EXIBIT 2
CONFIDENTIAL TREATMENT REQUESTED
Dated November 9, 0000
XXXX XXXXXXXXXXX, plc
AND
LIGAND PHARMACEUTICALS INCORPORATED
DEVELOPMENT, LICENCE AND SUPPLY AGREEMENT
CONTENTS
Page
CLAUSE 1 - PRELIMINARY.........................................................3
CLAUSE 2 - THE LICENCE.........................................................8
CLAUSE 3 - INTELLECTUAL PROPERTY..............................................10
CLAUSE 4 - LIGAND COMPETING PRODUCTS..........................................15
CLAUSE 5 - DEVELOPMENT OF THE PRODUCT.........................................15
CLAUSE 6 - PROJECT TEAM AND PROJECT MANAGEMENT................................17
CLAUSE 7 - REGISTRATION OF THE PRODUCT........................................18
CLAUSE 8 - MARKETING AND PROMOTION OF THE PRODUCT.............................19
CLAUSE 9 - SUPPLY OF THE PRODUCT.............................................20
CLAUSE 10 - FINANCIAL PROVISIONS..............................................25
CLAUSE 11 - PAYMENTS, REPORTS AND AUDITS......................................27
CLAUSE 12 - DURATION AND TERMINATION..........................................29
CLAUSE 13 - CONSEQUENCES OF TERMINATION.......................................30
CLAUSE 14 - WARRANTY AND INDEMNITY............................................31
CLAUSE 15 - ADVERSE EVENTS AND PRODUCT RECALL.................................34
CLAUSE 16 - MISCELLANEOUS PROVISIONS..........................................35
SCHEDULE 1 ELAN PATENT RIGHTS
SCHEDULE 2 SPECIFICATIONS
SCHEDULE 3 ELAN CLINICAL TRIALS
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THIS AGREEMENT is made on November 9, 1998.
BETWEEN:
(1) ELAN CORPORATION, PLC, a company incorporated in Ireland having its
registered office at Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxx 0, Xxxxxxx
("ELAN") and
(2) LIGAND PHARMACEUTICALS INCORPORATED, a company organized under the laws of
Delaware, with offices at 00000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, Xxxxxx Xxxxxx of America ("LIGAND").
RECITALS:
A. ELAN is beneficially entitled to the use of various patents, including the
ELAN PATENTS, which have been granted or are pending under the
International Convention in relation to the development and production of
drug specific dosage forms for pharmaceutical products and processes.
B. ELAN is knowledgeable in the development of drug specific dosage forms and
has developed a unique range of delivery systems designed to provide newer
and better formulations of medicaments.
C. LIGAND is desirous of entering into a licensing agreement with ELAN by
virtue of which it will be free to have manufactured in accordance with the
terms of this Agreement and to market the PRODUCT in the TERRITORY without
infringing any of the ELAN INTELLECTUAL PROPERTY rights held by ELAN.
D. ELAN is prepared to licence the ELAN PATENTS in the TERRITORY to LIGAND and
ELAN is prepared to supply the PRODUCT to LIGAND.
E. ELAN and LIGAND are desirous of entering into an agreement to give effect
to the arrangements described at Recitals C and D.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1 - PRELIMINARY
Definitions: In this Agreement unless the context otherwise requires:
1.1.1 AFFILIATE shall mean any corporation or entity controlling or
controlled or under common control with ELAN or LIGAND, as the case
may be. For the purposes of this Agreement, "control" shall mean the
direct or indirect ownership of more than 50% of the issued voting
shares or other voting rights of the subject entity to elect
directors, or if not meeting the preceding criteria, any entity owned
or controlled by or owning or controlling at the maximum control or
ownership right permitted in the country where such entity exists.
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1.1.2 cGCP, cGMP, cGLP shall mean respectively current Good Clinical
Practice, as defined in the Good Clinical Practice Guideline as
published in 62 Federal Register 90 (May 9, 1997), and current Good
Manufacturing Practice and current Good Laboratory Practice as defined
in the FFDCA.
1.1.3 CFR shall mean the US Code of Federal Regulations 21, as amended from
time to time.
1.1.4 CLOSING PRICE shall mean, with respect to the Common Stock of LIGAND
on any trading day, the last reported per share sales price on
[**********] as reported by the NASDAQ National Market or, if the
Common Stock is listed on a United States securities exchange, the
closing per share sales price, regular way, on [**********] on the
principal United States securities exchange on which the Common Stock
is traded, or if no such sale takes place on [**********], the average
of the closing bid and asked prices on [**********].
1.1.5 CMC SECTION shall mean the chemistry, manufacturing, and controls
section of the NDA in the USA as defined in CFR Section 314.50 (1), as
may be amended from time to time, and/or its equivalent in foreign
NDAs.
1.1.6 COMPOUND shall mean the active drug substance morphine and its salts.
1.1.7 CONVERTIBLE NOTE shall mean the Zero Coupon Convertible Senior Note
due 2008 of November 9 executed by Ligand Pharmaceuticals Incorporated
and issued pursuant to the PURCHASE AGREEMENT.
1.1.8 DMF shall mean Drug Master File, as defined in the CFR Section
314.420 and/or its equivalent in the other countries of the TERRITORY.
1.1.9 EFFECTIVE DATE shall mean September 30, 1998.
1.1.10 ELAN shall mean Elan Corporation, plc and any of its AFFILIATES.
1.1.11 ELAN IMPROVEMENTS shall mean any improvement or enhancement to the
ELAN PATENTS that is created, conceived or invented during the INITIAL
PERIOD which ELAN is free to license and which are not subject to
contractual obligations with any third party,.
1.1.12 ELAN INTELLECTUAL PROPERTY shall mean the ELAN PATENTS and/or the
ELAN KNOW-HOW and shall include the improvements made by LIGAND as
referred to in Clause 3.1.3 to the extent such improvements relate to
the PRODUCT.
1.1.13 ELAN KNOW-HOW shall mean all knowledge, information, trade secrets,
data and expertise relating to the PRODUCT and which is not generally
known to the public, owned or licensed by ELAN as of the EFFECTIVE
DATE, or developed by ELAN whether before or during the INITIAL PERIOD
relating to the
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PRODUCT, and which ELAN is free to license and which is not subject to
contractual obligations with any third party, whether or not covered
by any patent, copyright, design patent, trademark, trade secret or
other industrial or any intellectual property rights.
In the event that ELAN acquires or merges with a third party entity,
ELAN KNOW-HOW shall not include any know-how to the extent that such
know-how relates to a product containing the COMPOUND which has been
approved for marketing or is in development by the said third party
entity. For the avoidance of doubt, the occurrence of any such
acquisition or merger shall not affect the licence of the ELAN
KNOW-HOW granted to LIGAND hereunder.
For the avoidance of doubt, ELAN KNOW-HOW shall exclude any know-how
owned, licenced or controlled by [**********] (collectively, the
"EXCLUDED KNOW-HOW").
For the avoidance of doubt, ELAN KNOW-HOW shall include any know-how
relating to the PRODUCT owned, licenced or controlled by [**********],
if any.
1.1.14 ELAN PATENTS shall mean all patents and patent applications listed
in Schedule 1. ELAN PATENTS shall also include all continuations,
continuations-in-part, divisionals, ELAN IMPROVEMENTS, and any patents
issuing thereon, and re-issues or re-examinations of such patents and
extensions of any patents licenced hereunder. Extensions of patents
shall include extensions under the U.S. Patent Term Restoration Act.
For the avoidance of doubt, ELAN PATENTS shall exclude any patents
owned, licenced or controlled by [**********] (the "EXCLUDED
PATENTS").
For the avoidance of doubt, ELAN PATENTS shall include any patents
relating to the PRODUCT owned, licenced or controlled by [**********],
if any.
In the event that ELAN acquires or merges with a third party entity,
ELAN PATENTS shall not include any patent rights of such third party
entity to the extent that such patent rights relate to a product
containing the COMPOUND which has been approved for marketing or is in
development by the said third party entity. For the avoidance of
doubt, the occurrence of any such acquisition or merger shall not
affect the licence of the ELAN PATENTS granted to LIGAND hereunder.
1.1.15 ELAN TRADEMARK shall mean the trademark, Morphelan(TM).
1.1.16 ENFORCEMENT PROCEEDINGS shall mean the proceedings referred to in
Clause 3.3.2.
1.1.17 EU shall mean the Member States of the European Union, as same may
change from time to time in terms of Member States.
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1.1.18 EX WORKS shall have the meaning as such term is defined in the ICC
Incoterms, 1990, International Rules for the Interpretation of Trade
Terms, ICC Publication No. 460.
1.1.19 FDA shall mean the United States Food and Drug Administration or any
other successor agency whose approval is necessary to market the
PRODUCT in the United States of America and/or its foreign equivalents
in any other country of the TERRITORY.
1.1.20 FFDCA shall mean the US Federal Food, Drug and Cosmetic Act, and the
regulations promulgated thereunder, as may be amended from time to
time.
1.1.21 FINANCE AGREEMENTS means the PURCHASE AGREEMENT and CONVERTIBLE NOTE
entered into between Elan International Services, Ltd., Elan
Corporation, plc and Ligand Pharmaceuticals Incorporated.
1.1.22 FULLY ALLOCATED COST shall mean, with respect to a party, the fully
allocated cost which is the sum total of all production related costs
for the PRODUCT including direct labour, direct materials and
supplies, variable labour, reasonable overhead and allocable
administration, quality control, quality assurance and other costs;
such costs to be calculated in accordance with a [**********].
1.1.23 INITIAL PERIOD shall mean the initial period of this Agreement, as
more fully described in Clause 12.1.
1.1.24 IN MARKET shall mean the sale of the PRODUCT by LIGAND or by a
distributor of LIGAND to an unaffiliated third party including but not
limited to a wholesaler, chain store, managed care organisation,
hospital, pharmacy or governmental agency.
1.1.25 LAUNCH STOCKS shall mean the quantities of stocks of the PRODUCT
required by LIGAND in relation to the launch of the PRODUCT following
NDA APPROVAL in each country of the TERRITORY, as more fully described
in Clause 9.6.
1.1.26 LIGAND shall mean Ligand Pharmaceuticals Incorporated and any of its
AFFILIATES.
1.1.27 NDA shall mean the New Drug Application or any other application for
regulatory approval which ELAN intends to file and any supplements or
amendments thereto which LIGAND may file, for the PRODUCT in the
United States of America and its foreign equivalent in Canada.
1.1.28 NDA APPROVAL shall mean the final approval to market the PRODUCT in
the United States of America and/or its foreign equivalent in Canada
and in the case
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of Clause 2.2. its foreign equivalent in the applicable Member States
of the EU (excluding Ireland and the United Kingdom).
1.1.29 NSP shall, subject to the provisions of Clause 10.3.7, mean in the
case of PRODUCT sold by LIGAND or by a distributor of LIGAND, that sum
determined by [**********] by LIGAND in accordance with LIGAND's
standard accounting principles, expenses incurred by LIGAND under
Clause 3.2.2 if, as a result thereof, a patent is granted to ELAN and
a maximum deduction of [**********] to cover the following:-
(a) customs duties or other taxes (excluding income or corporation
tax), directly related to the sale of the PRODUCT which are paid
by LIGAND;
(b) a discount from the gross sales proceeds to cover such normal
costs as are incurred by LIGAND in respect of transport, shipping
insurance, returns, rebates, allowances for bad debt actually
taken, and discounts directly related to the sale of the PRODUCT.
1.1.30 PRODUCT shall mean the [**********] of the once-daily oral dosage
microparticulate formulation being developed and manufactured by ELAN
containing the COMPOUND as its primary active ingredient.
1.1.31 PROJECT TEAM shall mean the group to be established pursuant to
Clause 6.
1.1.32 PURCHASE AGREEMENT shall mean the Securities Purchase Agreement,
dated as of November 6, 1998 by and among Elan Corporation plc, Elan
International Services, Ltd. and Ligand Pharmaceuticals Incorporated.
1.1.33 SPECIFICATIONS shall mean the specifications for the PRODUCT set by
the parties for the NDA, as well as such other specifications such as
additional specifications for the PRODUCT as may be agreed by the
parties in writing.
1.1.34 TECHNOLOGICAL COMPETITOR shall mean [**********].
1.1.35 TERRITORY shall mean the United States of America and its
territories and Canada.
1.1.36 $ shall mean United States Dollars.
1.1.37 US or USA shall mean the United States of America.
Interpretation: In this Agreement:
1.2.1 the singular includes the plural and vice versa, the masculine
includes the feminine and vice versa and references to natural persons
include corporate bodies, partnerships and vice versa.
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1.2.2 any reference to a Clause or Schedule, unless otherwise specifically
provided, shall be respectively 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.
CLAUSE 2 - THE LICENCE
2.1 Licence to LIGAND:
2.1.1 Subject to the terms of this Agreement, ELAN hereby grants to LIGAND
and LIGAND hereby accepts for the INITIAL PERIOD an exclusive licence
(even as to ELAN) of the ELAN INTELLECTUAL PROPERTY to import, use,
offer for sale and sell the PRODUCT in the TERRITORY; provided that
LIGAND shall grant back to ELAN a non exclusive royalty-free license
to make, use and co-promote the PRODUCT in the TERRITORY so as to
enable ELAN to perform its obligations pursuant to this Agreement, to
enable ELAN to exercise its rights as set forth in Clause 2.2.1, and
for the avoidance of doubt to conduct further research, development
and manufacturing within the TERRITORY with regard to ELAN's
commercialisation of the PRODUCT outside the TERRITORY.
2.1.2 [**********] shall [**********]; provided, however, LIGAND can
appoint distributors or wholesalers for the PRODUCT in any country of
the TERRITORY to perform those activities which are within customary
boundaries of pharmaceutical product distribution for the sole purpose
of delivering the PRODUCT to retailers for final commercial sale to
patients without such prior consent.
2.1.3 ELAN covenants that neither ELAN nor any of its AFFILIATES will
prosecute any suit against LIGAND regarding any EXCLUDED KNOW-HOW and
EXCLUDED PATENTS by reason of LIGAND exercising its rights under this
Agreement. ELAN further covenants that after the EFFECTIVE DATE it
will not incorporate any know-how or patented technology of any third
party into the PRODUCT without the ability to licence such know-how or
patented technology without LIGAND's written permission.
2.2 Co-Promotion of the PRODUCT:
ELAN
2.2.1 For the period from the EFFECTIVE DATE up until [**********] in each
country of the TERRITORY, ELAN shall have [**********] to co-promote
the PRODUCT in such country of the TERRITORY for [**********] on other
terms to be agreed in good faith between the parties and having regard
to standard industry practices in such country of the TERRITORY.
LIGAND
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2.2.2 For the period from the EFFECTIVE DATE up until [**********] in each
Member State of the EU (excluding Ireland and the United Kingdom),
whether on an individual approval basis or through the European
decentralised procedure, LIGAND shall have a [**********] to
co-promote the PRODUCT in such Member State of the EU for [**********]
on other terms to be agreed in good faith between the parties
(including supply provisions) and having regard to standard industry
practices in such Member State of the EU; provided that LIGAND has an
established sales force in [**********] in such Member State.
2.3 Exercise of Co-Promotion Option
2.3.1 To exercise the option granted to ELAN in Clause 2.2.1, ELAN shall
deliver written notice of exercise to LIGAND prior to the end of such
option period described in Clause 2.2.1. Thereafter, the parties shall
diligently attempt to reach an agreement of the terms and conditions
governing the co-promotion of the PRODUCT for [**********] in the
TERRITORY. If the parties are unable to reach in good faith such an
agreement within [*****] of the receipt of such notice, either party
may seek arbitration pursuant to Clause 2.3.3.
2.3.2 To exercise the option granted to LIGAND in Clause 2.2.2, LIGAND
shall deliver written notice of exercise to ELAN prior to the end of
such option period described in Clause 2.2.2, specifying which Member
State or Member States in the EU LIGAND intends to co-promote the
PRODUCT. Thereafter, the parties shall diligently attempt to reach an
agreement of the terms and conditions governing the co-promotion of
the PRODUCT for [**********] in such Member State or Member States, as
the case may be. If the parties are unable to reach in good faith such
an agreement within [*****] of the receipt of such notice, either
party may seek arbitration pursuant to Clause 2.3.3.
2.3.3 In the event that the parties are unable to agree upon the terms for
co-promotion of the PRODUCT by either party as set out at Clauses
2.2.1. and 2.2.2. above, the parties shall appoint an arbitrator who
is technically knowledgeable in the pharmaceutical industry to choose
either ELAN's last proposed terms or LIGAND's last proposed terms for
the co-promotion on the basis of which terms he determines to be
closer to standard industry practice in the relevant country or Member
State, as the case may be. LIGAND and ELAN each shall be responsible
for [**********] of the total costs of arbitration incurred in
connection with this Clause 2.
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CLAUSE 3 - INTELLECTUAL PROPERTY
3.1 Ownership of ELAN INTELLECTUAL PROPERTY:
3.1.1 ELAN shall remain the sole owner of the ELAN INTELLECTUAL PROPERTY.
3.1.2 ELAN shall be entitled to use the ELAN INTELLECTUAL PROPERTY, and all
technical, clinical and other data, generated by ELAN and/or by LIGAND
pursuant to this Agreement in connection with:
(a) ELAN's commercial arrangements otherwise than in relation to the
PRODUCT; and
(b) ELAN's promotion of the PRODUCT for [**********] only in the
event that ELAN exercises the option set out in Clause 2.2.1.;
and
(c) the commercialization of the PRODUCT in any countries outside of
the TERRITORY or those which cease to be part of the TERRITORY;
and in the TERRITORY following termination of this Agreement; and
3.1.3 In consideration for the licences granted by ELAN pursuant to this
Agreement, any improvements relating to the ELAN INTELLECTUAL
PROPERTY, including improvements relating to the formulation, process
or manufacturing of the PRODUCT, made solely by LIGAND, its officers,
servants, agents, and pursuant to the conduct of clinical trials
conducted by or on behalf of LIGAND, its officers, servants, agents,
during the INITIAL PERIOD shall be assigned by LIGAND to ELAN and
shall form part of the ELAN INTELLECTUAL PROPERTY licenced to LIGAND
pursuant to Clause 2.1.
3.2 Filing and maintenance of patents:
3.2.1 ELAN will be entitled but not obliged, at its own expense, to file
and prosecute ELAN PATENTS; to determine the patent filing strategy in
relation to same at its sole discretion and upon grant of any letters
patent of the ELAN PATENTS, to maintain such letters patent in force.
3.2.2 Should ELAN elect not to file or not to continue the maintenance or
prosecution of any case under the ELAN PATENTS in the TERRITORY, it
shall at LIGAND's request and at LIGAND's expense and within the rules
and regulations of the appropriate patent issuing office attempt to
secure a proprietary position for LIGAND provided, however, that ELAN
shall not be obliged to perform such acts in any country of the
TERRITORY at LIGAND's request where to do so would violate any law
(statutory or judge-made) or regulations in such country. Any such
patent applications shall be made in the name of ELAN and ownership of
such patent applications or patents, if granted, shall remain with
ELAN and will become part of the ELAN PATENTS for the purpose of this
Agreement.
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3.3 Enforcement
3.3.1 LIGAND and ELAN shall promptly inform the other in writing of any
alleged infringement or unauthorised use of which it shall become
aware by a third party of any intellectual property within the ELAN
INTELLECTUAL PROPERTY and provide such other with any available
evidence of infringement or unauthorized use.
3.3.2 ELAN, at its option, shall be entitled to institute enforcement
proceedings ("ENFORCEMENT PROCEEDINGS") in respect of any infringement
or unauthorised use of the ELAN INTELLECTUAL PROPERTY. LIGAND agrees
to provide all reasonable co-operation and assistance to ELAN in
relation to any such ENFORCEMENT PROCEEDINGS (and agrees to be named
as a party if legally required) at ELAN's expense. Any reasonable fees
and costs borne by LIGAND shall be reimbursed by ELAN. ELAN shall be
entitled to deduct its reasonable expenses in relation to such
ENFORCEMENT PROCEEDINGS (including reasonable attorney's fees and
expenses) from any recovery [**********]. ELAN and LIGAND each
recognise that it is in both parties interest to enforce ELAN
INTELLECTUAL PROPERTY to the full amount provided by law, and neither
party shall, except as required by law, knowingly make any admission
to jeopardise, compromise or otherwise limit the scope of such ELAN
INTELLECTUAL PROPERTY.
3.3.3 In the event that ELAN does not want to institute, or to continue
already instituted, ENFORCEMENT PROCEEDINGS, then LIGAND, using
attorneys of LIGAND's choosing reasonably acceptable to ELAN, can
enforce such rights at its own expense. In such event, LIGAND must
keep ELAN fully and timely informed of the action so as to enable ELAN
to provide input which LIGAND shall reasonably consider. LIGAND
[**********] relating to the invalidity, unenforceability or
non-infringement of the ELAN INTELLECTUAL PROPERTY without ELAN's
prior written consent. ELAN agrees to provide all reasonable
co-operation and assistance to LIGAND in relation to any such
ENFORCEMENT PROCEEDINGS at LIGAND's expense and agrees to be named as
a party in any ENFORCEMENT PROCEEDINGS. Any reasonable fees and costs
borne by ELAN shall be reimbursed by LIGAND. In the event that LIGAND
enforces ELAN INTELLECTUAL PROPERTY in accordance with this paragraph,
LIGAND shall be entitled to deduct its reasonable expenses in relation
to such ENFORCEMENT PROCEEDINGS (including reasonable attorney's fees
and expenses and reimbursements to ELAN) from any recovery
[**********].
3.4 Defence
3.4.1 In the event that a claim or proceeding is brought against LIGAND or
ELAN by a third party alleging that the sale, manufacture, offer for
sale or use of the PRODUCT infringes the patent rights of such a third
party in the TERRITORY, LIGAND shall promptly advise ELAN of such
claim or proceeding and the party
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against whom the claim or proceeding is brought and the other party
shall meet to discuss in what manner such claim or proceeding should
be defended. Such discussion shall include, among other things,
responsibility of defense, financial undertaking, cessation of the
sale of the PRODUCT and modification of the PRODUCT to avoid
unauthorised use.
3.4.2 In the circumstance where (i) LIGAND or ELAN, or both LIGAND and
ELAN, are sued for infringement of a patent and ELAN is in breach of
its representation and warranty under Clause 14.13 and (ii) no
agreement is made by ELAN and LIGAND under Clause 3.4.1 concerning a
defense, then LIGAND shall defend such action at its expense. ELAN
shall reasonably cooperate with LIGAND in such defense and shall bear
its own expenses (including reasonable attorney fees) to the extent it
participates in the action. LIGAND shall be responsible for
[**********], except that neither party shall be liable for
[**********] against the other for [**********] (or, in the U.S., as
otherwise provided in [**********]) or for any [**********] (or, in
the U.S., as otherwise provided in [**********]) to the third party
against the other arising from [**********]. LIGAND must keep ELAN
fully and timely informed of the action, including any offers of
settlement made to or by LIGAND, so as to enable ELAN to provide input
which LIGAND shall reasonably consider. LIGAND shall have the right to
settle any claim against LIGAND based on such patent without ELAN's
approval [**********]. LIGAND shall have [**********]. If ELAN
[**********] of a settlement, then ELAN [**********] of such action
[**********] as and from such date, in which case LIGAND [**********]
of any award of [**********] (including the legal costs incurred by
LIGAND up to the date of ELAN [**********] of the action) and shall
have no obligation to contribute to [**********] (or, in the U.S., as
otherwise provided in [**********]) or for [**********] (or, in the
U.S., as otherwise provided in [**********]) arising from
[**********]. In the case in which ELAN [**********] of an action,
LIGAND's contribution to an award of [**********] ELAN shall be
[********************] ELAN and (ii) [**********] LIGAND, [**********]
by [**********] LIGAND; provided however, that in the event that such
sum paid by LIGAND to [**********] LIGAND [**********] shall be
[**********] LIGAND to ELAN. In no event, shall ELAN be obliged to
make any payment to LIGAND arising from any award [**********] ELAN
where ELAN has [**********] of an action pursuant to this Clause
3.4.2.
3.4.3. In the circumstance where (i) LIGAND or ELAN, or both LIGAND and
ELAN, are sued for infringement of a patent and [**********] of its
[**********] and (ii) no agreement is made by ELAN and LIGAND under
Clause 3.4.1 concerning a defense, then LIGAND shall defend such
action at its expense including the reasonable expenses of ELAN (not
including ELAN's attorney fees) incurred in cooperating with LIGAND in
such defense. LIGAND shall be obligated to pay [**********] to the
third party except that LIGAND shall not be obligated to pay
[**********] (or, in the U.S., as otherwise provided in [**********])
or for [**********] (or, in the U.S., as otherwise provided in
[**********]) to the
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third party against ELAN arising from [**********]. LIGAND must keep
ELAN fully and timely informed of the action, including offers of
settlement made to or by LIGAND, so as to enable ELAN to provide input
which LIGAND shall reasonably consider. LIGAND shall have the right to
settle any claim against LIGAND based on such patent without ELAN's
approval. LIGAND shall have no right to settle a claim against ELAN
without ELAN's written approval. If ELAN [**********] of a settlement,
then ELAN shall [**********] of such action [**********] as and from
such date, in which case [**********] to (i) [**********] by LIGAND up
to the date of ELAN [**********] of the action, and (ii) [**********]
and LIGAND shall have no obligation to contribute to any [**********]
(or, in the U.S., as otherwise provided in [**********]) or for
[**********] (or, in the U.S., as otherwise provided in [**********])
arising from [**********] by ELAN.
3.4.4 In the situation where (i) LIGAND settles an action against LIGAND
and ceases distribution of the PRODUCT and (ii) ELAN [**********] of
any claim against ELAN under either Clause 3.4.2 or Clause 3.4.3 and,
if applicable, ELAN is selling the PRODUCT on its own behalf or
through a distributor in accordance with Clause 2.2.1, then LIGAND
shall have [**********] to an award of damages against ELAN for the
manufacture, use or sale of the PRODUCT which is referable to the
period after LIGAND and/or its distributor ceases distribution of the
PRODUCT.
3.4.5 ELAN shall have no liability to LIGAND whatsoever or howsoever
arising for any losses incurred by LIGAND as a result of having to
cease selling the PRODUCT or having to defer the launch of selling the
PRODUCT, whether as a result of a court order or otherwise
3.5 Trademarks
3.5.1 LIGAND shall be entitled to market the PRODUCT in the TERRITORY under
the ELAN TRADEMARK.
3.5.2 ELAN hereby grants to LIGAND a non-exclusive royalty free license in
the TERRITORY for the INITIAL PERIOD (and thereafter for as long as
LIGAND continues to import, make or have made, use, offer for sale or
sell the PRODUCT in the TERRITORY in accordance with the provisions of
Clause 12.2) to use the ELAN TRADEMARK solely for the purposes of
exercising its rights and performing its obligations under this
Agreement and the following provisions shall apply as regards the use
of the ELAN TRADEMARK by LIGAND:
(1) LIGAND shall ensure that each reference to and use of the ELAN
TRADEMARK by LIGAND is in a manner from time to time 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.
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(2) LIGAND shall not use the ELAN TRADEMARK in any way which might
materially prejudice its distinctiveness or validity or the
goodwill of ELAN therein.
(3) LIGAND shall not use in relation to the PRODUCT any trademarks
other than the ELAN TRADEMARK without obtaining the prior consent
in writing of ELAN, which consent may not be unreasonably
withheld, and except that LIGAND shall have the right to employ
in connection with the PRODUCT, the trademark "LIGAND" and the
tradename "Ligand Pharmaceuticals Incorporated" and such other
trademarks and tradenames as required by law.
(4) LIGAND 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) LIGAND shall promptly notify ELAN in writing of any alleged
infringement of which it becomes aware by a third party of the
ELAN TRADEMARK and provide ELAN with any applicable evidence of
infringement.
3.5.3 ELAN shall, at its expense, file and prosecute applications to
register and maintain registrations of the TRADEMARK in the TERRITORY.
3.5.4 ELAN will be entitled to conduct all enforcement proceedings relating
to the ELAN TRADEMARK and shall at its sole discretion decide what
action, if any, to take in respect of any infringement or alleged
infringement of the ELAN TRADEMARK or passing-off or any other claim
or counter-claim brought or threatened in respect of the use or
registration of the ELAN TRADEMARK. Any such proceedings shall be
conducted at ELAN's expense and for its own benefit.
In the event that ELAN fails to take action in respect of any
infringement or alleged infringement of the ELAN TRADEMARK or
passing-off or any other claim or counter-claim brought or threatened
in respect of the use or registration of the ELAN TRADEMARK, LIGAND
may require ELAN defend such action, at LIGAND's expense, when there
is evidence of actual mistake, confusion, or deception. LIGAND may
request ELAN to take action in respect of acts it deems likely to
cause mistake, confusion or deception at LIGAND's expense. If ELAN
denies LIGAND's request, LIGAND can request an independent attorney
skilled in trademark law to render an opinion, at LIGAND's expense,
with respect to whether such acts are likely to cause mistake,
confusion or deception and if such attorney opines that such acts
constitute an infringement then ELAN shall take such action at
LIGAND's expense; provided however that such independent attorney
shall not be retained by either party in any such subsequent action.
Any amount remaining after the deduction of any reasonable expenses
(including reasonable attorney fees and expenses) shall be distributed
[**********] among
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the parties in which LIGAND shall receive [**********] and ELAN shall
receive [**********].
3.5.5 Except as provided in this Clause 3.5, LIGAND will have no ownership
rights in respect of the ELAN TRADEMARK or any trade names or
trademarks used by ELAN in relation to the PRODUCT or of the goodwill
associated therewith, and LIGAND 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 ELAN.
LIGAND shall not, at any time during or after the INITIAL PERIOD,
challenge or assist others to challenge the ELAN TRADEMARK, or the
registration thereof or attempt to register any trademarks, marks, or
trade names confusingly similar to the ELAN TRADEMARK.
CLAUSE 4 - LIGAND COMPETING PRODUCTS
4.1 LIGAND undertakes [**********] in the TERRITORY during the INITIAL PERIOD
and for [**********] thereafter.
CLAUSE 5 - DEVELOPMENT OF THE PRODUCT
5.1 ELAN shall diligently apply its technical skill and expertise, including
the ELAN PATENTS and ELAN KNOW-HOW, in the development of the PRODUCT on
behalf of LIGAND. However, it is acknowledged that pharmaceutical research
and development incorporates inherent risk in terms of outcomes and, save
for acts of negligence or omission by ELAN, ELAN shall have no liability to
LIGAND as a result of any failure or delay of the PRODUCT to obtain the NDA
APPROVAL in one or more of the other countries of the TERRITORY.
5.2 ELAN and LIGAND hereby confirm that each shall undertake its respective
part of the development of the PRODUCT as a collaborative effort and that
the provisions of this Agreement requires that each party diligently
carries out those tasks assigned to it. Each party shall co-operate with
the other in good faith particularly with respect to unknown problems or
contingencies and shall perform its obligations in good faith and in a
commercially reasonable, diligent and workmanlike manner.
5.3 In the event that LIGAND wishes to have more than [**********] developed
pursuant to this Agreement, the parties shall negotiate in good faith as to
the additional costs to be paid to ELAN for such development. The parties
agree that ELAN's charges to LIGAND for any such work shall be as set out
in Clause 10.2 of the Agreement.
5.4 ELAN shall be responsible, [**********], for the completion of the clinical
studies for the PRODUCT listed in Schedule 3 which are currently in
progress. LIGAND shall be responsible for the cost of all development work
and/or clinical trials on the PRODUCT in relation to the NDA APPROVAL and
commercialisation of the PRODUCT in the TERRITORY in addition to such
ongoing clinical trials but shall have no obligation to
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perform such development, work and/or clinical trials. [**********]. In the
event that LIGAND decides not to incur any [**********] or [**********] on
the PRODUCT , the provisions of Clause 7.4 shall be applicable. In relation
to the conduct of all clinical studies other than those listed in Schedule
3, ELAN shall be entitled to charge LIGAND for all research, development
and manufacturing work conducted by ELAN, including the oversight of the
conduct of such clinical studies by one or more third parties, on the basis
set forth in Clause 10.2.
5.5 For the [**********] following submission of the NDA in the USA, LIGAND
shall commit to undertake additional clinical expenditure, including
[**********] (including FULLY ALLOCATED COST of LIGAND and the sums paid by
LIGAND to ELAN as referred to in Clause 5.4 above). The objective of the
programme so conducted shall be to [**********]. LIGAND agrees to carry out
and complete the clinical efficacy programme to a standard and timeframe
that LIGAND would otherwise find acceptable for one of its major branded
products. LIGAND shall keep ELAN informed as to the [**********]. LIGAND
undertakes that it shall carry out all [**********] to prevailing cGCP and
cGLP and most specifically in accordance with FDA standards and guidelines.
In the event that LIGAND does not expend [**********] during the
[**********] following submission of the NDA in the USA, then, unless
otherwise agreed in writing between the parties, LIGAND shall pay any
shortfall between the [**********] and the actual sum expended by LIGAND to
ELAN, provided however, in the event the FDA notifies ELAN of its refusal
to grant the NDA submitted by ELAN and LIGAND, after discussion with ELAN,
determines that it is not commercially viable for LIGAND to incur any
additional development expenses as provided in Clause 5.4, LIGAND shall
have no further obligation to expend or remit sums under this Clause 5.5.
In such event, ELAN shall have the right to terminate this Agreement.
Thereafter, ELAN shall be entitled to research, develop and commercialise
the PRODUCT in the TERRITORY. In the event of such termination, all monies
paid to ELAN by LIGAND pursuant to this Agreement shall not be recoverable
by LIGAND.
5.6 During the development of the PRODUCT, the parties shall review and agree
on interim specifications for the PRODUCT and shall also agree on the final
SPECIFICATIONS following the filing of the NDA in the United States of
America, which shall at that time be attached to this Agreement as Schedule
2. The SPECIFICATIONS may thereafter be amended as agreed by the parties or
as may otherwise be requested or mandated by the regulatory authorities in
the TERRITORY, most specifically the FDA.
5.7 For the avoidance of doubt, the parties hereby confirm that the primary
objective of the development work on the PRODUCT is to generate data
required for inclusion in the NDA and secure NDA APPROVAL for the PRODUCT
in the United States of America. As of the date of this Agreement, it is
the parties' expectation that the body of data so generated in the
development of the PRODUCT will also be used to support such applications
for regulatory approval that LIGAND shall make in the other countries of
the TERRITORY.
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5.8 In the event however that such expectation proves unfounded or incorrect
and further data is required to obtain such other NDA APPROVAL as are
pursued by LIGAND in the other countries of the TERRITORY, LIGAND shall
determine the viability of proceeding further with the regulatory
application and generation of the further data requirements. In the event
that LIGAND elects to continue, the parties shall agree on the programme of
work to be undertaken to generate such additional data and the apportioning
of tasks and costs therefor. LIGAND shall reimburse ELAN for all such
additional work which it requires ELAN to carry out in accordance with
ELAN's charges as set out in Clause 10.2 of the Agreement.
CLAUSE 6 - PROJECT TEAM AND PROJECT MANAGEMENT
6.1 It is recognised by the parties that a significant commitment of resources
shall be required from each party to accomplish successful NDA APPROVAL in
the TERRITORY and launch of the PRODUCT, particularly in the co-ordination
of logistics, finalisation of various specifications, preparation and
agreement of clinical study designs and protocols (other than in relation
to the clinical trials listed in Schedule 3), methodologies transfer,
supply and packaging configurations, shipping and handling procedures etc.
and for this purpose, the parties will establish a PROJECT TEAM.
6.2 The PROJECT TEAM shall consist of a chief representative from each party
together with such additional business and development personnel from each
party who are appropriately skilled and knowledgeable in relation to the
development of the PRODUCT and who are deemed necessary to accomplish such
work. The PROJECT TEAM shall have an equal number of members from each of
the parties.
6.3 Unless otherwise agreed by the parties, the PROJECT TEAM shall meet at
least once each calendar quarter, such meetings to continue until the time
of launch or such later time as may be agreed. The PROJECT TEAM shall meet
alternately at the Georgia offices of ELAN and the San Diego offices of
LIGAND or as otherwise agreed by the parties. Meetings shall be co-chaired
by the chief representatives of the parties. At and between meetings of the
PROJECT TEAM, each party shall keep the other fully and regularly informed
as to its progress with its respective obligations.
6.4 In the event of a dispute amongst the PROJECT TEAM which cannot be resolved
by consensus, such dispute shall be resolved by a management committee
which shall have an equal number of members from each of the parties. In
the event that the dispute cannot be resolved by the management committee,
the dispute shall be referred to the Vice President, Marketing of LIGAND
and the Vice President, Commercial Development, Elan Pharmaceutical
Technologies, a division of ELAN, who shall discuss the matter and attempt
to reach an amicable solution. In the event that the foregoing officers
cannot resolve the dispute amicably, the said officers shall refer the
dispute to the Chairmen of LIGAND and ELAN who shall discuss the matter and
attempt to reach an amicable solution. The provisions of this Clause 6.4.
shall be without prejudice to the parties' other rights and remedies.
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CLAUSE 7 - REGISTRATION OF THE PRODUCT
7.1 ELAN shall be responsible for the compilation, preparation, submission and
prosecution to approval of the NDA for the PRODUCT in each country of the
TERRITORY. ELAN will use its reasonable efforts in prosecuting the NDA to
approval. ELAN shall thereafter maintain at its own cost the NDA and the
NDA APPROVAL in each country of the TERRITORY for the INITIAL PERIOD. The
NDAs shall remain the property of ELAN, provided that ELAN shall allow
LIGAND access thereto to enable LIGAND to fulfill its obligations and
exercise its rights hereunder, including the confidential portions of the
CMC SECTION relating to the formulation and manufacturing processes.
7.2 At meetings of the PROJECT TEAM, ELAN shall consult with LIGAND on the
preparation of the NDA. Notwithstanding the foregoing, ELAN shall at its
sole discretion decide on the ultimate content of the NDA. ELAN shall
notify LIGAND of the NDA APPROVAL in each country of the TERRITORY.
7.3 ELAN shall bear the costs and expenses of filing the NDA with the FDA in
the USA provided that such costs as of the date of submission and filing of
the NDA are consistent with the filing charges prevailing as of the date of
this Agreement. All costs associated with maintaining the NDA APPROVAL
(other than maintaining the manufacturer's licence, the costs of which
shall be borne by ELAN) in each country of the TERRITORY including any post
approval studies required by the FDA in respect of the PRODUCT shall be
paid by ELAN. LIGAND may elect to conduct [**********] in conjunction with
ELAN whether or not [**********] are mandated by the FDA provided that
LIGAND shall bear [**********] in relation to commercialisation of the
PRODUCT in the TERRITORY. Such costs incurred by LIGAND shall be deemed
[**********] under Clause 5.5 of this Agreement.
7.4 If any information or clinical data are requested by the FDA in addition to
the data generated from the clinical trials specified in Schedule 3 in
order to obtain NDA APPROVAL in any country of the TERRITORY, LIGAND, at
its option and at its own cost, may undertake to supply said information or
data. If LIGAND so requests, ELAN will assist LIGAND, at LIGAND's expense,
in the collection of said information or data. [**********], if incurred by
LIGAND, will be deemed [**********] under Clause 5.5 of this Agreement. In
the event that LIGAND decides not to generate any additional information or
clinical data which is requested by the FDA to obtain NDA APPROVAL in any
country of the TERRITORY, then, ELAN shall have the right to terminate the
license granted to LIGAND pursuant to Clause 2.1. for any such country or
countries of the TERRITORY. Thereafter, ELAN shall be entitled to research,
develop and commercialise the PRODUCT in such country or countries of the
TERRITORY. In the event of such termination, all monies paid to ELAN by
LIGAND pursuant to this Agreement shall not be recoverable by LIGAND.
7.5 ELAN shall at its option file DMF(s) for the PRODUCT in its own name and
shall be responsible for all interaction with FDA, and where applicable
other REGULATORY AUTHORITIES, concerning the DMF.
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7.6 ELAN [**********] LIGAND, its agents and employees [**********] to which
LIGAND, its agents and employees [**********] in connection with
[**********] or failure to [**********].
7.7 It is hereby acknowledged that there are inherent uncertainties involved in
the development and registration of pharmaceutical products with the FDA
insofar as obtaining approval is concerned and such uncertainties form part
of the business risk involved in undertaking the form of commercial
collaboration as set forth in this Agreement. Therefore, save for using its
reasonable efforts, neither party shall have any liability to the other
solely as a result of any failure of the PRODUCT to successfully achieve
the interim specifications or to achieve the NDA APPROVAL by the FDA.
7.8 LIGAND shall not conduct any technical analysis, study or test on the
formulations of the PRODUCT without the prior agreement of ELAN, save for
the routine quality tests required to verify conformance with the
SPECIFICATIONS.
CLAUSE 8 - MARKETING AND PROMOTION OF THE PRODUCT
8.1 LIGAND shall control and be responsible for the content and format of the
promotional campaign to be submitted to the FDA; provided that ELAN has the
opportunity to review and provide input into such promotional campaign.
LIGAND shall use reasonable endeavours to obtain approval by the FDA of the
promotional campaign for the PRODUCT.
8.2 Within [**********] after the filing of the NDA in each country of the
TERRITORY, LIGAND and ELAN shall agree upon appropriate due diligence
obligations on LIGAND for marketing the PRODUCT, including the promotional
support budget and minimum sales figures for the [**********] following
commercial launch of the PRODUCT in each country of the TERRITORY, having
regard to standard industry practises. In the event that the parties are
unable to agree upon such due diligence obligations for the PRODUCT within
the time period as set out above, the parties shall appoint an arbitrator
who is technically knowledgeable in the pharmaceutical industry to choose
either ELAN's proposed terms or LIGAND's proposed terms on the basis of
which terms he determines to be closer to standard industry practice in the
relevant country of the Territory. LIGAND and ELAN each shall be
responsible for [**********] of the costs of arbitration incurred in
connection with this Clause 8.2.
8.3 LIGAND shall diligently pursue the commercialisation of the PRODUCT and
shall use all [******] efforts to market and promote the PRODUCT throughout
the TERRITORY and in doing so, shall use the same level of effort as with
other similar products of similar sales potential which it markets. LIGAND
covenants that it shall not use the PRODUCT as a "loss leader" in its
marketing programs and shall at all times use its reasonable efforts in
marketing the PRODUCT.
8.4 LIGAND shall submit to ELAN for ELAN's information, copies of all
promotional and other printed materials which LIGAND proposes at any time
to use in relation to the sale
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of the PRODUCT provided always that the provisions of this Clause 8.4 shall
be without prejudice to the obligations and responsibilities of LIGAND
under Clauses 8.1 and 14.9 and LIGAND shall indemnify and hold harmless
ELAN from and against all claims, damages, losses, liabilities and expenses
to which ELAN may become liable arising out of LIGAND's bad faith, gross
negligence or intentional misconduct in connection with the activities
described in this Clause 8.
8.5 To the extent permitted by law, such materials shall include due
acknowledgement that the PRODUCT is developed and manufactured by ELAN.
8.6 LIGAND shall effect the first full scale national commercial launch of the
PRODUCT in the each country of the TERRITORY within [**********] of the NDA
APPROVAL in such country, provided that LIGAND shall have received the
agreed quantities of LAUNCH STOCKS ordered pursuant to firm purchase orders
at least [**********] in advance of the launch date. ELAN shall not
unreasonably withhold its agreement to a request by LIGAND for an extension
of the said [**********] period if there are legitimate commercial reasons
for such an extension.
8.7 The parties shall meet to discuss the sales performance of the PRODUCT on a
quarterly basis for the first year following the initial launch of the
PRODUCT, on a semi-annual basis for the second and third years and on an
annual basis thereafter. At such meetings, LIGAND shall report on the
ongoing marketing and sales strategy related to the PRODUCT in the
TERRITORY, including marketing approaches educational campaigns,
promotional and advertising materials and campaigns, sales plans and
results, performance against competitors, its objectives for the PRODUCT
and its plans for the next year of the Agreement.
8.8 LIGAND shall xxxx or have marked all patent number(s) of the ELAN PATENTS
on all PRODUCT or otherwise communicate to the trade the existence of the
ELAN PATENTS in the countries of the TERRITORY in such a manner as to give
constructive or actual notice of infringement under applicable laws.
CLAUSE 9 - SUPPLY OF THE PRODUCT
9.1 Save as otherwise provided in this Agreement, ELAN shall produce and supply
to LIGAND its entire requirements of the PRODUCT. ELAN shall be the sole
and exclusive supplier of the PRODUCT to LIGAND in the TERRITORY and LIGAND
will purchase the PRODUCT exclusively from ELAN in the TERRITORY.
9.2 As a consequence of the restrictions currently imposed upon the
importation, use and distribution of the COMPOUND in and into the countries
of the TERRITORY, the parties acknowledge the requirement to order the
appropriate quantity of COMPOUND in sufficient time to enable the supplier
of the COMPOUND to obtain the appropriate aggregate quota from the Drug
Enforcement Agency in the U.S.A. or its successor agency,, and its
equivalent in Canada (where applicable). In this regard, the parties shall
negotiate and agree upon a binding forecast for the supply of COMPOUND for
the
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applicable calendar year (or part thereof) including the quantity of
COMPOUND which is necessary for the manufacture of the LAUNCH STOCKS. In
the event that LIGAND does not order sufficient PRODUCT to utilise the
quantity of COMPOUND, LIGAND shall reimburse ELAN for the cost of the
unutilised COMPOUND.
9.3 The PRODUCT to be supplied to LIGAND by ELAN shall be in
[******************] complying with the SPECIFICATIONS. ELAN shall deliver
the PRODUCT to LIGAND and/or any party designated by LIGAND in proper
packaging so as to permit safe storage and transport. ELAN shall bear all
the costs of labeling the PRODUCT so as to appropriately display the LIGAND
name provided that LIGAND supplies all the appropriate graphics, designs,
logos and related and appropriate artwork.
9.4 As a consequence of the restrictions currently imposed upon the
importation, use and distribution of COMPOUND into the countries of the
TERRITORY, the parties currently envisage that the PRODUCT shall be
manufactured by ELAN or a nominated sub-contractor in the USA for supply in
the USA and Canada. In the event that the relevant authorities in Canada
prohibit the importation of the PRODUCT from the USA, the parties shall
review alternative arrangements which can be put in place having regard to
such expenditure as is justified and the commercial opportunities available
in the country or countries concerned. In the event that ELAN appoints a
third party manufacturer, such appointment shall be subject to the secrecy
provisions of Clause 16.1 and ELAN shall be solely responsible and liable
to LIGAND for the performance of the said manufacturer. ELAN shall ensure
that the said manufacturer's facility is approved by and complies in all
material respects with the requirements of the FDA of the country where the
PRODUCT is manufactured and sold and that LIGAND has the customary rights
of audit and inspection of such third party manufacturer.
9.5 Within [**********] following the signing hereof, LIGAND shall provide ELAN
with a forecast of LIGAND requirements for the PRODUCT for the 18 month
period following the first anticipated NDA APPROVAL in the TERRITORY. The
said forecast will be updated quarterly until the first NDA APPROVAL in the
TERRITORY. Except as otherwise provided herein (and specifically except as
set out in Clause 9.2. regarding ordering of the COMPOUND), all forecasts
made hereunder shall be made to assist ELAN in planning its production and
LIGAND in planning marketing and sales. Such forecasts shall not be binding
purchase orders, shall not be the basis for a binding commitment under
Clause 9.2 and shall be without prejudice to LIGAND's subsequent firm
purchase orders for the PRODUCT in accordance with the terms of this
Agreement.
9.6 In advance of the first NDA APPROVAL in the TERRITORY and in advance of NDA
APPROVAL in the USA where such approval is not the first NDA APPROVAL in
the TERRITORY, the parties shall discuss and agree upon the manufacture and
purchase of specific quantities of LAUNCH STOCKS; however, for the
avoidance of doubt, the parties hereby confirm that ELAN's manufacturing
obligations shall only arise on receipt of firm purchase orders.
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9.7 ELAN shall deliver the PRODUCT to LIGAND within [**********] of the receipt
of a firm purchase order therefor ([**********] in the case of LAUNCH
STOCKS). In any event and notwithstanding any firm purchase orders for
LAUNCH STOCKS which LIGAND has already placed with ELAN, ELAN will notify
LIGAND within 5 working days of ELAN's receipt of an approval letter, or a
pre-approval letter in respect of a NDA from FDA. LIGAND shall within
[*****] of such notification place a firm purchase order with ELAN for
LAUNCH STOCKS, unless such a purchase order has already been submitted to
ELAN prior to that date. In addition, LIGAND will use its reasonable
efforts to provide forecasts for deliveries in addition to the LAUNCH
STOCKS for the balance of the year in which the NDA APPROVAL is obtained.
9.8 Within [**********] after the first NDA APPROVAL in the TERRITORY and on or
before the 23rd day of each calendar month thereafter, LIGAND shall provide
a rolling 18 month-forecast for the period beginning on the first day of
the relevant calendar month. The format of such 18 month-forecasts shall be
comprised of a 12 month-forecast together with 2 quarterly forecasts. The
first calendar quarter of such 18 month-forecast shall be a binding
purchase commitment of LIGAND. In addition to the obligation of LIGAND
regarding rolling 18 month-forecasts outlined herein, LIGAND shall provide
ELAN with rolling 3 years' forecasts on 1st August of each year of this
Agreement.
9.9 Subject to the agreement of ELAN, the 12 month forecasts (other than for
LAUNCH STOCKS) may increase or decrease from one quarter to the next,
provided, however, ELAN shall not be obligated to produce an amount of
PRODUCT which differs by more than [**********] in terms of volume of
PRODUCT ordered as compared to the preceding quarter. Notwithstanding the
foregoing, ELAN will use its reasonable efforts to fulfil LIGAND's
requirements in excess of forecasted amounts, but shall not be obliged to
meet such requirements if it is not reasonably practicable to do so
provided that ELAN shall supply the PRODUCT so ordered but not immediately
available as soon thereafter as reasonably practicable.
9.10 The parties shall agree upon a minimum order quantity for the manufacture
and supply of each dosage strength the PRODUCT. ELAN shall have the right
to refuse to fulfil orders which do not conform with the provisions of this
Clause 9.10. Where ELAN in its absolute discretion, fulfils any order which
does not conform with the provisions of this Clause 9.10, the fulfillment
of such order by ELAN shall not affect ELAN's right to refuse to fulfil any
subsequent order which does not conform with the provisions hereof.
9.11 Save as otherwise agreed between the parties, delivery of consignments of
PRODUCT shall be effected by ELAN EX-WORKS the manufacturing facility
designated by ELAN. Risk of loss of or damage to any consignment of the
PRODUCT shall pass to LIGAND when each such consignment of the PRODUCT is
loaded onto the vehicle of LIGAND's agent on which it is to be despatched
from the manufacturing facility designated by ELAN. LIGAND shall fully
insure or procure the insurance of all consignments of the PRODUCT from the
time when risk passes as aforesaid and shall produce the supporting
insurance when requested by ELAN.
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9.12 All claims for failure of any delivery of the PRODUCT to conform to the
SPECIFICATIONS under Clause 14 shall be made by LIGAND to ELAN in writing
within [******] following delivery except in the case of latent defects.
Claims for latent defects, which could not reasonably have been discovered
during the routine testing protocol (to be agreed by LIGAND and ELAN),
shall be made by LIGAND to ELAN in writing within [******] of discovery.
Failure to make timely claims in the manner prescribed shall constitute
acceptance of the delivery.
9.13 PRODUCT which has been delivered and which has been shown within the period
designated in Clause 9.12 not to conform to the SPECIFICATIONS where such
non-conformity is attributable to negligent acts or omissions of ELAN shall
be replaced at ELAN's cost within [******] of the receipt by ELAN of the
failed PRODUCT except where such non-conformity is attributable to
negligent acts or omissions of LIGAND.
9.14 In the event of an unresolved dispute as to conformity of the PRODUCT with
the SPECIFICATIONS, the parties shall within 30 days appoint an independent
first class laboratory to undertake the relevant testing and its findings
shall be conclusive and binding upon the parties. All costs relating to
this process shall be borne solely by the unsuccessful party. In the event
that the parties should fail to agree a mutually acceptable independent
laboratory within such 30 day period, the Head of the School of Pharmacy,
Trinity College, Dublin, Ireland shall be entrusted with appointing such
independent laboratory.
9.15 In the event that ELAN fails to deliver to LIGAND a significant portion of
an order of PRODUCT for a period exceeding [******] from the due delivery
date therefor, or there are [***************************************] are
caused by the supplier of the COMPOUND or other raw materials or due to the
applicable governmental imposed quota system for the COMPOUND), ELAN shall,
if requested by LIGAND, meet with LIGAND as soon as possible thereafter to
discuss the reasons for the [******] and outline to LIGAND its plans to
remedy the situation. If following such meeting, or further meetings which
may be agreed by the parties, the parties agree that ELAN is unlikely to
remedy the situation within 90 days of the last such meeting, upon written
request by LIGAND, ELAN shall for so long as such conditions exist:
9.15.1 grant to LIGAND a production licence in the applicable country or
countries of the TERRITORY so that LIGAND may manufacture the relevant
PRODUCT without infringing any of the ELAN INTELLECTUAL PROPERTY. Any
such licence shall apply only in regard to the relevant PRODUCT as
well as to the applications of technology derived from the ELAN PATENT
RIGHTS related to its use with such PRODUCT;
9.15.2 provide LIGAND with any technical data incorporated in the ELAN
KNOW-HOW, including but not limited to, access to the CMC SECTION, to
give effect to the provisions of Clause 9.15.1 and ELAN shall promptly
provide to LIGAND the documentation constituting the required material
support, more particularly
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practical performance advice, shop practice, specifications as to
materials to be used and control methods; and
9.15.3 assist LIGAND with the working up and use of the technology and with
the training of LIGAND's personnel to the extent which may reasonably
be necessary in relation to the manufacture of the PRODUCT by LIGAND.
In this regard, ELAN will receive LIGAND's scientific staff in its
premises for certain periods, the term of which will be agreed by the
parties.
For the avoidance of doubt, the parties confirm that a royalty of
[**********] shall be payable by LIGAND to ELAN on sales of PRODUCT
manufactured by LIGAND hereunder.
9.16 When ELAN has remedied the cause of its failure to satisfy LIGAND's
requirements and is once again able to fulfil its obligations to supply the
PRODUCT, LIGAND shall cease manufacturing the PRODUCT and shall resume
purchasing the PRODUCT exclusively from ELAN pursuant to the terms of this
Agreement provided that LIGAND shall be entitled to manufacture the PRODUCT
for such period as is [*************] to enable LIGAND to [*************]
by LIGAND in establishing its manufacturing capability for the PRODUCT
prior to commercial production of the PRODUCT as provided for in this
Clause 9.16. To the extent LIGAND's FULLY ALLOCATED COST of manufacturing
the PRODUCT is [*************] to which ELAN would be entitled to under
Clause 10.3.1, such [*************] of LIGAND's FULLY ALLOCATED COST
expended in establishing such manufacturing capability for the PRODUCT.
Furthermore, the royalty payable by LIGAND to ELAN pursuant to Clause 9.15
on sales of PRODUCT manufactured by LIGAND shall be [*********] from
[**********] to [**********]. Such [*********] in the royalty shall be
[*********] towards [*********] of such FULLY ALLOCATED COST [*********] by
LIGAND establishing such manufacturing capability for the PRODUCT. At such
time LIGAND [*********] such FULLY ALLOCATED COST from the [*********]
price of PRODUCT and the reduction in royalty payments, the royalty payable
pursuant to Clause 9.15 shall revert to [**********]. Upon cessation of
manufacture by LIGAND under this Clause 9.16, the production licence
granted by ELAN to LIGAND under Clause 9.15 shall automatically terminate.
9.17 In manufacturing the PRODUCT under Clause 9.15, LIGAND shall be responsible
for all process and equipment validation required by the FDA and the
regulations thereunder and shall take all steps reasonably necessary to
pass government inspection by the FDA.
9.18 At any time during the INITIAL PERIOD, ELAN shall be entitled to notify
LIGAND of its intention to cease manufacture of the PRODUCT due to poor
economic return on the PRODUCT, provided, however, that such notice is
given to LIGAND at least [**********] prior to the date ELAN intends to
cease manufacturing the PRODUCT. In such event, ELAN shall grant LIGAND a
production licence in accordance with Clauses 9.15 and 9.17. For the
avoidance of doubt, the parties confirm that a royalty of
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[**********] shall be payable by LIGAND to ELAN on sales of PRODUCT
manufactured by LIGAND hereunder.
9.19 ELAN will grant to [**********] or any other subsidiaries of ELAN, as
necessary or appropriate, a licence of the ELAN PATENTS and ELAN KNOW-HOW
and other intellectual property rights necessary for such company or
companies to manufacture the PRODUCT in accordance with the terms of this
Agreement.
CLAUSE 10 - FINANCIAL PROVISIONS
10.1 Licence Royalties:
10.1.1 In consideration of the licence of the ELAN PATENTS granted to
LIGAND under this Agreement, LIGAND shall pay to ELAN the following
amounts:-
(1) $5 million in cash or in shares of Common Stock of LIGAND, par
value $.001 per share (the "Common Stock") (valued at $11.65 per
share), at LIGAND's option, upon the execution of the Agreement
by both parties;
(2) $10 million in cash, or at LIGAND's option, in cash through an
increase in the issue amount of the CONVERTIBLE NOTE, upon the
execution of the Agreement by both parties;
(3) [**********] in cash or in shares of Common Stock of LIGAND
(valued at a price per share equal to the average of the CLOSING
PRICE of the Common Stock for the 5 consecutive trading days
immediately prior to the required payment date thereof), at
LIGAND's option, upon submission of the NDA for the PRODUCT in
the U.S.A.; and
(4) [**********] in cash or in shares of Common Stock of LIGAND
(valued at a price per share equal to the average of the CLOSING
PRICE of the Common Stock for the 5 consecutive trading days
immediately prior to the required payment date thereof), at
LIGAND's option, upon the NDA APPROVAL of the PRODUCT in the
U.S.A.
10.1.2. In the event that LIGAND elects to issue shares of the Common Stock
pursuant to Clause 10.1.1(1), (3) or (4) or the CONVERTIBLE NOTE
pursuant to Clause 10.1.1(2), each such issuance shall be made
pursuant to, and subject to the terms and conditions set forth in, the
PURCHASE AGREEMENT. Nothing in this Agreement shall relieve LIGAND
from its obligations to make the payments set forth in Clauses
10.1.1(1), (2), (3), or (4), in cash, in the event that any of the
applicable conditions set forth in the PURCHASE AGREEMENT are not
satisfied or waived on or prior to the required payment date thereof;
provided however, that in the event that LIGAND elects to issues
shares of Common Stock pursuant to Clause 10.1.1.(1), (3) or (4) and
ELAN is unable to satisfy the conditions to such issuance as set forth
in the PURCHASE AGREEMENT or if such conditions have not been waived
by LIGAND, as the case may be, LIGAND and ELAN shall negotiate in good
faith to agree upon customary terms and conditions which will
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enable LIGAND to issue such shares pursuant to a transaction exempt
from the registration requirements of the Securities Act pursuant to
Regulation D thereunder, including the giving by ELAN, to the extent
possible, of representations and warranties in connection therewith.
10.2 Additional Assistance and Work:
In the event that work or technical assistance beyond that specified in
Schedule 3 ("ADDITIONAL WORK") is requested by LIGAND, or is necessary to
complete the development of the PRODUCT, LIGAND shall reimburse ELAN in
respect of the cost of such ADDITIONAL WORK requested by LIGAND or required
pursuant to the terms of this Agreement provided that:
10.2.1 where ELAN conducts ADDITIONAL WORK under Clause 10.2, ELAN's
charges for such work shall be ELAN's [**********] except where ELAN
is supervising any clinical studies for LIGAND, ELAN's charges for
such supervisory work shall be ELAN's [**********].
10.2.2 payment for all ADDITIONAL WORK carried out by ELAN hereunder shall
be effected in U.S. Dollars within [**********] of the date of receipt
of the relevant invoice for completed ADDITIONAL WORK.
10.3 Price of PRODUCT:
10.3.1 The price of the PRODUCT to be charged by ELAN to LIGAND for
commercial sale shall be :
(1) [**********] of NSP for the [**********] in the TERRITORY;
(2) [**********] of NSP for the [**********] in the TERRITORY; and
(3) [**********] of NSP for [**********] during the INITIAL PERIOD of
the Agreement.
Said price shall apply to PRODUCT supplied EX WORKS ELAN's
facility to LIGAND. Notwithstanding the other provisions of this
Agreement, ELAN shall in no circumstances be obliged to supply
PRODUCT to LIGAND for commercial sale at less than [**********]
("FLOOR PRICE").
10.3.2 The price of the PRODUCT to be charged to LIGAND for supplies of
PRODUCT for distribution as [**********] promotional samples
(including an indigent patient program not to exceed [**********] of
PRODUCT sold IN MARKET by LIGAND in each country of the TERRITORY) in
its marketing of the PRODUCT shall be equivalent to [**********] which
price shall apply to PRODUCT supplied EX WORKS ELAN's facility to
LIGAND.
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10.3.3 ELAN shall supply the PRODUCT to LIGAND at the [**********]. The
purchase price of the PRODUCT may be adjusted by ELAN each calendar
quarter with the understanding that such purchase price is intended to
represent the [**********].
10.3.4 Within 45 days of the end of each calendar quarter, LIGAND shall
notify ELAN of the NSP of PRODUCT for that previous calendar quarter
and pay to ELAN the excess of: (i) the percentage of NSP of PRODUCT
for that previous calendar quarter calculated in accordance with
Clause 10.3.1. over (ii) the [**********] paid by LIGAND for such
PRODUCT pursuant to Clause 10.3.4.
10.3.5 Payment for all PRODUCT supplied by ELAN to LIGAND shall be made in
$ within [****] of the date of the relevant invoice.
10.3.6 All prices for the PRODUCT are exclusive of any applicable value
added or any other sales tax, for which LIGAND will be additionally
liable.
10.3.7 In the event that LIGAND shall sell the PRODUCT together with other
products of LIGAND to third parties (by the method commonly known in
the pharmaceutical industry as "bundling") and the price attributable
to the PRODUCT is less than the average price of "arms length" sales
to similar customers for the reporting period in which sales occur
(such sales to be excluded from the calculation of the average price
of "arms length" sales), NSP for any such sales shall be the average
price of "arms length" sales by LIGAND to similar customers in the
country where such bundling occurs during the reporting period in
which such sales occur.
10.3.8 For the avoidance of doubt the parties agree that if for whatever
reason the PRODUCT supplied by ELAN to LIGAND is not sold by LIGAND,
payment to ELAN for such PRODUCT shall nonetheless be effected at
[**********].
CLAUSE 11 - PAYMENTS, REPORTS AND AUDITS
11.1 LIGAND shall keep true and accurate records of gross sales of the PRODUCT,
the items deducted from the gross amount in calculating the NSP, the NSP
and the royalties payable to ELAN under Clause 10. LIGAND shall deliver to
ELAN a written statement ("the STATEMENT") thereof within 45 days following
the end of each calendar quarter, (or any part thereof in the first or last
calendar quarter of this Agreement) for such calendar quarter. The
STATEMENT shall outline on a country-by-country basis, the calculation of
the NSP from gross revenues during that calendar quarter, the applicable
percentage rate, and a computation of the sums due to ELAN (i.e. the price
of the PRODUCT determined in accordance with Clause 10.3.1 less
[**********]). The parties' financial officers shall agree upon the precise
format of the STATEMENT.
11.2 Payments due on NSP of the PRODUCT based on sales amounts in a currency
other than US Dollars shall first be calculated in the foreign currency and
then converted to
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US Dollars on the basis of the exchange rate in effect for the purchase of
US Dollars with such foreign currency quoted in the Wall Street Journal (or
comparable publication if not quoted in the Wall Street Journal) with
respect to the sale of currency of the country of origin of such payment
for the day prior to the date on which the payment by LIGAND is being made.
11.3 Any income or other taxes which LIGAND is required by law to pay or
withhold on behalf of ELAN with respect to royalties and any other monies
payable to ELAN under this Agreement shall be deducted from the amount of
such NSP payments, royalties and other monies due. LIGAND shall furnish
ELAN with proof of such payments. Any such tax required to be paid or
withheld shall be an expense of and borne solely by ELAN. LIGAND shall
promptly provide ELAN with a certificate or other documentary evidence to
enable ELAN to support a claim for a refund or a foreign tax credit with
respect to any such tax so withheld or deducted by LIGAND. The parties will
reasonably cooperate in completing and filing documents required under the
provisions of any applicable tax treaty or under any other applicable law,
in order to enable LIGAND to make such payments to ELAN without any
deduction or withholding.
11.4 All payments due hereunder shall be made to the designated bank account of
ELAN in accordance with such timely written instructions as ELAN shall from
time to time provide.
11.5 LIGAND shall pay interest to ELAN at the Prime Rate publicly announced by
Xxxxxx Guaranty Trust Company of New York at its principal office on the
date (or next to occur business day, if such date is not a business day) on
which payment should have been made pursuant to the applicable provisions
of this Agreement plus [****] on all late payments more than 10 days past
due under this Agreement applicable from the date on which payment should
have been made pursuant to the applicable provisions of this Agreement
until the date of payment.
11.6 Where meetings of the PROJECT TEAM have ceased and where ELAN so requests
to supplement the information available to ELAN at the meetings of the
parties under Clause 8.7, LIGAND shall provide ELAN with annual sales
reports outlining the status of the PRODUCT in the TERRITORY, including a
report on the competitive position of the PRODUCT in its relevant market
segment(s).
11.7 For the 180 day period following the close of each calendar year of the
Agreement, ELAN and LIGAND will, in the event that the other party
reasonably requests such access, provide each other's independent certified
accountants (reasonably acceptable to the other party) with access, during
regular business hours and subject to the confidentiality provisions as
contained in this Agreement, to such party's books and records relating to
the PRODUCT, solely for the purpose of verifying the accuracy and
reasonable composition of the calculations hereunder for the calendar year
then ended.
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11.8 In the event of a discovery of a discrepancy which exceeds [***] of the
amount due or charged by a party for any period, the cost of such
accountants shall be borne by the audited party; otherwise, such cost shall
be borne by the auditing party.
11.9 ELAN shall make (and where relevant shall procure that ELAN's subcontractor
shall make) that portion of its manufacturing, testing or storage facility
where PRODUCT is manufactured, tested or stored, including all record and
reference samples relating to the PRODUCT available for inspection by
LIGAND's duly qualified person or by the relevant governmental or
regulatory authority. The investigation shall be limited to determining
whether there is compliance with cGMP and other requirements of applicable
law.
CLAUSE 12 - DURATION AND TERMINATION
12.1 This Agreement shall be deemed to have come into force on the EFFECTIVE
DATE and, subject to the rights of termination outlined in this Clause 12
will expire on a country by country basis:
12.1.1 on the [**********] of the date of the launch of the PRODUCT in the
country concerned; or
12.1.2 in any country upon the expiration of the life of the last to expire
patent included in the ELAN PATENTS in that country;
whichever date is later to occur ("the INITIAL PERIOD").
12.2 Not later than [**********] prior to the end of the INITIAL PERIOD on a
country by country basis, ELAN and LIGAND shall enter into a long-term
supply agreement upon terms and conditions to be mutually agreed between
the parties. If the parties fail to enter into such a long-term supply
agreement, ELAN shall grant LIGAND a licence to the ELAN KNOW-HOW to
manufacture the PRODUCT for sale in the TERRITORY and access to the CMC
SECTION of the NDA APPROVAL upon terms and conditions to be mutually agreed
between the parties, including a [**********] on NSP of sales of such
PRODUCT.
12.3 In addition to the rights of termination provided for elsewhere in this
Agreement, either party will be entitled forthwith to terminate this
Agreement by written notice to the other party if:
12.3.1 that other party commits any material breach of this Agreement, and
(A) in the case of a breach capable of cure, fails to cure the same
within 60 days after receipt of a written notice giving full
particulars of the breach and requiring it to be remedied or (B) in
the case of a breach not capable of cure, the non-breaching party has
a remedy at law;
12.3.2 that other party goes into liquidation (except for the purposes of
amalgamation or reconstruction and in such manner that the company
resulting therefrom
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effectively agrees to be bound by or assume the obligations imposed on
that other party under this Agreement);
12.3.3 an encumbrancer takes possession or a receiver is appointed over any
of the property or assets of that other party;
12.3.4 any proceedings are filed or commenced by that other party under
bankruptcy, insolvency or debtor relief laws or anything analogous to
any of the foregoing under the laws of any jurisdiction occurs in
relation to that other party, and such proceeding is not dismissed
within 90 days;
12.4 For the purposes of Clause 12.3.1, a breach will be considered capable of
remedy if the party in breach can comply with the provision in question in
all respects other than as to the time of performance (provided that time
of performance is not of the essence).
12.5 In further addition to the rights and termination provided for elsewhere in
this Agreement, ELAN shall be entitled to terminate the licence granted to
LIGAND under this Agreement for any country or countries of the TERRITORY
in the event that:-
12.5.1 LIGAND fails to effect any one of the commercial launches required
by Clause 8 in accordance with the provisions thereof; or
12.5.2 a TECHNOLOGICAL COMPETITOR of ELAN shall directly or indirectly,
acquire [**********] or more of LIGAND's capital stock, or otherwise
control or influence in any material respect the management or
business of LIGAND, or
12.5.3 any person or entity other than a TECHNOLOGICAL COMPETITOR shall
acquire [**********] or more of the voting stock of LIGAND, or
otherwise merge, consolidate or enter into any similar transaction (or
binding agreement in respect thereof) with LIGAND; provided, however,
that the foregoing shall not apply in relation to any exercise of any
options by ELAN as contemplated herein or by the FINANCE AGREEMENTS.
CLAUSE 13 - CONSEQUENCES OF TERMINATION
13.1 Upon exercise of those rights of termination specified in Clause 12 or
elsewhere in this Agreement, this Agreement shall, subject to the
provisions of the Agreement which survive the termination of the Agreement
automatically terminate forthwith and be of no further legal force or
effect.
13.2 Upon termination of the Agreement by either party, or upon termination by
ELAN of a licence for a particular country under Clause 12.5, the following
shall be the consequences relating to the TERRITORY or the particular
country, as applicable:
13.2.1 any sums that were due from LIGAND to ELAN under the provisions of
Clause 10 or otherwise howsoever prior to the exercise of the right to
terminate this Agreement as set forth herein shall be paid in full
within 30 days of termination of
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this Agreement and, subject to Clause 13.2.4, ELAN shall not be liable
to repay to LIGAND any amount of money paid or payable by LIGAND to
ELAN up to the date of the termination of this Agreement;
13.2.2 all confidentiality provisions set out herein shall remain in full
force and effect for a period of [******] from the date of termination
of this Agreement;
13.2.3 all responsibilities and warranties shall insofar are appropriate
remain in full force and effect;
13.2.4 the rights of inspection and audit shall continue in force for the
period referred to in the relevant provisions of this Agreement;
13.2.5 ELAN shall be entitled to research, develop and commercialise the
PRODUCT for its own benefit in the TERRITORY or in the relevant
country or countries of the TERRITORY;
13.2.6 the licence granted by ELAN to LIGAND of the ELAN TRADEMARK under
Clause 3.5 shall automatically terminate; and
13.2.7 the option granted by ELAN to LIGAND to co-promote the PRODUCT in
the Member States of the EU (excluding Ireland and Great Britain)
under Clause 2.2.2. shall automatically terminate.
CLAUSE 14 - WARRANTY AND INDEMNITY
14.1 ELAN represents and warrants that it has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized, executed
and delivered by ELAN and constitutes a valid and legally binding agreement
of ELAN enforceable against ELAN in accordance with its terms, except that
(A) the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought and (B) any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations.
14.2 ELAN represents and warrants that it has the sole, exclusive and
unencumbered right to grant the licences and rights herein granted to
LIGAND, and that it has not granted any option, licence, right or interest
in or to the ELAN PATENTS or ELAN KNOW-HOW to any third party which would
conflict with the rights granted by this Agreement. ELAN also represents
and warrants that none of the EXCLUDED PATENTS or EXCLUDED KNOW-HOW is
necessary to import, use, offer for sale, sell and make or have made the
PRODUCT. ELAN agrees to hold LIGAND harmless from any and all damages and
reasonable out-of-pocket expenses and costs (including reasonable
attorneys' fees) incurred or sustained by LIGAND as the result of any third
party's challenges to ELAN's right to grant the licences and rights herein
granted to LIGAND.
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14.3 ELAN represents and warrants that the execution of this Agreement and the
consummation of the transactions contemplated hereby will not breach or in
any way conflict with the terms and conditions of any licence, contract,
understanding or agreement, whether express, implied, written or oral
between ELAN and any third party.
14.4 ELAN represents and warrants that no consent, approval, authorization or
order of any court or governmental agency or body or third party is
required for the execution and delivery by ELAN of this Agreement of the
consummation by ELAN of the transactions contemplated hereby, except that
no representation or warranty is made with repsect to filings required by
the Xxxx-Xxxx Xxxxxx Antitrust Improvements Act of 1976, as amended, upon
issuance of shares of Common Stock of LIGAND pursuant to Clauses 10.1.1 (3)
and (4) hereof.
14.5 ELAN represents and warrants that, once successfully developed, the PRODUCT
supplied by ELAN to LIGAND under this Agreement will conform to:
14.5.1 the SPECIFICATIONS;
14.5.2 all applicable regulations and requirements of the FDA including the
then cGMP regulations which apply to the manufacture and supply of the
PRODUCT.
EXCEPT AS EXPRESSLY STATED IN THIS CLAUSE 14, ALL OTHER WARRANTIES,
CONDITIONS AND REPRESENTATIONS, EXPRESS OR IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING A WARRANTY AS TO THE QUALITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE PRODUCT ARE HEREBY EXCLUDED AND EXCEPT AS
EXPRESSLY STATED IN THIS CLAUSE 14, ELAN SHALL NOT BE LIABLE IN
CONTRACT, TORT OR OTHERWISE FOR ANY LOSS, DAMAGE, EXPENSE OR INJURY,
ARISING OUT OF OR IN CONNECTION WITH THE PRODUCT OR ANY DEFECT IN THE
PRODUCT OR FROM ANY OTHER CAUSE.
14.6 LIGAND represents and warrants that it has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized , executed
and delivered by LIGAND and constitutes a valid and legally binding
agreement of LIGAND enforceable against LIGAND in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
14.7 LIGAND represents and warrants that the execution, delivery and performance
by LIGAND of this Agreement and the consummation by LIGAND of the
transactions contemplated hereby will not conflict with or constitute or
result in a breach of or a default under (or an event which with notice or
passage of time or both would constitute a
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default under) or violation of any of (i) the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which LIGAND is bound or to which any of its properties or
assets is subject, except for any such conflict, breach, default, violation
or event which would not, individually or in the aggregate, have a material
adverse effect on the business, assets, liabilities (contingent or
otherwise, operations, condition (financial or otherwise), solvency,
properties, prospects or material agreements of the LIGAND (any such event,
a "Material Adverse Effect"), (ii) the certificate of incorporation or
bylaws of LIGAND or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of each of ELAN set forth in this Clause 14
of this Agreement and the accuracy of the representations and warranties of
ELAN and Elan International Services, Ltd., set forth in Section 4 of the
SECURITIES PURCHASE AGREEMENT of even date herewith) any statute, judgment,
decree, order, rule or regulation applicable to LIGAND or any of its
properties or assets, except for any such conflict, breach or violation
which would not, individually or in the aggregate, have a Material Adverse
Effect.
14.8 LIGAND represents and warrants that no consent, approval, authorization or
order of any court or governmental agency or body or third party is
required for the execution and delivery by LIGAND of this Agreement of the
consummation by LIGAND of the transactions contemplated hereby, except that
no representation or warranty is made with repsect to filings required by
the Xxxx-Xxxx Xxxxxx Antitrust Improvements Act of 1976, as amended, upon
issuance of shares of Common Stock of LIGAND pursuant to Clauses 10.1.1 (3)
and (4) hereof.
14.9 LIGAND represents and warrants to ELAN that in the promotion, marketing,
transporting, storing, handling, distributing and selling the PRODUCT
hereunder:
14.9.1 it will exercise all due skill, care and diligence in conducting
such activities; and
14.9.2 it will comply with the provisions of this Agreement, all FDA and
other approvals, all applicable state and local regulatory approvals
and all applicable laws, ordinances and regulations.
14.10 LIGAND represent and warrants that immediately after the consummation of
the transactions contemplated by this Agreement. the fair value and present
fair saleable value of the assets of LIGAND (on a consolidated basis) will
exceed the sum of its stated liabilities and identified contingent
liabilities; LIGAND (on a consolidated basis) is, nor will LIGAND (on a
consolidated basis) be, after giving effect to the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby and thereby, (a) left with unreasonably small capital
with which to carry on its business as it is proposed to be conducted, (b)
unable to pay its debts (contingent or otherwise) as they mature or (c)
otherwise insolvent.
14.11 ELAN is cognisant in all material respects of all applicable statutes,
ordinances and
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regulations of the TERRITORY with respect to the manufacture of the PRODUCT
including, but not limited to the FFDCA, including cGLP and cGMP. ELAN
shall manufacture or procure the manufacture the PRODUCT in conformance
with the SPECIFICATIONS and the relevant NDA or DMF and in a manner which
complies in all material respects with such statutes, ordinances,
regulations and practises.
14.12 Each of the parties shall indemnify, defend and hold harmless the other
party from all actions, losses, claims, demands, damages, costs and
liabilities (including reasonable attorneys' fees) to which the other party
is or may become liable insofar as they arise out of any breach by the
first party of any of its obligations or warranties under this Agreement.
14.13 ELAN represents and warrants that, as of the date of this Agreement, to
the best of its knowledge and belief, that making, using or selling the
PRODUCT would not infringe any patent of any third party in the TERRITORY.
14.14 As a condition of obtaining an indemnity in the circumstances set out in
Clauses 14.5, 14.6 and 14.9, the party seeking an indemnity shall:
14.14.1 fully and promptly notify the other party of any claim or
proceedings, or threatened claim or proceedings;
14.14.2 permit the indemnifying party to take full control of such claim or
proceedings;
14.14.3 assist in the investigation and defence of such claim or
proceedings;
14.14.4 not compromise or otherwise settle any such claim or proceedings
without the prior written consent of the other party, which consent
shall not be unreasonably withheld; and
14.14.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceedings.
14.15 Notwithstanding anything to the contrary in this Agreement, ELAN and
LIGAND 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 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.
CLAUSE 15 - ADVERSE EVENTS AND PRODUCT RECALL
15.1 Each party shall notify the other party promptly:
15.1.1 of any complaints from third parties reported to such party
involving any serious and unexpected adverse reactions resulting from
the use of the PRODUCT; and
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15.1.2 of any potential recall of the PRODUCT by any governmental
authority.
15.2 LIGAND and ELAN shall establish a procedure for formal adverse event
handling and reporting. It is envisaged that LIGAND shall be responsible
for furnishing post-marketing reports to ELAN and where applicable, ELAN
will be responsible for furnishing such reports to the FDA. LIGAND and ELAN
shall keep each other informed and shall copy the other party with all
communications with the FDA and other relevant regulatory agencies with
respect to the PRODUCT.
15.3 In the event of any recall of the PRODUCT, as suggested or requested by any
governmental authority:
15.3.1 LIGAND shall perform the recall of the PRODUCT in the TERRITORY and
save as provided in Clause 15.3.2, [**********].
15.3.2 If the recall arises from ELAN's negligent acts or omissions in
manufacturing the PRODUCT, the recall costs [**********] provided that
LIGAND [**********] of the PRODUCT [**********].
In the event that ELAN [**********] hereunder, ELAN shall be entitled
but shall not obliged to [**********] of the PRODUCT described in
Clause 15.3.1 and LIGAND shall provide ELAN [**********] by ELAN.
15.3.3 Neither party shall be liable to the other party or to any third
party for consequential or incidental damages which may arise as a
result of the recall of the PRODUCT.
15.4 In the event that ELAN exercises its option pursuant to Clause 2.2, the
parties shall review, and if appropriate, negotiate and amend the
provisions of Clause 15, as appropriate.
CLAUSE 16 - MISCELLANEOUS PROVISIONS
16.1 Secrecy:
16.1.1 Any information, whether written or oral (oral information shall be
reduced to writing within one month by the party giving the oral
information and the written form shall be furnished to the other
party) pertaining to the PRODUCT that has been or will be communicated
or delivered by ELAN to LIGAND, or by LIGAND to ELAN, including,
without limitation, trade secrets, business methods, and cost,
supplier, manufacturing and customer information, shall be treated by
LIGAND and ELAN, respectively, as confidential information, and shall
not be disclosed or revealed to any third party whatsoever or used in
any manner except as expressly provided for herein; provided, however,
that such confidential information shall not be subject to the
restrictions and prohibitions set forth herein to the extent that such
confidential information:
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(1) is available to the public in public literature or otherwise, or
after disclosure by one party to the other becomes public
knowledge through no default of the party receiving such
confidential information; or
(2) was known to the party receiving such confidential information
prior to the receipt of such confidential information by such
party, whether received before or after the date of this
Agreement; or
(3) is obtained by the party receiving such confidential information
from a third party not subject to a requirement of
confidentiality with respect to such confidential information; or
(4) is required to be disclosed pursuant to: (A) any order of a court
having jurisdiction and power to order such information to be
released or made public; or (B) any lawful action of a
governmental or regulatory agency provided that each party shall
notify the other in writing of any disclosure of information
required hereunder prior to such disclosure.
16.1.2 Each party shall take in relation to the confidential information of
the other party all such precautions as it normally takes with its own
confidential information to prevent any improper disclosure of such
confidential information to any third party; provided, however, that
such confidential information may be disclosed within the limits
required to obtain any authorisation from the applicable FDA or any
governmental or regulatory agency or, with the prior written consent
of the other party, which shall not be unreasonably withheld, or as
may otherwise be required in connection with the purposes of this
Agreement.
16.1.3 LIGAND agrees that it will not use, directly or indirectly, any ELAN
KNOW-HOW, or other confidential information disclosed to it by ELAN or
obtained by it from ELAN pursuant to this Agreement, other than as
expressly provided herein.
16.1.4 Neither party will publicise the existence of this Agreement in any
way without the prior written consent of the other party subject to
the disclosure requirements of applicable laws and regulations. In the
event that either party wishes to make an announcement concerning the
Agreement, that party will seek the consent of the other party. The
terms of any such announcement shall be agreed in good faith.
16.1.5 At the request of a party in writing, the other party shall not
disseminate any public announcement for a period of 60 days from the
receipt of such request regarding this Agreement or the transactions
contemplated hereby or regarding such requesting party, without such
requesting party's consent, which shall not be unreasonably withheld,
provided, however, a party may disseminate a public announcement
regarding the foregoing if such party obtains an opinion of
independent counsel that such party is obligated by law to disseminate
such information to the public.
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16.2 Specific Performance:
Each of ELAN and LIGAND acknowledges and agrees that in the event either
party materially breaches an obligations under this Agreement which can be
specifically performed, the aggrieved party shall be entitled to seek
specific performance of this Agreement and to enjoin any continuing breach
of this Agreement (without the necessity of proving actual damages and
without posting bond or other security), in addition to any other remedy
which such aggrieved party may be entitled to at law or in equity and each
of ELAN and LIGAND will waive the defence in any action for specific
performance or other equitable relief that a remedy at law would be
adequate or that the services provided hereunder are personal in nature.
16.3 Assignments/Sub-contracting:
Neither party shall be permitted to assign or sub-licence any of its rights
under this Agreement without the prior written consent of the other;
provided that ELAN and LIGAND may assign this Agreement to an AFFILIATE
without such consent provided that such assignment has no adverse tax
implications for the other party and provided further that such assigning
party is not relieved of its obligations hereunder. Notwithstanding the
foregoing, but subject to ELAN's right to terminate this Agreement in
Clause 12.5.3, LIGAND may transfer or assign its rights under this
Agreement without the prior written consent of ELAN to a person that
acquires all or substantially all of the assets or capital stock of LIGAND,
provided that such assignment has no adverse tax implications for ELAN
under this Agreement (but not in connection with the transfer of Shares of
Common Stock of LIGAND granted to ELAN pursuant to this Agreement or the
Securities Purchase Agreement). ELAN shall also have the right to
subcontract all or any portion of the manufacturing or packaging of the
PRODUCT to one or more third parties. LIGAND shall also have the right to
subcontract all or any of its obligation regarding development of the
PRODUCT. Each party shall be responsible for the acts and/or omissions of
its respective AFFILIATES and subcontractors.
16.4 Parties bound:
This Agreement shall be binding upon and enure for the benefit of parties
hereto, their successors and permitted assigns.
16.5 Severability:
If any provision in this Agreement is agreed by the parties to be, or is
deemed to be, or becomes invalid, illegal, void or unenforceable under any
law that is applicable hereto:
16.5.1 such provision will be deemed amended to conform to applicable laws
so as to be valid and enforceable or, if it cannot be so amended
without materially altering the intention of the parties, it will be
deleted, with effect from the date of such agreement or such earlier
date as the parties may agree; and
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16.5.2 the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected in any
way.
16.6 Force Majeure:
Neither party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results from
causes beyond its reasonable control, including, without limitation, acts
of God, fires, strikes, acts of war, or intervention of a government
authority, non-availability of raw materials, but any such delay or failure
shall be remedied by such party as soon as practicable.
16.7 Relationship of the parties:
Nothing contained in this Agreement is intended or is to be construed to
constitute ELAN and LIGAND as partners or members of a joint venture or
either party as an employee of the other. Neither party hereto shall have
any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other party or to bind the
other party to any contract, agreement or undertaking with any third party.
16.8 Amendments:
No amendment, modification or addition hereto shall be effective or binding
on either party unless set forth in writing and executed by a duly
authorised representative of both parties.
16.9 Waiver:
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any future breach or failure to perform or of any
other right arising under this Agreement.
16.10 No effect on other agreements:
This Agreement supersedes that certain Letter of Intent dated September 28,
1998 between the parties as such Letter of Intent relates to the subject
matter hereof. Except as limited by the foregoing sentence, no provision of
this Agreement shall be construed so as to negate, modify or affect in any
way the provisions of any other agreement between the parties unless
specifically referred to, and solely to the extent provided, in any such
other agreement.
16.11 Governing law and jurisdiction:
This Agreement is construed under and ruled by the laws of New York. For
the purposes of this Agreement the parties submit to the non-exclusive
jurisdiction of the courts of New York.
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16.12 Notice:
16.12.1 Any notice or communications to be given under this Agreement shall
be written in English and shall be sufficiently given if delivered
personally or sent by nationally recognised overnight delivery
service, or telecopier (receipt confirmed), addressed as follows:
ELAN at
Elan Corporation, plc.
Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxx 0
Xxxxxxx.
Attention: Vice-President & General Counsel,
Elan Pharmaceutical Technologies
Telephone: 000 0 0000000
Telefax: 353 1 6624960
LIGAND at
Ligand Pharmaceuticals Incorporated
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx
Xxxxxxxxxx 00000
XXX.
Attention: General Counsel
Telephone: (000) 000-0000
Telefax: (000) 000-0000
or to such other address(es) and telecopier numbers as may
from time to time be notified by either party to the other
hereunder.
16.12.2 Any notice sent by mail shall be deemed to have been delivered
within 7 working days after dispatch and any notice sent by telecopy
shall be deemed to have been delivered within 24 hours of the time of
the despatch. Notice of change of address shall be effective upon
receipt.
IN WITNESS of which the parties have executed this Agreement.
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Executed by LIGAND on November , 1998
By : /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------
Senior Vice President General
Title: Counsel, Government Affairs
Executed by ELAN on November , 1998
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
---------------------------------
Title: Group Vice President, Finance
SCHEDULE 1
ELAN PATENTS
[**********] [**********]
[**********] [**********]
[**********] [**********]
SCHEDULE 2
SPECIFICATIONS
SCHEDULE 3
CLINICAL TRIALS
[**********]
