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
ELAN CORPORATION, PLC
AN IRISH COMPANY
AND
SYSTEMIC PULMONARY DELIVERY, LTD.
A BERMUDA COMPANY
AND
SHEFFIELD PHARMACEUTICAL, INC.
A DELAWARE CORPORATION
THIS AGREEMENT IS MADE THE 30TH DAY OF JUNE 1998
TABLE OF CONTENTS
1. ARTICLE I : DEFINITIONS...................................................1
2. ARTICLE II : THE LICENSE.................................................9
3. ARTICLE III: DEVELOPMENT OF THE PRODUCT.................................14
4. ARTICLE IV: FINANCIAL PROVISIONS........................................15
5. ARTICLE V: REGISTRATION OF THE PRODUCT..................................17
6. ARTICLE VI: WARRANTY AND INDEMNITY......................................18
7. ARTICLE VII: PATENTS...................................................21
8. ARTICLE VIII(A): REGARDING THE SHEFFIELD INTELLECTUAL PROPERTY..........24
9. ARTICLE VIII : MISCELLANEOUS CLAUSES.....................................24
LICENSE AND DEVELOPMENT AGREEMENT, dated June 30, 1998, by and between Elan
Corporation, plc., an Ireland corporation ("Elan"); Systemic Pulmonary Delivery,
Ltd., a Bermuda corporation ("Newco") and Sheffield Pharmaceutical, Inc., a
Delaware corporation.
RECITALS
--------
A. ELAN is beneficially entitled to the use of various
patents, including the ELAN PATENT RIGHTS (capitalized terms used herein are
defined below), 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
B. ELAN is knowledgeable in the development of devices and has
developed a unique range of delivery systems designed to provide newer and
better formulations of medicaments, and
X. XXXXXXXXX possesses proprietary information, including patented
and patent applications, relating to certain technologies in the Systemic
Pulmonary Field, and
D. NEWCO desires to enter into a licensing agreement with ELAN
pursuant to which NEWCO shall have the right to manufacture and to market the
PRODUCTS in the TERRITORY, and
E. ELAN is prepared to license the ELAN PATENT RIGHTS and the ELAN
KNOW HOW in the TERRITORY to NEWCO. The PARTIES entered into a letter of
agreement dated June 3, 1998 (the "LETTER AGREEMENT") pursuant to which the
PARTIES agreed to enter into definitive documents, including this Agreement, and
F. As of the date of this Agreement, NEWCO, ELAN, EIS and SHEFFIELD
are entering into several agreements with respect to the transactions
contemplated hereunder.
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:
"ADDS TECHNOLOGY" shall mean all of the MDI-Aeroquip technology
for all pharmaceutical, medicinal and therapeutic applications,
acquired or to be acquired by NEWCO upon terms and conditions
approved in advance by EIS.
"AFFILIATE" shall mean any corporation or entity controlling,
controlled by or under the common control of ELAN or NEWCO as
the case may be. For the
1
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).
"cGCP", "cGLP" and "cGMP" shall mean current Good Clinical
Practices, current Good Laboratory Practices and current Good
Manufacturing Practices respectively.
"COMPETING PRODUCT" shall mean a product in the FIELDS which is
not a PRODUCT but which would compete with one or more of the
PRODUCTS in the TERRITORY such that sales of the COMPETING
PRODUCT would significantly reduce the sales of a PRODUCT.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Article 8.1 below.
"DEFINITIVE DOCUMENTS" shall mean this AGREEMENT; the Security
Agreement from Newco to Elan, the Pledge Agreement from
Sheffield to Elan, the Subscription Agreement, the Securities
Purchase Agreement, Registration Rights Agreement, the Newco
Development Agreement, all as contemplated under the LETTER
AGREEMENT (as defined in the Recitals); the NEWCO/SHEFFIELD
LICENSE AGREEMENT, the SHEFFIELD/NEWCO 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.
"EIS" shall mean Elan International Services, Ltd.
"ELAN INTELLECTUAL PROPERTY" shall mean the ELAN PATENT RIGHTS
and/or the ELAN KNOW-HOW.
"ELAN KNOW-HOW" shall mean all knowledge, information, trade
secrets, data and expertise relating to the UPDAS TECHNOLOGY and
ENHANCING TECHNOLOGY and that is owned or licensed by ELAN
(other than the EXCLUDED TECHNOLOGY) as of the EFFECTIVE DATE,
including, but not limited to, clinical data and test results,
and for the avoidance of doubt shall
2
include the ELAN PROJECT KNOW-HOW, whether or not covered by any
patent, copyright, design, trademark, trade secret or other
industrial or intellectual property rights, but all subject to
any contractual obligations to unaffiliated third parties that
relates to specific pharmaceuticals that may be formulated for
delivery by the UPDAS TECHNOLOGY or ENHANCING TECHNOLOGY that
ELAN has as of the EFFECTIVE DATE.
"ELAN PATENT RIGHTS" shall mean all patents and patent
applications related to the UPDAS TECHNOLOGY and/or the
ENHANCING TECHNOLOGY that are owned or licensed by or on behalf
of Elan, including the ELAN PROJECT PATENT RIGHTS, (but
excluding the EXCLUDED TECHNOLOGY), which patents as of the
EFFECTIVE DATE are set forth on Appendix A attached hereto;
subject, however, to any contractual obligations to unaffiliated
third parties that relates to specific pharmaceuticals that may
be formulated for delivery by the UPDAS TECHNOLOGY or ENHANCING
TECHNOLOGY that ELAN has as of the EFFECTIVE DATE. ELAN PATENT
RIGHTS shall also include all 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.
"ELAN PROJECT KNOW-HOW" shall mean all knowledge, information,
trade secrets, data and expertise relating to the UPDAS
TECHNOLOGY and ENHANCING TECHNOLOGY that is owned or developed
by or on behalf of ELAN (other than with respect to the EXCLUDED
TECHNOLOGY) pursuant to the PROJECT, including but not limited
to clinical data, whether or not covered by any patent,
copyright, design, trademark, trade secret or other industrial
or intellectual property rights.
"ELAN PROJECT PATENT RIGHTS" shall mean any patents or patent
applications related to the UPDAS TECHNOLOGY and/or the
ENHANCING TECHNOLOGY that are owned or developed by or on behalf
of Elan (other than the EXCLUDED TECHNOLOGY), under this
AGREEMENT and pursuant to the PROJECT.
"ENHANCING TECHNOLOGY" shall mean (i) the use of [text omitted]
that is intended to facilitate or enhance systemic delivery of a
drug for therapeutic purposes, when co-administered via
inhalation with said drug via the pulmonary route, and/or (ii)
the use, if any, of [text omitted] that is intended to
facilitate or enhance topical delivery to the lung of a drug for
therapeutic purposes when co-administered via inhalation with
said drug via the pulmonary route.
"EXCLUDED TECHNOLOGY" shall mean all knowledge, information,
trade secrets, data, discoveries, inventions, improvements,
ideas, techniques, processes, formulations, systems, designs
and/or expertise, and any and all other intellectual
3
property (including patents and patent applications that are
issued or that may be issued), relating to motor driven dry
powder inhalers and related powdered storage systems, and any
and all other transactions contemplated under the License
Agreement, and the Protein and Peptide Development Agreement,
each dated September 5, 1994, between [text omitted] and ELAN,
as the same may be amended from time to time.
"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.
"FIELDS" shall mean the SYSTEMIC PULMONARY FIELD and/or the
TOPICAL PULMONARY FIELD.
"IN MARKET" shall mean the sale of the PRODUCTS, whether by
NEWCO or its AFFILIATES, or where applicable by a permitted
sublicensee, to a third party such as a wholesaler, distributor,
managed care organization, hospital, pharmacy and/or the like.
"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 FIELDS, and in accordance with the PROJECT.
JOINT PATENT RIGHTS shall also include all 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.
"MAJOR MARKETS" shall mean the United States of America, the
United Kingdom of Great Britain and Northern Ireland, Italy,
France, Germany, Japan and/or Korea.
"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.
4
"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 that is possessed by NEWCO, 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, NEWCO PROJECT KNOW-HOW, and clinical data
and test results, whether or not covered by any patent,
copyright, design, trademark, trade secret or other industrial
or intellectual property rights.
"NEWCO/SHEFFIELD LICENSE AGREEMENT" shall mean the License
Agreement, dated as of the date hereof, entered into between
NEWCO and SHEFFIELD with respect to, among other things, the
sublicense of certain rights in accordance with Article 2.2
below.
"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 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. 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 owned or to be developed by or
on behalf of NEWCO in connection with the PROJECT, including
clinical data, whether or not covered by any patent, copyright,
design, trademark, trade secret or other industrial or
intellectual property rights.
5
"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.
"NSP" shall mean that sum determined by deducting from the gross
amount billed for the PRODUCTS (including, without limitation,
any and all sums billed for the compound and/or drug product
delivered with, by and/or via the PRODUCTS; sums billed for the
supply of the PRODUCTS; and royalties receivable for the sale of
the PRODUCTS) sold IN MARKET, the following:
(a) transportation charges or allowances, including freight
pick-up allowances, and packaging costs, if any;
(b) trade, quantity or cash discounts, service allowances
and independent broker's or agent's commissions, if any,
allowed or paid;
(c) credits or allowances, if any, given or made on account
of price adjustments, returns up to ten per cent (10%) of
gross sales, off-invoice promotional discounts, rebates,
any and all national, federal, state or local government
rebates, whether in existence now, or enacted at any time
during the term of this Agreement; and
(d) any tax (other than income or corporation tax), excise
or governmental charge upon or measured by the production,
import, export, sale, transportation, delivery, or use of
the PRODUCTS.
If NEWCO or its permitted sublicensees shall sell any of the
PRODUCTS together with other products to third parties in a
particular country and the price attributable to the PRODUCTS is
less than the average price of "arms length" sales of the
PRODUCTS alone in the particular country for the reporting
period in which such sales occur (such sales to be excluded from
the calculation of the average price of "arms length" sales),
NSP for any such sales shall be the average price of "arms
length" sales by NEWCO or its AFFILIATES of the PRODUCTS alone
and in the country during the reporting period in which such
sales occur.
"PARTY" shall mean NEWCO, SHEFFIELD or ELAN as the case may be.
"PARTIES" shall mean NEWCO, SHEFFIELD and ELAN.
"PLAN" shall mean the business plan and program of development
agreed to by the PARTIES and attached hereto as Appendix B, with
respect to the research, development, prosecution and
commercialization of the PRODUCTS, which PLAN shall be reviewed
and mutually agreed to by the PARTIES on an annual basis.
6
"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 ELAN INTELLECTUAL PROPERTY, the SHEFFIELD
INTELLECTUAL PROPERTY and/or the NEWCO 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 related 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 related
to the SYSTEMIC PULMONARY FIELD, including clinical data, and
shall for the avoidance of doubt include the MSI DELIVERY SYSTEM
and the SHEFFIELD PROJECT KNOW-HOW, whether or not covered by
any patent, copyright, design, trademark, trade secret or other
industrial or intellectual property rights.
"SHEFFIELD/NEWCO LICENSE AGREEMENT shall mean the Sublicense
Agreement, dated even date herewith, between SHEFFIELD and
NEWCO, pursuant to which, among other things, SHEFFIELD is
licensing to NEWCO certain intellectual property rights.
"SHEFFIELD PATENT RIGHTS" shall mean all patents and patent
applications related to the SYSTEMIC PULMONARY FIELD, other than
compounds, that are owned or licensed by SHEFFIELD, which
patents as of the EFFECTIVE DATE are set forth on Appendix C
attached hereto. SHEFFIELD PATENT RIGHTS shall also include all
extensions, continuations, continuations-in-part, divisionals,
patents of addition, re-issues, reexaminations supplementary
protection certificates and foreign 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 patent and patent applications
relating to the MSI DELIVERY SYSTEM and the SHEFFIELD PROJECT
PATENT RIGHTS).
7
"SHEFFIELD PROJECT KNOW-HOW" shall mean all knowledge,
information, trade secrets, data and expertise relating to the
SYSTEMIC PULMONARY FIELD that is owned or developed by or on
behalf of SHEFFIELD in connection with the PROJECT, including,
but not limited to, clinical data, whether or not covered by any
patent, copyright, design, trademark, trade secret or other
industrial or intellectual property rights.
"SHEFFIELD PROJECT PATENT RIGHTS" shall mean any patents or
patent applications related to the SYSTEMIC PULMONARY FIELD that
are owned or developed by or on behalf of SHEFFIELD in
connection with the PROJECT during the TERM.
"SIEMENS" shall mean Siemens Aktiengesellsehaft, 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.
"TECHNOLOGICAL COMPETITOR" shall mean any entity (including, if
applicable, Zambon Group S.p.A) that substantially engages or
proposes to substantially engage directly or indirectly in the
areas of drug delivery, neurological therapies, pain therapies,
acute care, and/or oncology in the pharmaceutical industry.
"TERM" shall have the meaning set forth in Article 8.6 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.
8
"UPDAS TECHNOLOGY" (Ultrasonic Pulmonary Drug Absorption System)
shall mean a system intended to enhance pulmonary delivery via
inhalation by [text omitted]
"$" shall mean United States Dollars.
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, ELAN
hereby grants to NEWCO for the TERM, and NEWCO hereby accepts, an exclusive
license of the ELAN INTELLECTUAL PROPERTY, only in the FIELDS, 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 TERRITORY.
2.2. NEWCO may not assign or sublicense the licenses and rights
granted to it herein without the prior written approval of ELAN, which approval
may be withheld for any reason whatsoever, provided, however, that Elan will not
unreasonably withhold its consent to any sublicense, PROVIDED, FURTHER HOWEVER,
that simultaneously with the execution and delivery of this Agreement, NEWCO and
SHEFFIELD are entering into the NEWCO/SHEFFIELD LICENSE AGREEMENT pursuant to
which NEWCO shall grant to SHEFFIELD an exclusive license or sublicense, as the
case may be, to the intellectual property rights, including patent rights, in
and to the NEWCO INTELLECTUAL PROPERTY and ELAN INTELLECTUAL PROPERTY and only
in the TOPICAL PULMONARY FIELD, where the therapeutic mechanism of action is
local to the lung, solely and specifically for asthma, cystic fibrosis, chronic
obstructive pulmonary disease and the use of anti-infectives for the treatment
of respiratory infection. ELAN hereby consents to the license and sublicense
granted by NEWCO to SHEFFIELD as set forth in this Article 2.2, subject to the
terms and conditions of the NEWCO/SHEFFIELD LICENSE AGREEMENT. Subject to
Article 2.2 of the NEWCO/SHEFFIELD LICENSE AGREEMENT with respect to SHEFFIELD,
any sublicense or other agreement permitted by this Article 2.2 shall survive
the termination of this Agreement
9
as follows: upon termination of this AGREEMENT, ELAN shall, with NEWCO'S
assistance, notify each permitted sublicensee of the termination of this
AGREEMENT. If a sublicensee elects to notify ELAN that it requires the
continuation of the permitted sublicense granted to it by NEWCO pursuant to this
AGREEMENT, ELAN shall promptly negotiate with such sublicensee in good faith
with a view to entering into a direct contractual relationship with such
sublicensee. Such agreement between ELAN and such sublicensee shall, in ELAN'S
reasonable discretion be on commercially reasonable terms and shall be, to the
extent practicable, on terms no less favorable to the sublicensee than the terms
of such sublicensee's agreement with NEWCO, and shall provide that such
sublicensee shall take over the applicable obligations owed by NEWCO to ELAN.
Sales of PRODUCTS payable to such a sublicensee in relation to the PRODUCTS
shall constitute NSP for the purpose of calculating the sums payable by the
sublicensee to ELAN. If NEWCO does not continue, or procure the continuance, of
the supply of the relevant PRODUCT to the said sublicensee, then NEWCO shall use
its reasonable endeavors to ensure that ELAN or the sublicensee can enter into
the appropriate supply arrangements with NEWCO or NEWCO'S suppliers of the
PRODUCTS and the components thereof and grant ELAN a licence on the terms set
forth in Article 2.9 below.
2.3. ELAN shall be entitled to use the ELAN INTELLECTUAL PROPERTY and
all technical and clinical data or improvements thereto in connection with (i)
ELAN's commercial arrangements for the PRODUCTS in any country that ceases to be
a part of the TERRITORY, or in any country in the TERRITORY in the event of the
expiration or sooner termination of this Agreement, or (ii) ELAN'S commercial
arrangements for products outside of the FIELDS. Such commercial arrangements
referred to in the immediately preceding sentence shall include the right to
research, develop, manufacture, offer for sale, sell, license or otherwise
market the PRODUCTS.
2.4. NEWCO and SHEFFIELD will not market, develop for market, offer
for sale or sell a COMPETING PRODUCT during the TERM and for a period of one
year thereafter. Should NEWCO or SHEFFIELD market, develop for market, offer for
sale or sell a COMPETING PRODUCT in the TERRITORY, ELAN reserves the right to
terminate the licenses granted to NEWCO hereunder.
2.5. Notwithstanding anything contained in this Agreement to the
contrary, ELAN shall have the right of first negotiation 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 NEWCO INTELLECTUAL PROPERTY and/or SHEFFIELD INTELLECTUAL
PROPERTY) in the SYSTEMIC PULMONARY FIELD that relate to the areas of pain,
neurology, oncology and acute care. Such right of first negotiation shall be
exercised as follows:
2.5.1. (A) If NEWCO intends to develop a PRODUCT
that is subject to ELAN'S right of first negotiation, then NEWCO
immediately shall notify ELAN in writing that ELAN may elect to
enter into negotiations referred to in this Article 2.5, or (B)
if NEWCO, on its own behalf (and/or together with SHEFFIELD),
has developed a PRODUCT that is subject to ELAN'S right of first
negotiation, then at such time that NEWCO determines in good
faith that it wishes to commercialize the PRODUCT itself,
whether with a third party or otherwise, then
10
NEWCO shall notify ELAN in writing that ELAN may elect to enter
into negotiations referred to in this Article 2.5. ELAN shall
indicate its desire to enter into such negotiations pursuant to
this Article 2.5 by delivering written notice to NEWCO within
forty-five (45) days of ELAN's receipt of the written
notification from NEWCO to ELAN. If ELAN elects to enter into
such negotiations, the Parties shall negotiate in good faith the
terms of an applicable agreement.
2.5.2. If, despite such good faith negotiations,
ELAN and NEWCO do not reach agreement on the terms of such an
agreement within six (6) months from the notification in writing
by NEWCO to ELAN, then NEWCO shall be free to offer a third
party (other than a TECHNOLOGICAL COMPETITOR unless consented to
by ELAN which consent shall not be unreasonably withheld, and
otherwise subject to the terms and conditions of this Agreement)
terms to develop and commercialize, as applicable, such PRODUCT
in the TERRITORY, which terms when taken as a whole, are more
favorable to NEWCO than the principal terms of the last written
proposal offered to NEWCO by ELAN, or by NEWCO to ELAN, as the
case may be. Prior to entering into such an agreement with a
third party, NEWCO shall promptly notify ELAN, in writing and in
confidence, of the principal terms of such agreement and the
identity of the third party with whom NEWCO intends to contract.
ELAN shall have the right, to be exercised within ten (10) days
of receipt of such notice, to elect by written notice to NEWCO,
to enter into an agreement with NEWCO upon the same terms and
conditions contained in NEWCO'S notice to ELAN. In the event
ELAN does not elect to enter into such agreement, NEWCO shall
have the right, for a period of sixty (60) days from the
expiration of the ten (10) day period set forth above, to enter
into an agreement with the third party specified in NEWCO'S
notice upon the same terms and conditions as contained in such
notice.
2.6 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.
2.7 ELAN 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 the "UPDAS"(TM)trademark, on the following terms:
2.7.1 NEWCO shall as soon as it becomes aware of
any infringement give to ELAN 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.
2.7.2 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 or attackable, NEWCO
shall immediately give to ELAN full particulars in writing
thereof and shall make no comment or admission to any third
party in respect thereof.
11
2.7.3 ELAN 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 ELAN'S expense and for its own benefit.
2.7.4 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 of
this Agreement 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 ELAN for approval (which shall not be unreasonably
withheld) of design, color, and other details, or shall be exact
copies of those used by ELAN. In addition, NEWCO shall fully
comply with all reasonable guidelines, if any, communicated by
ELAN concerning the use of any such trademark as well as all
rules and regulations of such use throughout the Territory.
2.7.5 The rights granted to NEWCO under this
Article 2.7 shall automatically terminate on termination or
expiration of this Agreement with respect to a PRODUCT in a
country in the TERRITORY.
2.8 When packaged, and to the extent permitted by law, a product
label shall include an acknowledgement that the PRODUCT is made under license
from ELAN. Such acknowledgement shall take into consideration regulatory
requirements and NEWCO's reasonable commercial requirements. NEWCO shall
wherever possible give due acknowledgement and recognition to ELAN in all
printed promotional and other material regarding the PRODUCT such as stating
that the PRODUCT is under license from ELAN and that the applicable ELAN
technology has been applied to the PRODUCTS. NEWCO shall consult with and obtain
the written approval of ELAN 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 ELAN INTELLECTUAL PROPERTY, such approval not to be
unreasonably withheld or delayed. The further consent of ELAN 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 ELAN.
2.9 NEWCO will use reasonable best efforts to file and obtain
MARKETING AUTHORIZATIONS in the MAJOR MARKETS as soon as possible. If (i) NEWCO
fails to obtain MARKETING AUTHORIZATION to commercialize a PRODUCT in a country
in the MAJOR MARKETS within a commercially reasonable time, in accordance with
the PLAN and as determined by the STEERING COMMITTEE, or (ii) NEWCO fails to
effect a national commercial launch of a PRODUCT in a country in the MAJOR
MARKETS within the period specified in Article 2.12 below then, in such event,
NEWCO and SHEFFIELD shall, at the option of ELAN, make available and transfer to
ELAN all of NEWCO'S and SHEFFIELD'S respective data, information, applications,
approvals, filings and the like to permit ELAN to
12
commercialize such PRODUCT in the applicable country or countries in the MAJOR
MARKETS. In such event ELAN shall be entitled to an irrevocable, exclusive,
perpetual, royalty free, license from NEWCO and SHEFFIELD to the NEWCO
INTELLECTUAL PROPERTY, the SHEFFIELD INTELLECTUAL PROPERTY and the TRADEMARK to
commercialize such PRODUCT in the applicable country in the FIELDS on the terms
set out in this Article 2.9. ELAN may sublicense the rights granted to it
pursuant to this Article 2.9 to one or more sublicensees without the prior
consent of NEWCO or SHEFFIELD. Insofar as NEWCO or SHEFFIELD has licensed or
acquired third party technology, NEWCO and SHEFFIELD shall use all commercially
reasonable efforts to exclude or where applicable to minimize the extent of any
limitations or restrictions on its use for such purposes, and it is understood
that no such limitations or restrictions shall be permitted as between SHEFFIELD
and NEWCO. In the event that ELAN acquires such a license, the PARTIES shall
enter into a further written license and other applicable agreement which shall
include customary and reasonable terms in accordance with this Article 2.9, and
at ELAN'S option, SHEFFIELD and NEWCO shall use their best efforts to assign to
ELAN their respective rights under any third party supply or other agreement
relating to such PRODUCT.
2.10 NEWCO will use its reasonable best efforts to obtain MARKETING
AUTHORIZATIONS to commercialize the PRODUCTS in the other countries of the
TERRITORY (I.E., other than the MAJOR MARKETS) that it selects, having regard to
the effort and expenditure required to obtain MARKETING AUTHORIZATIONS for the
PRODUCTS and the commercial opportunities for the PRODUCTS in such other
countries of the TERRITORY.
2.11 In general, NEWCO and SHEFFIELD shall employ diligent efforts to
research, develop, register, market, promote and sell and maintain sales of the
PRODUCTS in the TERRITORY and NEWCO shall employ a level of advertising, sales,
marketing, and promotion efforts in each country in the TERRITORY where
MARKETING AUTHORIZATION for PRODUCT has been obtained which is: (i) commensurate
with that used by other pharmaceutical manufacturers for products of similar
market potential in that country in the TERRITORY, and (ii) sufficient with
respect to the potential for that country to fully exploit the market potential
for the PRODUCT as depicted in the PLAN and as determined by the STEERING
COMMITTEE. Such PLAN shall be reviewed and mutually agreed to by the PARTIES on
an annual basis.
2.12 NEWCO shall effect a national commercial launch of a PRODUCT in
a country in the MAJOR MARKETS within one hundred and eighty (180) days of
MARKETING AUTHORIZATION thereof in such country in the MAJOR MARKETS. If NEWCO
does not make a national commercial launch of such PRODUCT in one or more
countries of the MAJOR MARKETS within the one hundred and eighty (180) day
period, the licenses granted to NEWCO hereunder shall with thirty (30) days
written notice from ELAN terminate in the applicable country and ELAN shall be
entitled to commercialize such PRODUCT in the FIELDS and to receive a license in
the FIELDS to the NEWCO INTELLECTUAL PROPERTY, SHEFFIELD
13
INTELLECTUAL PROPERTY and TRADEMARK in the applicable country on the terms set
forth in Article 2.9.
2.13 If NEWCO indicates to ELAN that it does not intend to obtain
MARKETING AUTHORIZATION and commercialize the PRODUCTS in a particular country
or countries of the TERRITORY, or fails to commence commercialization in any
country within one hundred and (180) days after receiving the required MARKETING
AUTHORIZATION therefor, ELAN shall be entitled to license from NEWCO the NEWCO
INTELLECTUAL PROPERTY, SHEFFIELD INTELLECTUAL PROPERTY and TRADEMARK to
commercialize the PRODUCTS in the FIELDS and to receive licenses in the FIELDS
in such countries on the terms set forth in Article 2.9.
3. ARTICLE III: DEVELOPMENT OF THE PRODUCT
----------------------------------------
3.1 NEWCO shall be responsible for the cost of the development,
registration, manufacture and marketing of the PRODUCTS, in accordance with the
PLAN and subject to the direction of the STEERING COMMITTEE, and NEWCO and
SHEFFIELD shall each use its reasonable best efforts, as would be deemed
commensurate with the achievement by SHEFFIELD of the business aims for a
similar product of its own, to conduct the PROJECT. Subject to the provisions of
this Article 3, ELAN shall use its reasonable best efforts, as would be deemed
commensurate with the achievement of its own business aims for a similar product
of its own, to conduct such part of the PROJECT as the Parties mutually agree
that shall be conducted by ELAN in accordance with the PLAN.
3.2 Each Party hereby confirms that it shall undertake its
respective part of the PROJECT as a collaborative effort and that the provisions
of this Agreement requires that each Party diligently carries out those tasks
assigned to it under the PROJECT and as otherwise agreed during the course of
the PROJECT. Each Party shall co-operate with the other in good faith
particularly with respect to unknown problems or contingencies and shall perform
its obligations in good faith and in a commercially reasonable, diligent and
workmanlike manner. Each Party will update the other Party on the progress of
the PROJECT.
3.3 For the avoidance of doubt, the Parties hereby confirm that a
primary objective of the PROJECT is to procure MARKETING AUTHORIZATIONS in the
MAJOR MARKETS for the PRODUCTS. As of the EFFECTIVE DATE, it is the Parties'
expectation that the body of data so generated in the PROJECT will also support
such applications for regulatory approval that NEWCO shall make in the other
countries of the TERRITORY. In the event however that such expectation proves
incorrect and further data is required to obtain such other approvals as are
pursued by NEWCO in the other countries of the TERRITORY, NEWCO shall determine
the viability of proceeding further with the regulatory application and
generation of the further data requirements. In the event that NEWCO elects to
continue, the Parties shall agree on the program of work to be undertaken to
generate such additional data and the apportioning of tasks therefor in
accordance with the other provisions of Article 3.
14
3.4 NEWCO shall xxxx or have marked the patent number(s) on all
PRODUCTS or otherwise reasonably communicate to the trade concerning the
existence of any ELAN PATENT RIGHTS, SHEFFIELD PATENT RIGHTS, NEWCO PATENT
RIGHTS or JOINT PATENT RIGHTS for the countries within the TERRITORY in such a
manner as to ensure compliance with, and enforceability under, all applicable
laws, including, without limitation, 00 Xxxxxx Xxxxxx Code Section 287, as the
same may be amended from time to time.
4. ARTICLE IV: FINANCIAL PROVISIONS
---------------------------------
4.1 In consideration of the rights and licenses granted to NEWCO to
the ELAN PATENT RIGHTS by virtue of this Agreement, NEWCO shall pay to ELAN or
ELAN'S designee the following:
4.1.1 [text omitted]
4.1.2 a single payment of [text omitted] within
[text omitted] days of NEWCO'S receipt of Marketing
Authorization in a country in the MAJOR MARKETS for the first
PRODUCT. NEWCO shall immediately notify ELAN in writing upon
NEWCO'S receipt of such MARKETING AUTHORIZATION.
4.1.3 a royalty based on NSP generated by NEWCO or
its sublicensees, as follows:
(A) [text omitted] percent of NSP for
PRODUCTS due and payable to ELAN that
utilize, incorporate, apply and/or are
based on the UPDAS TECHNOLOGY in the
SYSTEMIC PULMONARY FIELD and/or the
ENHANCING TECHNOLOGY in the SYSTEMIC
PULMONARY FIELD,
(B) [text omitted] percent of NSP due and
payable to EIS for PRODUCTS that
utilize, incorporate, apply and/or are
based solely on the ADDS TECHNOLOGY;
and
(C) [text omitted] percent of NSP for
PRODUCTS due and payable to ELAN that
utilize, incorporate, apply and/or are
based on any combination of UPDAS
TECHNOLOGY, ENHANCING TECHNOLOGY,
and/or ADDS TECHNOLOGY.
4.1.4 If NEWCO claims in good faith that one or
more of its devices, products, parts or components thereof,
compounds and/or drug products does not utilize, incorporate,
apply or is not based on the ELAN INTELLECTUAL PROPERTY, the
SHEFFIELD
15
INTELLECTUAL PROPERTY and/or NEWCO INTELLECTUAL PROPERTY, then
NEWCO shall immediately notify ELAN in writing. If ELAN disputes
NEWCO's claim, the PARTIES shall discuss such matter in good
faith and determine a mutually agreeable resolution.
4.2 ROYALTIES, PAYMENTS, REPORTS AND RECORDS
----------------------------------------
4.2.1 Within forty five (45) days of the end of
each quarter, NEWCO shall notify ELAN of the NSP of PRODUCTS
sold in that preceding quarter. Payments shown by each calendar
quarter report to have accrued shall be due on the date such
report is due and shall be payable to the designated bank
account of ELAN or its designee as instructed by ELAN. All
payments due under this Agreement shall be made in United States
Dollars and shall be non-refundable to NEWCO.
4.2.2 NEWCO shall keep and shall cause its
AFFILIATES and sublicensees to keep true and accurate records of
gross sales of the PRODUCT, the items deducted from the gross
amount in calculating the NSP, the NSP and the royalties payable
to ELAN under this Article 4. NEWCO shall deliver to ELAN a
written statement thereof within forty-five (45) days following
the end of each calendar quarter (or any part thereof in the
first or last calendar quarter of this Agreement) for such
calendar quarter. The said written statements shall set forth
for each PRODUCT on country-by-country basis, the calculation of
the NSP from gross revenues during that calendar quarter, the
applicable percentage rate, a computation of the sums due to
ELAN, and such details of the transactions that are relevant to
the calculations of NSP ("the Statement"). The Parties'
financial officers shall agree upon the precise format of the
Statement.
4.2.3 Payments due on NSP of the PRODUCT based on
sales amounts in a currency other than United States Dollars
shall first be calculated in the foreign currency and then
converted to United States Dollars on the basis of the exchange
rate in effect for the purchase of United States Dollars with
such foreign currency quoted in the Wall Street Journal (or
comparable publication if not quoted in the Wall Street Journal)
with respect to the sale of currency of the country of origin of
such payment for the day prior to the date on which the payment
by NEWCO is being made.
4.2.4 Any income or other taxes which NEWCO is
required by law to pay or withhold on behalf of ELAN with
respect to royalties and any other monies payable to ELAN under
this Agreement shall be deducted from the amount of such NSP
payments, royalties and other monies due. NEWCO shall furnish
ELAN with proof of such payments. Any such tax required to be
paid or withheld shall be an expense of and borne solely by
ELAN. NEWCO shall promptly provide ELAN with a certificate or
other documentary evidence to enable ELAN to support a claim for
a refund or a foreign tax credit with respect to any such tax so
withheld or deducted by NEWCO. The Parties will reasonably
cooperate in completing and filing documents required under the
provisions of any applicable tax treaty or under any other
applicable law, in order to enable NEWCO to make such payments
to ELAN without any deduction or withholding.
16
4.2.5 For the twenty four (24) month period
following the close of each calendar year during the TERM, NEWCO
and its sublicensees will provide ELAN's independent certified
accountants (reasonably acceptable to NEWCO) with access, during
regular business hours and upon reasonable prior request and
subject to the confidentiality provisions as contained in this
Agreement, to the books and records relating to the PRODUCTS,
solely for the purpose of verifying the accuracy and reasonable
composition of the calculations hereunder for the calendar year
then ended, including the sums payable by NEWCO to ELAN pursuant
to Article 4.
4.2.6 Any adjustment required by such inspection
shall be made within thirty (30) days of the agreement of the
Parties or, if not agreed, upon the determination of an
arbitrator to whom any dispute under this Article shall be
submitted to arbitration. If the adjustment payable to ELAN is
greater than [text omitted] of the amount paid for the relevant
period, then the cost to ELAN for the inspection, and if
applicable the arbitration, shall be paid by NEWCO provided that
the costs of the inspection shall not exceed the adjustment
payable to ELAN. In addition, NEWCO shall pay interest to ELAN
at the rate publicly announced by Xxxxxx Guaranty Trust Company
of New York at its principal office as its prime rate plus one
per cent (1%) (applicable as of the date on which payment should
have been made pursuant to Article 4), from the date on which
the payment should have been made pursuant to Article 4.2.1
until the date of payment.
4.2.7 NEWCO shall pay interest to ELAN at the rate
publicly announced by Xxxxxx Guaranty Trust Company of New York
at its principal office as its prime rate plus one per cent
(applicable as of the date on which payment should have been
made pursuant to the applicable provisions of this AGREEMENT)
from the date on which payment should have been made pursuant to
the applicable provision of this AGREEMENT until the date of
payment.
5. ARTICLE V: REGISTRATION OF THE PRODUCT
---------------------------------------
5.1 NEWCO shall at its sole cost file, and NEWCO and SHEFFIELD shall
use their reasonable best efforts to prosecute to approval, the MARKETING
AUTHORIZATIONS for the PRODUCTS in the TERRITORY in accordance with the Plan and
subject to the direction of the STEERING COMMITTEE.
5.2 NEWCO shall maintain at its own cost the MARKETING
AUTHORIZATIONS during the period that NEWCO is marketing the PRODUCTS. NEWCO
shall continue to maintain the MARKETING AUTHORIZATIONS in the applicable
countries at ELAN'S request and expense, if ELAN acquires the right to a license
pursuant to Article 2.9 for such term thereafter during which ELAN and/or its
designees is marketing the PRODUCTS, and NEWCO hereby agrees to provide to ELAN,
or at ELAN'S option to transfer and assign to ELAN, the MARKETING AUTHORIZATIONS
and any applications for regulatory approval within thirty (30) days of the
submission thereof to the applicable authority. NEWCO shall furnish to ELAN all
regulatory filings and other material correspondence with the FDA and other
regulatory authorities within thirty (30) days of submission.
17
5.3 During the registration procedure for MARKETING AUTHORIZATIONS,
NEWCO shall keep ELAN promptly and fully advised of NEWCO's registration
activities, progress and procedures. NEWCO shall notify ELAN immediately of any
inspection by the FDA or any other regulatory authority of the manufacturing or
other facilities used in the clinical research, manufacturing, packaging,
storage or handling of the PRODUCTS. Copies of all correspondence with the
regulatory authority will be provided to ELAN.
5.4 NEWCO shall indemnify and hold harmless ELAN, its agents and
employees from and against all claims, damages, losses, liabilities and expenses
to which ELAN, its agents, and employees may become subject related to or
arising out of NEWCO's and SHEFFIELD'S bad faith, negligence or intentional
misconduct in connection with the filing or maintenance of the MARKETING
AUTHORIZATIONS.
6, ARTICLE VI: WARRANTY AND INDEMNITY.
------------------------------------
6.1 ELAN represents and warrants to NEWCO and SHEFFIELD as follows:
6.1.1 ELAN is duly and validly existing in the
jurisdiction of its incorporation and each other jurisdiction in
which the conduct of its business requires such qualification
(except where such failure to so qualify shall not have a
material adverse affect on the business and assets of ELAN), and
is in compliance with all applicable laws, rules, regulations or
orders relating to its business and assets;
6.1.2. ELAN has full corporate authority to execute
and deliver this AGREEMENT and to consummate the transactions
contemplated hereby; this AGREEMENT has been duly executed and
delivered by ELAN and constitutes the legal and valid
obligations of ELAN and is enforceable against ELAN in
accordance with its terms and the execution, delivery and
performance of this AGREEMENT and the transactions contemplated
hereby and will not violate or result in a default under or
creation of lien or encumbrance under ELAN's memorandum and
articles of association or any material agreement or instrument
binding upon or affecting ELAN or its properties or assets or
any applicable laws, rules, regulations or orders affecting ELAN
or its properties or assets;
6.1.3. ELAN is not in material default of its
memorandum and articles of association, any applicable material
laws or regulations or any material contract or agreement
binding upon or affecting it or its properties or assets and the
execution, delivery and performance of this AGREEMENT and the
transactions contemplated hereby will not result in any such
violation;
6.1.4. As of the EFFECTIVE DATE, ELAN is the sole
and exclusive owner or licensee of, or controls all right, title
and interest to the ELAN PATENT RIGHTS; and to ELAN'S knowledge
and belief without independent investigation, ELAN is the sole
owner or licensee of the ELAN KNOW-HOW. ELAN has the right to
grant the licenses granted herein.
18
The ELAN PATENT RIGHTS, and to ELAN'S knowledge and belief, the
ELAN KNOW-HOW, are free and clear of any lien, encumbrances,
security interest or restriction granted by ELAN. ELAN will not
grant during the TERM, any right, license or interest in and to
the ELAN INTELLECTUAL PROPERTY, or any portion thereof,
inconsistent with the license granted herein; and to the best of
ELAN'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 ELAN INTELLECTUAL
PROPERTY as of the EFFECTIVE DATE;
6.1.5 ELAN represents and warrants that the
execution of this AGREEMENT will not breach or in any way be
inconsistent with the terms and conditions of any license,
contract, understanding or agreement, whether express, implied,
written or oral between ELAN and any third party; and
6.1.6 EXCEPT AS SET FORTH IN THIS ARTICLE 6.1, ELAN
IS GRANTING THE LICENSES 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.
6.2 NEWCO and SHEFFIELD, jointly and severally, represent and
warrant to ELAN the following:
6.2.1 Each of NEWCO and SHEFFIELD 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 or SHEFFIELD, respectively),
and each of NEWCO and SHEFFIELD is in compliance with all
applicable laws, rules, regulations or orders relating to its
business and assets;
6.2.2 Each of NEWCO and 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 and constitutes the legal
and valid obligations of NEWCO and SHEFFIELD and is enforceable
against NEWCO and 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
NEWCO's and SHEFFIELD'S respective certificate of incorporation,
by-laws or other organic documents, any material agreement or
instrument binding upon or affecting NEWCO or SHEFFIELD, or
their respective properties or assets or any applicable laws,
rules, regulations or orders affecting NEWCO, SHEFFIELD or their
respective properties or assets;
6.2.3 Each of NEWCO and SHEFFIELD is not in default
of its charter or by-laws, any applicable laws or regulations or
any material contract or agreement binding upon or
19
affecting it or its properties or assets and the execution,
delivery and performance of this AGREEMENT and the transactions
contemplated hereby will not result in any such violation; and
6.2.4 As of the EFFECTIVE DATE, each of NEWCO and
SHEFFIELD is the sole and exclusive owner or licensee of, or
controls all right, title and interest to the NEWCO INTELLECTUAL
PROPERTY and the SHEFFIELD INTELLECTUAL PROPERTY, respectively;
and
6.2.5 Each of NEWCO and SHEFFIELD has not granted
any option, license, right or interest to any third party which
would conflict with the terms of this AGREEMENT.
6.2.6 The PRODUCTS shall be developed,
manufactured, transported, stored, handled, packaged, marketed,
promoted, distributed, offered for sale and sold in accordance
with all regulations and requirements of the FDA and foreign
regulatory authorities including, without limitation, cGCP,
cGLP, cGMP regulations. 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.
6.2.7 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 Cosmetic Act and regulations
thereunder and similar statutes in countries outside of the
United States, and cGMPs. NEWCO shall manufacture or procure the
manufacture of the PRODUCTS 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.
6.3 ELAN shall indemnify, defend and hold harmless NEWCO, SHEFFIELD
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 SHEFFIELD is or may
become subject insofar as they arise out of or are alleged or claimed to arise
out of (i) any breach by ELAN of any of its obligations under this AGREEMENT,
(ii) any breach of a representation or warranty of ELAN made in this AGREEMENT,
and (iii) any activities conducted by ELAN in connection with the PROJECT,
except to the extent due to the negligence or willful misconduct of NEWCO or
SHEFFIELD.
6.4 NEWCO and SHEFFIELD, jointly and severally, shall indemnify,
defend and hold harmless ELAN and its 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 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 or SHEFFIELD of any of its obligations
under the AGREEMENT, (ii) any breach of any representation or warranty of NEWCO
or SHEFFIELD made in this AGREEMENT, (iii) any activities conducted by NEWCO
20
or SHEFFIELD in connection with the PROJECT, except to the extent due to the
negligence or willful misconduct of ELAN, and (iv) third party claims to which
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.
6.5 As a condition of obtaining an indemnity in the circumstances
set out above or elsewhere in the AGREEMENT, the Party seeking an indemnity
shall:
6.5.1 fully and promptly notify the other Party of
any claim or proceeding, or threatened claim or proceeding;
6.5.2 permit the indemnifying Party to take full
care and control of such claim or proceeding;
6.5.3 reasonably assist in the investigation and
defense of such claim or proceeding; and
6.5.4 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.
6.6 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.
7. ARTICLE VII: PATENTS
---------------------
7.1 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 owned by NEWCO including, without
limitation, any such inventions or intellectual property relating to the ADDS
TECHNOLOGY;
21
(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.
7.2 FILING AND PROSECUTION OF PATENTS
---------------------------------
7.2.1 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.
7.2.2 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 apprise ELAN of the status of any
such activity and shall 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 FIELDS, 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.
7.2.3 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.
7.3 ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS; THIRD PARTY
INFRINGEMENT
----------------------------------------------------------------
7.3.1 NEWCO and ELAN shall promptly inform the
other in writing of any alleged infringement or unauthorized use
of which it shall become aware
22
by a third party of ELAN INTELLECTUAL PROPERTY, NEWCO
INTELLECTUAL PROPERTY, SHEFFIELD INTELLECTUAL PROPERTY and/or
JOINT INTELLECTUAL PROPERTY and provide such other with any
available evidence of such unauthorized activity.
7.3.2 During the TERM, NEWCO shall have the right
to pursue at its own expense any enforcement activities of the
ELAN INTELLECTUAL PROPERTY the NEWCO INTELLECTUAL PROPERTY, the
SHEFFIELD INTELLECTUAL PROPERTY and/or the JOINT INTELLECTUAL
PROPERTY within the FIELDS. ELAN 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. Any
expenses borne by ELAN shall be reimbursed by NEWCO. Any
recovery remaining after the deduction by NEWCO of the
reasonable expenses (including attorney's fees) incurred in
relation to such action shall be treated as NSP for all the
purposes of this AGREEMENT. Should NEWCO decide not to enforce
the ELAN INTELLECTUAL PROPERTY, the SHEFFIELD INTELLECTUAL
PROPERTY and/or the NEWCO INTELLECTUAL PROPERTY and/or the JOINT
INTELLECTUAL PROPERTY within the FIELD, ELAN 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 ELAN.
7.3.3 Notwithstanding anything contained in Article
7.3.2 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.
7.4 INFRINGEMENT OF THIRD PARTY PATENTS
-----------------------------------
7.4.1 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 ELAN of such threat or
suit.
7.4.2 NEWCO shall indemnify, defend and hold 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 7.4; provided that ELAN
shall not acknowledge to the third party or to any other person
the validity of any claims
23
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. At
its option, ELAN may elect to take over the conduct of such
proceedings from NEWCO; provided that NEWCO'S indemnification
obligations shall continue; the costs of defending such claim
shall be borne by ELAN; and ELAN shall not compromise or settle
any such claim or proceeding without the prior written consent
of NEWCO, not to be unreasonably withheld or delayed.
7.4.3 ELAN shall have no liability to NEWCO or
SHEFFIELD whatsoever or howsoever arising for any losses
incurred by NEWCO as a result of having to cease selling
PRODUCTS or having to defer the launch of selling PRODUCTS,
whether as a result of a court order or otherwise.
8A ARTICLE VIII(A): REGARDING THE SHEFFIELD INTELLECTUAL PROPERTY
---------------------------------------------------------------
8A.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 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.
8A.2 AFTER ACQUIRED KNOW HOW
-----------------------
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.
8. ARTICLE VIII: MISCELLANEOUS CLAUSES
------------------------------------
8.1 SECRECY
-------
8.1.1 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 ELAN to NEWCO and/or SHEFFIELD, or by NEWCO
and/or SHEFFIELD to ELAN, including, without limitation, trade
secrets, business methods, and cost, supplier, manufacturing and
customer information
24
(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.
8.1.2 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 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.
8.1.3 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
25
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).
8.1.4 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.
8.1.5 NEWCO and ELAN will not publicize the
existence of this Agreement in any way without the prior written
consent of the other subject to the disclosure requirements of
applicable laws and regulations. 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.
8.2 CONFLICT. IN THE EVENT OF ANY INCONSISTENCY OR CONFLICT BETWEEN
THE PROVISIONS OF THIS AGREEMENT ON THE ONE HAND, AND THE PROVISIONS OF THE
SHEFFIELD/NEWCO LICENSE AGREEMENT OR THE NEWCO/SHEFFIELD LICENSE AGREEMENT ON
THE OTHER HAND, THE TERMS OF THIS AGREEMENT SHALL GOVERN AND CONTROL IN ALL
RESPECTS.
8.3 ASSIGNMENTS/ SUBCONTRACTING. This Agreement shall not be
assignable by ELAN, SHEFFIELD or NEWCO to any third party without the prior
written consent of the other Party hereto. Notwithstanding the above and subject
to the following sentence, ELAN may assign this Agreement, without the consent
of NEWCO or SHEFFIELD, to an AFFILIATE or to an entity that acquires all or
substantially all of the business or assets of ELAN to which this Agreement
pertains, whether by merger, reorganization, acquisition, sale, or otherwise.
Notwithstanding the foregoing, NEWCO, SHEFFIELD and ELAN will, subject to any
confidentiality obligations to third parties, discuss any assignment prior to
its implementation in order to consider how to avoid or reduce any additional
tax liability to either Party resulting solely from different tax law provisions
applying after such assignment. For the purpose hereof, an additional tax
liability to either Party means that such Party would be subject to a higher net
tax on payments made hereunder after taking into account any applicable tax
treaty and available tax credits, than the said Party was subject to before the
proposed assignment.
8.4 PARTIES BOUND. This Agreement shall be binding upon and inure
for the benefit of PARTIES hereto, their successors and permitted assigns.
26
8.5 SEVERABILITY. If any provision in this Agreement is agreed by
the PARTIES to be, or is deemed to be, or becomes invalid, illegal, void or
unenforceable under any law that is applicable hereto, (i) such provision will
be deemed amended to conform to applicable laws so as to be valid and
enforceable or, if it cannot be so amended without materially altering the
intention of the PARTIES, it will be deleted, with effect from the date of such
agreement or such earlier date as the PARTIES may agree, and (ii) the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be impaired or affected in any way.
8.6 DURATION AND TERMINATION
------------------------
8.6.1 Subject to the other provisions of Article
8.6, 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").
8.6.2 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, in the event that (1) a change of
"control" of NEWCO or SHEFFIELD shall occur
(the term "control" shall have the meaning
set forth in the definition of
"Affiliate"), or (2) a TECHNOLOGICAL
COMPETITOR acquires directly or indirectly
voting stock or equivalent securities in
SHEFFIELD or NEWCO representing [text
omitted] percent or more of the stock which
carries entitlement to vote, or where [text
omitted] or more of such TECHNOLOGICAL
COMPETITOR'S stock or equivalent securities
is acquired by SHEFFIELD or NEWCO;
provided, however, that in the case of
[text omitted] (should [text omitted]
become a Technological Competitor), the
[text omitted] percent threshold set forth
in this sentence shall be deemed to be
[text omitted] percent, or (3) if such
TECHNOLOGICAL COMPETITOR otherwise controls
SHEFFIELD'S or NEWCO'S respective board of
directors, or either SHEFFIELD or NEWCO
otherwise controls such TECHNOLOGICAL
COMPETITOR's board of directors or similar
governing body.
(C) 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
27
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.
8.6.3 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.
8.6.4 Upon termination of this Agreement:
(A) any sums that were due from NEWCO to ELAN
prior to the exercise of the right to
terminate this Agreement shall be paid in
full within sixty (60) days of termination
of this Agreement;
(B) all confidentiality provisions set out
herein shall remain in full force and
effect for a period of five (5) years;
(C) all representations, warranties, and
indemnities shall survive the termination
of this agreement and shall remain in full
force and effect;
(D) the rights of inspection and audit shall
continue in force for the period referred
to in the relevant provisions of this
Agreement;
(E) 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;
(F) except as is necessary to enable ELAN to
exercise the licenses 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);
28
(G) 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 Article
4 and Article 5 and the other applicable
terms of this Agreement;
(H) The ELAN INTELLECTUAL PROPERTY and all of
the rights granted to NEWCO hereunder shall
immediately revert to ELAN and, unless this
Agreement is terminated due to the breach
by ELAN beyond any cure or grace period in
accordance with the terms of this
Agreement, NEWCO and SHEFFIELD shall
immediately be deemed to have assigned and
transferred to ELAN the MARKETING
AUTHORIZATIONS (together with all
applications for regulatory approvals), the
TRADEMARK, the SHEFFIELD INTELLECTUAL
PROPERTY, the NEWCO INTELLECTUAL PROPERTY,
the JOINT INTELLECTUAL PROPERTY, all rights
under the purchase agreement for the ADDS
TECHNOLOGY (including any employment and
other agreements contemplated thereunder),
all rights under supply or other agreements
relating to the PRODUCTS, and all other
transactions and documents relating to the
foregoing and/or contemplated thereby.
(I) All sublicenses of the ELAN INTELLECTUAL
PROPERTY shall terminate, provided,
however, that ELAN agrees to enter into
licenses with all sublicensees of NEWCO on
terms no less favorable to the sublicensees
than those contained in the sublicense
agreements with NEWCO; provided such
sublicense agreements have been approved by
ELAN in accordance with this AGREEMENT.
(J) The following Articles shall survive the
termination or expiration of this Agreement
for any reason: Article 1; Articles 2.2,
2.4, 2.9, 2.12, and 2.13; Articles 4.2.5;
4.2.6; and 4.2.7; Article 5.4; Article 6;
Article 7, and Article 8.
8.7 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.
29
8.8 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.
8.9 AMENDMENTS. No amendment, modification or addition hereto shall
be effective or binding on either Party unless set forth in writing and executed
by a duly authorized representative of both PARTIES.
8.10 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.
8.11 NO EFFECT ON OTHER AGREEMENTS. No provision of this Agreement
shall be construed so as to negate, modify or affect in any way the provisions
of any other agreement between the PARTIES unless specifically referred to, and
solely to the extent provided, in any such other agreement.
8.12 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.
8.13 NOTICES. Any notice to be given under this Agreement shall be
sent in writing in English by registered airmail or faxed to:
- If to ELAN, at
Elan Corporation plc.
Xxxxxxx Xxxxx,
Xxxxxxx Xxxxx,
Xxxxxx 0, Xxxxxxx.
Attention: President, Elan Pharmaceutical Technologies,
a division of Elan Corporation plc
Telefax: 353 1 662 4960
30
- If to 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
- If to SHEFFIELD, at
Sheffield Pharmaceutical, Inc.
000 Xxxxx Xxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telefax : (000) 000-0000
with a copy to
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.
8.14 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.
31
8.15 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.
8.16 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.
32
8.17 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
31
APPENDIX A
ELAN PATENT RIGHTS
NONE AT PRESENT
APPENDIX B
PLAN
[text omitted]
APPENDIX C
SHEFFIELD PATENT RIGHTS
[text omitted]
