Exhibit 1.8
LICENSE AGREEMENT
BETWEEN
ELAN CORPORATION, PLC
ELAN PHARMA INTERNATIONAL LIMITED
AND
DEPOMED DEVELOPMENT, LTD.
AND
DEPOMED, INC.
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 ELAN LICENSES 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) 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;
(2) Elan Pharma International Limited incorporated under the laws of Ireland,
and having its registered office at XXX Xxxxx, Xxxxxxx Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxx Xxxxx, Xxxxxxx;
(3) 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
(4) 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.
RECITALS:
--------
A. Simultaneously herewith, Depomed, Elan Corp, EPIL, 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 EPIL and Elan Corp so as to
permit Newco to utilize the Elan Intellectual Property in making, having
made, importing, using, offering for sale and selling the Products in the
Fields in the Territory.
C. Simultaneously herewith Newco and Depomed are entering into the Depomed
License Agreement relating to Newco's use of the Depomed 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
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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).
"Business Plan" shall have the meaning, as such term is defined in the
JDOA.
"Change of Control of Depomed/Newco" shall mean circumstances where:
(i) a Technological Competitor of Elan shall, directly or indirectly,
acquire [**]% or more of the voting stock of Depomed or Newco, or
otherwise control or influence in any material respect the management
or business of Depomed or Newco, as the case may be; or
(ii) any person other than a Technological Competitor of Elan shall,
directly or indirectly, acquire [**]% or more of the then voting stock
of Depomed or Newco, or otherwise control or influence in any material
respect their management or business of Depomed or Newco, as the case
may be
provided that the foregoing shall not apply in relation to any exercise of
any options by Elan granted by the Definitive Documents.
"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 have the meaning as such term is defined in the
Depomed License Agreement.
"Depomed License" shall mean have the meaning set forth in Clause 2.1 of
the Depomed License Agreement.
"Depomed License Agreement" shall mean that certain license agreement, of
even date herewith, entered into between Depomed and Newco.
"Depomed Patents" shall have the meaning as such term is defined in the
Depomed License Agreement.
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"Depomed Improvements" shall have the meaning as such term is defined in
the Depomed License Agreement.
"Effective Date" shall mean the date of this Agreement.
"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.
"EIS" shall mean Elan International Services, Ltd., a private limited
company incorporated under the laws of Bermuda and having its registered
office at Xxxxxxxxx Xxxxx, 0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx.
"Elan Intellectual Property" shall mean:
(i) the Nano Know-How and the Nano Patents;
(ii) the Elan Corp CR Know-How and the Elan Corp CR Patents;
(iii) the [**]; and
(iv) the Elan Improvements;
and shall exclude the Elan Excluded Intellectual Property.
"Elan Excluded Intellectual Property" shall mean:
(i) Elan's patent rights and know-how relating to protein or peptide
agents or peptodomimetics, derivatives or analogs thereof, designed
to target a pharmaceutically active agent to a certain site or sites
in the body (targeting technology);
(ii) [**]
(iii) for the avoidance of doubt, inventions, patents and know-how owned,
licensed or controlled by Axogen Limited and Neurelab Limited and by
all Affiliates or subsidiaries (present or future) of Elan
Corporation, Plc. within the division of Elan Corporation, Plc
carrying on business as Elan Pharmaceuticals which incorporates,
inter alia, EPIL (only to the extent that it is the owner of patents,
know-how or other intellectual property or technology invented and/or
developed within the division of Elan Corporation, Plc carrying on
business as
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Elan Pharmaceuticals but, for the avoidance of doubt, not to the
extent that it is the owner of patents, know-how or other
intellectual property or technology expressly licensed or sub-
licensed to Depomed pursuant to the Elan License Agreement), Targon
Corporation, Athena Neurosciences, Inc., Elan Pharmaceuticals, Inc.,
Elan Diagnostics, Carnrick Laboratories, and Elan Europe Limited.
"Elan Improvements" shall mean improvements relating to:
(i) the Nano Know-How and/or the Nano Patents;
(ii) the Elan Corp CR Know-How and/or the Elan Corp CR Patents; and
(iii) the [**];
developed (i) by Elan whether or not pursuant to the Project, (ii) by Newco
or Depomed or by an independent third party (under contract with Newco)
pursuant to the Project, and/or (iii) jointly by any combination of Elan,
Depomed or Newco pursuant to the Project, except as limited by agreements
with independent third parties.
Subject to independent third party agreements, Elan Improvements shall
constitute part of Elan Intellectual Property and shall, upon development,
be included in the licenses of the Elan Intellectual Property pursuant to
Clause 2 solely for the purposes set forth therein. If the inclusion of an
Elan Improvement in the license of Elan Intellectual Property is restricted
or limited by an independent third party agreement, Elan shall use
reasonable commercial efforts to exclude or minimize any such restriction
or limitation.
"Elan Licenses" shall mean the Elan Corp License, the EPIL License and the
EPIL Sub-License, as set forth in Clause 2.
"Elan Corp CR Know-How" shall, subject to the exclusions set forth in the
definition of "Elan Excluded Intellectual Property" and Clause 4.2, mean
any and all rights owned, licensed or controlled by Elan Corp on the
Effective Date to any discovery or invention (whether patentable or not)
and owned, licensed to or controlled by Elan Corp on the Effective Date to
any know-how, substances, data, techniques, processes, systems,
formulations, designs, knowledge, expertise and information relating to
oral controlled release formulation technologies.
"Elan Corp CR Patents" shall, subject to the exclusions set forth in the
definition of "Elan Excluded Intellectual Property" and 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 Elan Corp
on inventions conceived or reduced to practice on or before the Effective
Date relating to oral controlled release formulation technologies and any
foreign counterparts thereof and all divisionals, continuations,
continuations-in-part, patents of addition, supplementary protection
certificates, any
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foreign counterparts thereof and all patents issuing on, any of the
foregoing, together with all registrations, reissues, re-examinations or
extensions thereof.
"EGTS Know-How" shall mean any and all discoveries or inventions (whether
patentable or not), know-how, substances, data, techniques, processes,
systems, formulations, designs, knowledge, expertise and information
relating to the EGTS Technology [**].
"EGTS Patents" shall mean the patents relating to the EGTS Technology, as
set forth in Schedule 1, which were assigned by [**] 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.
"EGTS Technology" shall mean the technology directly relating to the [**].
"Elan Trademark(s)" shall mean one or more trademarks, trade names, or
service marks that are owned or licensed by or on behalf of Elan which Elan
may nominate and approve in writing from time to time for use in connection
with the sale or promotion of the Products by Newco.
"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.
"EPIL[**] Know-How" shall, subject to the exclusions set forth in the
definition of "Elan Excluded Intellectual Property" and Clause 4.2, mean
[**], including but not limited to:
(i) the EGTS Know-How; and
(ii) the [**] Know-How.
"EPIL [**] Patents" shall, subject to the exclusions set forth in the
definition of "Elan Excluded Intellectual Property" and 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 EPIL on
inventions conceived or reduced to practice on or before the Effective Date
relating to [**] Technology, including but not limited to the EGTS Patents,
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.
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"[**] 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.
"[**] Technology" shall mean [**].
"[**] Field" shall mean [**].
"[**] Product" shall mean [**].
"[**] Know-How" shall mean [**].
"[**] Technology" shall mean [**].
"JDOA" shall mean that certain Subscription, Joint Development and
Operating Agreement, of even date herewith, by and between Elan Corp, EPIL,
Depomed, EIS and Newco.
"Licensed Technologies" shall mean the Elan Intellectual Property and the
Depomed Intellectual Property.
"Licenses" shall mean the Elan Licenses and the Depomed License.
"Management Committee" shall have the meaning, as such term is defined in
the JDOA.
"Nano Know-How" shall, subject to the exclusions set forth in the
definition of "Elan Excluded Intellectual Property" and Clause 4.2, mean
any and all rights owned, licensed to or controlled by EPIL on the
Effective Date to any discovery or invention (whether patentable or not)
and owned, licensed to or controlled by EPIL on the Effective Date to any
know-how, substances, data, techniques, processes, systems, formulations,
designs, knowledge, expertise and information relating to Nanocrystal(R)
Technology.
"Nano Patents" shall, subject to the exclusions set forth in the definition
of "Elan Excluded Intellectual Property" and 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 EPIL on inventions
conceived or reduced to practice on or before the Effective Date relating
to Nanocrystal(R) Technology and any foreign counterparts thereof and all
divisionals, continuations, continuations-in-part, patents
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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.
"Nanocrystal(R) Technology" shall mean the EPIL proprietary technology
directly related to nanoparticulate formulations of compounds used in the
manufacturing and/or formulation process, and methods of making the same.
"Newco" shall mean a new company to be established by Depomed and EIS, in
Bermuda.
"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 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.
"[**]" shall mean [**].
"[**] Agreement" shall mean [**].
"[**] Agreement" shall mean [**].
"Party" shall mean Elan Corp, EPIL, Depomed or Newco, as the case may be,
and "Parties" means 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 Elan, Depomed and
Newco in order to develop the Products.
"[**] License Agreement" [**].
"[**] Field" shall mean [**].
"[**] Product" shall mean [**].
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"Technological Competitor of Elan" shall mean a company, corporation or
person listed in Schedule 2 and successors thereof or any additional broad-
based technological competitor of Elan added to such Schedule from time to
time upon mutual agreement of the Parties.
"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 ELAN LICENSES TO NEWCO
2.1 Elan Corp License for the Fields:
---------------------------------
Elan Corp hereby grants to Newco for the Term a [**] license (the "Elan
Corp License") to the Elan Corp CR Patents and the Elan Corp CR Know-How
solely to make, have made, import, use, offer for sale and sell Products in
the Territory in the Fields.
2.2 EPIL Licenses for the Fields:
-----------------------------
EPIL hereby grants to Newco for the Term a [**] license (the "EPIL
License") to the Nano Patents, the Nano Know-How, the EGTS Patents and the
EGTS Know-How solely to make, have made, import, use, offer for sale and
sell Products in the Territory in the Fields, subject to the Development
License and Supply Agreement dated 26 July 1999 between EPIL and Merck
Corporation.
2.3 EPIL Sub-License for the [**] Field:
------------------------------------
EPIL hereby grants to Newco for the Term a [**] sub-license (the "EPIL Sub-
License") to the [**] Know-How to make, have made, import, use, offer for
sale and sell Products in the Territory in the [**] Field.
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2.4 Subject to Clause 2.5, [**] shall be responsible for payments related to
the financial provisions and obligations of any third party agreement with
respect to the Elan Intellectual Property to which it is a party on the
Effective Date (including amendments thereto) (the "Elan 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 Elan 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 2.4.
2.5 For the avoidance of doubt, the Parties acknowledge and agree that:
2.5.1 [**] shall be responsible for the payment of all [**] payments to
[**] Agreement;
2.5.2 [**] shall be responsible for the payment of all royalty obligations
of [**] to [**] in relation to the commercialization of the [**]
pursuant to this Agreement.
2.6 Depomed 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 Elan.
2.7 Notwithstanding anything contained in this Agreement to the contrary, Elan
shall have the right outside the fields set forth in Clause 2.1, 2.2 and
2.3, respectively and subject to the [**] to exploit and grant licenses and
sublicenses of the Elan Intellectual Property.
For the avoidance of doubt, Newco shall have no right to use the Elan
Intellectual Property outside the Fields.
2.8 Except as provided in Clause 11 of the JDOA, Newco shall not be permitted
to assign, license or sublicense rights under the Elan Intellectual
Property and/or the Newco Intellectual Property without the prior consent
in writing of Elan.
2.9 Any agreement between Newco and any permitted third party for the
development or exploitation of the Elan Intellectual Property shall require
such third party to maintain the confidentiality of all information
concerning the Elan Intellectual Property.
Insofar as the obligations owed by Newco to Elan are concerned, Newco shall
remain responsible for all acts and omissions of any permitted sub-
licensee, including Depomed, as if they were acts and omissions by Newco.
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2.10 [**]
3 INTELLECTUAL PROPERTY
3.1 Ownership of Intellectual Property:
-----------------------------------
3.1.1 Newco shall own the Newco Intellectual Property.
3.1.2 Elan shall own the Elan Intellectual Property.
3.2 Trademarks:
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3.2.1 Elan hereby grants to Newco for the Term a [**], royalty free
license to use the Elan 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 Elan Trademarks by Elan to Newco
hereunder:
(1) Newco shall ensure that each reference to and use of an Elan
Trademark by Newco is in a manner approved by Elan and
accompanied by an acknowledgement, in a form approved by Elan,
that the same is a trademark (or registered trademark) of Elan.
From time to time, upon the reasonable request of Elan, Newco
shall submit samples of the Product to Elan or its duly
appointed agent to ensure compliance with quality standards and
specifications. Elan, 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 Elan Trademarks that fails to comply
with the quality standards and specifications referred to in
this Clause 3.2, as determined by Elan.
(2) Newco shall not use an Elan Trademark in any way which might
materially prejudice its distinctiveness or validity or the
goodwill of Elan therein.
(3) The parties recognize that the Elan Trademarks have
considerable goodwill associated therewith. Newco shall not use
in relation to the Products any trademarks other than the Elan
Trademarks (except the
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Depomed Trademarks (as defined in the Depomed License
Agreement) licensed to Newco under the Depomed License
Agreement) without obtaining the prior consent in writing of
Elan, which consent may not be unreasonably withheld. However,
such use must not conflict with the use and display of the Elan
Trademark and such use and display must be approved by Elan.
(4) Newco shall not use in the Territory any trademarks or trade
names so resembling the Elan Trademark as to be likely to cause
confusion or deception.
(5) Newco shall promptly notify Elan in writing of any alleged
infringement or unauthorised use of which it becomes aware by a
third party of the Elan Trademarks and provide Elan with any
applicable evidence of infringement or unauthorised use.
(6) Newco shall favourably consider promoting and using the Elan
Trademarks in each country of the Territory and provide proof
of such use upon request by Elan.
(7) Newco shall not be permitted to assign or sublicense any of its
rights under the Elan Trademarks without the prior written
consents of Elan.
3.2.2 Elan may, at its sole expense and discretion, file and prosecute
applications to register and maintain registrations of the Elan
Trademarks in the Territory. Newco shall reasonably co-operate with
Elan in such efforts.
3.2.3 Elan will be entitled to conduct all enforcement proceedings
relating to the Elan Trademarks and shall at its sole discretion
decide what action, if any, to take in respect to any enforcement
proceedings of the Elan Trademarks or any other claim or counter-
claim brought in respect to the use or registration of the Elan
Trademarks. Any such proceedings shall be conducted at Elan's
expense and for its own benefit. Newco and Depomed shall reasonably
cooperate with Elan in such efforts.
3.2.4 Newco shall promptly notify Elan in writing in the event that any
Elan 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 Elan shall have the
first right to decide whether or not to defend such allegations, or
to adopt an alternative xxxx. If Elan decides not defend the Elan
Trademark, then Newco may request Elan to defend the Elan Trademark,
at Newco's expense, unless such requested defense is believed by
Elan to be unsubstantiated and without merit. In such a case, Elan
may elect not to initiate defence proceedings.
3.2.5 Newco will have no ownership rights in respect of the Elan
Trademarks or of the goodwill associated therewith, and Newco hereby
acknowledges that,
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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 Elan.
3.2.6 Nothing in this Agreement shall be construed as a warranty on the
part of Elan regarding the Elan Trademarks, including without
limitation, that use of the Elan Trademarks in the Territory will
not infringe the rights of any third parties. Accordingly, Newco
acknowledges and agrees that Elan makes no such warranty.
3.2.7 Elan 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 Elan Trademarks
pursuant to this Agreement.
4 [**]
4.1 [**]
4.2 [**]
5 FINANCIAL PROVISIONS
5.1 License Fees:
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The following license fees shall be payable pursuant to this Agreement:
5.1.1 in consideration of the license by Elan Corp to Newco of the Elan
Corp CR Patents under Clause 2.1, Newco shall pay to Elan Corp a
non-refundable license fee of $[**] in cash, the receipt of which is
hereby acknowledged by Elan Corp;
5.1.2 in consideration of the license by EPIL to Newco of the Nano Patents
and the Nano Know-How under Clause 2.2, Newco shall pay to EPIL a
non-refundable license fee of $[**] in cash, the receipt of which is
hereby acknowledged by EPIL;
5.1.3 in consideration of the license by EPIL to Newco of the EGTS Patents
and the EGTS Know-How under Clause 2.2, Newco shall pay to EPIL a
non-refundable license fee of $[**] in cash, the receipt of which is
hereby acknowledged by EPIL;
5.1.4 in consideration of the sub-license by EPIL to Newco of the GR Know-
How under Clause 2.3, Newco shall pay to EPIL a non-refundable
license fee of
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$[**] in cash, the receipt of which is hereby acknowledged by EPIL;
(together the "License Fees").
The License Fees payable to Elan Corp and EPIL respectively described in
this Clause 5.1 shall not be subject to future performance obligations of
Elan Corp and/or EPIL to Newco or Depomed and shall not be applicable
against future services provided by Elan Corp and/or EPIL to Newco or
Depomed.
The terms of this Clause 5.1 relating to the License Fees are independent
and distinct from the other terms of this Agreement.
5.2 Royalties:
----------
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.
5.3 Payment of royalties pursuant to Clause 5.2 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 Elan. Each payment made to Elan 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.
5.4 Newco shall maintain and keep clear, detailed, complete, accurate and
separate records for a period of 3 years:
5.4.1 to enable any royalties on Net Sales that shall have accrued
hereunder to be determined; and
5.4.2 to enable any deductions made in the Net Sales calculation to be
determined.
5.5 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
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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.
5.6 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 Elan
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 Elan's account in a bank acceptable to Elan in the
country the currency of which is involved or as otherwise agreed by the
Parties.
5.7 Elan 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.
5.8 Any taxes payable by Elan on any payment made to Elan pursuant to this
Agreement shall be for the account of Elan. 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 Elan 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 Elan, Newco shall permit Elan 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 Elan.
Any such inspection of Newco's records shall be at the expense of Elan,
except that if any such inspection reveals a deficiency in the amount of
the royalty actually paid to Elan hereunder in any Financial Year quarter
of [**]% or more of the amount of any royalty actually due to Elan
hereunder, then the expense of such inspection shall be borne solely by
Newco. Any amount of deficiency shall be paid promptly to Elan by Newco.
If such inspection reveals a surplus in the amount of royalties actually
paid to Elan by Newco, Elan shall reimburse Newco the surplus within 15
days after determination.
6.2 In the event of any unresolved dispute regarding any alleged deficiency or
16
overpayment of royalty payments hereunder, the matter will be referred to
an independent firm of chartered accountants chosen by agreement of Depomed
and Elan 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 Elan represents and warrants to Newco and Depomed, as of the Effective
Date, as follows:
7.1 Elan has the right to grant the Elan Licenses;
7.2 there are no agreements between Elan and any third party that conflict
with the Elan Licenses.
7.2 In addition to any other indemnities provided for herein, Elan 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
Elan hereunder; or
7.2.2 negligent act or omission on the part of Elan 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 Elan 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 Elan 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.
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
17
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, ELAN IS GRANTING THE LICENSES
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, ELAN 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
8.1.2 the date of expiration of the last to expire of the patents included
in the Elan Patents and the Elan Improvements and/or the Depomed
Patents and the Depomed Improvements
("the Term")
8.2 If either Party commits a Relevant Event, the other Party shall have, in
addition to all
18
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 Elan shall be entitled to terminate this Agreement in the event of a Change
of Control of Depomed/Newco.
8.5 Upon expiration or termination of the Agreement:
8.5.1. Any sums that were due from Newco to Elan 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
19
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 pursuant to this Agreement and to
the Elan 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 Elan, 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 Elan pursuant to the provisions of Clause 11 of the JDOA,
all rights to Newco Intellectual Property shall be transferred to
and jointly owned by Depomed and Elan.
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.
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.
In the event of a dispute arising pursuant to this Clause 8.5.6,
Elan and Depomed agree to negotiate in good faith on the course of
action to be taken with 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 Elan
Intellectual Property shall survive the termination of the license
and sublicense agreements granting said intellectual property rights
to Newco; and Newco, Elan and Depomed shall in good faith agree upon
the form most advantageous to Elan and Depomed 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
20
third party or parties, including an assignment to both Elan and
Depomed).
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.
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,
21
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 [**]
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.
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.
22
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 Elan 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
Xxxxxxxxx: Secretary
Telephone: 000 000 0000
Fax: 000 000 0000
with a copy to Elan at:
Elan Corporation, plc
000 Xx. Xxxxx Xxxxx
00
Xxxxxx, Xxxxxx XX00
Bermuda
Attention: President
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.
24
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 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
25
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 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 Elan and Newco as partners, or Elan as an employee of Newco,
or Newco as an employee of Elan.
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.
26
IN WITNESS WHEREOF the Parties hereto have executed this Agreement.
SIGNED BY /s/ Xxxxx Xxxxxx
-------------------------
for and on behalf of
ELAN CORPORATION, PLC
SIGNED BY /s/ Xxxxx Xxxxxx
-------------------------
for and on behalf of
ELAN PHARMA INTERNATIONAL LIMITED
SIGNED BY /s/ Xxxxx Xxxxxxx
-------------------------
For and on behalf of
DEPOMED DEVELOPMENT, LTD.
AGREED TO AND ACCEPTED BY
DEPOMED, INC.
/s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
Title: President & CEO
[Elan License]
27
SCHEDULE 1
EGTS PATENTS
------------
[**]
[List of EGTS Patents]
28
SCHEDULE 2
TECHNOLOGICAL COMPETITIORS OF ELAN
[**]
[List of Technological Competitors of Elan]
29
