuing on, any of the
foregoing, together with all registrations, reissues, re-examinations or
extensions thereof.
"Party" shall mean Elan Corporation, Plc., Depomed or Newco, as the case
may be, and "Parties" shall mean all such parties together.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental entity or authority
or other entity of whatever nature.
"Product(s)" shall mean [**].
"Project" shall mean all activities as undertaken by Depomed, Elan and
Newco in order to develop the Products.
"[**] Field" shall mean [**].
"[**] Product" shall mean [**].
"Term" shall have the meaning set forth in Clause 8.
"Territory" shall mean all the countries of the world.
"United States Dollar" and "US$" shall mean the lawful currency for the
time being of the United States of America.
1.2 In this Agreement:
1.2.1 The singular includes the plural and vice versa, and the masculine
includes the feminine and vice versa and the neuter includes the
masculine and the feminine.
1.2.2 Any reference to a Clause or Schedule shall, unless otherwise
specifically provided, be to a Clause or Schedule of this Agreement.
1.2.3 The headings of this Agreement are for ease of reference only and
shall not affect its construction or interpretation.
2 DEPOMED LICENSE TO NEWCO
2.1 Depomed hereby grants to Newco for the Term a non-exclusive license (the
"Depomed License") to the Depomed Intellectual Property to make, have made,
import, use, offer for sale and sell the Products in the Territory in the
[**] Field and the [**] Field, subject to any contractual obligations that
Depomed has as of the
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Effective Date under any agreement with any unaffiliated third party.
Depomed hereby confirms that no such agreements are in effect on the date
hereof between Depomed and an unaffiliated third party.
2.2 [**] shall be responsible for payments related to the financial provisions
and obligations of any third party agreement with respect to the Depomed
Intellectual Property to which it is a party on the Effective Date
(including amendments thereto) (the "Depomed Effective Date Agreements"),
including without limitation, any royalty or other compensation obligations
triggered thereunder on the Effective Date, or triggered thereunder after
the Effective Date.
For the avoidance of doubt, royalties, milestones or other payments which
arise from the process of the commercialization or exploitation of products
under the Depomed Effective Date Agreements (for example, a milestone
payment payable upon successful completion of Phase II clinical trials, the
filing of an NDA application, obtaining NDA approval, or first commercial
sale) shall be payments for which [**] will be responsible under this
Clause 2.2.
2.3 Elan shall be a third party beneficiary under this Agreement and shall have
the right to cause Newco to enforce Newco's rights under this Agreement
against Depomed.
2.4 Notwithstanding anything contained in this Agreement to the contrary,
Depomed shall have the right outside the [**] Field and the [**] Field and
subject to the [**] to exploit and grant licenses and sublicenses of the
Depomed Intellectual Property.
For the avoidance of doubt, Newco shall have no right to use the Depomed
Intellectual Property outside the [**] Field and the [**] Field.
2.5 Except as provided in Clause 11 of the JDOA, Newco shall not be permitted
to assign, license or sublicense any of its rights under the Depomed
Intellectual Property without the prior consent in writing of Depomed.
2.6 Any agreement between Newco and any permitted third party for the
development or exploitation of the Depomed Intellectual Property shall
require such third party to maintain the confidentiality of all information
concerning the Depomed Intellectual Property.
Insofar as the obligations owed by Newco to Depomed are concerned, Newco
shall remain responsible for all acts and omissions of any permitted sub-
licensee, including Elan, as if they were acts and omissions by Newco.
3 INTELLECTUAL PROPERTY
3.1 Ownership of Intellectual Property:
-----------------------------------
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3.1.1 Newco shall own the Newco Intellectual Property.
3.1.2 Depomed shall own the Depomed Intellectual Property.
3.2 Trademarks:
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3.2.1 Depomed hereby grants to Newco for the Term a non-exclusive, royalty
free license to use the Depomed Trademarks solely to research,
develop, make, have made, import, use, offer for sale and sell the
Products in the Field in the Territory and the following provisions
shall apply as regards the license of the Depomed Trademarks by
Newco hereunder:
(1) Newco shall ensure that each reference to and use of a Depomed
Trademark by Newco is in a manner approved by Depomed and
accompanied by an acknowledgement, in a form approved by
Depomed, that the same is a trademark (or registered trademark)
of Depomed.
From time to time, upon the reasonable request of Depomed,
Newco shall submit samples of the Product to Depomed or its
duly appointed agent to ensure compliance with quality
standards and specifications. Depomed, or its duly appointed
agent, shall have the right to inspect the premises of Newco
where the Product is manufactured, held or stored, and Newco
shall permit such inspection, upon advance notice at any
reasonable time, of the methods and procedures used in the
manufacture, storage and sale of the Product. Newco shall not
sell or otherwise dispose of any Product under the Depomed
Trademarks that fails to comply with the quality standards and
specifications referred to in this Clause 3.2, as determined by
Depomed.
(2) Newco shall not use a Depomed Trademark in any way which might
materially prejudice its distinctiveness or validity or the
goodwill of Depomed therein.
(3) The parties recognize that the Depomed Trademarks have
considerable goodwill associated therewith. Newco shall not use
in relation to the Products any trademarks other than the
Depomed Trademarks (except the Elan Trademarks (as defined in
the Elan License Agreement) licensed to Newco under the Elan
License Agreement) without obtaining the prior consent in
writing of Depomed, which consent may not be unreasonably
withheld. However, such use must not conflict with the use and
display of the Depomed Trademark and such use and display must
be approved by Depomed.
(4) Newco shall not use in the Territory any trademarks or trade
names so resembling the Depomed Trademark as to be likely to
cause confusion or deception.
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(5) Newco shall promptly notify Depomed in writing of any alleged
infringement or unauthorised use of which it becomes aware by a
third party of the Depomed Trademarks and provide Depomed with
any applicable evidence of infringement or unauthorised use.
(6) Newco shall favourably consider promoting and using the Depomed
Trademarks in each country of the Territory and provide proof
of such use upon request by Depomed.
(7) Newco shall not be permitted to assign or sublicense any of its
rights under the Depomed Trademarks without the prior written
consents of Depomed.
3.2.2 Depomed may, at its sole expense and discretion, file and prosecute
applications to register and maintain registrations of the Depomed
Trademarks in the Territory. Newco shall reasonably co-operate with
Depomed in such efforts.
3.2.3 Depomed will be entitled to conduct all enforcement proceedings
relating to the Depomed Trademarks and shall at its sole discretion
decide what action, if any, to take in respect to any enforcement
proceedings of the Depomed Trademarks or any other claim or counter-
claim brought in respect to the use or registration of the Depomed
Trademarks. Any such proceedings shall be conducted at Depomed's
expense and for its own benefit. Newco and Elan shall reasonably
cooperate with Depomed in such efforts.
3.2.4 Newco shall promptly notify Depomed in writing in the event that any
Depomed Trademark has been challenged by a third party in a judicial
or administrative proceeding in a country in the Territory as
infringing on the rights of a third party and Depomed shall have the
first right to decide whether or not to defend such allegations, or
to adopt an alternative xxxx. If Depomed decides not defend the
Depomed Trademark, then Newco may request Depomed to defend the
Depomed Trademark, at Newco's expense, unless such requested defense
is believed by Depomed to be unsubstantiated and without merit. In
such a case, Depomed may elect not to initiate defence proceedings.
3.2.5 Newco will have no ownership rights in respect of the Depomed
Trademarks or of the goodwill associated therewith, and Newco hereby
acknowledges that, except as expressly provided in this Agreement,
it shall not acquire any rights in respect thereof and that all such
rights and goodwill are, and will remain, vested in Depomed.
3.2.6 Nothing in this Agreement shall be construed as a warranty on the
part of Depomed regarding the Depomed Trademarks, including without
limitation, that use of the Depomed Trademarks in the Territory will
not infringe the
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rights of any third parties. Accordingly, Newco acknowledges and
agrees that Depomed makes no such warranty.
3.2.7 Depomed assumes no liability to Newco or to any third parties with
respect to the quality, performance or characteristics of any of the
goods manufactured or sold by Newco under the Depomed Trademarks
pursuant to this Agreement.
4 [**]
4.1 [**]
4.2 [**]
5 FINANCIAL PROVISIONS
5.1 Royalties:
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Prior to the commercialization of the Products, the Management Committee
shall consider and if appropriate, determine reasonable royalties with
respect to the commercialization of the Products by Newco that shall be
payable by Newco to Elan and Depomed, and shared by Elan and Depomed pro
rata with Elan's and Depomed's respective percentage ownership of stock
(whether common stock and/or preferred stock) in Newco.
At such time, the Management Committee will agree an appropriate definition
of "Net Sales" as such term is used in this Agreement.
5.2 Payment of royalties pursuant to Clause 5.1 shall be made quarterly in
arrears during each Financial Year within 30 days after the expiry of the
calendar quarter. The method of payment shall be by wire transfer to an
account specified by Depomed. Each payment made to Depomed shall be
accompanied by a true accounting of all Products sold by Newco's permitted
sublicensees, if any, during such quarter.
Such accounting shall show, on a country-by-country and Product-by-Product
basis, Net Sales (and the calculation thereof) and each calculation of
royalties with respect thereto, including the calculation of all
adjustments and currency conversions.
5.3 Newco shall maintain and keep clear, detailed, complete, accurate and
separate records for a period of 3 years:
5.3.1 to enable any royalties on Net Sales that shall have accrued
hereunder to be determined; and
5.3.2 to enable any deductions made in the Net Sales calculation to be
determined.
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5.4 All payments due hereunder shall be made in United States Dollars.
Payments due on Net Sales of any Product for each calendar quarter made in
a currency other than United States Dollars shall first be calculated in
the foreign currency and then converted to United States Dollars on the
basis of the exchange rate in effect on the last working day for such
quarter for the purchase of United States Dollars with such foreign
currency quoted in the Wall Street Journal (or comparable publication if
not quoted in the Wall Street Journal) with respect to the currency of the
country of origin of such payment, determined by averaging the rates so
quoted on each business day of such quarter.
5.5 If, at any time, legal restrictions in the Territory prevent the prompt
payment when due of royalties or any portion thereof, the Parties shall
meet to discuss suitable and reasonable alternative methods of paying
Depomed the amount of such royalties. In the event that Newco is prevented
from making any payment under this Agreement by virtue of the statutes,
laws, codes or government regulations of the country from which the payment
is to be made, then such payments may be paid by depositing them in the
currency in which they accrue to Depomed's account in a bank acceptable to
Depomed in the country the currency of which is involved or as otherwise
agreed by the Parties.
5.6 Depomed and Newco agree to co-operate in all respects necessary to take
advantage of any double taxation agreements or similar agreements as may,
from time to time, be available.
5.7 Any taxes payable by Depomed on any payment made to Depomed pursuant to
this Agreement shall be for the account of Depomed. If so required by
applicable law, any payment made pursuant to this Agreement shall be made
by Newco after deduction of the appropriate withholding tax, in which event
the Parties shall co-operate to obtain the appropriate tax clearance as
soon as is practicable. On receipt of such clearance, Newco shall
forthwith arrange payment to Depomed of the amount so withheld.
6 RIGHT OF INSPECTION AND AUDIT
6.1 Once during each Financial Year, or more often not to exceed quarterly as
reasonably requested by Depomed, Newco shall permit Depomed or its duly
authorised representatives, upon reasonable notice and at any reasonable
time during normal business hours, to have access to inspect and audit the
accounts and records of Newco and any other book, record, voucher, receipt
or invoice relating to the calculation of the royalty payments on Net Sales
submitted to Depomed.
Any such inspection of Newco's records shall be at the expense of Depomed,
except that if any such inspection reveals a deficiency in the amount of
the royalty actually paid to Depomed hereunder in any Financial Year
quarter of [**]% or more of the amount of any royalty actually due to
Depomed hereunder, then the expense of such inspection shall be borne
solely by Newco. Any amount of deficiency shall be paid
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promptly to Depomed by Newco.
If such inspection reveals a surplus in the amount of royalties actually
paid to Depomed by Newco, Depomed shall reimburse Newco the surplus within
15 days after determination.
6.2 In the event of any unresolved dispute regarding any alleged deficiency or
overpayment of royalty payments hereunder, the matter will be referred to
an independent firm of chartered accountants chosen by agreement of Elan
and Depomed for a resolution of such dispute. Any decision by the said
firm of chartered accountants shall be binding on the Parties.
7 REPRESENTATIONS AND WARRANTIES
7.1 Depomed represents and warrants to Newco and Elan, as of the Effective
Date, as follows:
7.1.1 Depomed has the right to grant the Depomed License;
7.1.2 there are no agreements between Depomed and any third party that
conflict with the Depomed License.
7.2 In addition to any other indemnities provided for herein, Depomed shall
indemnify and hold harmless Newco and its Affiliates and their respective
employees, agents, officers and directors from and against any claims,
losses, liabilities or damages (including reasonable attorney's fees and
expenses) incurred or sustained by Newco arising out of or in connection
with any:
7.2.1 breach of any representation, covenant, warranty or obligation by
Depomed hereunder; or
7.2.2 negligent act or omission on the part of Depomed or any of its
respective employees, agents, officers and directors in the
performance of this Agreement.
7.3 In addition to any other indemnities provided for herein, Newco shall
indemnify and hold harmless Depomed and its Affiliates and their respective
employees, agents, officers and directors from and against any claims,
losses, liabilities or damages (including reasonable attorney's fees and
expenses) incurred or sustained by Depomed arising out of or in connection
with any:
7.3.1 breach of any representation, covenant, warranty or obligation by
Newco hereunder; or
7.3.2 negligent act or omission on the part of Newco or any of its agents
or employees in the performance of this Agreement.
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7.4 The Party seeking an indemnity shall:
7.4.1 fully and promptly notify the other Party of any claim or
proceeding, or threatened claim or proceeding;
7.4.2 permit the indemnifying Party to take full care and control of such
claim or proceeding;
7.4.3 co-operate in the investigation and defence of such claim or
proceeding;
7.4.4 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 conditioned or delayed; and
7.4.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceeding.
7.5 EXCEPT AS SET FORTH IN THIS CLAUSE 7, DEPOMED IS GRANTING THE LICENSE
HEREUNDER ON AN "AS IS" BASIS WITHOUT 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.
7.6 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, DEPOMED AND
NEWCO SHALL NOT BE LIABLE TO THE OTHER BY REASON OF ANY CONDITION OR TERM
OR DUTY OF COMMON LAW, OR UNDER THE EXPRESS TERMS, REPRESENTATIONS OR
WARRANTIES OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL, SPECIAL OR INCIDENTAL
OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF PROFITS OR OTHERWISE) AND
WHETHER OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR
EMPLOYEES OR AGENTS OR OTHERWISE.
8. TERM AND TERMINATION
8.1 The term of this Agreement shall commence as of the Effective Date and
shall, subject to the rights of termination outlined in this Clause 8,
expire on a Product-by-Product basis and on a country-by-country basis on
the last to occur of:
8.1.1 [**] years starting from the date of the first commercial sale of
the Product in the country concerned; or
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8.1.2 the date of expiration of the last to expire of the patents included
in the Depomed Patents and the Depomed Improvements and/or the Elan
Patents and the Elan Improvements
("the Term")
8.2 If either Party commits a Relevant Event, the other Party shall have, in
addition to all other legal and equitable rights and remedies hereunder,
the right to terminate this Agreement upon 30 days' prior written notice to
the defaulting Party.
8.3 For the purpose of this Clause 8, a "Relevant Event" is committed or
suffered by a Party if:
8.3.1 it commits a material breach of its obligations under this Agreement
or the JDOA and fails to remedy it within 60 days of being
specifically required in writing to do so by the other Party;
provided, that 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 60th day, such period shall
be extended by such period as is reasonably necessary to permit the
breach to be rectified;
8.3.2 a distress, execution, sequestration or other process is levied or
enforced upon or sued out against a material part of its property
which is not discharged or challenged within 30 days;
8.3.3 it is unable to pay its debts in the normal course of business;
8.3.4 it ceases wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or amalgamation,
without the prior written consent of the other Party (such consent
not to be unreasonably withheld);
8.3.5 the appointment of a liquidator, receiver, administrator, examiner,
trustee or similar officer of such Party or over all or
substantially all of its assets under the law of any applicable
jurisdiction, including without limitation, the United States of
America, Bermuda or Ireland;
8.3.6 an application or petition for bankruptcy, corporate re-
organisation, composition, administration, examination, arrangement
or any other procedure similar to any of the foregoing under the law
of any applicable jurisdiction, including without limitation, the
United States of America, Bermuda or Ireland, is filed, and is not
discharged within 60 days, or a Party applies for or consents to the
appointment of a receiver, administrator, examiner or similar
officer of it or of all or a material part of its assets, rights or
revenues or the assets and/or the business of a Party are for any
reason seized, confiscated or condemned.
8.4 Depomed shall be entitled to forthwith terminate this Agreement if Elan
elects to
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terminate the Elan License Agreement under Clause 8.4 of the Elan License
Agreement.
8.5 Upon expiration or termination of the Agreement:
8.5.1. Any sums that were due from Newco to Depomed on Net Sales in the
Territory or in such particular country or countries in the
Territory (as the case may be) prior to the expiration or
termination of this Agreement as set forth herein shall be paid in
full within 60 days after the expiration or termination of this
Agreement for the Territory or for such particular country or
countries in the Territory (as the case may be).
8.5.2 Any provisions that expressly survive termination or expiration of
this Agreement, including without limitation this Clause 8, shall
remain in full force and effect.
8.5.3 All representations, warranties and indemnities shall insofar as are
appropriate remain in full force and effect.
8.5.4 The rights of inspection and audit set out in Clause 6 shall
continue in force for a period of one year.
8.5.5 All rights and licenses granted to Newco pursuant to this Agreement
and to the Depomed Intellectual Property pursuant to the JDOA
(including the rights of Newco pursuant to Clause 10 of the JDOA)
shall cease for the Territory or for such particular country or
countries in the Territory (as the case may be) and shall revert to
or be transferred to Depomed, and Newco shall not thereafter use in
the Territory or in such particular country or countries in the
Territory (as the case may be) any rights covered by this Agreement.
8.5.6 Subject to Clause 8.5.7 and to such license, if any, granted by
Newco to Depomed pursuant to the provisions of Clause 11 of the
JDOA, all rights to Newco Intellectual Property shall be transferred
to and jointly owned by Elan and Depomed.
Depomed shall have the right to exploit and commercialize, including
the right to grant sub-licenses, the Newco Intellectual Property
which relates predominantly to the Depomed Intellectual Property.
Elan shall have the right to exploit and commercialize, including
the right to grant sub-licenses, the Newco Intellectual Property
which relates predominantly to the Elan Intellectual Property.
In the event of a dispute arising pursuant to this Clause 8.5.6,
Depomed and Elan agree to negotiate in good faith on the course of
action to be taken with
16
respect to determining their respective entitlements pursuant to
this Clause 8.5.6.
8.5.7 The rights of permitted third party sub-licensees in and to the
Depomed Intellectual Property shall survive the termination of the
license and sublicense agreements granting said intellectual
property rights to Newco; and Newco, Depomed and Elan shall in good
faith agree upon the form most advantageous to Depomed and Elan in
which the rights of Newco under any such licenses and sublicenses
are to be held (which form may include continuation of Newco solely
as the holder of such licenses or assignment of such rights to a
third party or parties, including an assignment to both Depomed and
Elan).
Any sublicense agreement between Newco and such permitted
sublicensee shall permit an assignment of rights by Newco and shall
contain appropriate confidentiality provisions.
9 CONFIDENTIAL INFORMATION
9.1 The Parties agree that it will be necessary, from time to time, to disclose
to each other confidential and proprietary information, including without
limitation, inventions, works of authorship, trade secrets, specifications,
designs, data, know-how and other proprietary information relating to the
Field, the Products, processes, services and business of the disclosing
Party.
The foregoing shall be referred to collectively as "Confidential
Information".
9.2 Any Confidential Information disclosed by one Party to another Party shall
be used by the receiving Party exclusively for the purposes of fulfilling
the receiving Party's obligations under this Agreement and the JDOA and for
no other purpose.
9.3 Each Party shall disclose Confidential Information of the other Party only
to those employees, representatives and agents requiring knowledge thereof
in connection with fulfilling the Party's obligations under this Agreement.
Each Party further agrees to inform all such employees, representatives and
agents of the terms and provisions of this Agreement and their duties
hereunder and to obtain their agreement hereto as a condition of receiving
Confidential Information. Each Party shall exercise the same standard of
care as it would itself exercise in relation to its own confidential
information (but in no event less than a reasonable standard of care) to
protect and preserve the proprietary and confidential nature of the
Confidential Information disclosed to it by the other Party. Each Party
shall, upon request of the other Party, return all documents and any copies
thereof containing Confidential Information belonging to, or disclosed by,
such other Party.
9.4 Any breach of this Clause 9 by any person informed by one of the Parties is
considered a breach by the Party itself.
17
9.5 Confidential Information shall not be deemed to include:
9.5.1 information that is in the public domain;
9.5.2 information which is made public through no breach of this
Agreement;
9.5.3 information which is independently developed by a Party as evidenced
by such Party's records;
9.5.4 information that becomes available to a Party on a non-confidential
basis, whether directly or indirectly, from a source other than a
Party, which source did not acquire this information on a
confidential basis; or
9.5.5 information which the receiving Party is required to disclose
pursuant to:
(i) a valid order of a court or other governmental body; or
(ii) any other requirement of law;
provided that if the receiving Party becomes legally required to
disclose any Confidential Information, the receiving Party shall
give the disclosing Party prompt notice of such fact so that the
disclosing Party may obtain a protective order or other appropriate
remedy concerning any such disclosure. The receiving Party shall
fully co-operate with the disclosing Party in connection with the
disclosing Party's efforts to obtain any such order or other remedy.
If any such order or other remedy does not fully preclude
disclosure, the receiving Party shall make such disclosure only to
the extent that such disclosure is legally required.
9.6 The provisions relating to confidentiality in this Clause 9 shall remain in
effect during the term of this Agreement, and for a period of [**] years
following the expiration or earlier termination of this Agreement.
9.7 The Parties agree that the obligations of this Clause 9 are necessary and
reasonable in order to protect the Parties' respective businesses, and each
Party agrees that monetary damages would be inadequate to compensate a
Party for any breach by the other Party of its covenants and agreements set
forth herein.
Accordingly, the Parties agree that any such violation or threatened
violation shall cause irreparable injury to a Party and that, in addition
to any other remedies that may be available, in law and equity or
otherwise, each Party shall be entitled to obtain injunctive relief against
the threatened breach of the provisions of this Clause 9, or a continuation
of any such breach by the other Party, specific performance and other
equitable relief to redress such breach together with its damages and
reasonable counsel fees and expenses to enforce its rights hereunder,
without the necessity of proving actual or express damages.
18
10 GOVERNING LAW AND JURISDICTION
10.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
10.2 The Parties will attempt in good faith to resolve any dispute arising out
of or relating to this Agreement promptly by negotiation between
executives of the Parties. In the event that such negotiations do not
result in a mutually acceptable resolution, the Parties agree to consider
other dispute resolution mechanisms including mediation.
In the event that the Parties fail to agree on a mutually acceptable
dispute resolution mechanism, any such dispute shall be finally settled by
the courts of competent jurisdiction. For the purposes of this Agreement
the parties submit to the non-exclusive jurisdiction of the courts of the
State of New York.
11 IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE
Neither Depomed nor Newco 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, intervention of a government authority, provided
that the Party whose performance is delayed or prevented shall continue to
use good faith diligent efforts to mitigate, avoid or end such delay or
failure in performance as soon as practicable.
12 ASSIGNMENT
This Agreement may not be assigned by either Party without the prior
written consent of the other, save that either Party may assign this
Agreement to its Affiliates or subsidiaries without such prior written
consent; provided that such assignment does not have any adverse tax
consequences on the other Party.
13 NOTICES
13.1 Any notice to be given under this Agreement shall be sent in writing in
English by registered airmail or telefaxed to the following addresses:
If to Newco at:
Xxxxxxxxx Xxxxx,
0 Xxxxxx Xx.,
Xxxxxxxx,
Xxxxxxx
19
Attention: Secretary
Telephone: 000 000 0000
Fax: 000 000 0000
If to Depomed at:
000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx
Xxxxxxxxxx
00000-0000
XXX.
Attn: Chief Executive Officer
Telephone 000 000 000 0000
Fax: 000 000 000 0000
with a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx
Xxxxxxxxxx 00000
XXX
Attention: Xxxxxx Xxxxx
Telephone 000 000 000 0000
Fax: 000 000 000 0000
If to Elan at:
Elan Corporation, plc
000 Xx. Xxxxx Xxxxx
Xxxxxx, Xxxxxx XX00
Bermuda
Attention: President
Telephone: 000-000-0000
Fax: 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.
13.2 Any notice sent by mail shall be deemed to have been delivered within 7
working days after dispatch and any notice sent by telex or telefax shall
be deemed to have been delivered within 24 hours of the time of the
dispatch. Notice of change of
20
address shall be effective upon receipt.
14 MISCELLANEOUS
14.1 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 other breach or failure to perform or of any
other right arising under this Agreement.
14.2 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:
14.2.1 such provision will be deemed amended to conform to applicable
laws so as to be valid and enforceable; or
14.2.2 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 the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be impaired or
affected in any way.
14.3 Further Assurances:
-------------------
At the request of any of the Parties, the other Party or Parties shall
(and shall use reasonable efforts to procure that any other necessary
parties shall) execute and perform all such documents, acts and things as
may reasonably be required subsequent to the signing of this Agreement for
assuring to or vesting in the requesting Party the full benefit of the
terms hereof.
14.4 Successors:
-----------
This Agreement shall be binding upon and enure to the benefit of the
Parties hereto, their successors and permitted assigns.
14.5 No Effect on Other Agreements/Conflict:
---------------------------------------
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
herein.
In the event of a conflict between the provisions of this Agreement and
the provisions
21
of the JDOA, the terms of the JDOA shall prevail unless this Agreement
specifically provides otherwise.
14.6 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
authorised representative of each Party.
14.7 Counterparts:
-------------
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which
when taken together shall constitute this Agreement.
14.8 Good Faith:
-----------
Each Party undertakes to do all things reasonably within its power which
are necessary or desirable to give effect to the spirit and intent of
this Agreement.
14.9 No Reliance:
------------
Each Party hereby acknowledges that in entering into this Agreement it
has not relied on any representation or warranty save as expressly set
out herein or in any document referred to herein.
14.10 Relationship of the Parties:
----------------------------
Nothing contained in this Agreement is intended or is to be construed to
constitute Depomed and Newco as partners, or Depomed as an employee of
Newco, or Newco as an employee of Depomed.
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.
22
IN WITNESS WHEREOF the Parties hereto have executed this Agreement.
SIGNED BY /s/ Xxxx X. Xxxx
---------------------------
for and on behalf of
DEPOMED, INC.
SIGNED BY /s/ Xxxxx Xxxxxxx
---------------------------
for and on behalf of
DEPOMED DEVELOPMENT, LTD.
AGREED TO AND ACCEPTED BY
ELAN CORPORATION, PLC
/s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
Authorised Signatory
[DepoMed License]
23
Schedule 1
----------
Depomed Patents
---------------
[**]
[List of DepoMed Patents]
24
