EXHIBIT 4.5(d)
CONFORMED COPY
VERNALIS DEVELOPMENT LIMITED
- AND -
ENDO PHARMACEUTICALS INC.
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LICENSE AGREEMENT
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THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED. REDACTED PORTIONS OF THIS EXHIBIT ARE
MARKED BY AN ***.
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THIS LICENSE AGREEMENT is made the 14th day of July, 2004
BETWEEN:
(1) VERNALIS DEVELOPMENT LIMITED whose principal place of business is at
Oakdene Court, 613 Reading Road, Winnersh, Wokingham, RG41 5UA, England
("Vernalis"); and
(2) ENDO PHARMACEUTICALS INC. whose principal place of business is at 000,
Xxxxxxxx Xxxxx, Xxxxxx Xxxx, XX 00000, XXX ("Endo").
WHEREAS:
(A) Endo is one of the world's leading specialty pharmaceutical companies with
particular expertise in launching, marketing, selling and managing the lifecycle
of certain specialty pharmaceutical products.
(B) Vernalis owns the rights to the compound called frovatriptan and the
marketed product called FROVA, which has initial product registrations for acute
migraine and is undergoing further trials in respect of menstrual associated
migraine, and has agreed to license those rights to Endo on the terms of the
license and co-promotion rights set out in this document.
IT IS NOW AGREED AS FOLLOWS:
1. DEFINITIONS
1.1 In this Agreement the following definitions shall apply and
initially capitalized terms shall have the meanings ascribed to them
elsewhere in this Agreement:
1.1.1 "AFFILIATE" - any company, partnership or other business
entity which Controls, is Controlled by or is under common
Control with either Party.
1.1.2 "AGREEMENT" - this document including any and all schedules,
appendices and other addenda to it as may be added and/or
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amended from time to time in accordance with the provisions of
this Agreement.
1.1.3 "ANNUAL MARKETING PLAN AND BUDGET" - the document delivered
pursuant to Clause 6.1.2.
1.1.4 "API SUPPLY AGREEMENT" - the supply agreement between Vernalis
and Evotec OAI Limited (then named Oxford Asymmetry
International plc), dated December 28, 2000.
1.1.5 "BUSINESS DAY" - 9.00 am to 5.00 pm local time on a day other
than a Saturday, Sunday, bank or other public holiday in
England and Wales or USA.
1.1.6 "CHANGE OF CONTROL" - the occurrence of a tender offer, stock
purchase, other stock acquisition, merger, consolidation,
recapitalization, reverse split, sale or transfer of assets or
other transaction, as a result of which any person, entity or
group, other than an Affiliate of Endo or Vernalis, as the
case may be, (a) becomes the beneficial owner, directly or
indirectly, of securities of Endo or Vernalis representing
more than 50% of the ordinary shares of Endo or Vernalis, as
the case may be, or representing more than 50% of the combined
voting power with respect to the election of directors, (b)
obtains the ability to appoint a majority of the board of
directors of Endo or Vernalis, as the case may be, or (c)
obtains the ability to direct the operations or management of
Endo or Vernalis, as the case may be.
1.1.7 "CLINICAL STUDY" - any clinical trial and/or other study on
Product carried out by or on behalf of Endo including, without
limitation, any study carried out in order to obtain a label
extension or other new Marketing Authorisation for the Product
in the Territory (but for the avoidance of doubt always
excluding the MAM & Paediatric Development Program) including,
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without limitation, any clinical trial or other study carried
out for marketing purposes.
1.1.8 "CLOSING DATE" - the second Business Day after the date upon
which the conditions precedent in Clauses 2.1, 2.5, 2.6 and
2.7 are satisfied.
1.1.9 "COMBINATION PRODUCT" - a product in which the Compound is an
active ingredient and in relation to which a Marketing
Authorisation has been granted which also:
***
and such other pharmaceutical product, active ingredient or
active administration or delivery technology, when used as
described above, shall be referred to individually or
collectively as "Combined Product".
1.1.10 "COMMERCIALISATION", "COMMERCIALISING", or "COMMERCIALISE" -
all activities relating to the import, promotion, marketing,
detail, distribution, storage, handling, offering for sale
and sale of the Product.
1.1.11 "COMMERCIALLY REASONABLE EFFORTS" - efforts and resources
commonly used in the pharmaceutical industry for a product
owned by a pharmaceutical company of similar size and
resources or to which it has rights, which product is at a
similar stage in its development or product life and is of
similar market potential and taking into account the patent
and other proprietary position of the product.
1.1.12 "COMMITMENT" - the amount to be expended in a specified
period by Endo, directly or indirectly, in relation to (i)
the clinical and education aspects of the Product in the
Territory, including (a) Costs associated with Phase IV
clinical trials and (b) Costs
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relating to clinical and educational promotional activities;
(ii) advertising the Product in the Territory; (iii)
marketing, selling and promoting the Product in the
Territory; (iv) public relations in relation to Product in
the Territory, together in each case with Costs relating to
the same accrued in a period and payable in a subsequent
period and (v) indirect selling, general and administrative
costs and expenses allocated to marketing and selling the
Product.
1.1.13 "COMPETENT AUTHORITY" - any national or local agency,
authority, department, inspectorate, minister, ministry
official, parliament or public or statutory person (whether
autonomous or not) of any government of any country having
jurisdiction over either any of the activities contemplated
by this Agreement or over the Parties.
1.1.14 "COMPOUND" - the compound known as frovatriptan being
R(+)-6-carboxamido-3-N-methylamino-1, 2, 3, 4
tetrahydrocarbazole succinate (1:1) monohydrate and
"Compound", including any physiologically acceptable salts
thereof.
1.1.15 "CONFIDENTIAL INFORMATION" - in the case of obligations of
Endo in relation to Confidential Information, shall mean
Vernalis IP and, in the case of obligations of Vernalis in
relation to Confidential Information shall mean Endo IP and,
in the case of both Vernalis and Endo, shall mean all trade
secret and/or confidential information relating to business
affairs not limited to development and Commercialisation
plans, marketing plans, financial forecasts and projections,
of the other supplied or otherwise made available to them or
coming into their possession in relation to the performance
of this Agreement.
1.1.16 "CONTROL" (including variations such as "Controls" or
"Controlled by") - the ownership, either directly or
indirectly, of
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more than 50% of the issued share capital or any other
comparable equity or ownership interest with respect to a
business entity or the legal power to direct or cause the
direction of the general management and policies of the Party
in question.
1.1.17 "CO-PROMOTE" - the simultaneous Detailing of a Product by
Vernalis field sales force representatives and Endo field
sales force representatives.
1.1.18 "CO-PROMOTION OPTION" - Vernalis' option to Co-promote
Product as set forth in Clauses 9.1 and 9.2.
1.1.19 "COPYRIGHT" - all (if any) right, title and interest of
Vernalis in copyright subsisting in the Marketing Materials.
1.1.20 "COSTS" - Actual out-of-pocket costs and expenses.
1.1.21 "COST PER DETAIL" - Endo's incremental Cost for the
engagement of a sales representative for Specialty Detailing
in any particular Year, excluding training, meetings, etc.,
which in 2004 is USD *** and which in subsequent Years will
be USD ***, adjusted for CPI, divided by ***.
1.1.22 "COVER" (including variations such as "Covered", "Coverage"
or "Covering") - the making, using or Commercialisation of a
given product in a Commercialised form that would infringe a
Valid Claim of a Patent Right in the absence of a license
under such Patent Right. The determination of whether a
product is so Covered by a particular Patent Right shall be
made on a country-by-country basis.
1.1.23 "CPI" - the consumer price index for the previous twelve
months published by the U.S. Department of Labor.
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1.1.24 "DDMAC" - the FDA's Division of Drug Marketing, Advertising
and Communication.
1.1.25 "DETAIL" (including variations such as "Detailing")- direct
face to face contact between a field sales force
representative and medical professional with prescribing or
dispensing authority for the purpose of discussing
information about a pharmaceutical product(s).
1.1.26 "DISCLOSING PARTY" - the Party which discloses Confidential
Information to the other Party.
1.1.27 "DOCUMENTS" - reports, research notes, charts, graphs,
comments, computations, analyses, recordings, photographs,
paper, notebooks, books, files, ledgers, records, tapes,
discs, diskettes, CD-ROM, computer programs and documents
thereof, computer information storage means, samples of
material, other graphic or written data and any other media
on which Know How can be permanently stored.
1.1.28 "DOMAIN NAMES" - the URLs xxx.xxxxx.xxx, xxx.xxxxx.xxx,
xxx.xxxxx.xx, xxx.xxxxx.xxx, xxx.xxxxx.xxxx,
xxx.xxxxxxxxxxxx.xxx and xxx.xxxxxxxxxxxx.xx (and any
equivalent addresses for any successor electronic address
system thereto).
1.1.29 "ELAN ASSET TRANSFER AGREEMENT" - the agreement relating to
the North American Frova Assets of Elan between Elan and
Vernalis, dated May 18, 2004.
1.1.30 "ELAN GROUP" - the group of companies the parent of which is
Elan Corporation plc, a company incorporated in Ireland
(registered no 30356) whose registered office is at Xxxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxx 0, Xxxxxxx.
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1.1.31 "ENCUMBRANCE" - a mortgage, charge, pledge, lien, option,
restriction, right of first refusal, right of pre-emption,
third party right or interest, other encumbrance or security
interest of any kind, or another type of preferential
arrangement (including, without limitation, a title transfer
or retention arrangement) having similar effect.
1.1.32 "ENDO COPYRIGHT" - copyright or any other intellectual
property analogous to copyright including any rights in
designs subsisting or relating to any Documents, designs or
other embodiments of the trade dress for the Product, any
form of advertisement in whatever media, marketing materials,
samples or other promotional gifts or any other materials in
which such rights are capable of subsisting as a matter of
law in all cases which are generated by or upon behalf of
Endo or its Affiliates during the period of this Agreement in
connection with the advertising, promotion, marketing or sale
or other Commercialisation of Product.
1.1.33 "ENDO IP" - Endo Patent Rights, Endo Know How, Endo
Copyrights, Endo Materials and Endo Trade Marks.
1.1.34 "ENDO KNOW HOW" - Know How owned by or licensed to Endo or
its Affiliates (other than from Vernalis) or acquired by Endo
or its Affiliates during the period of this Agreement that is
necessary or useful for or which otherwise relates to the
development or Commercialisation of Product, including Know
How relating to Clinical Studies and Product Enhancements.
1.1.35 "ENDO MATERIALS" - Materials owned by or licensed to Endo or
its Affiliates (other than from Vernalis) or acquired by Endo
or its Affiliates during the term of this Agreement that are
necessary or useful for or which otherwise relate to the
development or
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Commercialisation of Product, including Materials used in
Clinical Studies or being or relating to Product
Enhancements.
1.1.36 "ENDO PATENT RIGHTS" - Patent Rights owned by or licensed to
Endo or its Affiliates (other than from Vernalis) which have
claims which Cover Product or the making, using or
Commercialisation of the Product or that Cover Product
Enhancements or the making, using or Commercialisation of
Product Enhancements.
1.1.37 "ENDO TRADE MARKS" - (i) the name and xxxx XXXX and the
associated Endo logo, and (ii) any other trade marks other
than the Vernalis Trade Marks used in relation to Products
owned by or licensed to Endo during the term of this
Agreement which are the subject of Clause 13.1.
1.1.38 "ESTIMATED COMMITMENT" - the estimated commitment set out in
Schedule 1.
1.1.39 "ESTIMATED DETAILING EFFORT" - the estimated Detailing effort
specified in Schedule 5 for each Year specified in
Schedule 5.
1.1.40 "EVENT OF DEFAULT" - as defined in the Loan Agreement.
1.1.41 "FDA" - the United States Food and Drug Administration or any
successor agency thereto.
1.1.42 "FORCE MAJEURE" - in relation to either Party, any event or
circumstance which is beyond the reasonable control of that
Party, which event or circumstance that Party could not
reasonably be expected to have taken into account at the date
of this Agreement and which results in or causes the failure
of that Party to perform any or all of its obligations under
this Agreement, including acts of God, lightning, fire,
storm, flood, earthquake, accumulation of snow or ice, lack
of water arising
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from weather or environmental problems, strike, lockout or
other industrial or student disturbance, act of the public
enemy, war declared or undeclared, threat of war, terrorist
act, blockade, revolution, riot, insurrection, civil
commotion, public demonstration, sabotage, act of vandalism,
energy or other supplies, explosion, fault or failure of
plant or machinery (which could not have been prevented by
Good Industry Practice), or Legal Requirement governing
either Party, provided that lack of funds in and of itself
shall not be interpreted as a cause beyond the reasonable
control of that Party.
1.1.43 "FORMAL PRESENTATION" - an oral presentation with supporting
written evidence of the outcome of a clinical study given at
a time before the formal written report has been completed
but which contains a final assessment of the results and
conclusions of such study.
1.1.44 "FTE" - the equivalent of the work of a scientist or other
project managerial professional, full time for one year,
which equates to *** hours per day, *** days per week,
excluding national holidays and reasonable vacation being a
total of *** days or *** hours per year of work.
1.1.45 "GAAP" - generally accepted accounting principles from time
to time current in USA.
1.1.46 "GENERIC VERSION" - any pharmaceutical product that is
recognized by a Regulatory Authority in the particular
country in the Territory as "AB" rated to a Product (or the
equivalent in such country) or is substitutable at the
pharmacy for a prescription written for a Product.
1.1.47 "GCP" - clinical practice as set out in:
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(a) Directive 2001/20/EC and Directive 2001/83/EC as well
as ICH-GCP and any other guidelines for good clinical
practice for trials on medicinal products in the
European Community as amended and applicable from time
to time; and
(b) US Code of Federal Regulations Title 21, Parts 50
(Protection of Human Subjects), 56 (Institutional
Review Boards) and 312 (Investigational New Drug
Applications), as may be amended from time to time; and
(c) the Declaration of Helsinki as last amended at the 52nd
World Medical Association in October 2000 and any
further amendments thereto; and
(d) the equivalent law or regulation in any country in the
Territory.
1.1.48 "GLP" - laboratory practice as set out in:
(a) Directive 2004/9/EC and Directive 2004/10/EC as may be
amended or replaced from time to time as well as any
Rules Governing Medicinal Products in the European
Community Vol III, ISBN 92.825 9619-2 (ex OECD
principles of GLP) as amended and applicable from time
to time; and
(b) US Code of Federal Regulations, Title 21, Part 58 (Good
Laboratory Practice for Nonclinical Laboratory
Studies); and
(c) the equivalent law or regulation in any country in the
Territory.
1.1.49 "GOOD MANUFACTURING PRACTICE" or "GMP" - manufacture in
accordance with:
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(a) Directive 91/412/EEC and Directive 2003/94/EC or any
other applicable European Community Legislation or
regulation as amended and applicable from time to time;
(b) those practices in the manufacture of pharmaceutical
products that are recognized as the current good
manufacturing practices by the FDA in accordance with
FDA regulations, guidelines, other administrative
interpretations, and rulings in connection therewith,
including but not limited to those regulations cited in
21 C.F.R. parts 210 and 211, all as they may be amended
from time to time; and
(c) the equivalent law or regulation in any country in the
Territory.
1.1.50 "IND" - an investigational new drug application filed with
the FDA prior to beginning clinical trials in humans or any
comparable application filed with the Regulatory Authority
of a country other than the United States prior to beginning
trials in humans in that country.
1.1.51 "INITIAL FDA MEETING" - the meeting between Vernalis and the
FDA, with Endo present (if acceptable to the FDA), scheduled
to be held on ***, with respect to the MAM & Paediatric
Development Program.
1.1.52 "INSOLVENCY EVENT" - in relation to either Party, means any
one of the following:
(a) a notice having been issued to convene a meeting for
the purpose of passing a resolution to wind up that
Party, or such a resolution having been passed other
than a resolution for the solvent reconstruction or
reorganisation of that Party or for the purpose of
inclusion of any part of
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the share capital of that Party in the Official List of
the London Stock Exchange or in the list of the New
York Stock Exchange or quotation of the same on the
National Association of Securities Dealers Automated
Quotation System or any other international stock
exchange; or
(b) a resolution having been passed by that Party's
directors to seek a winding up order or a petition for
a winding up order having been presented against that
Party which has not been dismissed or withdrawn within
7 days of its presentation, or any analogous action is
taken in a jurisdiction other than England and Wales;
or
(c) a resolution having been proposed by any Party to
appoint an administrator, or to apply to court for an
administration order, or an application for an
administration order having been lodged with the Court
whether or not by a Party or any step is taken pursuant
to the Insolvency Xxx 0000, Schedule B1 and/or the
Insolvency Rules 1986 to appoint an administrator out
of court or any Party enters administration, or any
analogous action that is taken in a jurisdiction other
than England and Wales; or
(d) a receiver, administrative receiver, receiver and
manager, court appointed receiver, interim receiver,
custodian, sequestrator or similar officer is appointed
in respect of that Party or over any part of that
Party's assets or any third party takes steps to
appoint such an officer in respect of that Party or an
encumbrancer takes steps to enforce or enforces its
security over any part of any Party's assets, or any
analogous action that is taken in a jurisdiction other
than England and Wales; or
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(e) a moratorium comes into force in respect of any Party
or a Party's directors resolve to make a proposal for a
voluntary arrangement or meetings are convened for
consideration of a proposal for a voluntary arrangement
made in relation to that Party under Part I and/or
Schedule A1 of the Insolvency Xxx 0000, or any
analogous action that is taken in a jurisdiction other
than England and Wales; or
(f) an application or proposal is made under section 425
Companies Act 1985 (as amended), or any analogous
action that is taken in a jurisdiction other than
England and Wales; or
(g) a step or event having been taken or arisen outside the
United Kingdom which is similar or analogous to any of
the steps or events listed at (a) to (f) above in the
case of Endo under the US Bankruptcy Code (including a
filing under Chapter 11 proceedings) or other relevant
laws of the USA which, in the case of a filing made
against Endo, shall not have been appealed within 7
days of having been lodged or such an order shall have
been made and not dismissed within thirty (30) days
thereafter; or
(h) a Party takes any step, whether under the Insolvency
Xxx 0000 or otherwise (including starting
negotiations), with a view to readjustment,
rescheduling or deferral of any part of that Party's
indebtedness, or proposes or makes any general
assignment, composition or arrangement with or for the
benefit of all or some of that Party's creditors or
makes or suspends or threatens to suspend making
payments to all or some of that Party's creditors or
the Party submits to any type of voluntary arrangement,
or any
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analogous action that is taken in a jurisdiction other
than England and Wales; or
(i) where that Party is resident in the United Kingdom it
is unable to pay or has no reasonable prospect of being
able to pay its debts within the meaning of Section 123
Insolvency Act 1986, but disregarding references in the
Insolvency Xxx 0000 to proving this inability to the
court's satisfaction, or any analogous event that is
taken in a jurisdiction other than England and Wales.
1.1.53 "INTERIM PERIOD" - the period between the Closing Date and
the date of Re-Launch in the USA as notified by Endo to
Vernalis under Clause 6.1.1.
1.1.54 "INVENTORY STATEMENT" - the statement of the quantity and
value of Stock at the Closing Date agreed by Vernalis and
Endo (or determined) in accordance with Schedule 2.
1.1.55 "KNOW HOW" - technical and other information which is not in
the public domain, including information comprising or
relating to concepts, discoveries, data, designs, formulae,
ideas, inventions, methods, models, assays, research plans,
procedures, designs for experiments and tests and results of
experimentation and testing (including results of research
or development), processes (including manufacturing
processes, specifications and techniques), laboratory
records, chemical, pharmacological, toxicological, clinical,
analytical and quality control data, trial data, case report
forms, data analyses, reports, manufacturing data,
information contained in submissions to and information from
ethical committees and Regulatory Authorities, data
concerning pricing or reimbursement including discounts and
rebates to particular customers, data concerning dealings
with managed and similar healthcare providers including
lists of
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customers and key prescribers, data concerning trade
inventory levels, data concerning returns and chargebacks
and any other data covering the supply chain, and summaries
of any of the foregoing. Know How includes Documents
containing Know How, including but not limited to any rights
including trade secrets, copyright, database or design
rights protecting such Know How. The fact that an item is
known to the public shall not be taken to preclude the
possibility that a compilation including the item, and/or a
development relating to the item, is not known to the
public.
1.1.56 "LEGAL REQUIREMENT" - any present or future law, regulation,
directive, instruction, direction or rule of any Competent
Authority or Regulatory Authority including any amendment,
extension or replacement thereof which is from time to time
in force.
1.1.57 "LOAN AGREEMENT" - the loan agreement entered into by the
Parties on the Signature Date.
1.1.58 "MAM" - menstrual associated migraine.
1.1.59 "MAM & PAEDIATRIC DEVELOPMENT PROGRAM" - the program of work
to be conducted and managed by Vernalis hereunder for the
clinical development program of the Product for purposes of
gaining an approved indication for use in MAM and leading to
Marketing Authorisation for the same and for those
paediatric studies required by FDA which program is set out
in Schedule 3 hereto.
1.1.60 "MAM PRODUCT" - the Product with a Marketing Authorisation
for MAM.
1.1.61 "MAM PRODUCT IND" - the IND number IND 48,933 (encompassing,
inter alia, the identification to study the use of
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frovatriptan for the prevention of menstrually-associated
migraine) filed in respect of the Product pursuant to C.F.R.
Parts 312 of the U.S. Food, Drug and Cosmetic Xxx 0000.
1.1.62 "MAM PRODUCT LAUNCH" - the commercial launch of MAM Product
in USA.
1.1.63 "MANAGED CARE AGREEMENTS AND ASSIGNED CONTRACTS" - the
agreements set out in Schedule 4.
1.1.64 "MARKETING AUTHORISATION" - any approval required from a
Regulatory Authority to market and sell a Product in any
country of the Territory including any approval for a label
extension or new indication and also including any pricing
or reimbursement approval required or commercially
desirable.
1.1.65 "MARKETING MATERIALS"- any packaging, advertising and
promotional literature and materials in each case used in
the advertising and promotion of the Product in the
Territory in Vernalis' possession at the Closing Date.
1.1.66 "MATERIAL" - any chemical or biological substance other than
the Compound including any:
(a) organic or inorganic element;
(b) drug or pro-drug; and
(c) assay or reagent.
1.1.67 "MONIES" - all monies due and outstanding to Endo from
Vernalis under the Loan Agreement from time to time.
1.1.68 "NDA" - a new drug license application filed with the FDA to
obtain Marketing Authorisation for a pharmaceutical product
in the USA, or any comparable application filed with the
Regulatory
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Authorities in or for a country or group of countries other
than the USA to obtain Marketing Authorisation for a
pharmaceutical product in or for that country or within that
group of countries.
1.1.69 "NET SALES" - the gross amount invoiced for sales of
Product(s), in arm's length sales by Endo or its Affiliates,
agents and distributors to Third Parties, less the following
deductions from such gross amounts which are actually
incurred, allowed, accrued or specifically allocated:
(i) credits, price adjustments or allowances for
damaged products, returns, recalls or rejections
of such products;
(ii) cash and quantity discounts, allowances and
credits and other customary discounts (other than
those granted at the time of invoicing which have
already been included in the gross amount
invoiced) or retroactive price reductions;
(iii) chargeback payments and rebates (or the
equivalent thereof) granted to group purchasing
organizations, managed health care organizations
or to federal, state/provincial, local and other
governments, including their agencies, or to
trade customers;
(iv) any freight charges invoiced by Endo, its
Affiliates, its agents or distributors, including
postage, shipping, insurance and other
transportation charges; and
(v) sales taxes, value-added taxes (to the extent not
refundable in accordance with applicable law),
and excise taxes, tariffs and duties, and other
taxes
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directly related to the sale (but not including
taxes assessed against the income derived from
such sale).
"Net Sales" shall not include any provision for unpaid
amounts owed by Third Party purchasers of the Products or
sales among the Parties and their respective Affiliates or
distributors.
Such amounts shall be determined from the books and records
of Endo maintained in accordance with GAAP consistently
applied.
In the event that Product is sold as a Combination Product
in any country of the Territory, the Net Sales from the
Combination Product in that country for the purposes of
determining royalty payments shall be determined by ***.
In the event that the average sale price of the Product in
that country can be determined but the average sale price of
the Combined Product in that country cannot be determined,
or the average sale price of the Combined Product in that
country can be determined but the average sale price of the
Product in that country cannot be determined, ***.
1.1.70 "PARTY" or "PARTIES" - Vernalis and/or Endo.
1.1.71 "PATENT RIGHTS" - patent applications and patents, utility
certificates, improvement patents and models and
certificates of addition and all foreign counterparts of
them in all countries, including any divisional applications
and patents, refilings, renewals, re-examinations,
continuations, continuations-in-part, patents of addition,
extensions, (including patent term extensions,) reissues,
substitutions, confirmations, registrations, revalidations,
and any equivalents of the foregoing in any and all
countries of or to any of them, as well as any supplementary
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protection certificates and equivalent protection rights in
respect of any of them.
1.1.72 "PCP" - the Detailing of Product by sales personnel to
primary care physicians.
1.1.73 "PERSON" - an individual or a corporation, partnership,
association, trust or any other entity or organization,
including a government or political subdivision or an agency
or instrumentality thereof.
1.1.74 "PHASE III CLINICAL TRIALS" - large scale, pivotal
multicentre, human clinical trials conducted in a sufficient
number of patients to establish safety or efficacy in the
particular claim and indication tested and required to
obtain Marketing Authorisation.
1.1.75 "PRIMARY DETAIL" - a full Product presentation presented in
the first position during a Detail in which key Product
attributes are verbally presented in a balanced manner.
1.1.76 "PRODUCT(s)" - any pharmaceutical product in which the
Compound is an active ingredient and in relation to which
Marketing Authorisation has been granted. For the avoidance
of doubt it is declared and agreed that this definition
includes (i) any form of the Product Commercialised by Endo
hereunder regardless of indication which includes all line
extensions of the Product (including those that provide for
different dosage strengths); and (ii) any Product
Enhancements. If a pharmaceutical product can be marketed
and sold without pricing or reimbursement approval nothing
in this definition requires such approval for it to be
classified as a Product for the purposes of this Agreement.
1.1.77 "PRODUCT ENHANCEMENT" - any improvements made after the
Closing Date in the Product's formulation or delivery, any
and all
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line extensions of the Product (including those that provide
for different dosage strengths), and any and all Combination
Products and any over-the-counter version of the Product.
1.1.78 "PRODUCT REGISTRATION"-
(a) the NDA number NDA 021006 filed in respect of the
Product pursuant to 21 C.F.R. Part 314 of the U.S.
Food, Drug and Cosmetic Xxx 0000; and
(b) the New Drug Submission control number 065221 made
pursuant to Division 8 of the Food and Drugs Act
Regulations (Canada); and
(c) all supplements or amendments to any of the foregoing.
1.1.79 "PRODUCT REGISTRATION INFORMATION"-
(a) the complete NDA, MAM Product IND and New Drug
Submission files referred to in or served in relation
to the Product Registration or MAM Product IND; and
(b) any and all regulatory correspondence between Elan
Group and any Regulatory Authority in the Territory in
relation to the Product Registration, MAM Product IND
or the Product; and
(c) all dossiers, data, reports and other material in
written or electronic form to the extent relating to
the Product Registration, MAM Product IND or the
Product which have been filed with any Regulatory
Authority.
1.1.80 "QUARTER" - each period of three months ending on 31 March,
30 June, 30 September or 31 December and "Quarterly" shall
be construed accordingly.
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1.1.81 "RECIPIENT PARTY" - the Party which receives Confidential
Information from the other Party.
1.1.82 "REGISTERED TRADEMARKS" - U.S. Federal Trade Xxxx
Registration No. 2,828,476 registered on March 30, 2004 and
Canadian trade xxxx application no. 1123447, each for
`FROVA'.
1.1.83 "REGULATORY AUTHORITY" - any national, supranational (e.g.,
the European Commission, the Council of the European Union,
the European Agency for the Evaluation of Medicinal
Products), regional, state or local regulatory agency,
department, bureau, commission, council or other
governmental entity including the FDA, in each country
involved in the granting of Marketing Authorisation for the
Product.
1.1.84 "RE-LAUNCH" - the first invoiced commercial sale by Endo or
its Affiliates of a Product in each country of the Territory
***.
1.1.85 "RE-LAUNCH DATE" - the date of Re-Launch in each country of
the Territory.
1.1.86 "REPRESENTATIVES" - each of the Parties, their Affiliates or
each of their directors, officers, employees, agents and
advisors.
1.1.87 "SAFETY AGREEMENT" - a safety and data exchange agreement
between the Parties dealing with each of the Parties
responsibilities in respect of pharmacovigilance.
1.1.88 "SECONDARY DETAIL" - a full Product presentation not
presented in the first position during a Detail in which key
Product attributes are verbally presented in a balanced
manner.
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1.1.89 "SECURITY AGREEMENT" - the Security Agreement to be entered
into between the Parties to which reference is made in the
Loan Agreement.
1.1.90 "SIGNATURE DATE" - the date upon which this Agreement is
executed by both of the Parties to it.
1.1.91 "SPECIALTY DETAILING" - the Detailing of Product by
specialty sales personnel to neurologists.
1.1.92 "SPECIALTY SALES FORCE" - sales personnel employed by Endo
for Specialty Detailing, including Vernalis Specialty Sales
Personnel.
1.1.93 "STEERING COMMITTEE" or "SC" - the committee established
pursuant to Clause 7.1.
1.1.94 "STOCK" - the stock of:
(a) Frova 2.5mg Tab, 9 Count Blister with an expiration
date on or after the *** month anniversary of the
Closing Date;
(b) Those certain *** Frova 2.5 mg Tab 2 Count Blisters
with an expiration date on or after *** for use as
samples;
(c) ***;
(d) ***; and
(e) ***, subject to the terms set forth in Schedule 2,
in each case held by or on behalf of Vernalis at the Closing
Date, listed in the Inventory Statement and valued at Cost,
excluding in each case inventory which is not good,
merchantable and suitable for sale.
1.1.95 "SUPPLY AND TECHNICAL AGREEMENTS" -
(a) the API Supply Agreement; and
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(b) the Frovatriptan supply agreement between Vernalis and
Xxxxx Limited, dated January 1, 2002; and
(c) the other supply and technical agreements listed in
Schedule 6.
1.1.96 "TERRITORY" - Canada, Mexico, the United States of America,
its territories and possessions and the Commonwealth of
Puerto Rico.
1.1.97 "TERRITORY STUDY" - a clinical trial and/or other study on
Product which is conducted by Vernalis in the Territory, as
specified in Clause 8.10.
1.1.98 "THIRD PARTY" - any Person who or which is neither a Party
nor an Affiliate of a Party.
1.1.99 "TRANSITIONAL SERVICES AGREEMENT" - the transitional
services agreement made between Vernalis and certain
companies in the Elan Group dated May 18, 2004.
1.1.100 "UK AFFILIATE" - an Affiliate of Vernalis, then and
thereafter existing, incorporated or otherwise organized
under the laws of England and Wales or Scotland.
1.1.101 "UNREGISTERED TRADE MARKS" - Vernalis' right, title and
interest in the name and xxxx FROVA and in the logo
reproduced in Schedule 7 (The Frova Logo) in the Territory
(in each case).
1.1.102 "USD" - United States Dollars.
1.1.103 "USE SUGGESTION" - any suggestion by Vernalis to Endo for a
new clinical use or indication for Product (including
Combination Product) which suggestion ***, provided that
Endo provides evidence of such consideration or
contemplation within 10 days of Endo's receipt of such Use
Suggestion from Vernalis.
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1.1.104 "VALID CLAIM" - either:
(a) a claim of an issued and unexpired patent included
within Patent Rights, which has not been held
permanently revoked, unenforceable or invalid by a
decision of a court or other governmental agency of
competent jurisdiction, unappealable or un-appealed
within the time allowed for appeal, and which has not
been admitted to be invalid or unenforceable through
reissue or disclaimer or otherwise; or
(b) a claim of a pending patent application included within
Patent Rights which claim was filed and is being
prosecuted in good faith and has not been abandoned or
finally disallowed without the possibility of appeal or
refiling of the application.
1.1.105 "VERNALIS IP" - the Vernalis Patent Rights, Vernalis Know
How, Vernalis Materials and Vernalis Trade Marks whether any
of the foregoing are in existence as of the Closing Date or
subject to the provisions of Clauses 8.11 and 8.12 come into
existence during the term of this Agreement.
1.1.106 "VERNALIS KNOW HOW" - Know How owned by or licensed to
Vernalis either at the Closing Date or subject to the
provision of Clauses 8.11 and 8.12 during the term of this
Agreement (but excluding for the purposes of this definition
the Product Registration and Product Registration
Information) that relates to (i) the Compound or its
development or previous Commercialisation in the Territory;
(ii) Commercialisation outside of the Territory to the
extent Vernalis has rights to license the same; (iii) the
MAM & Paediatric Development Program; and (iv) Product
Enhancements, to the extent Vernalis has rights to license
the same.
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1.1.107 "VERNALIS MATERIALS" - Materials owned by or licensed to
Vernalis or its Affiliates (other than from Endo) at the
Closing Date or subject to the provisions of Clauses 8.11
and 8.12 acquired by Vernalis or its Affiliates during the
period of this Agreement which are Materials that are
necessary or useful for or which otherwise relate to the
development or Commercialisation of Product including
Materials used in clinical studies or being or relating to
Product Enhancements.
1.1.108 "VERNALIS PATENT RIGHTS" - the Patent Rights which are owned
by or licensed to Vernalis at the Closing Date Covering the
Compound or its manufacture or use in the Territory set out
in Schedule 8 and subject to the provisions of Clauses 8.11
and 8.12, any other Patent Rights in the Territory which are
owned or become owned by or licensed to Vernalis during this
Agreement which Cover (i) the making, using or
Commercialisation of Compound or Product in the form in
which it exists at the Closing Date; and (ii) Product
Enhancements, to the extent Vernalis has rights to license
the same.
1.1.109 "VERNALIS SPECIALITY SALES PERSONNEL" - sales
representatives employed by Vernalis and engaged in
Specialty Detailing pursuant to the Co-Promotion Agreement.
1.1.110 "VERNALIS TRADE MARKS" - (i) the Registered Trade Marks, and
(ii) the Unregistered Trade Marks.
1.1.111 "YEAR" - any period of twelve (12) months which ends
December 31 in each year.
2. CONDITION PRECEDENT
2.1 The coming into force and effect of this Agreement is conditional on
any applicable waiting period under the Xxxx Xxxxx Xxxxxx Anti-Trust
Improvements Xxx 0000, as amended, and any regulations made
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thereunder ("HSR Act") relating to the proposed licenses and
transfer of rights pursuant to this Agreement having expired or been
terminated. Promptly after the Signature Date, each of Endo and
Vernalis shall make any necessary filing under the HSR Act, and the
Parties will cooperate as necessary in coordinating such filings.
Upon such expiration or termination, and satisfaction of the
conditions set forth in Clauses 2.5, 2.6 and 2.7 below, this
Agreement shall come into full force and effect.
2.2 If the condition in Clause 2.1 has not been satisfied by December
31, 2004, any Party may terminate this Agreement with immediate
effect at any time thereafter.
2.3 From the Signature Date until the Closing Date, Vernalis shall:
2.3.1 conduct its business with respect to the Product in the
Territory only in the ordinary course of business, including
maintaining and preserving goodwill associated with the
Product and confer with, and provide information to, Endo on
a regular basis concerning material operational matters and
the status of operations and finances relating to the
Product in the Territory;
2.3.2 afford to Endo employees or representatives, reasonable
access to Vernalis' offices, properties, books and records
that relate to the Product in the Territory, and, to the
extent within Vernalis' rights under its existing
contractual relationships, reasonable access to customers,
vendors, consultants and suppliers that relate to the
Product in the Territory, in each case during normal
business hours, in order that Endo may make reasonable
inspections, investigations, analyses and audits with
respect to the Product; and
2.3.3 promptly notify Endo in writing of (a) any material notice
or other material communication from any Regulatory
Authority that may affect the Product in the Territory ,
including any notice of
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violation; (b) any actions or investigations commenced or
threatened related to the Product and (c) the occurrence or
non-occurrence of any event, condition or circumstance which
would cause any representation or warranty of Vernalis
contained in this Agreement to be untrue or inaccurate in
any material respect.
2.4 Within 30 days after the Signature Date, Vernalis shall deliver to
Endo, to the extent in its possession or control (and which it is
free to disclose) or otherwise available to Vernalis given its
current contractual arrangements in effect as of the Signature Date,
the following, to the extent they relate to or affect the Product in
the Territory, provided, that, delivery of the items set forth in
this Clause 2.4 shall not be a condition to the Closing Date, and
provided further that Vernalis shall use its best efforts to obtain
permission necessary to disclose any of the items set forth in
Clause 2.4 which it is not free to disclose (which, for the
avoidance of doubt, shall not require Vernalis to make any payments
for such permission):
2.4.1 A list of all investigators ***;
2.4.2 Documentation as to all formulation work performed to date
on the Product, including by both Vernalis, Vernalis'
Affiliates and contractors and the Elan Group;
2.4.3 All documentation relating to the research grants listed on
Schedule 4, including investigator-initiated studies of
which Vernalis is aware;
2.4.4 Copies of all Marketing Materials developed prior to and
since the Product's initial launch, whether or not actually
used to market the Product;
2.4.5 Copies of all DDMAC correspondence relating to the marketing
or sale of the Product prior to and since the initial launch
of
- 28 -
Product;
2.4.6 Lists of prescribers, including physicians, nurse
practitioners, physician assistants, pharmacies, hospitals
and other organizations, to which Product has been Detailed,
including any lists for segmentation;
2.4.7 Report of sampling activity by physician or healthcare
provider including units distributed;
2.4.8 Copies of all Managed Care Agreements, Assigned Contracts
and Non-Assignable Contracts;
2.4.9 A list of all trade customers (retail, wholesale and other)
and any applicable rebates, discounts, or administrative
payments for each customer and sales and unit history by lot
number since the initial launch of the Product in the
Territory;
2.4.10 Updated sales, returns and rebate reports;
2.4.11 Updated inventory reports showing WIP, API, finished product
and samples;
2.4.12 Copies of any safety agreements to which Vernalis is a party
with respect to the Product; and
2.4.13 Copies of any purchase orders from Elan or Vernalis to the
Sharp Corporation in the 12 months prior to the Signature
Date.
2.5 On or before the Closing Date, Vernalis shall ***.
2.6 On or before the Closing Date, Vernalis shall deliver to Endo a
report of "best price" (as defined under the Social Security Act, 42
U.S.C. Section 1396r-8(c)(1)(c)) and any other pricing offered to a
governmental entity for the Product.
2.7 Effective as of the Closing Date, the Parties shall have entered
into a
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Safety Agreement, in the form agreed pursuant to Clause 3.6.
3. LICENSE
3.1 Subject to (i) Vernalis' right to conduct or have conducted the MAM
& Paediatric Development Program, (ii) Vernalis' right to conduct a
Territory Study and (iii) Vernalis' right to co-promote under Clause
9 and Schedule 10, and in consideration of the payments referred to
in Clause 11, Vernalis hereby grants to Endo and its Affiliates with
effect from the Closing Date a sole and exclusive (even as against
Vernalis) licence for each country of the Territory under Vernalis
IP to make, have made, use, Commercialise and have Commercialised
the Product including the right to record sales for its own account.
3.2 For the avoidance of doubt it is declared and agreed that Endo shall
not be entitled to sublicense the rights granted to it hereunder
without the prior written consent of Vernalis, provided that:
3.2.1 For the purpose of the exploitation of the rights granted to
Endo hereunder in Canada, Endo shall be entitled to
sublicense to *** or any replacement for such sublicensee
from time to time as notified by Endo to Vernalis in writing;
3.2.2 For the purpose of the exploitation of the rights granted to
Endo hereunder in Mexico, Endo shall be entitled to
sublicense from time to time as notified to Vernalis in
writing;
3.2.3 Endo shall not be restricted from appointing distributors,
advertisers, public relations agencies, consultants or
advisors to assist Endo with Commercialising the Product in
the Territory; provided, however, that Endo shall not have
the right to appoint any contract sales organization or
representatives to assist it and its Affiliates in Detailing,
except that ***; and
3.2.4 Notwithstanding the provisions of this Clause 3.2, Endo shall
be
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entitled to sublicense the rights granted to it hereunder to
an Affiliate of Endo.
3.3 To the extent that Endo is permitted under this Agreement to
sublicense the rights granted to it hereunder, Endo shall remain
responsible for all of its obligations hereunder and if the acts or
omissions of any such sublicensee cause Endo to be in breach of this
Agreement, Endo shall be responsible therefor regardless of any
remedy that Endo may have against the sublicensee for breach of the
sublicense.
3.4 Forthwith following the Closing Date and during the period of this
Agreement, Vernalis shall disclose and make available to Endo the
subject matter of any and all then-existing Vernalis IP for use in
connection with Endo's making, having made, use and
Commercialisation of the Product in the Territory, including, but
subject to Clauses 8.11 and 8.12, any and all Vernalis IP comprising
or relating to Product Enhancements and relevant Documents. In
addition to the foregoing, Vernalis shall also disclose and make
available to Endo all information relevant or necessary for Endo to
fully exercise its rights and fulfil its obligations hereunder.
3.5 Vernalis shall, at Vernalis' cost, provide Endo with reasonable
assistance including meetings, conference calls, exchange of
documents and other appropriate forms of communication to explain
knowledge and experience obtained by Vernalis, either directly or
through a Third Party, with regard to the Product (and for the
avoidance of doubt in addition to the time spent by Vernalis on the
Steering Committee) in the period prior to Re-Launch and after the
Re-Launch. Furthermore, Vernalis shall disclose, make available and,
at the request of Endo, assign, to the extent that Vernalis has the
right to do so, to Endo any agreements, rights or obligations which
become known to Vernalis after the Closing Date and which are, in
Endo's opinion, necessary for the effective Commercialisation of the
Product.
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3.6 On the Closing Date, the Parties shall execute a Safety Agreement in
a form mutually agreed and which shall be negotiated in good faith.
Each Party shall comply with the terms and conditions of the Safety
Agreement, including, but not limited to promptly providing one
another with all information concerning any charges, complaints or
claims reportable to any Regulatory Authority relating to the
Product. Vernalis shall ensure that all of its and its Affiliates'
future licensees and future sub-licensees outside of the Territory
become parties to a safety agreement that contains the same material
terms as those set forth in the Safety Agreement (including
requirements regarding the timing and substance of reports for
adverse events) and are bound to report safety information in
accordance with the terms of such safety agreement. Vernalis shall,
immediately upon becoming aware of any such information, provide
Endo with all information Vernalis receives from any of its current
licensees and sublicensees pursuant to any safety agreement in
existence on the Signature Date with any of such licensees or
sublicensees (or any replacement or successor agreement thereof).
3.7 Vernalis shall, so far as is permitted by Legal Requirements and
without seeking to amend any license in existence as of the
Signature Date which it has granted outside the Territory, ensure
that its Affiliates and the licensees and sub-licensees of it or any
of its Affiliates of the Compound and/or Product outside the
Territory do not market or sell such Compound or Product in the
Territory.
3.8 Vernalis hereby grants Endo a royalty-free, non-exclusive,
non-sub-licensable and non-assignable license to use the name and
xxxx "Elan", the Elan group corporate logo or any name or xxxx
including or comprising "Elan" (including, without limitation, as
part of any of the corporate or trading names of any Elan Group
undertaking) and the stylized "e" symbol currently embossed on the
Product (the "e" Symbol) (the "Xxxx Xxxxx") as follows:
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3.8.1 the Xxxx Xxxxx (other than the "e" Symbol) on packaging of
the Product and the "e" Symbol on tablets in both cases which
are intended for sale by Endo or its Affiliates on or before
February 18, 2005;
3.8.2 Endo shall no later than *** destroy all existing stocks of
Product in packaging bearing any Elan Xxxx and remove the "e"
Symbol from all equipment used to xxxx the Product in Endo's
possession or control; and
3.8.3 Endo shall not intentionally violate any of the provisions of
Clause 11.4 of the Elan Asset Transfer Agreement prior
to ***.
4. TRANSFER OF THE PRODUCT REGISTRATIONS
On or before the Closing Date, or as soon as practicable thereafter, upon
written notice from Endo, Vernalis and Endo shall transfer the Product
Registrations and the Product Registration Information to Endo free from any
Encumbrance. Vernalis shall deliver signed transfer letters to the FDA, Health
Canada or any other Regulatory Authority in the Territory, as the case may be,
and all other notice, application, submission, report and other instrument,
document, correspondence or filing presented to it by Endo that is necessary or
useful for the transfer of the Product Registrations to Endo. From the Signature
Date until the Product Registrations are transferred to Endo, Vernalis shall:
(i) submit all necessary filings, correspondence and reports, attend all
meetings and otherwise conduct all activities required to maintain the Product
Registrations, (ii) promptly submit to Endo copies of all filings and
correspondence that are submitted to any Regulatory Authority which relates to
the Product in the Territory, and (iii) provide Endo with advance written notice
of any meetings or telephone calls with any Regulatory Authority in the
Territory relating to Product Registrations and allow Endo to participate in all
such meetings or telephone calls.
5. TRANSFER OF OTHER ASSETS/TRANSITIONAL SERVICES AGREEMENT
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5.1 Vernalis hereby transfers effective on (and contingent upon) the
Closing Date in the USA transfer to Endo with full title guarantee
and free of any Encumbrance:
5.1.1 in a novation or assignment and in a form satisfactory to
Endo acting reasonably, the Managed Care Agreements and
Assigned Contracts and the Supply and Technical Agreements;
5.1.2 the Stock;
5.1.3 all right, title and interest in the Copyrights (including
the Marketing Materials) and the registrations for the Domain
Names.
5.2 Vernalis shall during the Interim Period procure the provision to
Endo of the services specified in the Transitional Services
Agreement (with the Costs to Vernalis (if any) to be reimbursed by
Endo to Vernalis within thirty (30) days of receipt by Endo of
Vernalis receipt therefor), but shall terminate each service
provided under the Transitional Services Agreement as soon as
practicable as agreed between Vernalis and Endo. For the avoidance
of doubt it is declared and agreed that such services may be
terminated on different dates and, if it is necessary for Vernalis
to extend the time period for provision of certain services provided
by the Elan Group pursuant to the Transitional Services Agreement
(to the extent Vernalis has the right to extend the time period for
such services pursuant to the Transitional Services Agreement) to
comply with the provisions of this Clause 5, it shall do so. In
relation to such services provided by Vernalis, after the Closing
Date, Vernalis shall provide to Endo on a weekly basis a report,
which will include a description of actions, if any, taken by
Vernalis or the Elan Group under the Transitional Services Agreement
which may materially affect the Product. Except as otherwise
provided in this Clause 5, Vernalis shall cause the Transitional
Services Agreement to remain in full force and effect during the
Interim Period, and thereafter, to the extent requested by
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Endo, but in no event to extend beyond the expiration date of the
Transitional Services Agreement.
5.3 On and after the Closing Date, Vernalis shall deliver to Endo all
purchase orders for Product received by Vernalis or Elan.
5.4 After the Closing Date, Vernalis will use Commercially Reasonable
Efforts to ensure that all Managed Care Agreements relating to the
Product which are not assigned to Endo hereunder (the "Non-Assigned
Contracts") are maintained by the Elan Group until the earlier of:
(i) the date Endo provides written notice to Vernalis to terminate
the Non-Assigned Contracts or (ii) the expiration of Vernalis'
rights in such Non-Assigned Contracts.
5.5 Payment Obligations.
5.5.1 Vernalis shall be responsible for any payments, rebates,
administrative fees or chargebacks ("Commercial Payments")
due to customers (including those payments due under Managed
Care Agreements and Non-Assigned Contracts) for Products sold
or dispensed up to and on the Closing Date, and Endo shall be
responsible for Commercial Payments to customers for Products
sold or dispensed after the Closing Date. After the Closing
Date, (i) Vernalis shall (through the Transitional Services
Agreement) process and pay all Commercial Payments in respect
of requests received by it or the Elan Group and (ii) Endo
shall process and pay all Commercial Payments in respect of
requests received by it. In the event that, with respect to
Products sold or dispensed during the Quarter in which the
Closing Date occurs, the Parties cannot determine the date on
which such Products were sold or dispensed, then the Party
that has made a Commercial Payment for such Product shall be
entitled to obtain reimbursement from the other Party on a
pro rata basis for such Commercial Payment (with Vernalis'
pro rata share constituting the proportion of days
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in the Quarter up to and including the Closing Date, and
Endo's pro rata share constituting the proportion of days in
such Quarter following the Closing Date). Either Party that
has made a Commercial Payment, all or a portion of which is
the responsibility of the other Party, shall submit a payment
request to the other Party, with supporting documentation,
and such other Party shall reimburse the requesting Party for
the Commercial Payment (or portion thereof) for which it is
responsible within 30 days of receipt of such request.
Notwithstanding the provisions of this Clause 5.5.1, if Endo
notifies Vernalis that it disputes in good faith the payment
of any Commercial Payment for which it would otherwise be
responsible and which Vernalis has processed and paid
pursuant to the terms hereof, Vernalis shall take all
commercially reasonable measures to dispute such Commercial
Payment and obtain a refund thereof and Endo shall have no
responsibility to reimburse Vernalis for the disputed portion
of such Commercial Payment until the dispute is resolved.
5.5.2 Vernalis shall be responsible for any rebates due to a
governmental entity ("Government Rebates") applicable to any
Product sold up to and on the Closing Date. The Parties
acknowledge that the request for such payments is submitted
to the NDC holder of the Product and, as such, Vernalis will
receive, process and pay Government Rebates on all Product
bearing the Elan NDC and shall within 30 days of payment,
submit to Endo an invoice for the amounts of any Government
Rebates made on Product sold after the Closing Date. In the
event that, with respect to Products sold or dispensed during
the Quarter in which the Closing Date occurs, the Parties
cannot determine the date on which such Products were sold or
dispensed, then the Party that has made a Government Rebate
for such Product shall be entitled to obtain reimbursement
from the other Party on a pro
- 36 -
rata basis for such Government Rebate (with Vernalis' pro
rata share constituting the proportion of days in the Quarter
up to and including the Closing Date, and Endo's pro rata
share constituting the proportion of days in such Quarter
following the Closing Date). Either Party that has made a
Government Rebate, all or a portion of which is the
responsibility of the other Party, shall submit a payment
request to the other Party, with supporting documentation,
and such other Party shall reimburse the requesting Party for
the Government Rebate (or portion thereof) for which it is
responsible within 30 days of receipt of such request.
5.5.3 Vernalis shall be responsible for returns from any customer
in respect of all Products sold or dispensed on or prior to
the Closing Date and Endo shall be responsible for returns in
respect of all Product sold or dispensed after the Closing
Date, regardless of when such return occurs. Neither Party
shall seek to encourage Product returns or accept Product
returns other than in the ordinary course of business save,
in each case, with the written consent of the other Party.
Endo shall process all Product returns received by it and
shall destroy the returned Product. Vernalis shall reimburse
Endo (within 10 days of request therefor) with respect to any
returns of Product sold on or prior to the Closing Date for
all Costs relating to the return, including the Cost of
destruction and related administrative costs and expenses.
5.6 For the avoidance of doubt, after the Closing Date, Endo shall book
sales in connection with all the Product in the Territory.
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6. ENDO COMMERCIALISATION
6.1 Endo and its Affiliates' core obligations in relation to
Commercialisation of Product in the Territory shall be as follows
(it being agreed that Vernalis' sole remedies for breach by Endo or
its Affiliates of Clauses 6.1.2 and 6.1.3 shall be limited to the
remedies specified therein):
6.1.1 to use its Commercially Reasonable Efforts to achieve
Re-Launch as soon as practicable. Endo shall promptly inform
Vernalis in writing of the occurrence of Re-Launch in each
country of the Territory. Endo shall also keep Vernalis
notified in writing of Endo's anticipated date of Re-Launch
in each country of the Territory;
6.1.2 within *** days following the Closing Date Endo shall provide
to Vernalis a marketing plan for the period commencing on the
Closing Date and ending ***. Endo shall also provide to
Vernalis no later than *** of each Year, an Annual Marketing
Plan and Budget for the upcoming Year that reflects its own
internal plans and budgets and is supportive of maximizing
the market potential of the Product, including (i) the
information set out in Schedule 9, which, with respect to
each of Years *** following MAM Product Launch, shall be no
less than the *** for such Years, and (ii) the number of
Details for the subsequent Year, which, with respect to each
of Years *** and ***, and each of the *** following MAM
Product Launch, shall be no less than the *** for such Years.
The budget shown in any such Annual Marketing Plan and Budget
shall be the fixed budget for the Year indicated ("Fixed
Budget") and the number of Details shown in any such Annual
Marketing Plan and Budget shall be the fixed number of
Details for the Year indicated ("Fixed Details"). No later
than (i) *** days after the end of each Year of this
Agreement or (ii) the date each Year on which Endo is
obligated
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under applicable law to file its annual report on Form 10-K
with the United States Securities and Exchange Commission,
whichever is later, Endo shall report to Vernalis (i) the
amount actually expended by Endo on Commitment in relation to
the Product in the Territory in the previous Year and (ii)
the number of Details in relation to the Product in the
Territory in the previous Year consistent with Schedule 5. If
for any two (2) consecutive Years such report shows Endo has
not met *** of the Estimated Commitments in each of such
Years, royalties payable to Vernalis for the subsequent two
(2) years under Clauses 11.9.2 or 11.9.3, as the case may be,
shall be calculated as if each of the royalty levels A, B, C,
D and E in such clauses were each *** higher;
6.1.3 use Commercially Reasonable Efforts to provide the Estimated
Detailing Effort in each Year specified in Schedule 5. If for
any two (2) consecutive Years such report shows that Endo has
not met a minimum of *** of the Estimated Detailing Efforts
in each of such Years, then Vernalis shall have the right,
but not the obligation, to carry out a minimum number of
Details equivalent to the average of those not carried out by
Endo or its Affiliates in the two Years in question under the
Annual Marketing Plan and Budget. If Vernalis elects to
increase its number of sales force representatives to make up
such shortfall in Details, then for the following two Years,
the cost and expenses for such minimum number of additional
Details undertaken by such additional sales force
representatives shall be borne by Endo under the terms set
forth in Clause 9 hereto. Vernalis shall cooperate and
coordinate with Endo the deployment of any such additional
sales force representatives and Detailing effort; and
6.1.4 use Commercially Reasonable Efforts to exploit the lifecycle
of the Product in accordance with best practice in the
- 39 -
pharmaceutical industry by carrying out, where appropriate as
determined by Endo in its reasonable opinion, Clinical
Studies and obtaining new Marketing Authorisations for the
Product in the Territory.
6.2 Subject always to the provisions of Clause 6.1, Endo and its
Affiliates shall use Commercially Reasonable Efforts to
Commercialise Product in the Territory as follows:
6.2.1 at all times deploy sales personnel (including any Vernalis
Specialty Sales Personnel utilized in accordance with the
Co-Promotion Option) as may be necessary to promote the
Product in the Territory, taking into account the sales
volume of the Product, the number of competitors, the
regulatory environment, the potential for sales in a
geographic area, the cost of sales personnel, and other
factors affecting Commercialisation;
6.2.2 market and promote the Product in accordance with the
Marketing Authorisation;
6.2.3 provide Vernalis with (i) copies of any scientific or
technical publications relating to the Product, the Compound
or any Clinical Study that it proposes to publish no later
than *** days prior to submission for publication and (ii)
copies of advertising, marketing or promotional information
or materials (in written, electronic or other forms) relating
to the Product, the Compound, any Clinical Study (including
reports of Clinical Studies used as promotional material) or
any Product Enhancement;
6.2.4 notify Vernalis of the outcome of any inspections by any
Regulatory Authority of which Endo becomes aware (either in
the Territory or outside of the Territory) of the facilities
at which Product is formulated, packaged and labelled;
- 40 -
6.2.5 not engage, either directly or indirectly, in the manufacture
or distribution of any pharmaceutical products which is or
contains a triptan and which therefore compete with the
Product in the Territory, provided, however, that in the
event of a Change of Control of Endo, the restrictions in
this Clause 6.2.5 shall no longer be effective, but instead,
for the Year following such Change of Control of Endo, if (i)
Endo (or its successor) does not meet (A) *** of the
Estimated Commitments as set forth in Clause 6.1.2 (if
applicable) or (B) *** of the Estimated Detailing Efforts as
set forth in Clause 6.1.3 (if applicable) or (ii) if such
Change of Control occurs after the *** anniversary of the
Closing Date and in the Year subsequent to such Change of
Control Endo (or its successor) fails to meet at least *** of
the Fixed Details and Fixed Budget set forth in the Annual
Marketing Plan and Budget for such Year, Vernalis shall have
the right to then terminate this Agreement on *** written
notice to Endo;
6.2.6 not seek customers, establish any branch or maintain any
distribution depot for the Product in any country which is
outside the Territory; and
6.2.7 not promote or otherwise solicit sales of the Product in any
country outside of the Territory.
6.3 Before using a Domain Name, Endo and Vernalis shall agree as to the
design of the homepage of such Domain Name, such agreement not to be
unreasonably withheld or delayed.
- 41 -
7. MANAGEMENT OF THE RELATIONSHIP
7.1 With effect from the Closing Date the Parties shall establish and
run the Steering Committee ("SC") as follows:
7.1.1 The SC shall comprise six (6) persons ("Members") and Endo
and Vernalis respectively shall be entitled to appoint three
(3) Members, to remove any Member appointed by it and to
appoint any person to fill a vacancy arising from the removal
or retirement of such Member appointed by it. The initial
Members shall be as follows:
ENDO MEMBERS
***
***
***
VERNALIS MEMBERS
***
***
***
Endo and Vernalis respectively shall each notify the other of
any change in the identities of their Members from time to
time. Members may be represented at any meeting by another
person designated by the absent Member. There will be a
Chairperson who will alternate between one of the Vernalis
Members and one of the Endo Members at each meeting.
7.1.2 The SC is not a decision making body but a forum through
which the Parties can liase concerning the Commercialisation
of the Product both inside and outside the Territory.
Vernalis acknowledges and agrees that all decisions relating
to the Commercialisation of the Product in the Territory
shall be in the sole discretion of Endo, provided always that
nothing in this
- 42 -
provision shall derogate from Endo's obligations under this
Agreement.
7.1.3 The venue for meetings shall alternate between the premises
of the Parties. Each Party shall be responsible for its own
expenses, including travel and accommodation Costs incurred
in connection with SC meetings.
7.1.4 The SC shall have power to invite persons whose special
skills or influence might assist an SC meeting, in confidence
and upon behalf of the SC, to attend and address meetings of
the SC. For the avoidance of doubt it is agreed that such
persons shall not be Members.
7.1.5 The SC Chairperson is responsible for promptly preparing the
minutes of any SC meeting, seeking unanimous approval of
those minutes from the Members who participated in the
meeting, signing and dating the approved minutes and promptly
distributing a copy of the signed minutes to each Party. It
is only such signed and dated minutes which shall constitute
acceptance by the SC.
7.2 The SC shall hold meetings in person as frequently as the Members
may agree shall be necessary during the period of this Agreement, or
more frequently upon the reasonable request of either Party, but in
any event no less frequently than monthly during the first six
months following the Closing Date and no less frequently than once a
Quarter thereafter. Dates of meetings to be held in person shall be
agreed by the Parties not less than thirty (30) days beforehand;
responsibility for arranging the meetings, including, at least,
providing notice and an agenda, shall alternate between the Parties;
the first meeting will take place as soon as practicable after the
Closing Date, but in no event later than twenty (20) Business Days
after the Closing Date and will be organised by Endo.
- 43 -
7.3 No later than ten (10) days prior to each meeting of the SC, Endo
and Vernalis will each provide the other with written copies of all
materials they intend to present at any SC meeting, which until
completion of the MAM & Paediatric Development Program shall include
a written report from Vernalis summarising its conduct of the MAM &
Paediatric Development Program since the previous meeting and any
material results. After receipt of any such report, either Party may
request additional information, and the Party to whom such request
is made shall promptly provide to the other Party such information.
7.4 The SC shall have the following particular functions:
7.4.1 it shall be the forum through which Vernalis reports its
progress with and the results of the MAM & Paediatric
Development Program;
7.4.2 it shall be the forum through which each Party reports to the
other Party details of any clinical study in relation to
Product or Product Enhancements which, in the case of Endo,
it or its Affiliates, or which, in the case of Vernalis it,
its Affiliates and its and its Affiliate's licensees and for
each of Endo's and Vernalis' and their respective Affiliate's
sub-licensees are proposing to carry out;
7.4.3 it shall be the forum through which the results of any such
clinical study are reported and through which any
publications or other advertising, marketing or promotional
information or materials are exchanged;
7.4.4 it shall be the forum through which each Party reports to the
other Party details of any Product Enhancement made by the
first Party or its Affiliates, or in the case of Vernalis,
Vernalis, its Affiliates and licensees and sub-licensees of
it or any of its Affiliates. In this respect, each Party
shall have a positive obligation to report
- 44 -
at each SC meeting upon any such Product Enhancements which
have been made by it since the previous SC meeting; and
7.4.5 it shall be the forum through which Vernalis makes Use
Suggestions to Endo.
7.5 Both Parties acknowledge and agree that they intend to be as
transparent as reasonably possible with each other on all material
issues relating to Commercialisation of Product, its further
development and the development and Commercialisation of Product
Enhancements both inside and outside the Territory and that the
forum for achieving such transparency shall be the SC.
8. FURTHER DEVELOPMENT OF THE PRODUCT
8.1 Subject to Clause 8.2, Vernalis shall undertake and assume
responsibility for completion of the MAM & Paediatric Development
Program. *** of the cost and expense of the MAM & Paediatric
Development Program, including internal FTE cost and expense
directly related to the conduct thereof, shall be the responsibility
of Vernalis, and Vernalis shall liase with Endo through the SC in an
effort to obtain a "***" (as defined in Schedule 1) indication for
the MAM Product. Notwithstanding the foregoing, and without
prejudice to any rights and remedies of Endo hereunder, Endo at its
option may assume the cost and expense of the MAM and Paediatric
Development Program following notice to Vernalis. Within thirty (30)
days of the completion of any clinical trial forming part of the MAM
& Paediatric Development Program (such completion to have occurred
when the data on safety and efficacy have been analysed
statistically and have undergone quality control in accordance with
GCP) by Vernalis it shall make a Formal Presentation in relation
thereto to Endo and shall supply to Endo all Vernalis Know How
necessary or useful in the case of the MAM Product for Endo to
prepare and submit a filing for an NDA for the MAM Product in the
Territory and, in the case of the Paediatric study, for Endo to
submit to the FDA.
- 45 -
Endo shall be responsible for registration of the Product for MAM in
the Territory. Endo shall keep Vernalis fully informed concerning
the progress of such registration and shall invite Vernalis to
participate in any meeting or conference calls held with FDA, Health
Canada or other Regulatory Authority concerning such registration.
8.2 Vernalis shall use Commercially Reasonable Efforts to complete the
MAM & Paediatric Development Program as follows:
8.2.1 Until the Initial FDA Meeting, Vernalis shall hold and be the
party of record for the MAM Product IND. Promptly following
the Initial FDA Meeting, Vernalis shall transfer the MAM
Product IND to Endo free from any Encumbrance. Vernalis shall
deliver signed transfer letters to the FDA and all other
notice, application, submission, report and other instrument,
document, correspondence or filing presented to it by Endo
that is necessary or useful for the transfer of MAM Product
IND to Endo.
8.2.2 Vernalis shall ensure that the MAM & Paediatric Development
Program is carried out in accordance with GLP, GCP and GMP.
Any animals involved in the MAM & Paediatric Development
Program shall be provided humane care and treatment in
accordance with current generally accepted veterinary
practice;
8.2.3 Vernalis shall keep or cause to be kept detailed written
records and reports of the progress of the MAM & Paediatric
Development Program in sufficient detail and in good
scientific manner appropriate for all purposes including
Marketing Authorisation purposes and patent purposes. These
written records and reports shall properly reflect all the
work done and the results achieved in carrying out the MAM &
Paediatric Development Program;
- 46 -
8.2.4 During the period of the MAM & Paediatric Development
Program, Vernalis shall be responsible at its cost and
expense for supplying all quantities of Product required for
the purposes of conducting any human or other studies within
the MAM & Paediatric Development Program; and
8.2.5 Vernalis shall conduct and complete, prior to the date
required by the FDA (or any extensions agreed with the FDA),
the Paediatric development program of the Product set out in
Schedule 3 hereto.
8.3 Vernalis shall provide Endo with copies of any scientific or
technical publications produced by Vernalis, its Affiliates, and
licensees and sub-licensees of Vernalis or any of its Affiliates
regarding the Product or Compound no later than ten (10) days prior
to submission for publication.
8.4 Endo shall prepare, submit and prosecute all NDAs and other
Regulatory Authority filings and applications required to obtain all
necessary Marketing Authorisations and pricing approvals to
Commercialise the MAM Product in each country of the Territory. Endo
shall be the owner and party of record for all such filings,
applications and approvals. The Costs associated with the
preparation, submission and prosecution of all NDAs and other
regulatory filings and applications shall be borne by Endo. At the
request of Endo, Vernalis shall take all necessary and appropriate
actions to assist Endo in the preparation of all NDAs and other
Regulatory Authority filings and applications, including providing
required information with respect to the study design, data
collection and results of the MAM & Paediatric Development Program.
Endo shall promptly inform Vernalis in writing of each NDA filing
made or Marketing Authorisation obtained by Endo or its Affiliates
in each country of the Territory in relation to the MAM Product.
8.5 During the term of the MAM & Paediatric Development Program and for
a period of three (3) years thereafter, Vernalis shall retain
accurate and
- 47 -
complete records showing the time devoted and activities performed
by each Vernalis person in performing Vernalis' obligations under
the MAM & Paediatric Development Program in sufficient detail such
that the number of Vernalis FTEs applied to the MAM & Paediatric
Development Program during each Quarter thereof can be accurately
determined.
8.6 Endo shall communicate the form and protocol of any Clinical Study
it proposes to undertake or have undertaken on its behalf to the SC
and the form and protocol of any such Clinical Study as reviewed by
a Regulatory Authority, in each case prior to the commencement of
any such study. Endo shall give due consideration to the views of
the SC in respect of any Clinical Study. Endo shall be responsible
for the design and cost and expense of the conduct of any such
Clinical Study. Endo may request Vernalis to conduct any such
Clinical Study or otherwise provide assistance to Endo in relation
to any such Clinical Study, and, if the Parties can agree to terms
therefor (which shall include Endo paying the Cost of such Clinical
Study), Vernalis shall conduct such Clinical Study or provide such
other assistance. Subject to any such involvement of Vernalis, Endo
shall be responsible for the conduct of any such Clinical Study,
shall provide all medical resources and Clinical Study monitors and
shall keep appropriate and complete data and records of all such
trials and testing activities. Endo shall keep the SC regularly
informed as to the conduct, progress and results of any Clinical
Study and of its communications with any Regulatory Authority in
connection therewith including details of any prospective meetings
or calls and shall provide to Vernalis copies of correspondence and
meeting notes with a Regulatory Authority which in Endo's reasonable
opinion are material. Vernalis may, at its sole option and expense,
attend any meeting or participate in any call with a Regulatory
Authority relating to such a Clinical Study or in any meeting with a
clinical research organisation appointed by Endo to conduct the
Clinical Study or the research
- 48 -
investigators. Endo shall (at a SC meeting) give a Formal
Presentation to Vernalis in relation to each Clinical Study
conducted by it or on its behalf and Vernalis shall have prompt and
full unrestricted access to the final report and results of any
Clinical Study and the related Endo Know How.
8.7 If, having received the final form and protocol of any Clinical
Study which Endo wishes to carry out, Vernalis using its
commercially reasonable judgement decides that the conduct or
outcome of that Clinical Study could seriously damage the world-wide
market for the Product, Vernalis shall have the right to submit to
Endo its reasons together with verifiable data supporting such
reasons. If Endo still wishes to go ahead with such Clinical Study,
Endo and Vernalis shall meet and endeavour to agree to a plan for
the conduct of a Clinical Study in similar form which could be
carried out. If following such a meeting the Parties still cannot
agree whether the Clinical Study is likely to seriously damage the
world-wide market for the Product, Endo will not conduct such
Clinical Study.
8.8 Vernalis shall communicate the form and protocol of any clinical
study it, its Affiliates, or any licensee or sub-licensee of it or
its Affiliates proposes to undertake in relation to Product or
Product Enhancements or have undertaken to the SC and the form and
protocol of any such clinical study as reviewed by a Regulatory
Authority, in each case prior to the commencement of any such study.
Vernalis shall give due consideration to the views of the SC in
respect of any such clinical study. Vernalis shall keep the SC
regularly informed as to the conduct, progress and results of any
such clinical study and of the communications of it, its Affiliates,
or any licensee or sub-licensee of it or its Affiliates, with any
Regulatory Authority in connection therewith, including details of
any prospective meetings or calls and shall provide to Endo copies
of correspondence and meeting notes with a Regulatory Authority
which in Vernalis' reasonable opinion are material. Endo may, at its
sole option and expense, attend any meeting or participate in any
call with a
- 49 -
Regulatory Authority relating to such a clinical study or in any
meeting with a clinical research organisation appointed by Vernalis,
its Affiliates, or any licensee or sub-licensee of Vernalis or its
Affiliates to conduct the clinical study or the research
investigators. Vernalis shall (at a SC meeting) give a Formal
Presentation to Endo in relation to each clinical study conducted by
it, its Affiliates, or a licensee or sub-licensee of it or its
Affiliates in relation to Product or Product Enhancements, and Endo
shall have prompt and full unrestricted access to the final report
and results of any such clinical study and the related Vernalis Know
How.
8.9 If, having received the final form and protocol of any clinical
study which Vernalis, its Affiliates, or a licensee or sub-licensee
of Vernalis or its Affiliates wishes to carry out in relation to
Product or Product Enhancements, Endo using its commercially
reasonable judgement decides that the conduct or outcome of that
clinical study could seriously damage the market for the Product in
the Territory, Endo shall have the right to submit to Vernalis its
reasons together with verifiable data supporting such reasons. If
Vernalis, its Affiliates, or the licensee or sub-licensee of
Vernalis or its Affiliates still wishes to go ahead with such
clinical study, Endo and Vernalis shall meet and endeavour to agree
a plan for the conduct of a clinical study in similar form which
could be carried out. If following such a meeting the Parties still
cannot agree whether the clinical study should be carried out,
Vernalis, its Affiliates, or the licensee or sub-licensee of
Vernalis or its Affiliates will not conduct such clinical study.
8.10 In the event that Vernalis or any of its Affiliates seeks to
undertake a Territory Study, it shall communicate the form and
protocol of such Territory Study to the SC. Vernalis shall not
undertake any Territory Study without the prior written consent of
Endo.
8.11 In the event that Vernalis or its Affiliates develop a Product
Enhancement during the term of this Agreement, Endo shall have the
- 50 -
option, but not the obligation, to take responsibility at its sole
cost for the technical, clinical and commercial development of such
Product Enhancement in the Territory. Endo may exercise such option
at any time following the date of notification of the Product
Enhancement by Vernalis at the SC meeting. Regardless of whether
Endo exercises the option under this Clause 8.11, Vernalis or its
Affiliates shall not be entitled to exploit or utilise the Product
Enhancement in the Territory.
8.12 In the event that Endo exercises the option granted in Clause 8.11,
Vernalis shall, subject to Clause 8.13, transfer and make available
to Endo the Vernalis Know How relating to such Product Enhancement
and Endo's license under Clause 3.1 to such Product Enhancement
shall become effective.
8.13 Endo shall not be obliged to make any upfront or milestone payment
to Vernalis in respect of the Product Enhancement licence to which
reference is made in Clause 8.12, but shall pay royalties on Net
Sales of such Product Enhancement either as if it were Product or
Combination Product as the case may be. Any Net Sales of such
Product Enhancement shall be taken into account with Net Sales of
the Product when calculating the milestone events and royalty levels
as specified in Clause 11.6 or 11.9. The period for the payment of
royalties specified in Clause 11.11 with respect to a Product
Enhancement for which Endo has exercised the option set forth in
Clause 8.11 shall be extended, on a country by country basis,
according to whether such Product Enhancement is (i) Covered by
Valid Claims of Vernalis Patent Rights in patents, or (ii) granted
orphan designation or other regulatory or administrative protection,
in each case conferring market exclusivity to Endo for the Product
in such country in the Territory and only for so long as Endo in its
sole discretion decides to continue to sell such Product Enhancement
Covered by such patents or granted orphan designation or other
administrative protection.
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8.14 In the event that Endo or its Affiliates develops a Product
Enhancement during the term of this Agreement, Vernalis shall have
the option, but not the obligation, to take responsibility at its
sole cost for the technical, clinical and commercial development of
such Product Enhancement outside the Territory. Vernalis may
exercise this option at any time following the date of notification
of the Product Enhancement by Endo at an SC meeting. Regardless of
whether Vernalis exercises the option under this Clause 8.14, Endo
shall not be entitled to exploit or utilise the Product Enhancement
outside the Territory.
8.15 In the event that Vernalis exercises the option granted in Clause
8.14 Endo shall, subject to Clause 8.15.1 or 8.15.2, as applicable,
transfer and make available to Vernalis the Endo Know How relating
to such Product Enhancement and Vernalis shall have the following
license (to the extent Endo has rights to license the same):
8.15.1 in the case of Endo IP relating solely to a Product
Enhancement where Endo or its Affiliates or contractors have
generated the Endo Know How or Endo Patent Rights as a
result of a Use Suggestion, Vernalis shall have a
sub-licensable, fully paid-up, royalty free license to
develop, make, have made, use, Commercialise and have
Commercialised such Product Enhancements outside the
Territory; or
8.15.2 in the case of Endo IP relating to the Product Enhancement
where Endo or its Affiliates or contractors have not
generated such Endo IP as a result of a Use Suggestion,
Vernalis shall have a sub-licensable royalty-bearing license
to develop, make, have made, use, Commercialise and have
Commercialised such Product Enhancements outside the
Territory on terms to be agreed between Endo and Vernalis
negotiating in good faith. Vernalis shall not use or
sub-license such Endo IP unless and until such a license is
entered into in writing by the Parties.
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8.16 Vernalis shall use its best efforts to procure that its and its
Affiliates' licensees and sub-licensees make Product Enhancements
available (through Vernalis) in the Territory for use by Endo on at
least as favorable terms as are available to Vernalis or its
Affiliates from their licensees or sublicensees outside the
Territory.
9. CO-PROMOTION
9.1 For so long as Endo is deploying sales force representatives to
Commercialise the Product in the USA, Vernalis shall have the option
to co-promote the Product with Endo in USA with effect from ***
using Vernalis Specialty Sales Personnel as part of a Specialty
Sales Force. Endo shall reimburse Vernalis a portion of the Cost of
such Vernalis Specialty Sales Personnel. This shall be calculated by
reference to a percentage of the Cost per Detail up to a maximum
number of Details carried out by Vernalis in the five Years 2006,
2007, 2008, 2009 and 2010, as specified in the following table. The
percentage of the Cost per Detail will vary according to whether the
Vernalis Specialty Sales Personnel exclusively Detail the Product or
whether they Detail the Product and any other product according to
the following table.
YEARS 2006 2007 2008 2009 2010
-------------------------- ---- ---- ---- ---- ----
Maximum no. of Details to *** *** *** *** ***
be reimbursed
% of *** where *** *** *** *** *** ***
Vernalis Specialty Sales
Personnel Detail only the
Product
% of *** where *** *** *** *** *** ***
Vernalis Specialty Sales
Personnel Detail one or
more other products
9.1.1 On the basis of the foregoing financial terms, Vernalis
Specialty Sales Personnel shall have the right to Detail
other products in
- 53 -
addition to the Product, provided that such other products
are not for the treatment of migraine or post herpetic
neuralgia or in direct competition with products in other
therapeutic areas that are being Commercialised by Endo or
are in Phase III Clinical Trial or have completed clinical
proof of principle by Endo.
9.1.2 If at any time Vernalis wishes to provide additional Details
in excess of the number of Details to be reimbursed by Endo,
it may provide such additional Details provided that the
total number of Details provided by Vernalis (including
Details provided pursuant to Clause 9.1) does not exceed ***
the maximum number of Details required to be reimbursed by
Endo pursuant to Clause 9.1 (unless otherwise agreed in
writing by Endo) at Vernalis' own cost. Endo shall support
any such additional Detailing effort with the provision of
marketing materials, samples and, to the extent reasonable,
training comparable to that given to Endo's own field force
representatives at Endo's cost through ***, and thereafter
at Vernalis' cost.
9.2 The Co-Promotion Option may be exercised by Vernalis by written
notice to Endo at any time during the period prior to *** specifying
the number of Details which Vernalis is proposing to carry out in
the Year ***. The precise number of Details up to the maximum in any
Year to be provided by Vernalis in any Year after *** shall be
notified in writing by Vernalis to Endo no later than *** the
previous Year.
9.3 Upon the exercise by Vernalis of its Co-Promotion Option, the
Parties shall on or before *** negotiate and agree to detailed terms
of a Co-Promotion Agreement for USA which will come into effect on
*** in the USA based on the terms set out in Schedule 10. If the
Parties fail to agree detailed terms of a Co-Promotion Agreement for
USA, Vernalis shall nonetheless have the right to promote the
Product in the USA for so
- 54 -
long as Endo is Commercialising the Product in the USA using its own
sales force representatives on the following basis:
9.3.1 on the terms of Clause 9.1;
9.3.2 liasing regularly with Endo on the sales force call and
deployment plan, including providing Endo with a copy of
Vernalis proposed call and deployment plan, and, so far as
Vernalis is reasonably able to do so, cooperating and
coordinating with Endo on creation and implementation of
that call and deployment plan;
9.3.3 Endo shall support such promotion efforts of Vernalis at
Endo's Cost through *** with the provision of marketing
materials, samples, and, to the extent reasonable, training;
9.3.4 with no restriction on Vernalis' ability to provide or
co-promote other products at the same time utilising the
same sales representatives, provided that such other
products are not for the treatment of migraine or post
herpetic neuralgia or in direct competition with products in
other therapeutic areas that are being Commercialised by
Endo or are in Phase III Clinical Trial or have completed
clinical proof of principle by Endo; and
9.3.5 all sales of the Product or MAM Product generated as a
result of any of Vernalis promotional activities shall be
booked by Endo and the applicable royalty under Clause 11
paid to Vernalis by Endo.
10. INTELLECTUAL PROPERTY - OWNERSHIP
10.1 Any and all Vernalis IP shall as between Endo and Vernalis be owned
by Vernalis. Vernalis shall own all right, title and interest in and
to all Product Enhancements made by or on behalf of Vernalis subject
always to the provisions of Clause 8.11 and Clause 8.12.
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10.2 Any and all Endo IP shall as between Vernalis and Endo be owned by
Endo. Endo shall own all right, title and interest in and to all
Product Enhancements made by or on behalf of Endo subject always to
the provisions of Clause 8.14 and Clause 8.15.
11. PAYMENTS
11.1 In consideration of the license rights granted hereunder Endo will
pay to Vernalis on the Closing Date an upfront fee equal to thirty
million USD (USD 30,000,000).
11.2 In consideration of the Stock sold hereunder (i) within thirty (30)
days of agreement or determination of the Inventory Statement to
which reference is made in Schedule 2, Endo will pay to Vernalis a
sum equal to the actual Cost specified in the Inventory Statement
and (ii) if appropriate, Vernalis shall pay Endo any amounts due
pursuant to paragraph 10 of Schedule 2.
11.3 Within thirty (30) days of the first anniversary of the Closing Date
and Endo's receipt of an invoice therefor, Endo will pay to Vernalis
a one year anniversary payment equal to fifteen million USD (USD
15,000,000).
11.4 Within thirty (30) days of the second anniversary of the Closing
Date and Endo's receipt of an invoice therefor, Endo will pay to
Vernalis a two year anniversary payment equal to fifteen million USD
(USD 15,000,000).
11.5 The following development milestone payment shall be paid by Endo to
Vernalis in relation to the MAM Product:
11.5.1 forty million USD (USD 40,000,000) upon receipt of the
Marketing Authorisation in the USA of the Product for MAM.
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11.6 The following sales milestone payments shall be payable as set forth
below:
11.6.1 *** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** USD (USD ***);
11.6.2 *** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars
(USD ***);
11.6.3 *** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars (USD
***);
11.6.4 *** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars (USD
***);
11.6.5 *** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars (USD
***); and
11.6.6 Seventy-five million USD (USD 75,000,000) one time payment
for the first time that aggregate Net Sales in a Year
surpass one thousand two hundred million US dollars (USD
1,200,000,000).
11.7 Each of the milestone payments subject to Clauses 11.5 and 11.6
shall only be payable by Endo upon the first occurrence of the
applicable event whenever it occurs and shall be payable even if
more than one applicable event occurs in a Year, unless otherwise
noted. Such milestone payments are non-refundable in any
circumstances whatsoever and are not creditable against the
royalties due under Clause 11.9.
11.8 Endo shall report the occurrence of each milestone event to Vernalis
within thirty (30) days of its occurrence and at the same time shall
make the milestone payment to Vernalis for which Clauses 11.5 and
11.6 provide.
11.9 Endo will pay to Vernalis royalties on a Product by Product basis
for all Products as set forth below:
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11.9.1 Except as otherwise provided in this Clause 11.9.1, no
royalties shall be payable with respect to any Year ending
on or before ***. Notwithstanding the foregoing, if
aggregate Net Sales of Product in the Territory by Endo, its
Affiliates, its agents and its sublicensees in any Year
ended on or before *** are greater than *** USD (USD ***),
then Endo shall pay to Vernalis royalties on aggregate Net
Sales of the Product in the Territory in excess of USD ***,
but only to the extent Net Sales of the Product in the
Territory exceed USD *** for such Year, in accordance with
the royalty rates set forth in Clause 11.9.2 or Clause
11.9.3, as applicable. No royalties shall be payable with
respect to the first USD *** of Net Sales of Product in the
Territory for any Year ending on or before ***.
11.9.2 If Marketing Authorisation for Product for MAM has not been
approved, then royalties shall be calculated as follows:
royalty = A + B + C + D + E
where,
A equals *** per cent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is less than or equal to *** USD (USD
***);
B equals *** percent (***%) of that portion of aggregate Net
Sales of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***) and less than or
equal to *** USD (USD ***);
C equals *** percent (***%) of that portion of aggregate Net
Sales of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***) and less than or
equal to *** USD (USD ***);
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D equals *** percent (***%) of that portion of aggregate Net
Sales of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***) and less than or
equal to *** USD (USD ***); and
E equals *** percent (***%) of that portion of aggregate Net
Sales of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***).
11.9.3 if Marketing Authorisation for the MAM indication has been
approved, then royalties shall be calculated as follows for
Net Sales subsequent to the effective date of such Marketing
Authorization:
royalty = A + B + C + D + E
where,
A equals *** per cent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is less than or equal to *** USD (USD
***);
B equals *** percent (*** %) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is greater than *** USD (USD ***) and less
than or equal to *** USD (USD ***);
C equals *** percent (***%) of that portion of aggregate Net
Sales of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***) and less than or
equal to *** USD (USD ***);
D equals *** percent (***%) of that portion of aggregate Net
Sales of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***) and less than or
equal to *** USD (USD ***); and
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E equals *** percent (***%) of that portion of aggregate Net
Sales of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***).
11.10 For the purposes of milestone and royalty payments under Clauses
11.6 and 11.9, all formulations (e.g. tablets, gel caps, topical
formulations, parenteral formulations, sustained release
formulations etc) of a Product will be considered to be the same
Product, regardless of the indications for which such Product may
be used.
11.11 Royalties under Clause 11.9 shall be payable on a country by
country basis for a Product for the shorter of (i) the period of
time that (a) there are Valid Claims of those Vernalis Patent
Rights set out in Schedule 8 or Endo Patent Rights which result
from a Use Suggestion for such Product, or (b) such Product is
granted orphan designation or other regulatory administrative
protection as a result of a Use Suggestion, in each case conferring
market exclusivity to Endo for such Product in such country of
sale, whichever is longer, or (ii) the date when a Generic Version
of such Product is first offered in such country for sale, but in
no event for longer than twenty (20) years from the Closing Date in
each country of the Territory (unless and for so long as Endo sells
Product Enhancements as set forth in Clause 8.13, pursuant to which
royalties shall be paid with regard to such Product Enhancements).
11.12 In the event that for any Product in any country of the Territory
royalties are no longer payable under Clause 11.11(i) and it is
prior to the twenty (20) year anniversary of the Closing Date, Endo
may thereafter continue to use (i) the Vernalis Trade Marks or (ii)
any trade marks used by Endo pursuant to Clause 13.1 for the MAM
Product or for any indication other than the indication of migraine
existing at the Closing Date or in relation to a Combination
Product or a Product Enhancement (excluding the ENDO name, xxxx and
associated logo (or successor xxxx or logo)) (the "Endo-Developed
MAM Trade Marks") (and for the avoidance of doubt
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Endo shall have the right to terminate such use in such
circumstances on a country-by-country basis upon giving written
notice to Vernalis), provided that Endo shall, for the balance of
such period in such country to the extent it chooses to make such
use, pay to Vernalis a trade xxxx usage fee of *** of Net Sales of
the Product sold under Vernalis Trade Marks and/or the
Endo-Developed MAM Trade Marks in such country in the Territory,
and shall, following such 20 Year period, have the right to
continue using the Vernalis Trade Marks on a royalty-free basis
(the Parties acknowledging that Endo, as the owner of the
Endo-Developed MAM Trade Marks, shall have such right and all other
rights with respect to such Endo-Developed MAM Trade Marks).
11.13 Endo shall make the royalty payments due to Vernalis under Clause
11.9 or 11.12 at Quarterly intervals. Within *** days of the end of
each Quarter after Closing Date in any country, Endo shall pay all
monies due to Vernalis under Clause 11.9 or Clause 11.12. Each
royalty payment shall be accompanied by a report summarising the
Net Sales of the Product (including the various elements of the Net
Sales calculation) on a country-by-country basis in the Territory
during the relevant Quarter the currency conversion rate, if
applicable, the taxes withheld, if any, which royalty calculation
is being applied and the total royalty payments due.
11.14 Whenever for the purpose of calculating royalties conversion from
any foreign currency shall be required, such conversion shall be
made as follows. When calculating the Net Sales, the amount of such
sales in foreign currencies shall be converted into USD using the
average monthly rate of exchange for such currencies at the time
published in Wall Street Journal in accordance with Endo's then
current standard practices;
11.15 Endo shall make all payments to Vernalis under this Agreement in
USD from the USA. All payments under this Agreement shall be made
free and clear of and without set off, deduction or deferment in
respect of any
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taxes, disputes or claims whatsoever unless required by law or
practice of any Competent Authority provided always that (i) Endo
shall have the right to set off against any sums due from it to
Vernalis under this Agreement any Monies following an Event of
Default until all such Monies have been paid but for no longer, and
(ii) both Parties shall have a right of set off as set forth in
Clause 15.11. Endo and Vernalis shall co-operate to minimize any
deduction or withholding in relation to any payments pursuant to
this Agreement and, without limitation, Vernalis shall provide Endo
with a W-8BEN (or successor form) duly executed by Vernalis.
11.16 Endo and its Affiliates shall keep and shall require its
sublicensees to keep, full, true and accurate records and books of
account containing all particulars that may be necessary for the
purpose of calculating all royalties payable to Vernalis and in
compiling the reports due from Endo under Clauses 6.1.2 and 6.1.3
for a minimum period of *** years. Upon timely request by Vernalis,
Vernalis shall have the right to instruct an independent,
internationally recognized, accounting firm to perform an audit,
conducted so far as appropriate in accordance with GAAP, as is
reasonably necessary to enable such accounting firm to report to
Vernalis the Net Sales of Product for the period or periods
requested by Vernalis or to report to Vernalis on the accuracy of
the reports issued by Endo under Clauses 6.1.2 and 6.1.3 on the
following basis:
11.16.1 such firm of accountants shall be given access to and shall
be permitted to examine and copy such books and records
upon twenty (20) Business Days notice having been given by
Vernalis and at all reasonable times on Business Days for
the purpose of certifying to Vernalis either that the Net
Sales calculated and reported by Endo or its Affiliates
during any Year were calculated correctly in accordance
with this Agreement (and if such certification cannot be
given specifying the reasons why which
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will enable the Parties to recalculate the relevant sums) or
that a report issued by Endo under Clause 6.1.2 or 6.1.3 was
accurate;
11.16.2 prior to any such examination taking place, such firm of
accountants shall undertake to Endo that they shall keep all
information and data contained in such books and records,
strictly confidential and shall not disclose such
information or copies of such books and records to any third
person including Vernalis, but shall only use the same for
the purpose of the reviews and/or calculations which they
need to perform in order to issue the certificate to
Vernalis which this Clause 11.16 envisages;
11.16.3 any such access examination and certification shall occur no
more frequently than once per year and will not go back over
records more than *** years old unless a discrepancy is
found;
11.16.4 Endo shall make available personnel to answer queries on all
books and records required for the purpose of that
certification;
11.16.5 any such certification shall be final in so far as it
relates to a report issued by Endo under Clause 6.1.2 or
6.1.3; and
11.16.6 if the certification is in disagreement with the Net Sales
as calculated by Endo, Endo shall notify Vernalis within ten
(10) days of receipt by Endo whether or not Endo agrees with
the certification. If Endo notifies its agreement with the
certification within the ten (10) day period or fails to
give any notification with that period, the Net Sales
calculated by the certification shall be used for purposes
of calculating any monies owed and any monies owed by one
Party to the other shall be paid by that Party. The Cost of
the accountant shall be the responsibility of Endo if the
recalculation shows the Endo's previous figures supplied to
Vernalis to be inaccurate by more than the lesser of USD$
*** or *** and the responsibility of Vernalis otherwise.
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11.16.7 If within ten (10) days starting on the day after receipt of
the notification referred to in Clause 11.16.6, Endo and
Vernalis have not agreed to the terms in dispute in relation
to the certification, either Party may refer the items in
dispute to a partner of at least 10 years qualified
experience at an independent, internationally recognized,
public accounting firm agreed by the Parties in writing for
final and binding resolution, or failing agreement on the
identity of the public accounting firm within fifteen (15)
days starting on the day after receipt of the notification
referred to in Clause 11.16.6, an independent,
internationally recognized, public accounting firm appointed
on the application of either Party by the President for the
time being of the Institute of Chartered Accountants in
England and Wales. Such person appointed shall act on the
following basis:
11.16.7.1 such person shall act as an expert and not as an
arbitrator;
11.16.7.2 such person's terms of reference shall be to
determine the matters in dispute within 20 days of
his appointment;
11.16.7.3 the Parties shall each provide such person with
all information relating to the items in dispute
which such person reasonably requires and such
person shall be entitled (to the extent he
considers appropriate) to base his determination
on such information;
11.16.7.4 the decision of such person is, in the absence of
fraud or manifest error, final and binding on the
Parties; and
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11.16.7.5 such person's Costs shall be paid by Endo and Vernalis as
such person may determine.
11.17 All payments made to Vernalis under this Agreement shall be made by
wire transfer to the account of Vernalis Development Limited at
Barclays Bank plc, London Corporate Banking, XX Xxx 000, 00 Xxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX, Sort Code 20-30-19, USD Account No.***
or any other bank account that may be notified by Vernalis to Endo
from time to time.
11.18 If either Party fails to make any payment to the other Party
hereunder on the due date for payment and the payment is not in
dispute between the Parties, and the dispute has not been resolved
pursuant to dispute resolution under Clause 22.2, without prejudice
to any other right or remedy available to that Party, that Party
expecting payment shall be entitled to charge the other Party
interest (both before and after judgement) on the amount unpaid at
the annual rate of LIBOR or EURIBOR plus *** calculated on a daily
basis until payment in full is made without prejudice to that
Party's right to receive payment on the due date. If a payment is in
dispute between the Parties, any such dispute shall be promptly
submitted for resolution according to Clause 22.2.
12. INTELLECTUAL PROPERTY - PROSECUTION, MAINTENANCE AND ENFORCEMENT - PATENT
RIGHTS
12.1 Vernalis shall at its own cost and expense be solely responsible for
the filing, prosecution and maintenance of Vernalis Patent Rights in
accordance with the patent strategy that Vernalis and Endo, in
consultation with each other, reasonably devise, but using all
reasonable endeavours to prosecute all patent applications forming
part of Vernalis Patent Rights to grant in whichever countries of
the Territory Vernalis and Endo, in consultation with each other,
deem commercially reasonable, including the conduct of any claims or
proceedings relating to them (including but not limited to any
interference, reissue or re-examination or opposition or revocation
proceedings). Vernalis shall promptly keep Endo informed of all
material developments in relation to
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the Vernalis Patent Rights and shall, upon Endo's request, provide
Endo with copies of relevant documents related to the filing,
prosecution and maintenance of the Vernalis Patent Rights. Vernalis
will take account of Endo's interest hereunder when making any
submission to a patent office (including the scope of foreign
filings) and in the conduct of any proceedings in relation to such
Vernalis Patent Rights.
12.2 In the event that Vernalis declines to file or, having filed,
declines to further prosecute and maintain any pending Vernalis
Patent Rights, Vernalis shall provide Endo with written notice
thereof. In the case where Vernalis has filed but is declining to
further prosecute or maintain, such notice shall be given prior to
the expiration of any deadline relating to such activities, but in
any event at least thirty (30) Business Days prior to such deadline.
In any of such circumstances Endo shall have the right to decide
that Endo should continue to file or prosecute such Vernalis Patent
Rights, and, in such case, Endo shall give written notice to
Vernalis. Vernalis shall upon receipt of any such notice from Endo
assign its right, title and interest in and to the relevant Vernalis
Patent Rights to Endo at Vernalis' cost and expense.
12.3 Endo shall at its own cost and expense be solely responsible for the
filing, prosecution and maintenance of Endo Patent Rights in
accordance with the strategy that Endo reasonably devises but using
all reasonable endeavours to prosecute all patent applications
forming part of Endo Patent Rights to grant in whichever countries
Endo deems commercially reasonable, including the conduct of any
claims or proceedings relating to them (including but not limited to
any interference, reissue or re-examination or opposition or
revocation proceedings). Endo shall keep Vernalis promptly informed
of all filings made for Endo Patent Rights including sending
Vernalis a copy of any such filing and otherwise shall keep Vernalis
informed of all material developments in relation to the Endo Patent
Rights and shall, upon Vernalis' request, provide Vernalis
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with copies of relevant documents related to the filing, prosecution
and maintenance of the Endo Patent Rights.
12.4 In the event that Endo declines to file or, having filed, declines
to further prosecute and maintain any pending Endo Patent Rights
Endo shall provide Vernalis with written notice thereof. In the case
where Endo has filed but is declining to further prosecute or
maintain such notice shall be given prior to the expiration of any
deadline relating to such activities, but in any event at least
thirty (30) Business Days prior to such deadline. In any of such
circumstances Vernalis shall have the right to decide that Vernalis
should continue to file or prosecute such Endo Patent Rights and in
such case Vernalis shall give written notice to Endo. Endo shall
upon receipt of any such notice from Vernalis assign its right,
title and interest in and to the relevant Endo Patent Rights to
Vernalis at Endo's cost and expense.
12.5 The Parties shall cause their patent attorneys to liase so far as
practicable with respect to the filing, prosecution and maintenance
of Patent Rights falling within Vernalis Patent Rights and Endo
Patent Rights. Each Party shall be responsible for the Cost of its
own patent attorney incurred pursuant to this Clause 12.5.
12.6 Endo may, but shall not be obliged to, at its own cost and expense,
enforce the Vernalis Patent Rights and Vernalis Know How against
infringers in accordance with the following:
12.6.1 Prior to the commencement of proceedings, Endo shall notify
Vernalis of the infringers' activities and shall consult with
Vernalis concerning the same, but thereafter Endo shall have
sole conduct of the dispute including the right to settle.
Where Endo decides to commence proceedings as plaintiff it
shall be entitled to require Vernalis to join Endo as
co-plaintiff. Vernalis shall provide all necessary assistance
to Endo in relation to such proceeding, and Endo shall on
demand by Vernalis indemnify
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Vernalis against the Costs of such activity unless Vernalis
elects to be separately represented (which shall be at
Vernalis' discretion) in which case such separate
representation shall be at Vernalis' own cost and expense;
12.6.2 If Endo succeeds in any such infringement proceedings whether
at trial or by way of settlement, Endo shall be entitled to
retain such part of any award of Costs and damages made in
such proceedings or settlement sum as is equal to Endo's
Costs of taking the proceedings and shall be entitled to
retain the balance received by Endo less an amount equivalent
to the royalties which would have been due to Vernalis on the
balance as if they were Net Sales which amount shall be paid
to Vernalis; and
12.6.3 If Endo fails to take any such proceedings, Vernalis may give
Endo notice requesting Endo to take such proceedings within
thirty (30) days of the date of notice and if Endo decides
not to do so, Vernalis shall be entitled to do so at its own
cost and expense. Endo shall provide all necessary assistance
to Vernalis in relation to such proceedings and Vernalis
shall on demand by Endo indemnify Endo against the Costs of
such activity, unless Endo elects to be separately
represented (which shall be at Endo's discretion), in which
case such separate representation shall be at Endo's cost and
expense. Vernalis shall have sole right to settle such
proceedings, provided that such settlement does not adversely
affect Endo's rights and interests hereunder and does not
include a license with respect to any Product in the
Territory. If Vernalis succeeds in any such proceedings it
shall be entitled to retain the whole of any award of Costs
and damages made or settlement sum paid.
12.7 Each Party shall promptly take all necessary steps to facilitate the
other's application (made either on the other's own initiative or
upon request by
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the first Party) for extensions to the term of Patent Rights falling
within Vernalis Patent Rights in any country of the Territory,
including applications for supplementary protection certificates and
patent term extensions.
12.8 Notwithstanding anything to the contrary herein, for Vernalis Patent
Rights Covering the making, having made, using or Commercialisation
of a Product, should either Party receive a certification from a
Third Party in the US under the US "Drug Price Competition and
Patent Term Restoration Act of 1984 (Public Law 98-417), as amended
(21 U.S.C. Section 355(j)(2)(A)(vii)(IV) or a comparable provision),
or its comparable law in the country other than the USA, then such
Party shall immediately give written notice to the other Party of
such certification. Endo shall then have twenty-eight (28) days from
the date such Party receives such certification to initiate suit. In
the event the twenty-eight (28) day period expires without Endo
having initiated suit, Vernalis shall have the right to immediately
bring suit against the Third Party that filed the certification. If
either Party initiates a suit within a forty-five (45) day period
from the date such Party received the certification, it will
immediately notify the other Party.
13. TRADE MARKS
13.1 The Product for the indication of migraine existing at the Closing
Date shall be promoted, advertised and sold in the Territory under
and using the Vernalis Trade Marks and the ENDO name, xxxx and
associated logo (or successor xxxx or logo). Endo shall use the
symbol "(R)" in conjunction with the Registered Trade Marks within a
reasonable time period after receiving notice from Vernalis that
they are registered. If at any time Endo decides that it wishes to
use a trade xxxx other than the Vernalis Trade Marks and the ENDO
name, xxxx and associated logo (or successor thereto) in relation to
the MAM Product in the Territory or in relation to Product for any
indication other than the indication of
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migraine existing at the Closing Date or in relation to a
Combination Product or a Product Enhancement, Endo shall give
written notice to Vernalis specifying the proposed trade xxxx, Endo
shall make filings for the proposed trade xxxx in respect of Product
in the countries of the Territory.
13.2 All goodwill arising from use of the Vernalis Trade Marks by Endo
during or after the term of this Agreement shall accrue and belong
to Vernalis or its nominated Affiliate. All goodwill arising from
use of the Endo Trade Marks by Endo during or after the term of this
Agreement shall accrue and belong to Endo or its nominated
Affiliates.
13.3 In relation to its use of the Vernalis Trade Marks hereunder, Endo
shall:
13.3.1 not use any of the Vernalis Trade Marks in any modified or
altered form or with any prefix or suffix or in any other
language. or as part of, or in combination or conjunction
with, any other name or xxxx, save for any xxxx including or
consisting of the name and xxxx "FROVA";
13.3.2 not take, or cause to be taken, any action knowing that such
action is likely to damage, depreciate, tarnish, jeopardise
or otherwise prejudice the goodwill and reputation, image or
distinctiveness associated with the Vernalis Trade Marks;
13.3.3 not knowingly do anything that may jeopardise the
enforceability or validity of any registration of any
Registered Trade Xxxx or lead to grounds for the revocation
of any such registration for any reason including, but not
limited to, knowing use of any Registered Trade Xxxx in a
manner which may be misleading to the public;
13.3.4 use the Vernalis Trade Marks only in connection with Product
complying with the quality and other specifications of the
Product Registrations;
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13.3.5 not knowingly apply to register in its own name in the
Territory any Vernalis Trade Xxxx nor any trade xxxx so
nearly resembling them or any of them as may be likely to
cause confusion based upon its use of the Vernalis Trade
Marks under this Clause 13, or otherwise at any time; and
13.3.6 not knowingly use in connection with the Product any other
trade xxxx or trade name which is confusingly similar to any
of the Vernalis Trade Marks.
13.4 The final decision on packaging, design and labelling for the
Territory shall be Endo's.
13.5 Vernalis or its designated Affiliate shall at its own cost and
expense be solely responsible for the filing, prosecution and
maintenance of the Registered Trade Marks in the Territory, and
shall use its Commercially Reasonable Efforts to file and prosecute
the trade xxxx applications forming part of Vernalis Trade Marks in
the Territory.
13.6 In the event that Vernalis or its designated Affiliate declines to
file or, having filed, declines to further prosecute and maintain
the Registered Trade Marks in the Territory, Vernalis or its
designated Affiliate shall provide Endo with written notice thereof
prior to the expiration of any deadline relating to such activities,
but in any event at least thirty-five (35) days prior notice. In
such circumstances Endo shall have the right to decide, with reason
and with written notice at least twenty (20) days prior to the
deadline, that Vernalis or its designated Affiliate should continue
to file or prosecute the Vernalis Trade Marks. Vernalis or its
designated Affiliate shall then have the option, with at least ten
(10) days notice to Endo, to:
13.6.1 continue to file or prosecute the Vernalis Trade Marks in
Vernalis or its designated Affiliate's own name and expense;
or
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13.6.2 allow Endo to file or prosecute the Vernalis Trade Marks in
Vernalis or its designated Affiliate's name and at Vernalis
or its designated Affiliate's expense using counsel of Endo's
own choice, in which instance Endo shall invoice Vernalis or
its designated Affiliate for such expenses within 30 days of
the end of each Quarter, such invoice to be payable within 30
days.
13.7 Each Party shall promptly notify the other Party or its designated
Affiliate in writing if it becomes aware of any infringement or
unauthorized use by a Third Party of the Vernalis Trade Marks in the
Territory.
13.8 In the event of an infringement of the Vernalis Trade Marks by a
Third Party in the Territory, Vernalis or its designated Affiliate
shall have first right to bring any action or proceedings, and shall
have sole control of the conduct of any such proceedings, including,
the right to settle them, provided such settlement does not
adversely affect Endo's rights and interests within the Territory.
13.9 Without prejudice to Clause 13.8, Endo shall have the right to be
joined as a co-plaintiff, in which case, Vernalis or its designated
Affiliate shall at its sole discretion and cost appoint counsel to
act on behalf of both Vernalis or its designated Affiliate and Endo.
In such a situation, if Vernalis or its designated Affiliate and
Endo succeed in any such proceedings in relation to an infringement
in the Territory of the Vernalis Trade Marks, whether at trial or by
way of settlement, in obtaining damages or any other financial
payment to Vernalis or its designated Affiliate and/or Endo:
13.9.1 Vernalis or its designated Affiliate shall first deduct for
itself all of its costs and expenses incurred in relation to
such proceedings; and
13.9.2 then the Parties shall share such damages or other payment
50:50.
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13.10 In the circumstances of Clause 13.9, in the event that Endo elects
not to be joined as a co-plaintiff, Endo shall, at Vernalis' or its
designated Affiliate's reasonable request and expense, provide
Vernalis or its designated Affiliate with reasonable assistance in
relation to such action or proceedings in the Territory. Vernalis or
its designated Affiliate shall have sole control of the conduct of
any such proceedings, including the right to settle them, provided
that such settlement does not adversely affect Endo's rights and
interests hereunder. If Vernalis or its designated Affiliate
succeeds in any such proceedings in relation to an infringement in
the Territory, whether at trial or by way of settlement, in
obtaining damages or any other financial payment Vernalis shall be
entitled to retain all such damages or other financial payment
awarded in such proceedings or agreed in any such settlement for its
own account.
13.11 In the event that Vernalis or its designated Affiliate fails to
institute an action or proceeding in relation to an infringement of
the Vernalis Trade Marks in the Territory for more than ninety (90)
days from notification of the infringement pursuant to Clause 13.7,
and if Endo wishes to do so, Endo shall, provided it has given
written notice to Vernalis or its designated Affiliate, be entitled
to institute action or proceeding in its own name and Vernalis or
its designated Affiliate shall do all such acts and things at Endo's
cost and expense as Endo shall reasonably request to assist Endo in
such proceedings, including, lending its name to such proceedings.
Endo shall have sole control of the conduct of any such proceedings,
including the right to settle them, provided such settlement does
not adversely affect Vernalis' or its designated Affiliate's rights
and interests outside of the Territory, and shall be entitled to
retain any financial payment awarded in such proceedings or agreed
in any such settlement for its own account.
14. GUARANTEE BY VERNALIS PLC
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14.1 Vernalis plc, a public limited company incorporated under the laws
of England and Wales (the "Guarantor"), hereby unconditionally and
irrevocably guarantees to Endo the performance of all of the
obligations of Vernalis under Clause 15 of this Agreement, including
the due and prompt payment by Vernalis of any amounts payable under
Clause 15 of this Agreement and the satisfaction of each of the
representations, warranties and indemnities of Vernalis set forth
therein(the "Guaranteed Obligations"). In case of the failure of
Vernalis promptly to pay any amounts or to make whole Endo for any
of its obligations under Clause 15 of this Agreement, the Guarantor
hereby agrees to cause the payment of such amounts to be made
promptly when and as such amounts become due and payable and as if
such amounts were paid by Vernalis. The Guarantor hereby agrees that
its obligations hereunder will be absolute and unconditional,
irrespective of, and will be unaffected by, the validity, regularity
or enforceability of the obligations of Vernalis under this
Agreement, the absence of any action to enforce the same, the
dissolution, the insolvency or bankruptcy of Vernalis or any other
circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor or surety. The Guarantor hereby
waives the benefits of diligence, presentment, demand of payment,
any requirement that Endo protect, secure, perfect or insure any
security interest in or other lien on any property subject thereto
or exhaust any right or take any action against Vernalis or any
collateral, filing of claims with a court in the event of
dissolution, insolvency or bankruptcy of Vernalis, any right to
require a proceeding first against Vernalis, protect, notice and all
demands whatsoever and covenants that its obligations hereunder will
not be discharged except by complete payment of the amounts due by
Vernalis under Clause 15 of this Agreement. Notwithstanding the
foregoing, unless Vernalis has legally dissolved, Endo agrees to
give Vernalis notice of any claim under this Agreement prior to
making any demand under this Clause 14 in respect of the Guaranteed
Obligations. In the event that any payment to Endo in
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respect of any amounts due by Vernalis under Clause 15 of this
Agreement is rescinded or must otherwise be returned for any reason
whatsoever, the Guarantor will remain liable for such amounts to the
extent provided herein as if such amounts had not been paid. The
aggregate amount to be paid under this Clause 14 by the Guarantor
shall be net of any prior payment to Endo by Vernalis in respect of
such Guaranteed Obligations.
15. WARRANTIES AND LIABILITY
15.1 Each Party represents and warrants to the other Party that:
15.1.1 it has the legal power, authority and right to enter into
this Agreement and to perform its respective obligations in
this Agreement; and
15.1.2 it is not at the Signature Date or the Closing Date a party
to any agreement, arrangement or understanding with any Third
Party which in any significant way prevents it from
fulfilling any of its material obligations under the terms of
this Agreement; and
15.1.3 it has disclosed to the other all information and material
which is material to the decision of the other to enter into
this Agreement.
15.2 Vernalis represents and warrants to Endo that Vernalis is the sole
owner of the Vernalis Patent Rights set out in Schedule 8 and
Registered Trademarks, and is the sole owner or licensee of all
other Vernalis IP, with the right to grant to Endo the rights which
are granted in this Agreement (including, without limitation, the
rights in the Xxxx Xxxxx granted to Vernalis pursuant to Clause
3.8), free and clear of any Encumbrances which would prevent or
impair the grant of such rights and that Vernalis is otherwise free
of any duties or obligations to third parties which may conflict
with the terms of this Agreement.
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15.3 Vernalis represents and warrants to Endo that Elan Group and
Vernalis have terminated the Second Amended and Restated Licence
Agreement, dated March 15, 2002, on the terms set forth in the Elan
Asset Transfer Agreement.
15.4 Vernalis represents and warrants to Endo that Vernalis has acquired,
pursuant to the Elan Asset Transfer Agreement, certain rights of
Elan Group under certain supply agreements and residual contracts
set forth in the Elan Asset Transfer Agreement and all of Elan
Group's other rights and assets relating to the development,
production, marketing, distribution, sales and supply of the Product
in the Territory.
15.5 Vernalis represents and warrants that as at the Signature Date and
the Closing Date, there are no actual, and, so far as Vernalis is
aware, there are no threatened proceedings relating to infringement
of Third Party intellectual property rights by the use of Vernalis
IP and Vernalis has used all reasonable endeavours to ensure that
the Vernalis IP will not infringe the rights of any Third Party and
that the Vernalis IP is not the subject of any actual or threatened
challenge or revocation proceedings.
15.6 Save as is expressly stated in Clauses 15.1, 15.2, 15.3, 15.4 and
15.5 no representation, condition or warranty whatsoever is made or
given by or on behalf of Vernalis or Endo.
15.7 Vernalis shall have the control of clinical trials conducted under
the MAM & Paediatric Development Program and shall be the sponsor of
such trials and, in such capacity, shall be responsible for the
payment of any compensation due to any participants in such trials
who suffer death or bodily injury pursuant to any legal rights or
applicable industry guidelines. Vernalis shall indemnify Endo and
its Representatives against any and all liability, loss, damage,
cost and expense (including legal costs) incurred or suffered by
Endo and/or its Representatives as a result of any claim brought
against Endo and/or its Representatives arising out of or related to
any clinical trials conducted by, or under the
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supervision of, Vernalis in connection with the Product, including
clinical trials conducted in connection with the MAM & Paediatric
Development Program.
15.8 Subject always to the provisions of Clause 15.12 Endo shall be
responsible for and shall indemnify Vernalis and its Representatives
against any and all liability, loss, damage, cost and expense
(including reasonable legal Costs) incurred or suffered by Vernalis
and/or its Representatives as a result of any claim brought against
Vernalis by a Third Party which arises as a result of:
15.8.1 The activities of Endo or its Representatives under this
Agreement (except as covered by Vernalis' indemnity
obligations under Clause 15.9);
15.8.2 A breach by Endo of any representation or warranty made by it
in this Agreement;
15.8.3 A breach by Endo or its Affiliates of the Safety Agreement;
15.8.4 The Product(s) manufactured, marketed, distributed, or sold
by or on behalf of Endo having caused death or bodily injury,
except to the extent covered by Vernalis' indemnity to Endo
under Clause 15.9;
15.8.5 The infringement or other violation of any intellectual
property rights of any Third Party arising out of the
manufacture, use or Commercialisation of the Product in the
Territory, solely to the extent related to activities,
resulting in or within the scope of Endo IP under the terms
of and during the term of this Agreement;
15.8.6 The conduct of Endo's business other than in connection with
this Agreement;
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except, in each case, where the claim is the result, either directly
or indirectly, of a negligent act or omission or gross misconduct on
the part of Vernalis or any of its employees or Affiliates.
15.9 Subject to the provisions of Clause 15.12, Vernalis shall be
responsible for and shall indemnify Endo and its Representatives
against any and all liability, loss, damage, cost and expense
(including reasonable legal Costs) incurred or suffered by Endo
and/or its Representatives as a result of any claim brought against
Endo or its Representatives by a Third Party which arises as a
result of:
15.9.1 The activities of Vernalis or its Representatives under this
Agreement (except as covered by Endo's indemnity obligations
under Clause 15.8);
15.9.2 A breach by Vernalis of any representation or warranty made
by it in this Agreement;
15.9.3 A breach by Vernalis or its Affiliates of the Safety
Agreement or a breach by Vernalis of Clause 3.6;
15.9.4 Any claim relating to any Product manufactured on or before
the Closing Date, including Stock manufactured on or before
the Closing Date, including the 2.5 mg 9 Count Blister and
any claim that Product manufactured on or before the Closing
Date does not meet the Specifications set forth in the
Product Registrations;
15.9.5 Any claim in relation to Product in countries outside the
Territory, except where the claim is the result, either
directly or indirectly, of any activities of Endo or any of
its employees or Affiliates;
15.9.6 The return of Product which is at wholesalers at the
Signature Date with an expiration date on or before the first
Year anniversary of the Signature Date;
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15.9.7 Any claim by Elan Group or any Affiliate of Elan Group,
including claims arising out of the Second Amended and
Restated Licence Agreement between Vernalis and Elan Pharma
International Limited, dated March 15, 2002, the Agreement
Relating to the North American Frova Assets of Elan between
Elan and Vernalis, dated May 18, 2004, or any other agreement
between a member of the Elan Group and Vernalis or its
Affiliates relating to the Commercialisation of the Product;
15.9.8 Any claim that Product(s) has caused death or bodily injury
relating to (i) a design defect or alleged inherently
dangerous nature of the Product(s), to the extent such design
defect or alleged inherent danger is not caused by a
modification to the Product made by Endo, provided, that,
Vernalis' indemnity obligation for such design defect or
alleged inherent danger shall not exceed *** USD (USD***) per
occurrence, or (ii) testing, clinical trials (included the
MAM & Paediatric Development Program) or other activities
undertaken by or on behalf of Vernalis with respect to
Product approvals by a Regulatory Authority;
15.9.9 Claims arising out of the manufacture, use, or
Commercialisation of the Product(s) as formulated as of the
Signature Date or the Closing Date and for the use approved
by Regulatory Authorities as of the Signature Date or the
Closing Date and for the MAM Product, each under the terms of
this Agreement relating to any infringement or other
violation of intellectual property rights of any Third Party.
15.10 Subject to the provisions of Clause 15.12, in addition to Vernalis'
indemnification obligations under Clause 15.9, Vernalis shall be
responsible for and shall indemnify Endo and its Representatives
against any and all liability, loss, damage, cost and expense,
arising out of any
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recall of the Product(s), voluntary or otherwise, or closure or
interruption of any manufacturing facilities, where such recall,
closure or interruption is attributable to Product(s) manufactured
prior to the Closing Date, provided, that as soon as practicable
following the Closing Date, Endo has assisted in the generation and
implementation of a stratified sampling protocol to address blend
uniformity in the manufacturing of the Product.
15.11 Upon receipt by a Party and/or its Representatives seeking
indemnification hereunder (an "Indemnified Party") of notice of any
action, suit, proceeding, claim, demand or assessment against such
Indemnified Party which might give rise to any liability, loss,
damage, cost or expenses, the Indemnified Party shall give prompt
written notice thereof to the Party from which indemnification is
sought (the "Indemnifying Party") indicating the nature of claim and
the basis therefor, provided that the failure to give such prompt
notice shall not relieve the Indemnifying Party of its obligations
hereunder except to the extent the Indemnifying Party or the defense
of any such claim is materially prejudiced thereby. The Indemnifying
Party shall have the right, at its option, to assume the defense of,
at its own expense and by its own counsel, any such claim involving
the asserted liability of the Indemnified Party. If any Indemnifying
Party shall undertake to compromise or defend any such asserted
liability, it shall promptly notify the Indemnified Party of its
intention to do so, and the Indemnified Party shall agree to
cooperate fully with the Indemnifying Party and its counsel in the
compromise of, or defense against, any such asserted liability;
provided, however, that the Indemnifying Party shall not, as part of
any settlement or other compromise, admit to liability or agree to
an injunction without the written consent of the Indemnified Party.
Notwithstanding an election by the Indemnifying Party to assume the
defense of any claim as set forth above, such Indemnified Party
shall have the right (at its own expense if the Indemnifying Party
has elected to assume such defense) to employ separate counsel and
to participate in the
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defense of any claim. In the event that the Indemnified Party has a
reasonable basis to believe that the Indemnifying Party may not have
sufficient funds to satisfy such indemnification obligation and the
Indemnifying Party upon request by the Indemnified Party cannot
provide assurances of its ability to satisfy such obligation to the
reasonable satisfaction of the Indemnified Party, the Indemnified
Party may deduct, defer or otherwise offset from any payment
obligations under this Agreement (if any) amounts reasonably
necessary to satisfy such indemnification obligation.
15.12 Notwithstanding any other provision of this Agreement, neither Party
shall be liable to the other in contract, tort, negligence, breach
of statutory duty or otherwise for any loss, damage, costs or
expenses of any nature whatsoever incurred or suffered by the other
or its Affiliates of an indirect or consequential or punitive
nature, including any indirect or consequential economic loss or
other indirect or consequential loss of turnover, profits, loss of
enterprise value, business or goodwill or otherwise.
15.13 Each of Endo and Vernalis shall secure and maintain comprehensive
general liability insurance including, product liability,
contractual liability, personal injury, and insurance against claims
regarding the development, manufacture, delivery, storage, handling
and use of Product under this Agreement, in such amounts as it
customarily maintains for similar products and activities in
accordance with prudent insurance practice. Notwithstanding the
foregoing, each of Endo and Vernalis shall be entitled to
self-insure risks in accordance with their respective risk
management policies.
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16. CONFIDENTIALITY
16.1 Each of the Parties undertakes and agrees to:
16.1.1 keep the Confidential Information secret and confidential
and shall not disclose it to any Third Party without the
other Party's prior written consent save as expressly or
impliedly permitted under this Agreement;
16.1.2 only use the Confidential Information for the purposes
envisaged under this Agreement and not to use the same for
any other purpose whatsoever; and
16.1.3 ensure that only those of its officers, consultants,
employees (including without limitation directors),
licensees, sub-licensees, Affiliates and such third parties
who are directly concerned with the carrying out of this
Agreement have access to the Confidential Information on a
reasonably applied "need to know" basis and are informed of
the secret and confidential nature of such Confidential
Information.
16.2 The obligations of confidentiality referred to in Clause 16.1 shall
not extend to any Confidential Information which:
16.2.1 is or becomes generally available to the public otherwise
than by reason of breach by a Recipient Party of the
provisions of that Clause; or
16.2.2 is known to the Recipient Party and is at its free disposal
at the time of its disclosure to the Recipient Party (having
been generated independently by the Recipient Party or a
Third Party in circumstances where it can be shown that it
has not been derived from access to the Disclosing Party's
Confidential Information);
or
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16.2.3 is subsequently disclosed to the Recipient Party without
obligations of confidentiality by a Third Party owing no
such obligations to the Disclosing Party in respect of that
Confidential Information; or
16.2.4 is required by law to be disclosed (including as part of any
regulatory submission or approval process) and then only
(subject to Clause 16.3) when prompt written notice of this
requirement has been given to the Disclosing Party so that
it may, if so advised, seek appropriate relief to prevent
such disclosure provided always that in such circumstances
such disclosure shall be only to the extent so required and
shall be subject to prior consultation with the Disclosing
Party with a view to agreeing to the timing and content of
such disclosure.
16.3 The requirement under Clause 16.2.4 to notify the Disclosing Party
when Confidential Information is required to be disclosed by law
shall not apply when such disclosure is required as part of any
regulatory submission or approval process or for the purposes of
marketing.
16.4 In the event that a court or Competent Authority assumes partial or
complete control over the assets of a Recipient Party based on an
Insolvency Event of that Party, the Recipient Party shall:
16.4.1 promptly notify such court or Competent Authority:
(a) that Confidential Information received from the
Disclosing Party is in the ownership or co-ownership
of the Disclosing Party; and
(b) of the confidentiality obligations under this
Agreement; and
16.4.2 to the extent permitted by law, take all steps necessary or
desirable to maintain the confidentiality and security of
the
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Disclosing Party's Confidential Information and to ensure
that the court or Competent Authority maintains that
Confidential Information in confidence in accordance with
this Agreement.
16.5 The Parties understand that remedies in damages may be inadequate to
protect against any breach of any of the provisions of this Clause
16 by either Party or their employees, officers or any other person
acting in concert with it or on its behalf. Accordingly, each Party
shall be entitled to seek the granting of interim and final
injunctive relief by a court of competent jurisdiction in the
discretion of that court against any action that constitutes any
breach of this Clause 16.
16.6 The Parties agree that the obligations of confidentiality set out in
this Clause 16 shall continue to apply following the termination of
this Agreement for whatever reason.
17. TERM AND TERMINATION
17.1 Subject to the other provisions of this Clause 17, this Agreement
shall expire on a country by country basis in the Territory when no
further payment is due from one Party to the other hereunder in
relation to sales of Product in that country, and in such
circumstances (or upon other cessation of a royalty obligation
hereunder for a Product in a country in the Territory), Endo shall
have a sub-licensable, fully paid-up, royalty free license to
develop, make, have made, use, Commercialise and have Commercialised
Product in the Territory under the Vernalis Know How.
17.2 Each of the Parties (the "Terminating Party") shall have the right
to terminate this Agreement for cause with immediate effect upon
giving written notice of termination to the other (the "Defaulting
Party") upon the occurrence of any of the following events at any
time during this Agreement:
17.2.1 the Defaulting Party commits a material breach of this
Agreement which shall not have been remedied (i) within
thirty (30) days of
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the receipt by it of a written notice from the other Party
identifying the breach and requiring its remedy, with
respect to any failure to pay amounts due pursuant to Clause
11 (except in the case of failure to pay amounts that are
subject to good faith dispute) and (ii) within ninety (90)
days of the receipt by it of a written notice from the other
Party identifying the breach and requiring its remedy, with
respect to any other material breaches; and
17.2.2 if an Insolvency Event occurs in relation to the Defaulting
Party. In any event when a Party first becomes aware of the
likely occurrence of any Insolvency Event in regard to that
Party, it shall promptly so notify the other Party in
sufficient time to give the other Party sufficient notice to
protect its interests under this Agreement
17.3 Endo shall have the right at any time to give twelve (12) months'
notice of termination in writing to Vernalis if in Endo's sole
opinion Endo decides not to proceed with this entire Agreement for
whatever reason. including but not limited to safety, efficacy or
other scientific or technical or strategic commercial or legal
reasons. This Agreement shall terminate upon expiration of such
twelve (12) month notice period. For the avoidance of doubt it is
declared and agreed that any payments due and owing during such
notice period shall continue to be due and payable.
17.4 During any period during which notice has been given by Vernalis
under Clause 17.2 or by Endo under Clause 17.3, Endo and its
Affiliates shall do all such acts and things that Vernalis may
reasonably require to prepare for the transition of the Product back
to Vernalis as envisioned in Clause 18.1.
18. CONSEQUENCES OF TERMINATION
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18.1 Upon a termination of this Agreement by Endo pursuant to Clause 17.3
or by Vernalis pursuant to Clause 17.2 (for cause) (which the
Parties agree shall not terminate the provisions of this Agreement
expressed to survive its termination), Endo shall:
18.1.1 have no further licenses under this Agreement and shall not
after the date of termination itself develop, manufacture,
have manufactured, use or Commercialise Product or otherwise
use the Vernalis IP, except that in the case of termination
by Vernalis under Clause 17.2 Endo shall have the right to
sell that part of its inventory of Product on hand as of the
date of termination which is the subject of orders for
Product accepted prior to the date of termination for a
period of six (6) months after the date of termination, and,
within thirty (30) days after disposition of such inventory
pursuant to the fulfilment of such orders, Endo will forward
to Vernalis a final report and pay all royalties due
hereunder for Net Sales of Product during such period;
18.1.2 grant to Vernalis, to the extent Endo has rights to license
the same, an exclusive fully paid up royalty free
sub-licensable licence under any Endo IP (excluding the Endo
name, xxxx and associated logo) and Endo Copyright used
previously by Endo hereunder, solely to develop, have
developed, make, have made, use, have used and Commercialise
the Product in the Territory (including, for the avoidance
of doubt, all and any Product Enhancements made by Endo, its
Affiliates, distributors or contractors, but on such terms
to be agreed by the Parties negotiating in good faith) and
to use such Endo IP as necessary for this purpose. For the
avoidance of doubt it is declared and agreed that the
provisions of this Clause 18.1.2 shall not vary any previous
license granted by Endo under the provision of Clause 8.15;
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18.1.3 deliver up to Vernalis any Documents and Know How comprised
in such Endo IP and also any and all Vernalis IP;
18.1.4 deliver up to Vernalis any and all stocks of Product in its
possession, power, custody or control subject always to
Endo's right to sell Product which is the subject of
pre-termination date orders pursuant to Clause 18.1.1;
18.1.5 commensurate with legislative and regulatory requirements,
transfer to Vernalis or its nominee all Marketing
Authorisations, INDs, NDAs and other regulatory filings and
approvals for the Product. In the event that in any country
such a transfer is not possible, Endo shall use reasonable
endeavours to ensure that Vernalis has the benefit of the
relevant Marketing Authorisations, INDs, NDAs and other
regulatory filings and approvals and, to this end, consents
to any Regulatory Authority cross-referencing to the data
and information on file with any Regulatory Authority as may
be necessary to facilitate the granting of second Marketing
Authorisations, INDs, NDAs, regulatory filings and approvals
to Vernalis, and Endo agrees to complete whatever other
procedures are reasonably necessary in relation to the same
to enable Vernalis (either itself or in conjunction with a
Third Party) freely to develop and sell the Product in
substitution for Endo at Vernalis' expense;
18.1.6 use its reasonable endeavours to assign to Vernalis the
benefit and burden of any agreement made between Endo and
any clinical researcher, contract manufacturer, managed care
provider or sub-licensee in relation to Product;
18.1.7 transfer to Vernalis the Domain Name registrations;
18.1.8 provide Vernalis with all reasonable assistance in relation
to Vernalis' appointment of a Third Party manufacturer of
Product;
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18.1.9 if Endo has itself been manufacturing Product, supply or
procure the supply to Vernalis with Product pursuant to the
terms of a manufacture and supply agreement to be agreed in
good faith between the Parties but at a cost of goods no
higher to Vernalis than Endo's fully absorbed costs
(calculated in accordance with GAAP) plus *** which
agreement shall contain an obligation on Endo to supply
Vernalis with its requirements of Product subject to the
capacity of manufacturing plant for at least two (2) years
following termination; and
18.1.10 the provisions of Clauses 10, 11 (with respect to Endo's
sale of Product pursuant to Clause 18.1.1), 14, 15, 16 and
19 to 30 shall continue to apply.
18.2 Upon the termination of this Agreement by Endo pursuant to Clause
17.2 (termination for cause), the licenses granted to Endo
hereunder, at Endo's sole option, shall continue to apply and:
18.2.1 in the case of termination under Clause 17.2.1, such
licenses shall continue on the terms of this Agreement save
that Endo shall have a right to set off against the
royalties due under Clauses 11.9 and 11.12 any damages which
it establishes are due to it under the procedures set out in
Clause 22; and
18.2.2 in the case of termination under Clause 17.2.2, such
licences shall continue on the terms of this Agreement.
19. ASSIGNMENT/CHANGE OF CONTROL
19.1 Neither this Agreement nor any interest hereunder (and in the case
of Endo, the Endo IP or the Endo Copyright, the Product
Registrations or any other Marketing Authorisations, INDs or NDAs
relating to the Product) shall be assignable or transferable by
either Party without the written consent of the other, such consent
not to be unreasonably withheld or delayed, provided, however, that
(i) Endo may assign this
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Agreement or any part of its rights and obligations hereunder, to
any Affiliate, and (ii) Vernalis may assign this Agreement or any
part of its rights and obligations hereunder, to any UK Affiliate,
provided, however that in no event shall Vernalis transfer any
right, title or interest in the Vernalis IP to an Affiliate that is
not a UK Affiliate, and provided further that Endo shall have no
increased liability under this Agreement which would not have arisen
if such assignment had not occurred.
19.2 Subject to the provisions of Clause 19.1 hereof, either Party may
merge or consolidate with any corporation, or transfer all or
substantially all of its assets to which this Agreement relates,
without obtaining the consent of the other Party.
19.3 Vernalis shall not, without the prior written consent of Endo, which
shall not be unreasonably withheld, intentionally or otherwise and
whether or not by reason of its own actions or omissions or those of
others, change its "Centre of Main Interests" (that term having the
meaning ascribed to it in the EC Regulation on Insolvency
Proceedings 2000 (No. 1346/2000 of 29 May 2000) from England & Wales
to elsewhere. It is hereby agreed that any Change of Control of
Vernalis or Vernalis plc by a Person with a "Centre of Main
Interests" outside England and Wales shall not be deemed a change in
Vernalis' "Centre of Main Interests", provided that such Person
continues Vernalis' business operations in connection with this
Agreement in England and Wales.
20. FORCE MAJEURE
20.1 If a Party (the "Affected Party") is unable to carry out any of its
obligations under this Agreement due to Force Majeure, this
Agreement shall remain in effect but the Affected Party's relevant
obligations under this Agreement and the corresponding obligations
of the other Party ("Non-Affected Party") under this Agreement,
shall be suspended for a period equal to the circumstance of Force
Majeure provided that:
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20.1.1 the suspension of performance is of no greater scope than is
required by the Force Majeure;
20.1.2 the Affected Party immediately gives the Non-Affected Party
prompt written notice describing the circumstance of Force
Majeure, including the nature of the occurrence and its
expected duration, and continues to furnish regular reports
during the period of Force Majeure and notifies the
Non-Affected Party immediately of the cessation of the Force
Majeure;
20.1.3 the Affected Party uses all reasonable efforts to remedy its
inability to perform and to mitigate the effects of the
circumstance of Force Majeure; and
20.1.4 as soon as practicable after the event which constitutes
Force Majeure the Parties discuss how best to continue their
operations as far as possible in accordance with this
Agreement.
20.2 If the circumstance of Force Majeure prevail for a continuous period
in excess of six (6) months, the Non-Affected Party may without
prejudice to any other rights or remedies which may be available to
it, terminate this Agreement with immediate effect by giving written
notice of termination to the other Party. In the event of
termination under this Clause 20.2 by Vernalis, the provisions of
Clause 18.1 shall apply.
21. GOVERNING LAW
21.1 The validity, construction and interpretation of this Agreement and
any determination of the performance which it requires shall be
governed by the laws of the State of New York (without reference to
New York choice of law rules).
22. JURISDICTION AND DISPUTE RESOLUTION
22.1 In the event of any material dispute concerning rights or
obligations under this Agreement or in material breach of this
Agreement then the
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Parties shall comply with the following procedure: the Chief
Executive Officer of Vernalis and the Chief Executive Officer of
Endo or their nominee shall be notified in writing of the dispute by
either Party. They or their nominees shall meet to resolve the
dispute in good faith. If such resolution is not reached within
sixty (60) days of such written notice, then the provision of Clause
22.2 shall apply.
22.2 All disputes between the Parties arising under, out of or relating
to this Agreement including its formation, validity, binding effect,
interpretation, performance breach or termination as well as
non-contractual claims and including disputes relating to
pre-contractual representations shall, save as specified in Clauses
11.16, 16.5 and 22.1 and Schedule 2, paragraphs 5 to 7, be
exclusively settled by arbitration as follows:
22.2.1 The arbitration shall be in accordance with the
International Arbitration Rules of the American Arbitration
Association ("AAA") in effect on the date of the filing of
the arbitration (the "Rules"). The seat of arbitration shall
be New York, NY;
22.2.2 The number of arbitrators shall be three, chosen in
accordance with the procedures set out in Clauses 22.2.3 to
22.2.4 inclusive. The award of the arbitrators shall be
final and binding on the Parties;
22.2.3 Each Party shall appoint one arbitrator. If within 30 days
after receipt of the claimant's notification of the
appointment of an arbitrator the respondent has not notified
the claimant of the arbitrator he appoints, the second
arbitrator shall be appointed by AAA;
22.2.4 The two arbitrators so appointed shall choose a further
arbitrator who will act as the presiding arbitrator of the
tribunal. If within thirty (30) days of the appointment of
the second arbitrator the
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two Party-appointed arbitrators have not agreed upon a
presiding arbitrator then the presiding arbitrator shall be
appointed by the AAA;
22.2.5 During the course of the arbitration, each Party shall
provide to the other copies of Relevant Material. Relevant
Material is defined as all documents or other material
relevant to the matters at issue in the arbitration with the
exception of (i) communications to and from lawyers admitted
to practice law or practicing law (whether or not employed
by a Party) for the purpose of obtaining and giving legal
advice; (ii) communications between the Parties and/or their
respective advisers in relation to the terms of a settlement
of the particular dispute or disputes which is or are the
subject of the arbitration proceedings;
22.2.6 The arbitrators may, if requested by one of the Parties,
order the preparation of lists of the Relevant Material for
initial evaluation by the requesting Party prior to
disclosure and/or inspection of the Relevant Material. The
arbitrators shall also have the power to order production of
the Relevant Material on whatever terms the arbitrators deem
fit including the need for production to take place on an
urgent basis and the reimbursement of all reasonable Costs
of production by the requesting Party to the furnishing
Party. Any dispute as to whether a particular document or
other material should be classified as Relevant Material or
otherwise disclosed in the course of the arbitration shall
be determined in the sole discretion of the arbitrators. The
classification of a document or other material as Relevant
Material shall not determine whether such material shall be
admissible in evidence in the arbitration. Questions of
admissibility shall be decided by the arbitrators in their
sole discretion. In the event that the parties seek to take
deposition discovery in the course of a proceeding, each
Party agrees that it will limit the number of depositions
that
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it will take to 10 depositions, unless the arbitrators
determine that additional depositions are warranted;
22.2.7 The arbitration shall be confidential. No Party shall use or
disclose any Relevant Material obtained under this paragraph
for any purpose except in the course of the conduct of the
arbitration and (as far as applicable) proceedings before
any court, and then only to the extent necessary for the
implementation and enforcement of any award of the
arbitrators;
22.2.8 The seat of arbitration shall be New York, NY, although
hearings may take place in any other venue as the Parties
may agree. In rendering an award the arbitrators shall
follow the laws of the State of New York. The arbitrators
are not empowered to award punitive or exemplary damages,
and the Parties hereby waive any rights to any such damages;
and
22.2.9 The arbitration award shall be final and binding on the
Parties and may be entered and enforced in any court having
jurisdiction over any Party or any of its assets.
22.3 All submissions and awards in relation to arbitration hereunder
shall be made in English and all arbitration proceedings shall be
conducted in English.
23. WAIVER
23.1 Save as expressly provided in this Agreement, neither Party shall be
deemed to have waived any of its rights or remedies whatsoever,
unless the waiver is made in writing, signed by a duly authorised
representative of that Party and may be given subject to any
conditions thought fit by the grantor. Unless otherwise expressly
stated, any waiver shall be effective only in the instance and for
the purpose for which it is given.
24. SEVERANCE OF TERMS
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24.1 If any provision(s) of this Agreement are or become invalid, are
ruled illegal by any Court of competent jurisdiction or are deemed
unenforceable under then current applicable law, it is the intention
of the Parties that the remainder of this Agreement shall not be
affected thereby, provided that a Party's rights are not materially
affected. The Parties hereto covenant and agree to re-negotiate any
such provision in good faith in order to provide a reasonably
acceptable alternative to the provision that is invalid, illegal, or
unenforceable, it being the intent of the Parties that the basic
purposes of this Agreement are to be effectuated.
24.2 If the whole or any part of this Agreement is or becomes or is
declared illegal, invalid or unenforceable in any jurisdiction for
any reason (including both by reason of the provisions of any
legislation and also by reason of any decision of any court or
Competent Authority which either has jurisdiction over this
Agreement or has jurisdiction over any of the Parties):
24.2.1 in the case of the illegality, invalidity or
un-enforceability of the whole of this Agreement, it shall
terminate in relation to the jurisdiction in question; or
24.2.2 in the case of the illegality, invalidity or
un-enforceability of part of this Agreement, that part shall
be severed from this Agreement in the jurisdiction in
question and that illegality, invalidity or
un-enforceability shall not in any way whatsoever prejudice
or affect the remaining parts of this Agreement which shall
continue in full force and effect provided that the said
remaining parts continue to satisfy the commercial
intentions of the Parties and provided that the remaining
parts do constitute a substantial part of this Agreement and
provided that the provision of Clause 24.1 shall then apply.
25. ENTIRE AGREEMENT/VARIATIONS
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25.1 This Agreement, together with the Loan Agreement ,the Security
Agreement and the Safety Agreement, constitutes the entire agreement
and understanding between the Parties and supersedes all prior oral
or written understandings, arrangements, representations or
agreements between them relating to the subject matter of this
Agreement. The Parties acknowledge that no claims shall arise in
respect of any understandings, arrangements, representations or
agreements so superseded. No director, employee or agent of any
Party is authorised to make any representation or warranty to
another Party not contained in this Agreement, and each Party
acknowledges that it has not relied on any such oral or written
representations or warranties. Nothing in this Agreement removes or
overrides any right of action by any Party in respect of any
fraudulent misrepresentation, fraudulent concealment or other
fraudulent action.
25.2 Neither Party or its Affiliates shall represent itself as an agent
of the other Party or its Affiliates for any purpose, nor pledge the
other Party or its Affiliates' credit, or give any condition or
warranty or make any representation on behalf of the other Party or
its Affiliates, other than representations consistent with the
Marketing Authorisations, or commit the other Party or its
Affiliates to any contracts.
25.3 No variation, amendments, modification or supplement to this
Agreement shall be valid unless agreed in writing in the English
language and signed by a duly authorised representative of each
Party.
25.4 All rights and licenses granted pursuant to this Agreement are, and
shall otherwise be deemed to be, for purposes of 11 U.S.C. 365 (n)
of the Bankruptcy Laws, licenses of rights to "intellectual
property" as defined under 11 U.S.C. 101(35A) of the Bankruptcy
Laws. The Parties agree that Endo, as a licensee of such rights
under this Agreement, shall retain and may fully exercise all of its
rights, including any right to enforce any exclusivity provision of
this Agreement, remedies, and elections enforce
- 95 -
any exclusivity provision of this Agreement, remedies, and elections
under the Bankruptcy Laws. To the fullest extent permitted by law,
the Parties further agree that, in the event of the commencement of
a bankruptcy proceeding by or against Vernalis under the Bankruptcy
Laws, Endo shall be entitled to all applicable rights under 11
U.S.C. 365 (n) of the Bankruptcy Laws, including copies and access
to, as appropriate, any such intellectual property and all
embodiments of such intellectual property upon written request
therefor by Endo, and such, if not already in its possession, shall
be promptly delivered to Endo.
26. NOTICES
26.1 Any notice or other communication given pursuant to or made under or
in connection with the matters contemplated by this Agreement shall
be in writing in the English language and shall be delivered by
courier, sent by post or sent by facsimile to the address or
facsimile number of the recipient set out in Schedule 11 or as
specified by the recipient from time to time in accordance with
Clause 26.3. Notices sent by E-Mail shall not be valid of themselves
and must be confirmed in hard copy form by courier, by post or
facsimile.
26.2 Any notice given pursuant to this Clause 26 shall be deemed to have
been received:-
26.2.1 if delivered by courier, at the time of delivery; or
26.2.2 if sent by post:
(a) where posted in the country of the addressee, on the
second working day following the day of posting, and
(b) where posted in any other country, on the fifth
working day following the day of posting; or
26.2.3 if sent by facsimile, on acknowledgement by the recipient
facsimile receiving equipment on a Business Day if the
- 96 -
acknowledgement occurs before 1700 hours local time on a
Business Day of the recipient and in any other case on the
following the Business Day.
26.3 A Party may notify the other Parties to this Agreement of a change
of its name, relevant addressee, address or facsimile number for the
purposes of Schedule 11 provided that such notification shall only
be effective on:
26.3.1 the date specified in the notification as the date on which
the change is to take place; or
26.3.2 if no date is specified or the date specified is less than
(five) clear Business Days after the date on which the
notice is given, the date falling five clear Business Days
after notice of any such change has been given.
26.4 For the avoidance of doubt, the Parties agree that the provisions of
this Clause 26 shall not apply in relation to the service of Service
Documents (as defined in Clause 26.5).
26.5 "Service Document" means a writ, summons, order, judgement or other
document related to or in connection with any Court proceeding,
cause, matter or action arising out of or connected in any way with
this Agreement.
27. COUNTERPARTS
27.1 This Agreement may be executed in any number of counterparts and by
the Parties on separate counterparts, each of which when so
executed shall be an original of this Agreement, and all of which
shall together constitute one and the same instrument. Complete
sets of counterparts shall be lodged with each Party.
27.2 Nothing in this Agreement and no action taken by the Parties
pursuant to this Agreement shall constitute or be deemed to
constitute a partnership, association, joint venture or other
co-operative entity between the Parties
- 97 -
and neither Party shall have any authority to bind the other in any
way except as provided in this Agreement.
28. COSTS
28.1 Each Party shall bear its own costs, legal fees and other expenses
incurred in the negotiation, preparation, execution and
implementation of this Agreement and the documents referred to
herein.
29. ANNOUNCEMENTS
29.1 No public announcements or other disclosure to third parties
concerning the financial or other terms of this Agreement or
financial or business information with respect to the other Party
(including projections) shall be made, whether directly or
indirectly, by either Party to this Agreement, except as may be
legally required or as may be required for recording purposes,
without first obtaining the approval of the other Party and
agreement upon the nature and text of such announcement or
disclosure, with the exception that:
29.1.1 a Party may disclose the full terms of this Agreement to its
investment bankers, lawyers, accountants and other
professional advisors or a Third Party seeking to invest in,
lend funds to acquire or merge with or be acquired by such
Party without the other Party's prior approval provided that
such disclosure is made under terms of confidentiality
whether express or implied; and
29.1.2 a Party may disclose the terms of this Agreement to any
securities exchange or regulatory authority or government
body to which either Party is subject or submits, wherever
situated, including (without limitation) the US Securities
Exchange Commission, the UK Stock Exchange or the Panel on
Take-overs and Mergers, whether or not the requirement has
the force of law provided that it takes advantage of all
provisions to keep confidential as many terms of this
Agreement as possible.
- 98 -
29.2 In respect of those public announcements and disclosures not
permitted by Clause 29.1 and with the exception of
publications covered by Clause 6.2.3 and the agreed press
releases announcing this transaction, the Party desiring to
make any such public announcements or other disclosure shall
inform the other Party of the proposed announcements or
disclosure in reasonably sufficient time prior to public
release, and shall provide the other Party with a written copy
thereof, in order to allow such Party to comment upon such
announcement or disclosure, which comments shall be provided
by such other Party within *** Business Days. The Parties
shall jointly develop press releases and information materials
that can be used by either Party for presentations to
financial advisers and similar recipients.
29.3 No Party shall make any public statement or communication in
derogation of the other Party, its officers, directors,
shareholders and Affiliates at any time.
- 99 -
IN WITNESS WHEREOF the Parties have executed this agreement the day and year
first above written.
SIGNED by Xxxxx Xxxxxx, Chief Executive Officer )
for and on behalf of ) /s/ XXXXX XXXXXX
VERNALIS DEVELOPMENT LIMITED )
SIGNED by Xxxxx Xxxxxx, Chief Executive Officer )
for and on behalf of ) /s/ XXXXX XXXXXX
VERNALIS PLC )
(As Guarantor under Clause 14 hereof)
SIGNED by Xxxxx X. Xxxxx, Chairman )
and Chief Executive Officer
for and on behalf of ) /s/ XXXXX XXXXX
ENDO PHARMACEUTICALS INC. )
- 100 -
SCHEDULE 1
INITIAL MARKETING BUDGET
ESTIMATED COMMITMENT
(IN USD MILLIONS)
-------------------------------------------------------
Pre-MAM No-MAM APPROVAL *** *** ***
------- --------------- --- --- ---
Year 1
(2005) *** *** *** ***
Year 2
(2006) *** *** *** ***
Post-MAM
Year 1 *** *** *** ***
(estimated ***)
Year 2 *** *** *** ***
(estimated ***)
***
***
***
- 101 -
SCHEDULE 2
INVENTORY STATEMENT
1. Immediately following the Closing Date Vernalis shall (at its cost) ensure
that Vernalis' accountants prepare a statement (in the form of paragraph
2) (the "INITIAL STATEMENT") specifying the amount of the Stock and the
actual stock value valued in accordance with paragraph 2 which Vernalis
owns on the proposed Closing Date. Vernalis shall supply a copy of the
Initial Statement to Endo and Endo's accountants respectively and at the
same time shall give them access to those assets, documents and records
within Vernalis' possession or control which they may reasonably require
for the purpose of agreeing the Initial Statement.
2. The form of the Initial Statement (incorporating the values for different
types of Stock) is as follows:
Expiration
Units Cost/Unit Lot No. Date
----- --------- ------- ----------
Frova 2.5mg 9 Count Blister ----- --------- ------- ----------
----- --------- ------- ----------
Frova 2.5 mg Tab 2 count ----- --------- ------- ----------
----- --------- ------- ----------
*** ----- --------- ------- ----------
----- --------- ------- ----------
*** ----- --------- ------- ----------
----- --------- ------- ----------
*** ----- --------- ------- ----------
----- --------- ------- ----------
3. Within ten (10) days of receipt of the Initial Statement Endo shall notify
Vernalis whether or not it agrees with the Initial Statement.
4 If Endo notifies its agreement with the Initial Statement within the ten
(10) day period referred to in paragraph 3 or fails to give any
notification within that period, the Initial Statement shall constitute
the Inventory Statement. If Endo notifies Vernalis within the ten (10) day
period referred to in paragraph 3 that it disagrees with the Initial
Statement, paragraphs 5, 6 and 7 apply.
5. If within ten (10) days starting on the day after receipt of the
notification referred to in paragraph 4, Endo and Vernalis have not agreed
the items in dispute in relation to the Initial Statement, either Party
may refer the items in dispute to a
- 102 -
partner of at least 10 years qualified experience at an internationally
recognized independent accounting firm agreed by the Parties in writing,
or failing agreement on the identity of the internationally recognized in
depending accounting firm within fifteen (15) days starting on the day
after receipt of the notification referred to in paragraph 4, an
internationally recognized independent accounting firm appointed on the
application of either Party by the President for the time being of the
Institute of Chartered Accountants in England and Wales (the "EXPERT").
6. The Expert shall act on the following basis:
(a) the Expert shall act as an expert and not as an arbitrator;
(b) the Expert's terms of reference shall be to determine the matters in
dispute within 20 days of his appointment;
(c) the Parties shall each provide the Expert with all information
relating to the items in dispute which the Expert reasonably
requires and the Expert shall be entitled (to the extent he
considers appropriate) to base his determination on such
information;
(d) the decision of the Expert is, in the absence of fraud or manifest
error, final and binding on the Parties; and
(e) the Expert's costs shall be paid by Endo and Vernalis as the Expert
may determine.
7. The Initial Statement, adjusted in accordance with the agreement, if any,
between Endo and Vernalis pursuant to paragraph 5 and the decision of the
Expert in accordance with paragraph 6 shall constitute the Inventory
Statement and be final and binding on the Parties.
8. For the avoidance of doubt, the Initial Statement shall not include, and
Endo shall not acquire, any Stock of Frova 2.5 mg 9 Count Blister with an
expiration date on or before the *** anniversary of the Signature Date.
Vernalis shall destroy any such stock with an expiration date on or before
the *** anniversary of the Signature Date promptly after the Closing Date.
9. For the avoidance of doubt, the Initial Statement shall not include, and
Endo shall not acquire, any stock of Frova 2.5 mg Tab 2 Count Blisters
with an expiration date before the ***. Vernalis shall destroy any such
stock with an expiration date before *** promptly after the Closing Date.
Endo shall not acquire more than *** Frova 2.5 mg Tab 2 Count Blisters.
10. Endo will retest any Stock set forth in Clauses 1.1.94(c), 1.1.94(d) and
1.1.94(e) on or about the expiration date of such Stock. In the event that
any re-tested Stock fails the re-test, Vernalis shall pay to Endo the Cost
of such Stock within 30 days of notification of such failed retest.
- 103 -
SCHEDULE 3
MAM & PAEDIATRIC DEVELOPMENT PROGRAM
Vernalis will complete the long-term safety trial in menstrual migraine
prophylaxis [PROTOCOL NUMBER: VML 251-3MAM03] entitled: "An open label study to
assess the safety, tolerability and efficacy of frovatriptan in the prevention
of menstrually-associated migraine (MAM) headaches"
Subject to agreement with FDA Vernalis will undertake the single efficacy trial
in menstrual migraine prophylaxis [PROTOCOL NUMBER: VML 251-3MAM02] as amended
following discussion with the FDA, entitled: "A double-blind,
placebo-controlled, parallel group study, with an open-label extension phase, to
assess the efficacy, tolerability and safety of oral frovatriptan in the
prevention of menstrually-associated migraine (MAM) headaches in a 'difficult to
treat' population"
Vernalis will undertake a single safety and a single efficacy trial of
frovatriptan as abortive therapy in paediatrics in accordance with FDA
requirements.
- 104 -
SCHEDULE 4
MANAGED CARE AGREEMENTS AND ASSIGNED CONTRACTS
MANAGED CARE AGREEMENTS
Elan Pharmaceuticals, Inc. *** Amended Formulary
Reimbursement Agreement ***
Elan Pharmaceuticals, Inc. *** Rebate Agreement ***
Elan Pharmaceuticals, Inc. *** Rebate Agreement ***
Elan Pharmaceuticals, Inc. *** Amended Rebate Agreement ***
Elan Pharmaceuticals, Inc. *** Rebate Agreement ***
Elan Pharmaceuticals, Inc. *** Rebate Agreement ***
Elan Pharmaceuticals, Inc. *** Rebate Agreement ***
Elan Pharmaceuticals, Inc. *** Rebate Agreement ***
Vernalis *** Rebate Agreement for
Medicare Endorsed
Discount Card Programs
Vernalis *** Medicare Endorsed
Prescription Drug
Discount Card Agreement
Vernalis *** Rebate Agreement for
Medicare Endorsed
Discount Card Program
- 105 -
- 106 -
PHASE IV COMMITMENTS IN RELATION TO THE PRODUCT
Research Grant between Elan Pharmaceuticals, Inc. and New England Center for
Headache, effective December 30, 2003
Research Grant, between Elan Pharmaceuticals, Inc. and Diamond Headache Center,
effective December 30, 2003
- 107 -
SCHEDULE 5
ESTIMATED DETAILING EFFORT(1)(2)(3)
PRIMARY SECONDARY
PRE-MAM DETAILS DETAILS TOTAL DETAILS ANNUAL DETAILS
------------------ ------- --------- ------------- --------------
(000S)
SPECIALTY *** *** ***
YEAR *** ***
PHARMA 1 *** *** ***
SPECIALTY *** *** ***
YEAR *** ***
PHARMA 1 *** *** ***
PRIMARY SECONDARY
POST-MAM DETAILS DETAILS TOTAL DETAILS ANNUAL DETAILS
-------------------- ------- --------- ------------- --------------
(000S)
SPECIALTY *** *** ***
YEAR ***
(ESTIMATED) ***
PHARMA 1 *** *** ***
PHARMA 2 *** *** ***
SPECIALTY *** *** ***
YEAR ***
(ESTIMATED) ***
PHARMA 1 *** *** ***
PHARMA 2 *** *** ***
(1) Assumes full field force complement. To be adjusted for ***.
(2) Includes total field force complement (including Vernalis field force
representatives for which Vernalis is reimbursed by Endo pursuant to Clause
9.1).
(3) Table assumes *** (see Schedule 1 for definitions).
- 108 -
SCHEDULE 6
SUPPLY AND TECHNICAL AGREEMENTS
1. Supply Agreement between Elan Pharma International Limited and Oxford
Asymmetry International PLC dated December 28 2000
2. First Amendment to the Supply Agreement between Elan Pharma International
Ltd and Evotec OIA Ltd, dated 1 January 2004
3. Technical Agreement between Evotec OAI Ltd and Elan, dated 12 October 2003
4. Frovatriptan Supply Agreement by and between Elan Pharma International
Limited and Xxxxx Limited dated as of January 1 2002
5. Technical Agreement between Elan Pharmaceuticals, Inc. and Xxxxx Limited
dated July 2 2003
6. Novation agreement dated 18th May, 2004 between Elan Pharma International
Limited, Evotec OAI Limited and Vernalis Development Limited in respect of
the supply agreement between Elan Pharma International Limited and Evotec
OAI Limited (formerly Oxford Asymmetry International plc) dated 28th
December, 2000.
7. Novation agreement dated 18th May, 2004 between Elan Pharma International
Limited, Xxxxx Limited and Vernalis Development Limited in respect of the
frovatriptan supply agreement between Elan Pharma International Limited
and Xxxxx Limited dated 1st January, 2002
- 109 -
SCHEDULE 7
FROVA LOGO
[FROVA LOGO]
- 110 -
SCHEDULE 0
XXXXXXXX XXXXXX XXXXXX
XX, XXXXXXXX (XX) AND MEXICAN (MX) PATENTS & PATENT APPLICATIONS
Application No. Application Date Patent No. Publication Date Status
US167846 23.12.1993 US5464864 07.11.1995 Granted
US442719 15.05.1995 US5637611 10.06.1997 Granted
US442720 17.05.1995 US5827871 27.10.1998 Granted
US770926 23.12.1996 US5962501 05.10.1999 Granted
US781990 06.01.1997 US5917054 29.06.1999 Granted
US451898 26.05.1995 US5616603 01.04.1997 Granted
US446655 16.12.1993 US5618947 08.04.1997 Granted
US451846 26.05.1995 US5618948 08.04.1997 Granted
US689661 13.10.2000 US6359146 19.03.2002 Granted
CA2113726 17.06.1992 N/A N/A Pending
XX0000000 16.12.1993 N/A N/A Pending
CA2328345 16.04.1999 N/A N/A Pending
MX923444 26.06.1992 MX193793 22.10.1999 Granted
MX940035 03.01.1994 N/A N/A Pending
MX010127 16.04.1999 N/A N/A Pending
- 111 -
SCHEDULE 9
INFORMATION FOR MARKETING PLAN
(a) Market analysis
(b) Promotional activities to be carried out including:
(i) marketing effort in the form of conferences
(ii) advertising and promotional materials to be run and published
(c) Sales forecasts: ***
- 112 -
SCHEDULE 10
CO-PROMOTION TERMS
1. Endo and Vernalis will form a Joint Co-Promotion team to co-ordinate the
Parties' Co-promote activities ("Joint Co-Promotion Team"). Any disputes
on the Joint Co-Promotion Team shall be promptly referred to the
representative Heads of Marketing of the Parties for resolution. The Heads
of Marketing shall use their best endeavours to resolve the dispute within
thirty (30) days of the reference of the dispute to them, failing which
Endo's decision shall be final. The Joint Co-Promotion Team shall be a
channel for organising communication of Endo's sales and marketing plans
to Vernalis and sales force liaison, including organising training on the
promotion messages, marketing materials and training aids.
2. Endo will determine, in consultation with the Joint Co-Promotion Team, the
number of field sales force representatives necessary to carry out its
Detailing effort. Endo shall notify Vernalis prior to *** of each year of
any planned increase in the number of field sales force representatives
dedicated to the Product for the following Year. Within 30 days of such
notification, Vernalis shall notify Endo as to the number of Vernalis
employees Vernalis desires to be included in the Specialty Sales Force for
that Year.
3. Endo may at its option and on terms to be agreed with Vernalis make
available to Vernalis Endo's human resource group to assist Vernalis to
hire the Vernalis Specialty Sales Personnel. Vernalis shall be the
employer of all Vernalis Specialty Sales Personnel and shall be entirely
responsible for the payment of all such Vernalis Specialty Sales Personnel
salary, bonus and benefits, pension, insurance, social security and any
other related obligations. Vernalis shall indemnify Endo in respect of any
claim against Endo by any member of Vernalis Specialty Sales Personnel and
in respect of any exposure of Endo for any tax or social security
obligation in respect of Vernalis Specialty Sales Personnel. The
geographic deployment of the Vernalis Specialty Sales Personnel shall be
determined by Endo, subject to paragraph 4 below.
4. The Joint Co-Promotion Team will devise a call plan for the Specialty
Sales Force, which will allocate calls equitably, including in relation to
decile, geographic location and key opinion leaders..
5. In circumstances where Endo is required to preimburse Vernalis for the
cost of Vernalis Specialty Sales Personnel, Endo shall pay Vernalis the
Cost per Detail for each Detail made by Vernalis sales force
representatives within 45 days of the end of each Quarter upon receipt of
an invoice from Vernalis and a report specifying the number of Details
carried out by it or upon its behalf during such Quarter. Such report
shall be auditable by Endo on the terms of Clause 11.16 of the Agreement.
- 113 -
6. All sales of the Product or MAM Product generated as a result of any of
Vernalis co-promotion activities shall be booked by Endo and the
appropriate royalty under the Agreement paid to Vernalis by Endo.
7. Vernalis shall have the right to Co-promote for so long as Endo is
Commercialising the Product in USA.
8. Vernalis shall have the right to terminate its involvement in co-promotion
on three (3) months notice to Endo.
9. During the period in which Endo is required to reimburse Vernalis in
respect of Vernalis Specialty Sales Personnel pursuant to Clause 9, in the
event Vernalis fails to achieve the number of Details it has elected to
undertake in any Year in any two consecutive Quarters or in any two of
four Quarters, Endo may terminate Vernalis' right to Co-promote hereunder.
10. The Co-Promotion arrangement described above shall be subject in all
respects to Clause 9. All the terms of Clauses 15, 16, 20, 21, 22, 23, 24,
25, 26, 28 and 29 shall apply to the co-promotion arrangement between the
Parties.
- 114 -
SCHEDULE 11
ADDRESSES FOR NOTICES
If to Endo:
Endo Pharmaceuticals Inc.
000 Xxxxxxxx Xx.
Xxxxxx Xxxx, XX 00000
Attention: Chief Legal Officer
Telecopy: 000-000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx and Xxxxx Xxxxxxx
Telecopy: 000-000-0000
If to Vernalis:
Vernalis Development Limited
Oakdene Court
000 Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxxxxx
XX00 0XX
Xxxxxx Xxxxxxx
Attention: Head of Legal Affairs
- 115 -
