LICENSE AGREEMENT
BETWEEN
SHEFFIELD PHARMACEUTICALS, INC.
AND
SHEFFIELD NEWCO LIMITED
TABLE OF CONTENTS
1. DEFINITIONS
2. SHEFFIELD LICENSE TO NEWCO
3. INTELLECTUAL PROPERTY
4. NON-COMPETITION/AFTER ACQUIRED TECHNOLOGY
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 19 October 1999
between:
(1) Sheffield Pharmaceuticals, Inc., a corporation duly incorporated and
validly existing under the laws of Delaware and having its principal
place of business at 000 X. Xxxxxxxxx Xxxx, Xxxxx 000, Xx. Xxxxx, XX
00000, USA("Sheffield");
(2) Newco Limited, a private limited company incorporated under the laws of
Bermuda and having its registered office at Xxxxxxxxx Xxxxx, 0 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxx ("Xxxxx"); and
(3) 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 ("EPIL").
RECITALS:
A. Simultaneously herewith, Sheffield, Elan, 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 Sheffield so as to
permit Newco to utilize the Sheffield Intellectual Property in making,
having made, importing, using, offering for sale and selling the
Products in Field B and Formulations in Field C in the Territory in
accordance with the terms of this Agreement.
C. Simultaneously herewith Newco and EPIL are entering into the Elan
License Agreement relating to Newco's use of the Elan Intellectual
Property.
1 DEFINITIONS
1.1 In this Agreement unless the context otherwise requires:
"Affiliate" shall mean any corporation or entity controlling,
controlled or under the common control of Elan or Sheffield, as the
case may be, excluding Systemic Pulmonary Delivery Ltd.. 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. Newco is not an
Affiliate of Sheffield.
"Agreement" shall mean this license agreement (which expression shall
be deemed to include the Recitals and Schedules hereto).
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"Business Plan" shall have the meaning, as such term is defined in the
JDOA.
"Combined Fields" shall mean Field A, Field B and Field C.
"Compounds" shall mean the Field A Compound, the Field B Compound
and/or the Field C Compound.
"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.
"Elan" shall mean EPIL and Affiliates and subsidiaries of Elan
Corporation, Plc. within the division of Elan Corporation, Plc.
carrying on business as Elan Pharmaceutical Technologies but shall not
include Affiliates and 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,
Targon Corporation, Athena Neurosciences, Inc., Elan Pharmaceuticals,
Inc., Elan Diagnostics, Carnrick Laboratories, and Elan Europe Limited.
"EIS" shall mean Elan International Services, Limited, a private
limited company incorporated under the laws of Bermuda and having its
registered office at Xx Xxxxx Xxxxx, Xxxxxx, Xxxxxx, XX00 Bermuda.
"Effective Date" shall mean the date of this Agreement.
"Elan Intellectual Property" shall mean the Elan Know-How, the Elan
Patents and the Elan Improvements, as such terms are defined in the
Elan License Agreement.
"Elan Patents" shall have the meaning as such term is defined in the
Elan License Agreement.
"Elan Improvements" shall have the meaning as such term is defined in
the Elan License Agreement.
"Elan Licenses" shall have the meaning set forth in Clause 2.1 of the
Elan License Agreement.
"Elan License Agreement" shall mean that certain license agreement, of
even date herewith, entered into between Elan and Newco.
"Field A" shall mean the topical pulmonary delivery of Formulations of
the Field A Compound by means of the Field A Device.
"Field B" shall mean the topical pulmonary delivery of Formulations of
the Field B Compound by means of the Field B Device.
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"Field C" shall mean the topical pulmonary delivery of Formulations of
the Field C Compound by means of the Field C Device.
"Field A Device" shall mean a third party table top unit dose nebulizer
having a reservoir capable of holding a unit dose (a device and the
compressor to nebulize a unit dose shall be deemed a device), which is
a device having any one the following characteristics:
(i) [REDACTED]
(ii) [REDACTED]
(iii) [REDACTED]
(iv) [REDACTED]
(v) [REDACTED]
For the avoidance of doubt, the Field A Device does not include
[REDACTED].
"Field B Device" shall mean the Aerosol Drug Delivery System ("ADDS"),
owned by Systemic Pulmonary Delivery Limited and exclusively licensed
to Sheffield for topical pulmonary applications.
"Field C Device" shall mean the handheld multi-dose nebulizer ("MSI")
which was licensed exclusively by Siemens to Sheffield pursuant to the
Siemens Agreements and which was subsequently sub-licensed by Sheffield
to Zambon (on an exclusive basis for delivery of various medicines for
humans in treating respiratory disease and/or other lung diseases
including, but not limited to, anti-infectives) provided that Newco,
through the Management Committee, is successful in obtaining a
sub-license from Zambon to Newco enabling the development and use of
the Field C Compound for use with the Field C Device , as described in
more detail in Clause 2.2.
"Field A Compound" shall mean [REDACTED].
"Field B Compound" shall mean [REDACTED] for therapeutic use to be
nominated by the Management Committee pursuant to the JDOA and with
reference to the JDOA, any Substitute Field B Compound.
"Field C Compound" shall mean [REDACTED] and with reference to the
JDOA, any Substitute Field C Compound and/or any Additional Field C
Compound.
"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.
"Formulations" shall mean Nanocrystal(TM) Technology formulations of
Compounds for use in Field A, Field B or Field C, as applicable.
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"JDOA" shall mean that certain joint development and operating
agreement, of even date herewith, by and between Elan, Sheffield, EIS
and Newco.
"Licensed Technologies" shall mean the Elan Intellectual Property and
the Sheffield Intellectual Property.
"Licenses" shall mean the Elan License and the Sheffield License.
"Management Committee" shall have the meaning, as such term is defined
in the JDOA.
"Nanocrystal(TM) Technology" shall mean the Elan proprietary technology
directed to nanoparticulate formulations of compounds used in the
manufacturing and/or formulation process, and methods of making the
same.
"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 Sheffield 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, any foreign
counterparts thereof and all patents issuing on, any of the foregoing,
together with all registrations, reissues, re-examinations or
extensions thereof.
"Party" shall mean Sheffield or Newco, as the case may be, and
"Parties" shall mean Sheffield and Newco.
"Products" shall mean the Field A Products, the Field B Products and/or
the Field C Products, as follows:
"Field A Products" shall mean Formulations of the Field A Compound
delivered by means of any Field A Device in Field A.
"Field B Products" shall mean Formulations of the Field B Compound
delivered by means of the Field B Device in Field B.
"Field C Products" shall mean Formulations of the Field C Compound
delivered by means of the Field C Device in Field C.
"Project" shall mean all activities as undertaken by Elan, Sheffield
and Newco in order to develop the Products.
"R&D Committee" shall have the meaning, as such term is defined in the
JDOA.
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"R&D Plan" shall have the meaning, as such term is defined in the JDOA.
"R&D Program" shall mean any research and development program commenced
by Newco pursuant to the Project.
"Sheffield" shall mean Sheffield Pharmaceuticals, Inc and its
Affiliates, excluding Newco.
"Sheffield Devices" shall mean the Field B Device and the Field C
Device.
"Sheffield Intellectual Property" shall mean the Sheffield Know-How,
the Sheffield Patents and the Sheffield Improvements.
"Sheffield Know-How" shall mean any and all rights owned, licensed or
controlled by Sheffield to any discovery, invention (whether patentable
or not), know-how, substances, data, techniques, processes, systems,
formulations and designs relating exclusively to the Sheffield Devices.
"Sheffield Licenses" shall have the meaning set forth in Clause 2.1.
"Sheffield Patents" shall mean any and all rights under any and all
patents applications and/or patents, now existing, currently pending or
hereafter filed or obtained by Sheffield relating to the Sheffield
Devices and all divisionals, continuations, continuations-in-part, any
foreign counterparts thereof and all patents issuing on, any of the
foregoing, together with all registrations, reissues, re-examinations
or extensions thereof.
"Sheffield Improvements" shall mean improvements relating to the
Sheffield Patents and/or the Sheffield Know-How, developed (i) by
Sheffield whether or not pursuant to the Project, (ii) by Newco or Elan
or by a third party (under contract with Newco) whether or not pursuant
to the Project, and/or (iii) jointly by any combination of Sheffield,
Elan or Newco pursuant to the Project, except as limited by agreements
with third Parties.
Subject to third party agreements, Sheffield Improvements shall
constitute part of Sheffield Intellectual Property and be included in
the license of the Sheffield Intellectual Property pursuant to Clause
2.1 solely for the purposes set forth therein. If the inclusion of a
Sheffield Improvement in the license of Sheffield Intellectual Property
is restricted or limited by a third party agreement, Sheffield shall
use reasonable commercial efforts to minimize any such restriction or
limitation.
"Siemens" shall mean Siemens Aktiengesellschaft.
"Siemens Agreements" shall mean the License Agreement dated 21 March
1997 and the Basic Supply Agreement dated 21 March 1997, both between
Sheffield Medical Technologies Inc. and Siemens Aktiengesellschaft.
"Technological Competitor of Sheffield" shall mean a company,
corporation or person listed in Schedule 1 and successors thereof or
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any additional broad-based technological competitor of Sheffield added
to such Schedule 1 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.
"Zambon" shall mean Inpharzam International, S.A.
"Zambon Agreement" shall mean the agreement dated 15 June 1998 between
Sheffield and Zambon.
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. SHEFFIELD LICENSE TO NEWCO
2.1. Sheffield hereby grants to Newco for the Term the following licenses:
2.1.1 a non-exclusive license (including the right to grant
sublicenses subject to the limitations of Clause 2.7) of the
Sheffield Intellectual Property solely to make, have made,
import, use, offer for sale and sell the Field B Products in
the Territory in Field B;
2.1.2 subject to the execution by Newco of a written sub-license
with Zambon as more fully described in Clause 2.2 for the
development by Newco of the Field C Formulations in accordance
with Clause 2.2, a non-exclusive license (including the right
to grant sublicenses subject to the limitations of Clause 2.7
and the Zambon Agreement) of the Sheffield Intellectual
Property solely to make and have made, import, use, offer for
sale and sell the Field C Products in the Territory in Field C
(the "Sheffield Licenses").
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2.2 On the date which is [REDACTED] days following the Effective Date, or
such extended date as may be agreed in writing by Elan and Newco
pursuant to Clause 2.2 of the Elan License Agreement, Sheffield shall,
at its sole discretion, be entitled forthwith to terminate the license
to Newco described in Clause 2.1.2, upon notice in writing to Newco, in
the event that Newco has not, prior to such date, executed a written
sub-license with Zambon for the development by Newco of the Field C
Formulations in Field X.
Xxxxxxxxx shall use reasonable commercial efforts to procure that
Zambon executes such written sub-license with Newco in a timely manner
and in any event within 180 days following the Effective Date, or such
extended date as may be agreed in writing by Elan and Newco pursuant to
Clause 2.2 of the Elan License Agreement.
Such written sub-license will be subject to the approval of the
Management Committee and will include authority from Zambon to Newco to
the extent necessary for Newco to develop, make, have made and use the
Field C Formulations in the Territory, general financial terms,
development schedule, and terms governing the funding by Zambon of any
R&D Program(s) in Field C, together with such other substantive issues
as the Management Committee shall deem appropriate and customary terms.
For the avoidance of doubt, to the extent royalty or other compensation
obligations are payable to Zambon in respect of any license or
sub-license from Zambon to Newco of intellectual property rights
necessary for Newco to develop, make, have made and use the Field C
Formulations in the Territory, Sheffield shall be responsible for same
and shall indemnify Newco in respect of any such royalty or other
compensation obligations payable to Zambon.
2.3 Sheffield shall be responsible for payments related to the financial
provisions and obligations of any third party agreement with respect to
the Sheffield Intellectual Property to which it is a party on the
Effective Date (including amendments thereto) (the "Sheffield 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 Sheffield 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
Sheffield will be responsible under this Clause 2.1.
2.4 Subject to Sheffield's obligations and indemnity set forth in Clause
2.2 to the extent royalty or other compensation obligations are payable
to Zambon in respect of any license or sub-license from Zambon to Newco
of intellectual property rights necessary for Newco to develop, make,
have made and use the Field C Formulations in the Territory, to the
extent royalty or other compensation obligations that are payable to
third parties with respect to the Sheffield Intellectual Property would
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be triggered after the Effective Date under any third party agreement
entered into by Sheffield after the Effective Date (the "Sheffield
Post-Effective Date Agreements"), by a proposed use of such Sheffield
Intellectual Property in connection with the Project, Sheffield will
inform Newco of such royalty or compensation obligations. If Newco
agrees to utilise such Sheffield Intellectual Property in connection
with the Project, Newco will be responsible for the payment of such
royalty or other compensation obligations relating thereto.
For the avoidance of doubt, royalties, milestones or other payments
which arise from the process of the commercialization or exploitation
of products under the Sheffield Post-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
Newco will be responsible under this Clause 2.4.
2.5 Elan shall be a third party beneficiary under this Agreement and shall
have the right to cause Newco to enforce Newco's rights under this
Agreement against Sheffield.
2.6 Notwithstanding anything contained in this Agreement to the contrary,
Sheffield shall have the right outside the Field B and Field C and
subject to the non-competition provisions of Clause 4 to exploit and
grant licenses and sublicenses of the Sheffield Intellectual Property.
For the avoidance of doubt, Newco shall have no right to use the
Sheffield Intellectual Property outside Field B or Field C.
2.7 Newco shall not be permitted to assign or sublicense any of its rights
under the Sheffield Intellectual Property without the prior written
consent of Sheffield, which consent shall not be unreasonably withheld
or delayed provided that Sheffield shall in all cases, in its sole
discretion, be entitled to withhold its consent in the case of a
proposed sublicense to any Technological Competitor to Sheffield.
2.8 Any agreement between Newco and any permitted third party for the
development or exploitation of the Sheffield Intellectual Property
shall require such third party to maintain the confidentiality of all
information concerning the Sheffield Intellectual Property.
Insofar as the obligations owed by Newco to Sheffield are concerned,
Newco shall remain responsible for all acts and omissions of any
permitted sub-licensee, including Elan, as if they were acts and
omissions by Newco.
3 INTELLECTUAL PROPERTY
3.1 Ownership of Intellectual Property:
3.1.1 Newco shall own the Newco Intellectual Property.
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3.1.2 Sheffield shall own the Sheffield Intellectual Property.
3.2 Trademarks:
3.2.1 Sheffield hereby grants to Newco for the Term a non-exclusive,
royalty free license in the Territory to use and display the
Sheffield Trademarks to promote, offer for sale and sell the
Products in Field B in the Territory and the following
provisions shall apply as regards the use of the Sheffield
Trademarks by Newco hereunder:
(1) Newco shall ensure that each reference to and use of an
Sheffield Trademark by Newco is in a manner approved by
Sheffield and accompanied by an acknowledgement, in a
form approved by Sheffield, that the same is a trademark
(or registered trademark) of Sheffield.
From time to time, upon the reasonable request of
Sheffield, Newco shall submit samples of the Product to
Sheffield or its duly appointed agent to ensure
compliance with quality standards and specifications.
Sheffield, or its duly appointed agent, shall have the
right to inspect the premises of Newco where the
Products are 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 Sheffield Trademarks that fails to comply with the
quality standards and specifications referred to in this
Clause 3.2, as determined by Sheffield.
(2) Newco shall not use an Sheffield Trademark in any way
which might materially prejudice its distinctiveness or
validity or the goodwill of Sheffield therein.
(3) The parties recognize that the Sheffield Trademarks have
considerable goodwill associated therewith. Newco shall
not use in relation to the Products any trademarks other
than the Sheffield Trademarks (except the Elan
Trademarks (as defined in the Elan License Agreement)
licensed to Newco under the Elan License Agreement)
without obtaining the prior consent in writing of
Sheffield, which consent may not be unreasonably
withheld. However, such use must not conflict with the
use and display of the Sheffield Trademark and such use
and display must be approved by Sheffield.
(4) Newco shall not use in the Territory any trademarks or
trade names so resembling the Sheffield Trademark as to
be likely to cause confusion or deception.
(5) Newco shall promptly notify Sheffield in writing of any
alleged infringement or unauthorised use of which it
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becomes aware by a third party of the Sheffield
Trademarks and provide Sheffield with any applicable
evidence of infringement or unauthorised use.
(6) Newco shall not be permitted to assign or sublicense any
of its rights under the Sheffield Trademarks without the
prior written consent of Sheffield, which consent shall
not be unreasonably withheld or delayed.
3.2.2 Sheffield shall, at its expense and sole discretion, file and
prosecute applications to register and maintain registrations
of the Sheffield Trademarks in the Territory. Newco shall
reasonably co-operate with Sheffield in such efforts. In the
event Sheffield decides not to file or prosecute such
Sheffield Trademark, Newco may request Sheffield to do the
same at Newco's expense, and Sheffield shall file or prosecute
such Sheffield Trademark at Newco's request and expense unless
Sheffield believes such action is without merit.
3.2.3 Sheffield will be entitled to conduct all enforcement
proceedings relating to the Sheffield Trademarks and shall at
its sole discretion decide what action, if any, to take in
respect to any enforcement proceedings of the Sheffield
Trademarks or any other claim or counter-claim brought in
respect to the use or registration of the Sheffield
Trademarks. Any such proceedings shall be conducted at
Sheffield's expense and for its own benefit. Newco and
Sheffield shall reasonably cooperate with Sheffield in such
efforts. In the event Sheffield decides not to engage in
enforcement proceedings of the Sheffield Trademarks, Newco may
request Sheffield to do the same at Newco's expense unless
Sheffield believes the basis for such enforcement proceedings
is without merit. In such a case, Sheffield shall have the
sole discretion not to engage in any such enforcement
proceedings
3.2.4 Save where Newco adopts its own xxxx under Clause 3.2.4, in
the event Newco becomes aware that any Sheffield 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 Newco shall promptly
notify Sheffield in writing and Sheffield shall have the first
right to decide whether or not to defend such allegations, or
to adopt an alternative xxxx, or allow Newco to adopt an
alternative xxxx. If Sheffield decides not defend the
Sheffield Trademark, then Newco may request Sheffield to
defend the Sheffield Trademark, at Newco's expense, unless
such requested defense is reasonably believed by Sheffield to
be unsubstantiated and without merit. In such a case,
Sheffield may elect not to initiate defence proceedings.
3.2.5 Newco will have no ownership rights in respect of the
Sheffield Trademarks or of the goodwill associated therewith,
and Newco hereby acknowledges that, except as expressly
provided in this Agreement, it shall not acquire any rights in
respect thereof and that all such rights and goodwill are, and
will remain, vested in Sheffield.
3.2.6 Nothing in this Agreement shall be construed as a warranty on
the part of Sheffield regarding the Sheffield Trademarks,
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including without limitation, that use of the Sheffield
Trademarks in the Territory will not infringe the rights of
any third parties. Accordingly, Newco acknowledges and agrees
that Sheffield makes no such warranty.
3.2.7 Sheffield 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 Sheffield Trademarks pursuant to this
Agreement.
4 NON-COMPETITION/AFTER ACQUIRED TECHNOLOGY
4.1 Subject to Clause 4.2 and Clause 8.6, during the period during which
the license described in Clause 2.1.1 of the Elan License Agreement has
not been terminated, Sheffield shall not, alone or in conjunction with
a third party, develop or commercialize any unit dose steroid listed in
Schedule 2 for topical pulmonary delivery using a Field A Device,
subject to written agreements between Sheffield and unaffiliated third
parties in effect on the Effective Date.
Sheffield hereby confirms that no such agreements are in effect on the
date hereof between Sheffield and an unaffiliated third party.
4.2 If, after the Effective Date, Sheffield acquires know-how or patent
rights relating to the Field A, Field B or Field C (in the case of
Field C, subject to the Zambon Agreement), or acquires or merges with a
third party entity that has know-how or patent rights relating to the
Field A, Field B or Field C (in the case of Field C, subject to the
Zambon Agreement), Sheffield shall offer to license such know-how and
patent rights to Newco (subject to existing contractual obligations),
on commercially reasonable terms on an arm's length basis for a
reasonable period under the prevailing circumstances.
If Newco determines that Newco should not acquire such license,
Sheffield shall be free to fully exploit such know-how and patent
rights with the Sheffield Intellectual Property then licensed to Newco,
whether inside or outside the Field A, Field B or Field C, as
applicable, and to grant to third parties licenses and sublicenses with
respect thereto.
5 FINANCIAL PROVISIONS
5.1 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 Sheffield, and shared
by Elan and Sheffield equally.
At such time, the Management Committee will agree an appropriate
definition of "Net Sales" as such term is used in this Agreement.
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5.2 Payment of any royalties pursuant to Clause 5.1 shall be made quarterly
in arrears during each Financial Year within 30 days after the expiry
of the calendar quarter. The method of payment shall be by wire
transfer to an account specified by Sheffield. Each payment made to
Sheffield shall be accompanied by a true accounting of all Products
sold by Newco's permitted sublicensees, if any, during such quarter.
Such accounting shall show, on a country-by-country and
Product-by-Product basis, Net Sales (and the calculation thereof) and
each calculation of royalties with respect thereto, including the
calculation of all adjustments and currency conversions.
5.3 Newco shall maintain and keep clear, detailed, complete, accurate and
separate records for a period of 3 years:
5.3.1 to enable any royalties on Net Sales that shall have accrued
hereunder to be determined; and
5.3.2 to enable any deductions made in the Net Sales calculation to
be determined.
5.4 All payments due hereunder shall be made in United States Dollars.
Payments due on Net Sales of any Product for each calendar quarter made
in a currency other than United States Dollars shall first be
calculated in the foreign currency and then converted to United States
Dollars on the basis of the exchange rate in effect on the last working
day for such quarter for the purchase of United States Dollars with
such foreign currency quoted in the Wall Street Journal (or comparable
publication if not quoted in the Wall Street Journal) with respect to
the currency of the country of origin of such payment, determined by
averaging the rates so quoted on each business day of such quarter.
5.5 If, at any time, legal restrictions in the Territory prevent the prompt
payment when due of royalties or any portion thereof, the Parties shall
meet to discuss suitable and reasonable alternative methods of paying
Sheffield 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 Sheffield's
account in a bank acceptable to Sheffield in the country the currency
of which is involved or as otherwise agreed by the Parties.
5.6 Sheffield and Newco agree to co-operate in all respects necessary to
take advantage of any double taxation agreements or similar agreements
as may, from time to time, be available.
5.7 Any taxes payable by Sheffield on any payment made to Sheffield
pursuant to this Agreement shall be for the account of Sheffield. 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 Sheffield of the
amount so withheld.
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6 RIGHT OF INSPECTION AND AUDIT
6.1 Once during each Financial Year, or more often not to exceed quarterly
as reasonably requested by Sheffield, Newco shall permit Sheffield 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 Sheffield.
Any such inspection of Newco's records shall be at the expense of
Sheffield, except that if any such inspection reveals a deficiency in
the amount of the royalty actually paid to Sheffield hereunder in any
Financial Year quarter of [REDACTED] or more of the amount of any
royalty actually due to Sheffield hereunder, then the expense of such
inspection shall be borne solely by Newco. Any amount of deficiency
shall be paid promptly to Sheffield by Newco.
If such inspection reveals a surplus in the amount of royalties
actually paid to Sheffield by Newco, Sheffield shall reimburse Newco
the surplus within 15 days after determination.
6.2 In the event of any unresolved dispute regarding any alleged deficiency
or overpayment of royalty payments hereunder, the matter will be
referred to an independent firm of chartered accountants chosen by
agreement of Sheffield 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 Sheffield represents and warrants to Newco and Elan, as of the
Effective Date, as follows:
7.1.1 Sheffield has the right to grant the Sheffield Licenses
subject to the Zambon Agreement in the case of the license
described in Clause 2.1.2;
7.1.2 there are no agreements with any third parties that conflict
with the Sheffield Licenses.
7.2 Sheffield further agrees and represents and warrants to Newco and Elan
as follows:
7.2.1 as of the Effective Date, each of the Siemens Agreements is
valid and in full force and effect;
7.2.2 as of the Effective Date, there are no existing or claimed
defaults by Sheffield, and to Sheffield's best knowledge by
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any other party, under any of the Siemens Agreements and no
event, act or omission has occurred which (with or without
notice, lapse of time or the happening or occurrence of any
other event) would result in a default under the Siemens
Agreements by Sheffield, or to Sheffield's best knowledge by
any other party;
7.2.3 during the Term, Sheffield will fully comply with all of the
terms and conditions of the Siemens Agreements. Sheffield will
enforce its rights under the Siemens Agreements and save with
the prior approval in writing of the Management Committee
which shall not unreasonably be withheld, Sheffield will not
assign its rights under the Siemens Agreements; and
7.2.4 during the Term, Sheffield will keep Newco and Elan fully
informed with respect to Sheffield's transactions,
arrangements and business under the Siemens Agreements that
relate to Newco and/or the transactions contemplated
hereunder, and Sheffield shall provide Newco and Elan with any
written notices delivered by any party thereunder that relate
to Newco and/or the transactions contemplated hereunder, or
that may affect Newco.
7.3 During the Term, Sheffield shall not terminate, amend, modify, or waive
any of its rights under the Siemens Agreements without the prior
written consent of the Management Committee (by the unanimous vote of
its members) provided, however, that such consent will not be required
if such termination, amendment, modification, or waiver would not have
a material adverse effect, individually or in the aggregate, on the
financial condition, results of operation, business and/or assets of
Newco.
7.4 Sheffield shall indemnify Newco and Elan against all costs claims and
liabilities which may arise in any way in relation to or in connection
with the Siemens Agreements and/or any sub-license agreement or
agreements entered into by Newco pursuant to Clause 2.2.
7.5 In addition to any other indemnities provided for herein, Sheffield
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:
7.5.1 breach of any representation, covenant, warranty or obligation
by Sheffield hereunder; or
7.5.2 act or omission on the part of Sheffield or any of its
respective employees, agents, officers and directors in the
performance of this Agreement.
7.6 In addition to any other indemnities provided for herein, Newco shall
indemnify and hold harmless Sheffield 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 Sheffield
arising out of or in connection with any:
16
7.6.1 breach of any representation, covenant, warranty or obligation
by Newco hereunder; or
7.6.2 act or omission on the part of Newco or any of its agents or
employees in the performance of this Agreement.
7.7 The Party seeking an indemnity shall:
7.7.1 fully and promptly notify the other Party of any claim or
proceeding, or threatened claim or proceeding;
7.7.2 permit the indemnifying Party to take full care and control of
such claim or proceeding;
7.7.3 co-operate in the investigation and defence of such claim or
proceeding;
7.7.4 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
7.7.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceeding.
7.8 EXCEPT AS SET FORTH IN THIS CLAUSE 7, SHEFFIELD 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.
7.9 EXCEPT AS SET FORTH IN CLAUSE 7.4, NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, SHEFFIELD AND NEWCO SHALL NOT BE LIABLE TO
THE OTHER BY REASON OF ANY REPRESENTATION OR WARRANTY, CONDITION OR
OTHER TERM OR ANY DUTY OF COMMON LAW, OR UNDER THE EXPRESS TERMS OF
THIS AGREEMENT, FOR ANY CONSEQUENTIAL, 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.
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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 Clauses 8,
expire on a Product-by-Product basis and on a country-by-country basis
on the last to occur of:
8.1.1 [REDACTED] 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/or the Elan Improvements
and/or the Sheffield Patents and/or the Elan Improvements that
relate to the Product.
("the Term")
8.2 If either Party commits a Relevant Event, the other Party shall have,
in addition to all other legal and equitable rights and remedies
hereunder, the right to terminate this Agreement upon 30 days' prior
written notice to the defaulting Party.
8.3 For the purpose of this Clause 8, a "Relevant Event" is committed or
suffered by a Party if:
8.3.1 [REDACTED]
8.3.2 [REDACTED]
8.3.3 [REDACTED]
8.3.4 [REDACTED]
8.3.5 [REDACTED]
8.3.6 [REDACTED]
18
8.4 Sheffield shall be entitled to forthwith terminate this Agreement if
Elan elects to terminate the Elan License Agreement under Clause 8.4 of
the Elan License Agreement.
8.5 Upon expiration or termination of the Agreement:
8.5.1. any sums that were due from Newco to Sheffield on Net Sales in
the Territory or in such particular country or countries in
the Territory (as the case may be) prior to the expiration or
termination of this Agreement as set forth herein shall be
paid in full within 60 days after the expiration or
termination of this Agreement for the Territory or for such
particular country or countries in the Territory (as the case
may be);
8.5.2 any provisions that expressly survive termination or
expiration of this Agreement, including without limitation
this Clause 8, shall remain in full force and effect;
8.5.3 all representations, warranties and indemnities shall insofar
as are appropriate remain in full force and effect;
8.5.4 the rights of inspection and audit set out in Clause 6 shall
continue in force for a period of one year; and
8.5.5 all rights and licenses granted pursuant to this Agreement and
to the Sheffield Intellectual Property pursuant to the JDOA
(including the rights of Newco pursuant to Clause 11 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 Sheffield, 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 Sheffield pursuant to the provisions of Clause 12
of the JDOA, all rights to Newco Intellectual Property shall
be transferred to and jointly owned by Sheffield and Elan and
may only be exploited by either Elan or Sheffield with the
consent of the other Party pursuant to a written agreement to
be negotiated in good faith;
8.5.7 the rights of permitted third party sub-licensees in and to
the Sheffield Intellectual Property shall survive the
termination of the license and sublicense agreements granting
said intellectual property rights to Newco; and Newco, Elan
and Sheffield shall in good faith agree upon the form most
advantageous to Elan and Sheffield in which the rights of
Newco under any such licenses and sublicenses are to be held
(which form may include continuation of Newco solely as the
holder of such licenses or assignment of such rights to a
third party or parties, including an assignment to both Elan
and Sheffield).
19
Any sublicense agreement between Newco and such permitted
sublicensee shall permit an assignment of rights by Newco and
shall contain appropriate confidentiality provisions.
8.6 In the event that the Parties and Elan mutually agree to terminate the
portion of the Project (as defined in the JDOA) which relates to Field
A, the provisions of Clause 4.1 and the provisions of Clause 4.2
(insofar as the provisions of Clause 4.2 relate to Field A) shall
automatically terminate.
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 Combined Fields, 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;
20
9.5.3 information which is independently developed by a Party as
evidenced by such Party's records;
9.5.4 information that becomes available to a Party on a
non-confidential basis, whether directly or indirectly, from a
source other than a Party, which source did not acquire this
information on a confidential basis; or
9.5.5 information which the receiving Party is required to disclose
pursuant to:
(i) a valid order of a court or other governmental body; or
(ii) any other requirement of law;
provided that if the receiving Party becomes legally required
to disclose any Confidential Information, the receiving Party
shall give the disclosing Party prompt notice of such fact so
that the disclosing Party may obtain a protective order or
other appropriate remedy concerning any such disclosure. The
receiving Party shall fully co-operate with the disclosing
Party in connection with the disclosing Party's efforts to
obtain any such order or other remedy. If any such order or
other remedy does not fully preclude disclosure, the receiving
Party shall make such disclosure only to the extent that such
disclosure is legally required.
9.6 The provisions relating to confidentiality in this Clause 9 shall
remain in effect during the term of this Agreement, and for a period of
7 years following the expiration or earlier termination of this
Agreement.
9.7 The Parties agree that the obligations of this Clause 9 are necessary
and reasonable in order to protect the Parties' respective businesses,
and each Party agrees that monetary damages would be inadequate to
compensate a Party for any breach by the other Party of its covenants
and agreements set forth herein.
Accordingly, the Parties agree that any such violation or threatened
violation shall cause irreparable injury to a Party and that, in
addition to any other remedies that may be available, in law and equity
or otherwise, each Party shall be entitled to obtain injunctive relief
against the threatened breach of the provisions of this Clause 9, or a
continuation of any such breach by the other Party, specific
performance and other equitable relief to redress such breach together
with its damages and reasonable counsel fees and expenses to enforce
its rights hereunder, without the necessity of proving actual or
express damages.
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.
21
10.2 The Parties will attempt in good faith to resolve any dispute arising
out of or relating to this Agreement promptly by negotiation between
executives of the Parties. In the event that such negotiations do not
result in a mutually acceptable resolution, the Parties agree to
consider other dispute resolution mechanisms including mediation.
In the event that the Parties fail to agree on a mutually acceptable
dispute resolution mechanism, any such dispute shall be finally settled
by the courts of competent jurisdiction. For the purposes of this
Agreement the parties submit to the non-exclusive jurisdiction of the
courts of the State of New York.
11 IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE
Neither Sheffield 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, but any such delay or failure shall be remedied
by such Party 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:
000 Xx. Xxxxx Xxxxx
Xxxxxx,
Xxxxxx XX00
Bermuda
Attention: Secretary
Telephone: 000 000 0000
Fax: 000 000 0000
with a copy to Elan and Sheffield at the addresses listed below:
22
If to Sheffield at:
Sheffield Pharmaceuticals, Inc.
000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xx Xxxxx
XX 00000
XXX.
Attn: Chief Executive Officer
Telephone 000 000 000 0000
Fax: 000 000 000 0000
with a copy to:
Xxxxxx Xxxxxxxxx, Esq.
Olshan, Grundman, Trome
Rosenzeig, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone 000 000 000 0000
Fax: 000 000 000 0000
If to Elan at:
Elan Corporation, plc
Xxxxxxx Xxxxx,
Xxxxxxx Xxxxx,
Xxxxxx 0,
Xxxxxxx.
Attention: Vice President, General Counsel,
Elan Pharmaceutical Technologies,
a division of Elan Corporation, plc
Telephone: + 000 0 000 0000
Telefax: + 353 1 709 4124
or to such other address(es) and telefax numbers as may from time to
time be notified by either Party to the other hereunder.
13.2 Any notice sent by mail shall be deemed to have been delivered within
seven 7 working days after dispatch and any notice sent by telex or
telefax shall be deemed to have been delivered within twenty 24 hours
of the time of the dispatch. Notice of change of address shall be
effective upon receipt.
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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 the Parties may agree, and the validity, legality and
enforceability of the remaining provisions of this Agreement
shall not be impaired or affected in any way.
14.3 Further Assurances:
At the request of any of the Parties, the other Party or Parties shall
(and shall use reasonable efforts to procure that any other necessary
parties shall) execute and perform all such documents, acts and things
as may reasonably be required subsequent to the signing of this
Agreement for assuring to or vesting in the requesting Party the full
benefit of the terms hereof.
14.4 Successors:
This Agreement shall be binding upon and enure to the benefit of the
Parties hereto, their successors and permitted assigns.
14.5 No Effect on Other Agreements/Conflict:
No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement
between the Parties unless specifically referred to, and solely to the
extent provided herein.
In the event of a conflict between the provisions of this Agreement and
the provisions of the JDOA, the terms of the JDOA shall prevail unless
this Agreement specifically provides otherwise.
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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 Sheffield and Newco as partners, or Sheffield as an
employee of Newco, or Newco as an employee of Sheffield.
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.
25
SCHEDULE 1
TECHNOLOGICAL COMPETITIORS OF SHEFFIELD
[REDACTED]
SCHEDULE 2
List of Steroids for Clause 4.1
[REDACTED]
IN WITNESS WHEREOF the Parties hereto have executed this Agreement.
/s/
SIGNED BY
for and on behalf of
SHEFFIELD PHARMACEUTICALS, INC.
/s/
SIGNED BY
For and on behalf of
SHEFFIELD NEWCO LIMITED
/s/
AGREED TO AND ACCEPTED BY
ELAN PHARMA INTERNATIONAL LIMITED
