Dated September 30, 0000
XXXX XXXXXX INTERNATIONAL LIMITED
AND
ELECTROPHARMACOLOGY, INC.
LICENSE AGREEMENT
CONTENTS
CLAUSE 1 PRELIMINARY
CLAUSE 2 THE LICENSE
CLAUSE 3 INTELLECTUAL PROPERTY
CLAUSE 4 DEVELOPMENT OF THE PRODUCT
CLAUSE 5 REGISTRATION OF THE PRODUCT
CLAUSE 6 MARKETING AND PROMOTION OF THE PRODUCT
CLAUSE 7 FINANCIAL PROVISIONS
CLAUSE 8 PAYMENTS, REPORTS AND AUDITS
CLAUSE 9 DURATION AND TERMINATION
CLAUSE 10 CONSEQUENCES OF XXXXXXXXXXX
XXXXXX 00 XXXXXXXXXXXXXX, Xxxxxxxx and Indemnity
CLAUSE 12 CUTOMER COMPLAINTS AND PRODUCT RECALL
CLAUSE 13 MISCELLANEOUS PROVISIONS
SCHEDULE 1 ELAN PATENT RIGHTS
SCHEDULE 2 EXCLUDED TECHNOLOGY
SCHEDULE 3 TECHNOLOGICAL COMPETITORS
2
THIS AGREEMENT is made on September 30, 1998.
BETWEEN:
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(1) ElAN PHARMA INTERNATIONAL LIMITED, a company incorporated in Ireland
having its registered office at XXX Xxxxx, Xxxxxxx Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxx Xxxxx, Xxxxxxx ("ELAN"); and
(2) ELECTROPHARMACOLOGY, INC., a company organised and existing under the
laws of the State of Delaware, having an office at 0000 XX 00xx Xxxxx,
Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx 00000, Xxxxxx Xxxxxx of America
(which intends shortly to change its name to Gemini Health
Technologies, Inc., "GEMINI").
RECITALS:
--------
A. ELAN is beneficially entitled to the use of various patents, included
in the ELAN TECHNOLOGY, which have been granted or are pending under
the International Convention in relation to the development and
production of iontophoretic transdermal devices, and
B. ELAN is knowledgeable in the development of iontophoretic transdermal
devices and has developed a unique range of device and delivery systems
designed to provide improved devices, and
C. GEMINI is desirous of entering into a licensing agreement with ELAN to
allow GEMINI develop, manufacture and have manufactured in accordance
with the terms of this Agreement and to market, sell and distribute
PRODUCTS in the TERRITORY without infringing any of the intellectual
property rights in the ELAN TECHNOLOGY held by ELAN, and
D. ELAN is prepared to license the ELAN TECHNOLOGY in the TERRITORY to
GEMINI for PHARMACEUTICAL USE in the FIELD.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1 - PRELIMINARY
1.1 Definitions: In this Agreement unless the context otherwise requires:
AFFILIATE shall mean any corporation or entity controlling or
controlled or under common control with ELAN or GEMINI, as the case may
be. For the purposes of
3
this Agreement, "control" shall mean the direct or indirect
ownership of more than 50% of the issued voting shares or
other voting rights of the subject entity to elect directors, or if not
meeting the preceding criteria, any entity owned or controlled by or
owning or controlling at the maximum control or ownership right
permitted in the country where such entity exists.
CFR shall mean the US Code of Federal Regulations 21, as amended from
time to time.
cGP shall mean current Good Clinical Practice, current Good
Manufacturing Practice and current Good Laboratory Practice as defined
in the FFDCA, (or applicable foreign law).
COSMETIC USE shall mean an application of the DEVICE which does not
require regulatory approval to market either (a) the DEVICE, (b) a
PRODUCT, or (c) GEMINI TECHNOLOGY, for such application in the
TERRITORY.
DERMATOLOGY shall mean the treatment of skin disorders including but
not limited to acne, alopecia, dermatitis, eczema, hyperhydrosis,
keratinisation disorders, pigmentation disorders, pruritus, psorasis,
rosacea and warts.
DEVICE shall mean any device, system, method or use which, in the
course of manufacture, use, offer for sale or sale of any such device,
or practice of any such method, in the absence of this Agreement, would
infringe the ELAN PATENTS, or constitute an unauthorised use of the
ELAN KNOW-HOW.
EFFECTIVE DATE shall mean 30th September, 1998.
ELAN shall mean Elan Pharma International Limited and any of its
AFFILIATES.
ELAN EXCLUDED TECHNOLOGY shall mean all intellectual property
including, without limitation, any inventions, discoveries, material
and data whether or not protectable by patents, trade secrets,
trademarks or copyrights in relation to (i) the iontophoretic
technology as set out in Schedule 2 which has been licensed by ELAN to
Iomed, Inc. ("IOMED") pursuant to agreements dated 14th April 1997
and/or developed pursuant to such agreements, (ii) ELAN's MEDIPAD(TM)
Drug Delivery System ambulatory pump infusion technology as described
in Schedule 2 and any improvements thereto, and (iii) the know-how as
set out in Schedule 2 which has been licensed by Asulab S.A. and/or SMH
Swiss Corporation for Microelectronics and Watchmaking Industries Ltd.
to ELAN pursuant to an agreement dated 7th March 1990.
ELAN IMPROVEMENTS shall mean any improvement or enhancement to the ELAN
TECHNOLOGY or DEVICE including its design, structure, manufacture and
use whether developed pursuant to this Agreement or otherwise.
ELAN KNOW-HOW shall mean all knowledge, information, trade secrets,
data and expertise relating to the DEVICE, and which is not generally
known to the public, and
4
that are owned or licensed by ELAN as of the EFFECTIVE DATE
and which permit(s) disclosure of same to GEMINI, whether or
not covered by or subject to protection by any patent,
copyright, design patent, trademark, trade secret or other industrial
or any intellectual property rights.
ELAN PATENTS shall mean all patents and patent applications listed in
Schedule 1, including all continuations, continuations-in-part,
divisionals, and any patents issuing thereon, and re-issues or
re-examinations of such patents and extensions of any patents licensed
hereunder. ELAN PATENTS shall also include all patent applications
directed to ELAN IMPROVEMENTS and any patents issuing thereon. subject
to the terms of this Agreement. Extensions of patents shall include:
(a) extensions under the U.S. Patent Term Restoration Act;
(b) extension of patents under Japanese Patent Law;
(c) Supplementary Protection Certificates for members of the
European Patent Convention and other countries in the EEA and
Switzerland.
ELAN TECHNOLOGY shall mean the ELAN PATENTS, and ELAN KNOW-HOW for (i)
the iontophoretic delivery of a substance to or through the skin in a
controlled manner, (ii) ELECTROMAGNETIC THERAPY and (iii) a combination
of iontophoretic delivery and ELECTROMAGNETIC THERAPY, but shall not
include the ELAN EXCLUDED TECHNOLOGY.
ELECTROMAGNETIC THERAPY shall mean the treatment of the body via
non-invasive delivery of electromagnetic pulses.
ENFORCEMENT PROCEEDINGS shall mean the proceedings referred to in
Clause 3.4.2.
EU shall mean the Member States of the European Union, as same may
change from time to time in terms of Member States.
FFDCA shall mean the US Federal Food, Drug and Cosmetic Act of 1934,
and the regulations promulgated thereunder, as may be amended from time
to time.
FIELD shall mean (i) DERMATOLOGY, (ii) WOUND CARE and (iii)
ELECTROMAGNETIC THERAPY.
FINANCIAL INVESTOR shall mean any company, individual or other entity
whose main activity is making investments in the common or preferred
stock of companies for long-term capital appreciation.
FULLY ALLOCATED COST shall include direct labour, direct materials and
supplies, variable labour, overhead and attributable administration,
quality control, quality assurance and other costs, whether incurred by
a Party, or any sub-contractor of a Party;
5
such costs to be calculated in accordance with the generally accepted
accounting principles applicable to such Party. GEMINI shall mean
Electropharmacology, Inc. and any of its AFFILIATES.
GEMINI IMPROVEMENTS shall mean any improvements which can be usefully
applied to the GEMINI TECHNOLOGY including its formulation, design,
structure, manufacture or use.
GEMINI TECHNOLOGY shall mean any (i) drug, (ii) marker, or (iii)
mechanism, instrumentality or feature relating exclusively to
electromagnetic technology, owned by or licensed to GEMINI from a third
party or which GEMINI may use without infringing any intellectual
property right of any third party.
GEMINI TRADEMARK shall mean the trademark(s) of GEMINI to be applied to
the PRODUCT.
INITIAL PERIOD shall mean the initial period of this Agreement, as more
fully described in Clause 9.
INDEPENDENT THIRD PARTY(IES) shall mean any party(ies) other than ELAN
or GEMINI and their AFFILIATES.
IN MARKET shall mean the sale of the PRODUCT by GEMINI or its
AFFILIATES, or where applicable by a permitted sub-licensee, to an
INDEPENDENT THIRD PARTY such as a wholesaler, distributor, managed care
organisation, hospital or pharmacy and shall exclude the transfer
pricing of the PRODUCT by GEMINI to an AFFILIATE or a permitted
sub-licensee.
JOINT IMPROVEMENTS shall mean any improvement in the area of
electromagnetic technology to the GEMINI TECHNOLOGY and the ELAN
TECHNOLOGY and which was developed, created, conceived or otherwise
invented during the TERM jointly by at least one ELAN employee or agent
and at least one GEMINI employee or agent pursuant to this Agreement.
MAJOR MARKETS shall mean the United States of America, the EU and Japan
and such additional countries as may be agreed in writing by the
Parties from time to time.
NET INCOME shall mean the monetary amount or non cash consideration
payable by an INDEPENDENT THIRD PARTY to GEMINI:-
(i) for the granting of rights, whether by license, sublicense or
otherwise, by GEMINI to any INDEPENDENT THIRD PARTY relating
to the development or commercialisation of one or more of the
PRODUCTS and/or to exploit the ELAN TECHNOLOGY within the
FIELD, including license fees, royalties on sales and other
ongoing fees, and
6
(ii) where GEMINI is not selling a PRODUCT IN MARKET, the gross
amount billed for the supply of such PRODUCT to an INDEPENDENT
THIRD PARTY for IN MARKET sale, and
(iii) where GEMINI is selling a PRODUCT IN MARKET, the NET SALES
PRICE of such PRODUCT;
but excluding in the case of each of the above:
-----------------------------------------------
(i) any bona fide research or development fees and payments
charged at cost by GEMINI for the ELAN TECHNOLOGY and/or a
PRODUCT to an INDEPENDENT THIRD PARTY which is a sublicensee
of the ELAN TECHNOLOGY; and
(ii) the FULLY ALLOCATED COST of manufacturing, packaging and
supplying the PRODUCT.
NET SALES PRICE shall, subject to the provision of Clause 7.2.5 of this
Agreement, mean in the case of PRODUCT sold by GEMINI or an AFFILIATE,
that sum determined by deducting from the aggregate gross IN MARKET
sales proceeds billed for the PRODUCT by GEMINI or, its AFFILIATE, as
the case may be, in accordance with generally accepted accounting
principles, the following deductions:-
(a) customs duties or other taxes (excluding income or corporation
tax), directly related to the sale of PRODUCT which are paid
by GEMINI or its AFFILIATE as the case may be;
(b) a discount from the gross sales proceeds to cover such normal
costs as are incurred by GEMINI or its AFFILIATE, as the case
may be, in respect of transport, shipping insurance, returns
or discounts directly related to the sale of PRODUCT, subject
to a cap of [omitted] of the sum of the aggregate gross IN
MARKET sales proceeds less the deductible items at (a) above.
Party shall mean GEMINI or ELAN, as the case may be. Parties shall mean
ELAN and GEMINI.
PHARMACEUTICAL USE shall mean an application of the DEVICE which
requires regulatory approval to market either (a) the DEVICE (b) the
PRODUCT, or (c) GEMINI TECHNOLOGY, for such application in the
TERRITORY. For the avoidance of doubt, PHARMACEUTICAL USE shall not
include, and GEMINI shall have no rights to, any application of the
DEVICE and/or PRODUCT for COSMETIC USE.
PRODUCT shall mean the DEVICE either on its own, or in combination with
GEMINI TECHNOLOGY.
REGULATORY APPLICATION shall mean any regulatory application or any
other
7
application for marketing approval, which a Party, or any
INDEPENDENT THIRD PARTY on behalf of such Party, will file, including
any supplements or amendments thereto, for a PRODUCT with the RHA.
REGULATORY APPROVAL shall mean the final approval to market a PRODUCT
in any country of the TERRITORY.
RHA shall mean any relevant government health authority (or successor
agency thereof) in any country of the TERRITORY whose approval is
necessary to market a PRODUCT in the relevant country of the TERRITORY.
TECHNOLOGICAL COMPETITOR shall mean a company or corporation having a
substantial part of its business in the research, development and
manufacturing of drug delivery technologies and/or products including
but not limited to the companies listed in Schedule 3.
TERM shall mean the term of this Agreement, as set out in Clause 9.
TERRITORY shall mean all of the countries of the world.
WOUND CARE shall mean the treatment of diseases and/or bodily injuries
caused by the disruption of the normal continuity of structures of the
skin.
$ shall mean United States Dollars.
"US" or "USA" shall mean the United States of America.
1.2 Interpretation: In this Agreement:
--------------
1.2.1 the singular includes the plural and vice versa, the masculine
includes the feminine and vice versa and references to natural
persons include corporate bodies, partnerships and vice versa.
1.2.2 any reference to a Clause or Schedule, unless otherwise
specifically provided, shall be respectively to a Clause or
Schedule of this Agreement.
1.2.3 the headings of this Agreement are for ease of reference only
and shall not affect its construction or interpretation.
CLAUSE 2 - THE LICENSE
2.1 License to GEMINI:
-----------------
2.1.1 Subject to the terms of this Agreement, ELAN hereby grants to
GEMINI and GEMINI hereby accepts for the TERM, a non-exclusive
license to the ELAN
8
TECHNOLOGY to develop, manufacture, use, offer for
sale and sell PRODUCTS for PHARMACEUTICAL USE in the
FIELD in the TERRITORY. For the avoidance of doubt, the
license granted herein for PHARMACEUTICAL USE shall only
entitle GEMINI to develop, manufacture, use, offer for sale
and sell PRODUCTS which require REGULATORY APPROVAL to be
marketed in the TERRITORY.
2.1.2 For the avoidance of doubt:-
(1) GEMINI shall have no rights to the ELAN TECHNOLOGY
for (i) the systemic delivery of a pharmaceutical
compound having a therapeutic use, or (ii) the
development of any water-soluble corticosteroid
product for treating local acute inflammatory
conditions or any local anaesthesia product
incorporating lidocaine or lidocaine analogues with
or without epinephrine; and
(2) it is agreed that ELAN shall not be obliged to
license technology acquired or licensed by ELAN after
the EFFECTIVE DATE to GEMINI except as provided in
Clause 3.2.3 of this Agreement.
2.1.3. ELAN agrees that it will from time to time discuss with GEMINI
other technology licensing opportunities in the FIELD and
otherwise, but only if and to the extent that ELAN decides, in
its sole discretion, that it is desirable and appropriate to
do so.
2.2 Sub-licensing by GEMINI:
-----------------------
2.2.1 GEMINI shall be entitled, subject to the prior written consent
of ELAN which shall not be unreasonably withheld or delayed,
to grant sub-licenses to package, import, use, offer for sale
and sell PRODUCTS in one or more countries of the TERRITORY,
provided that GEMINI shall grant one sub-license only per
country and GEMINI shall not grant a sub-license to a
TECHNOLOGICAL COMPETITOR of ELAN.
2.2.2 Any sub-license granted hereunder shall be in the same terms
mutatis mutandis as the terms of this Agreement insofar as
they are applicable, but excluding the right to grant a
sub-license.
2.2.3 GEMINI shall be liable to ELAN for all acts and omissions of
any sub-licensee as though such acts and omissions were by
GEMINI and GEMINI shall provide the indemnity to ELAN outlined
in Clause 11.7.
2.2.4 Where a sub-license has been granted under Clause 2.2.1, such
sub-license shall automatically terminate if this Agreement
terminates for the country or countries covered by the
sub-license.
2.2.5 GEMINI shall undertake to protect the confidentiality of the
ELAN
9
TECHNOLOGY in its dealings with permitted sub-licensees.
2.2.6 For the avoidance of doubt:-
(1) the Parties agree that any sub-license granted
pursuant to this Clause 2.2 shall not be capable of
surviving the termination of this Agreement; and
(2) GEMINI shall pay a royalty on NET INCOME on sales of
PRODUCT by permitted sub-licensees in accordance with
Clause 7 of this Agreement.
CLAUSE 3 - INTELLECTUAL PROPERTY
3.1. Ownership of ELAN Patent Rights/Know-how:
----------------------------------------
3.1.1 ELAN shall remain the sole owner of the ELAN PATENTS and ELAN
KNOW-HOW.
3.1.2 ELAN shall be entitled to use the ELAN PATENTS, ELAN
IMPROVEMENTS, JOINT IMPROVEMENTS and ELAN KNOW-HOW, and all
technical and clinical data, generated by either Party
pursuant to this Agreement in connection with ELAN's
commercial arrangements outside of the FIELD or for COSMETIC
USE in the FIELD.
3.2 Ownership of ELAN IMPROVEMENTS, GEMINI IMPROVEMENTS and JOINT
-------------------------------------------------------------
IMPROVEMENTS:
------------
3.2.1 The Parties agree that:
(1) ELAN IMPROVEMENTS will be owned by ELAN.
(2) GEMINI IMPROVEMENTS will be owned by GEMINI.
3.2.2 If GEMINI shall develop, or have developed, any ELAN
IMPROVEMENTS during the TERM, ELAN shall grant GEMINI the
right to use any such ELAN IMPROVEMENTS for PHARMACEUTICAL USE
in the FIELD for the TERM.
3.2.3 If ELAN shall develop, or have developed, any ELAN
IMPROVEMENTS during the TERM, ELAN shall, subject to any
contractual restrictions, grant GEMINI the right to use any
such ELAN IMPROVEMENTS for PHARMACEUTICAL USE in the FIELD for
the TERM. In the event that ELAN is obliged to pay a royalty
or any other consideration to a third party in connection with
any such ELAN IMPROVEMENTS, any such cost to ELAN
10
shall be discharged by GEMINI as a condition of use
thereof. If GEMINI is unwilling to pay any such royalty
or other consideration, GEMINI shall have no right to use any
such ELAN IMPROVEMENTS.
3.2.4 JOINT IMPROVEMENTS will be jointly owned by GEMINI and ELAN.
GEMINI shall obtain exclusive rights to exploit the JOINT
IMPROVEMENTS for PHARMACEUTICAL USE in the FIELD for the TERM.
ELAN reserves the right to exploit the JOINT IMPROVEMENTS
outside the FIELD or for COSMETIC USE within the FIELD.
3.3 Filing and maintenance of patents:
---------------------------------
3.3.1 ELAN will be entitled, at its own expense, to file and
prosecute ELAN PATENTS and ELAN IMPROVEMENTS; to determine the
patent filing strategy in relation to same at its sole
discretion; and upon grant of any letters patent of the ELAN
PATENTS or the ELAN IMPROVEMENTS, to maintain such letters
patent in force.
ELAN shall notify GEMINI in writing of any patent applications
filed by ELAN for any ELAN IMPROVEMENTS.
3.3.2 ELAN will be entitled, at GEMINI's reasonable expense, to file
and prosecute all patent applications directed to PRODUCTS or
JOINT IMPROVEMENTS; to determine the patent filing strategy in
relation to same subject to timely notice given to GEMINI for
its input on matters relating to GEMINI TECHNOLOGY; and upon
grant of any letters patent directed to PRODUCTS or JOINT
IMPROVEMENTS, to maintain such letters patent in force. Should
it however be reasonably doubtful whether a patent may be
obtained, then ELAN may at its sole discretion decide not to
apply for a patent in one or more countries of the TERRITORY.
ELAN shall promptly notify GEMINI in writing of any patent
applications filed by ELAN for PRODUCTS or JOINT IMPROVEMENTS.
3.3.3 GEMINI will be entitled, at its own expense, to file and
prosecute any patent applications for the GEMINI TECHNOLOGY
and GEMINI IMPROVEMENTS; to determine the patent filing
strategy in relation to same at its sole discretion; and upon
grant of any letters patent for the GEMINI TECHNOLOGY or the
GEMINI IMPROVEMENTS, to maintain such letters patent in force.
3.3.4 All patent prosecution to be performed by ELAN shall be
carried out in accordance with ELAN's standard practice.
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3.4 Enforcement
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3.4.1 GEMINI and ELAN shall promptly inform the other in writing of
any alleged infringement of which it shall become aware by a
third party of any patents within the ELAN PATENTS and provide
such other with any available evidence of infringement.
3.4.2 ELAN, at its option, shall be entitled to institute
enforcement proceedings ("ENFORCEMENT PROCEEDINGS") in
respect of any infringement or unauthorised use of the
ELAN PATENTS, the ELAN KNOW-HOW, the ELAN IMPROVEMENTS,
the Joint IMPROVEMENTS or any patents for PRODUCTS. GEMINI
agrees to provide all reasonable co-operation and
assistance to ELAN in relation to any such ENFORCEMENT
PROCEEDINGS and agrees to be named as a party in any
ENFORCEMENT PROCEEDINGS instituted by ELAN hereunder.
GEMINI shall share equally in the costs of the
ENFORCEMENT PROCEEDINGS provided that ELAN reasonably
believes that the chances of succeeding in the cause of
action are greater than fifty (50%) percent. Any recovery
remaining after the deduction of reasonable expenses
(including attorney's fees and expenses) incurred in
relation to such ENFORCEMENT PROCEEDINGS shall be shared
equally between ELAN and GEMINI.
3.4.3 GEMINI, at its option, shall be entitled to institute
ENFORCEMENT PROCEEDINGS in respect of any infringements of any
patents for the GEMINI TECHNOLOGY or the GEMINI IMPROVEMENTS
at its own expense and for its own benefit.
3.4.4 In the event that the intellectual property owner does
not want to institute ENFORCEMENT PROCEEDINGS, then the
other Party may enforce such rights at its own expense. The
intellectual property owner shall cooperate with the
enforcing Party and provide all reasonable assistance
in relation to any such ENFORCEMENT PROCEEDINGS. The
enforcing Party must seek written approval from the
intellectual property owner, which may not be unreasonably
withheld, prior to taking action and must keep
intellectual property owner informed of the action and may
not enter into any settlement agreement without the
intellectual property owner's consent, which may not be
unreasonably withheld. Any reasonable fees and costs
borne by the intellectual property owner shall be
reimbursed by the enforcing Party. In the event that GEMINI
decides to enforce ELAN PATENTS, the ELAN KNOW-HOW, the ELAN
IMPROVEMENTS, the Joint IMPROVEMENTS or any patents for
PRODUCTS in accordance with this paragraph, any recovery
remaining after the deduction of reasonable expenses
(including attorney's fees and expenses) incurred in relation
to such ENFORCEMENT PROCEEDINGS shall constitute NET INCOME
for the purpose of this Agreement.
3.4.5 GEMINI undertakes that during the TERM, GEMINI shall not cite
or otherwise rely upon the ELAN PATENTS, the ELAN KNOW-HOW,
the ELAN IMPROVEMENTS, the Joint IMPROVEMENTS or any patents
for
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PRODUCTS licensed by GEMINI from ELAN pursuant to this
Agreement, against the iontophoretic technology specified in
Schedule 2 which has been licensed by ELAN to IOMED.
3.5 Defence
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3.5.1 In the event that a claim or proceeding is brought against
GEMINI by a third party alleging that the sale, manufacture,
use or offer for sale of devices and or methods as
exclusively claimed in the ELAN PATENTS infringes the patent
rights of such a third party in the TERRITORY, GEMINI shall
promptly advise ELAN of such threat or suit.
3.5.2. ELAN shall indemnify GEMINI against such a claim to the
extent set out in Clause 3.5.4; provided that that ELAN
should have reasonably been aware of such third party
patent rights as a result of ELAN's efforts in the
preparation and prosecution of ELAN PATENTS as of the date
of execution of this Agreement. GEMINI shall not
acknowledge to the third party or to any other person the
validity of any claims of such a third party, and shall not
compromise or settle any claim or proceedings relating
thereto without the prior written consent of ELAN, not
to be unreasonably withheld or delayed. At its option,
ELAN may elect to take over the conduct of such proceedings
from GEMINI and ELAN shall indemnify GEMINI against the
third party claim subject to the provisions of this
paragraph. Both parties recognise that where ELAN should not
reasonably have had knowledge of such third party patent
rights as a result of ELAN's efforts in the preparation
and prosecution of ELAN PATENTS as of the date of
execution of the Agreement, ELAN shall not indemnify GEMINI
against any such claim.
3.5.3 In the event that a claim or proceeding is brought against
GEMINI by a third party alleging that the sale, manufacture,
offer for sale or use of any device or method as exclusively
claimed in the ELAN PATENTS infringes the patent rights of
such a third party and ELAN should not reasonably have had
knowledge of such third party intellectual property rights as
a result of ELAN's efforts in the preparation and prosecution
of ELAN PATENTS as of the date of the execution of the
Agreement, GEMINI and ELAN shall meet to discuss in what
manner the said proceedings should be defended.
3.5.4 ELAN's maximum liability pursuant to Clauses 3.5.2, and 11.8
for damages and costs in relation to all third party claims
shall be a reduction by up to [omitted] of the royalty payable
by GEMINI to ELAN pursuant to Clause 7.2 of this Agreement. In
accordance with its obligations pursuant to Clause 11.9.5,
GEMINI shall favourably consider taking such action as is
reasonable, such as to cease selling the PRODUCT, to
re-engineer or modify the applicable PRODUCT so as to avoid
infringing the patent rights of a third party, or entering
into a license agreement with such third party after due
consultation with ELAN.
13
3.5.5 ELAN shall have no liability to GEMINI whatsoever or howsoever
arising for any losses incurred by GEMINI as a result of
having to cease selling PRODUCT or having to defer the launch
of selling PRODUCT, whether as a result of a court order or
otherwise.
3.5.6 Subject to Clause 3.5.2, GEMINI shall indemnify ELAN for any
claim brought against ELAN by a third party alleging that the
manufacture, use, sale or offer for sale of the DEVICE or
PRODUCT constitutes an infringement or unauthorised use of any
such third party intellectual property right.
3.5.7 In the event that a claim or proceeding is brought against
ELAN by a third party alleging that the manufacture,
offer for sale, sale, distribution or use of PRODUCTS
(excluding the DEVICE where same is marketed on its own
without any GEMINI TECHNOLOGY), JOINT IMPROVEMENTS, GEMINI
TECHNOLOGY or GEMINI IMPROVEMENTS in the TERRITORY
infringes any adversely held patent or involves the
unauthorised use of any other intellectual property, ELAN
shall promptly advise GEMINI of such threat or suit. Subject
to ELAN's obligations pursuant to the provisions of
Clause 11.8 and Clause 3.5.2, GEMINI shall indemnify ELAN
against such a claim; provided that ELAN shall not
acknowledge to the third party or to any other person the
validity of the patent rights of such a third party and
shall not compromise or settle any claim or proceedings
relating thereto without the written consent of GEMINI,
which shall not be unreasonably withheld or delayed. At
its option, GEMINI may elect to take over the conduct
of such proceedings from ELAN with counsel of GEMINI's
choice. In such event GEMINI shall keep ELAN advised of all
material developments in the said proceedings and shall not
settle or compromise such proceedings without the consent
of ELAN which shall not be unreasonably withheld or
delayed.
3.6 Trademarks
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3.6.1 GEMINI shall market the PRODUCT in the TERRITORY under the
GEMINI TRADEMARK.
3.6.2 Any Party using the xxxx of the other Party must seek prior
written approval for all such uses, including but not limited
to advertising, marketing and promotional material.
CLAUSE 4 - DEVELOPMENT OF PRODUCTS
4.1 GEMINI shall be responsible for all activities and costs associated
with the further research, development, manufacture, marketing and
commercialisation of PRODUCTS utilising the ELAN TECHNOLOGY.
4.2 ELAN agrees to provide, at no cost to GEMINI, up to [omitted] of
technical support and assistance to GEMINI in connection with
implementing the transfer of the ELAN
14
TECHNOLOGY to GEMINI and commencing further development of the DEVICE.
The Parties shall each negotiate in good faith the extent, if any, to
which ELAN shall provide further research and development services to
GEMINI in addition to such 100 hours of technical support. In the event
that ELAN provides such additional services, ELAN's charges for this
work shall be on the basis set out in Clause 7.3.
4.3 GEMINI, alone or in partnership with a permitted sub-licensee, shall
commit to performing the following activities with regard to the
development and commercialisation of PRODUCTS utilising the ELAN
TECHNOLOGY:
4.3.1. [omitted];
4.3.2. [omitted].
4.3.3. [omitted];
4.3.4. [omitted];
4.3.5. [omitted];
4.3.6. [omitted].
4.3.7 [omitted].
4.4. Should GEMINI fail to submit any of the REGULATORY APPLICATIONS
in accordance with its obligations pursuant to Clause 4.3.
within the relevant time periods, ELAN shall be entitled, at its sole
discretion at any time thereafter, to terminate the Agreement on 30
days prior written notice to GEMINI; provided however, that ELAN
shall not be entitled to so terminate this Agreement if (i) GEMINI's
failure to file any such REGULATORY APPLICATIONS was due to regulatory
difficulties which could not have been reasonably foreseen and which
cannot be remedied without incurring expenditure which is
commercially unreasonable, and (ii) GEMINI has expended a minimum of
[omitted] in development costs on a FULLY ALLOCATED COST basis
during the relevant time period.
CLAUSE 5 - REGISTRATION OF THE PRODUCT
5.1 ELAN shall be responsible, at GEMINI's expense, for performing the
following regulatory activities:
5.1.1 compilation, filing and maintaining the REGULATORY
APPLICATIONS for the DEVICE with the RHA in the MAJOR MARKETS;
and
15
5.1.2 providing regulatory support to ensure timely review of the
DEVICE dossier and resolution of questions by the RHA in the
MAJOR MARKETS.
5.2 ELAN shall perform the regulatory activities described in Clause 5.1
for GEMINI in a manner as would be deemed commensurate with the
achievement of its own business aims for a similar mechanism or product
of its own. ELAN's charges for this work shall be on the basis set out
in Clause 7.3.
5.3 In the event that GEMINI or any reputable third party (which is
acceptable to ELAN and which agrees to be bound by an obligation of
confidentiality), can perform the regulatory activities as described in
Clause 5.1 to the same quality standard as ELAN but at a cost which is
at least [omitted] less than ELAN's charges and which is supported by
documentary evidence from GEMINI or such third party, and provided that
ELAN is not agreeable to matching such reduced cost, GEMINI shall be
entitled to perform itself, or have said third party perform, such
regulatory activities at the reduced cost.
5.4 GEMINI shall be responsible, at GEMINI's expense, for performing the
following regulatory activities:
5.4.1 compilation, filing and maintaining the REGULATORY
APPLICATIONS with the RHA in the TERRITORY for the GEMINI
TECHNOLOGY;
5.4.2 compilation, filing and maintaining the REGULATORY
APPLICATIONS for the PRODUCTS with the RHA in the TERRITORY;
5.4.3 compilation, filing and maintaining the REGULATORY
APPLICATIONS for the DEVICE with the RHA in all of the
countries of the TERRITORY outside of the MAJOR MARKETS; and
5.4.4 providing regulatory support to ensure timely review of the
DEVICE dossier and resolution of all questions by the RHA
pursuant to this Agreement.
5.5 ELAN shall notify GEMINI of the date of submission of any REGULATORY
APPLICATION for the DEVICE in the MAJOR MARKETS and shall also notify
GEMINI of any REGULATORY APPROVAL of such applications as soon as is
reasonably possible following said REGULATORY APPROVAL. GEMINI shall
notify ELAN of the date of submission of any REGULATORY APPLICATION for
the DEVICE in any country of the TERRITORY outside of the MAJOR MARKETS
and of any REGULATORY APPLICATION for the PRODUCT in the TERRITORY and
shall also notify ELAN of any REGULATORY APPROVAL as soon as is
reasonably possible following said REGULATORY APPROVAL. GEMINI shall
notify ELAN as soon as possible of any notification received by GEMINI
from an RHA to conduct an inspection of its manufacturing or other
facilities used in the development, manufacturing, packaging, storage
or handling of a PRODUCT. Copies of all correspondence with the RHA
will be provided to ELAN.
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5.6 Upon request, ELAN shall submit to GEMINI a report outlining the
regulatory status of the DEVICE in the MAJOR MARKETS. Upon request,
GEMINI shall submit to ELAN a report fully outlining the regulatory
status of (i) the DEVICE in the countries of the TERRITORY outside of
the MAJOR MARKETS and (ii) PRODUCTS in each country of the TERRITORY.
5.7 ELAN will be the holder of the REGULATORY APPROVAL for the DEVICE in
the MAJOR MARKETS. GEMINI will be the holder of the REGULATORY APPROVAL
(a) for the DEVICE in all of the countries of the TERRITORY outside of
the MAJOR MARKETS, and (b) for PRODUCTS in the TERRITORY.
5.8 GEMINI will permit ELAN, or ELAN's licensees, without charge, to have
access to, to photocopy and to cross reference all REGULATORY APPROVALS
or REGULATORY APPLICATIONS for the DEVICE and/or PRODUCTS for the
purpose of obtaining REGULATORY APPROVALS for the DEVICE for use
outside of the FIELD.
5.9 GEMINI shall indemnify and hold harmless ELAN from and against all
claims, damages, losses, liabilities and expenses to which ELAN may
become liable relating to or arising out of GEMINI's bad faith,
negligence or intentional misconduct in connection with the filing or
maintenance of the REGULATORY APPLICATIONS and REGULATORY APPROVALS for
(a) the DEVICE in all of the countries of the TERRITORY outside of the
MAJOR MARKETS, and (b) for PRODUCTS in the TERRITORY.
5.10 It is hereby acknowledged that there are inherent uncertainties
involved in the registration of pharmaceutical products with an RHA in
relation to obtaining the REGULATORY APPROVAL and such uncertainties
form part of the business risk involved in undertaking the form of
commercial collaboration outlined in this Agreement. Accordingly, ELAN
and GEMINI shall have no liability to the other as a result of any
failure of a DEVICE and/or a PRODUCT to successfully achieve REGULATORY
APPROVAL of an RHA.
CLAUSE 6 - MARKETING AND PROMOTION OF THE PRODUCT
6.1 Within 90 days after the filing of the REGULATORY APPLICATION for a
PRODUCT in each country of the TERRITORY, GEMINI will outline to ELAN
the structure of the promotional activities to be carried out by GEMINI
for the period up to the first launch of such PRODUCT and for a period
of 1 year thereafter. GEMINI shall both prior to and subsequent to the
launch of a PRODUCT communicate with ELAN regarding its objectives for
and performance of such PRODUCT in each country of the TERRITORY.
6.2 GEMINI shall use all commercially reasonable efforts to market and
promote PRODUCTS throughout the TERRITORY and, in doing so, shall use
the same level of effort as with other similar products of similar
sales potential which it markets.
17
6.3 If requested by ELAN and to the extent permitted by law, GEMINI's
promotional materials for a PRODUCT shall include due acknowledgement
that the ELAN TECHNOLOGY is licensed from ELAN and is included in the
PRODUCT.
6.4 GEMINI shall xxxx or have marked all patent number(s) in respect of the
ELAN PATENTS on all PRODUCTS, or otherwise reasonably communicate to
the trade the existence of any ELAN PATENTS for the countries within
the TERRITORY in such a manner as to ensure compliance with, and
enforceability under, applicable laws.
6.5 GEMINI shall effect the first full scale national commercial launch of
a PRODUCT in each country of the TERRITORY within 90 days of the
REGULATORY APPROVAL being granted for such PRODUCT in such country.
ELAN shall not unreasonably withhold its agreement to a request by
GEMINI for an extension of the said 90 day period if there are
legitimate commercial reasons for such an extension.
6.6 The Parties shall meet to discuss the sales performance of a PRODUCT on
a quarterly basis for the first year following the initial launch of
such PRODUCT, on a semi-annual basis for the second and third years and
on an annual basis thereafter. At such meetings, GEMINI shall report on
the ongoing sales performance of PRODUCTS in the TERRITORY, including
marketing approaches, educational campaigns, promotional and
advertising materials and campaigns, sales plans and results,
performance against competitors, its objectives for the PRODUCTS and
its plans for the next year of the Agreement.
CLAUSE 7 - FINANCIAL PROVISIONS
7.1 License Royalties:
-----------------
7.1.1 In consideration of the license of the ELAN PATENTS granted to
GEMINI under this Agreement, GEMINI shall pay to ELAN
(i) the sum of $7,500,000 in cash due upon execution of
this Agreement and payable within 2
business days of the EFFECTIVE DATE; and
(ii) a license royalty fee of [omitted] of NET INCOME
until the aggregate of such royalty fee equals
[omitted].
7.1.2 Payment of the license fee royalty pursuant to Clause
7.1.1(ii) shall be made once in each calendar quarter within
45 days after the expiry of the relevant calendar quarter.
7.1.3 All payments due hereunder shall be made in US Dollars.
7.1.4 For the avoidance of doubt, the Parties confirm that the
additional license fee
18
payable by GEMINI to ELAN in accordance with Clause 7.2.1 (ii)
shall be payable in addition to the royalty payments to be
made by GEMINI in accordance with Clause 7.2.
7.2 Royalties:
---------
7.2.1 In consideration of the license of the ELAN PATENTS granted to
GEMINI under this Agreement, GEMINI shall make the following
royalty payments to ELAN:
(i) a royalty of [omitted] of the NET SALES PRICE of
PRODUCTS which are sold IN MARKET by GEMINI or its
AFFILIATES, and
(ii) a royalty of [omitted] of NET INCOME on PRODUCTS
which are sold IN MARKET by INDEPENDENT THIRD
PARTIES.
7.2.2 Within 45 days of the end of each calendar quarter of this
Agreement, GEMINI shall notify ELAN of the NET SALES PRICE of
PRODUCT for that previous calendar quarter. Payments shown by
each calendar quarter report to have accrued but which have
not yet been paid shall be included in calculating the NET
SALES PRICE for that quarter.
7.2.3 Payment of the royalties on NET SALES PRICE and NET INCOME
shall be made once in each calendar quarter within 45 days
after the expiry of the relevant calendar quarter.
7.2.4 All payments due hereunder shall be made in U.S. Dollars.
7.2.5 In the event that GEMINI or any AFFILIATE of GEMINI shall
sell a PRODUCT together with other products of GEMINI
to third parties (by the method commonly known in the
pharmaceutical industry as "bundling") and the price
attributable to such PRODUCT is less than the average price
of "arms length" sales to similar customers for the reporting
period in which sales occur (such sales to be excluded from
the calculation of the average price of "arms length"
sales), NET SALES PRICE for any such sales shall be the
average price of "arms length" sales by GEMINI or an
AFFILIATE of GEMINI or a permitted sub-licensee to similar
customers in the country where such bundling occurs during
the reporting period in which such sales occur.
7.3 Additional Assistance and Work:
------------------------------
In the event that work or technical assistance beyond that contemplated
in Clause 4.2 ("ADDITIONAL WORK") is requested by GEMINI, GEMINI shall
reimburse ELAN in respect of the cost of such ADDITIONAL WORK requested
by GEMINI or required pursuant to the terms of this Agreement provided
that:-
19
7.3.1 ELAN's charges for such work shall be ELAN's FULLY ALLOCATED
COST plus [omitted]; and
7.3.2 payment for all ADDITIONAL WORK carried out by ELAN hereunder
shall be effected in U.S. Dollars within 30 days of the date
of receipt of the relevant invoice.
7.4 Method of calculation of royalties and fees:
-------------------------------------------
The Parties acknowledge and agree that the methods for calculating the
royalties and fees hereunder are for the purposes of the convenience of
the Parties, are freely chosen and not coerced.
CLAUSE 8 - PAYMENTS, REPORTS AND AUDITS
8.1 GEMINI shall keep true and accurate records of gross sales of each of
the PRODUCTS, the items deducted from the gross amount in calculating
the NET SALES PRICE and the NET INCOME, the NET SALES PRICE and the
royalties payable to ELAN under Clause 7. GEMINI shall deliver to ELAN
a written statement ("the STATEMENT") thereof within 45 days following
the end of each calendar quarter, (or any part thereof in the first or
last calendar quarter of this Agreement) for such calendar quarter. The
STATEMENT shall outline, on a country-by-country basis, the calculation
of the NET SALES PRICE and the NET INCOME from gross revenues during
that calendar quarter, the applicable percentage rate, and a
computation of the sums due to ELAN. The Parties' financial officers
shall agree upon the precise format of the STATEMENT.
8.2 Payments due on NET INCOME and NET SALES PRICE of the PRODUCT based on
sales amounts in a currency other than US Dollars shall first be
calculated in the foreign currency and then converted to US Dollars on
the basis of the exchange rate in effect for the purchase of US Dollars
with such foreign currency quoted in The Wall Street Journal (or
comparable publication if not quoted in The Wall Street Journal) with
respect to the sale of currency of the country of origin of such
payment for the day prior to the date on which the payment by GEMINI is
being made.
8.3 Any income or other taxes which GEMINI is required by law to pay or
withhold on behalf of ELAN with respect to royalties and any other
monies payable to ELAN under this Agreement shall be deducted from the
amount of such NET INCOME and/or NET SALES PRICE payments, royalties
and other monies due. GEMINI shall furnish ELAN with proof of such
payments. Any such tax required to be paid or withheld shall be an
expense of and borne solely by ELAN. GEMINI shall promptly provide ELAN
with a certificate or other documentary evidence to enable ELAN to
support a claim for a refund or a foreign tax credit with respect to
any such tax so withheld or deducted by GEMINI. The Parties will
reasonably cooperate in
20
completing and filing documents required under the provisions of any
applicable tax treaty or under any other applicable law, in order to
enable GEMINI to make such payments to ELAN without any deduction or
withholding.
8.4 All payments due hereunder shall be made to the designated bank account
of ELAN in accordance with such timely written instructions as ELAN
shall from time to time provide to GEMINI.
8.5 GEMINI shall pay interest to ELAN at either the Prime Rate publicly
announced by Xxxxxx Guaranty Trust Company of New York at its principal
office on the date (or next to occur business day, if such date is not
a business day) on which payment should have been made pursuant to the
applicable provisions of this Agreement plus 5%, or the highest
interest rate permissible under applicable law, on all late payments
under this Agreement applicable from the date on which payment should
have been made pursuant to the applicable provisions of this Agreement
until the date of payment.
8.6 Where ELAN so requests to supplement the information available to ELAN
at the meetings of the Parties under Clause 8.9, GEMINI shall provide
ELAN with annual sales reports outlining the status of each of the
PRODUCTS in the TERRITORY, including a report on the competitive
position of such PRODUCT in its relevant market segment(s).
8.7 At any time and from time to time, GEMINI shall permit ELAN or its duly
authorised representatives (reasonably acceptable to GEMINI) upon
reasonable notice and at any reasonable time during normal business
hours and subject to the confidentiality provisions as contained in
this Agreement, to have access to inspect and audit the accounts and
records of GEMINI and any other book, record, voucher, receipt or
invoice relating to the calculation of the royalty payments on NET
SALES PRICE and NET INCOME submitted to ELAN during the preceding 2
year period.
8.8 Not more than once per item of cost or expense, ELAN shall permit
GEMINI or its duly authorised representatives (reasonably acceptable to
ELAN) upon reasonable notice and at any reasonable time during normal
business hours and subject to the confidentiality provisions as
contained in this Agreement, to have access to inspect and audit the
accounts and records of ELAN, solely for the purpose of verifying the
accuracy and reasonable composition of the costs and expenses paid or
reimbursed by GEMINI to ELAN in accordance with the terms of this
Agreement during the preceding 2 year period.
8.9 In the event of a discovery of a discrepancy which exceeds 5% of the
amount due or charged by a Party for any period, the reasonable cost of
such discovery (including, without limitation, audit and accounting
cost) shall be borne by the audited Party; otherwise, such cost shall
be borne by the auditing Party.
CLAUSE 9 - DURATION AND TERMINATION
21
9.1 This Agreement shall be deemed to have come into force on the EFFECTIVE
DATE and, subject to the rights of termination outlined in this Clauses
9, will expire on a PRODUCT by PRODUCT basis and on a country by
country basis:-
9.1.1 on the [omitted] anniversary of the date of the commercial
launch of the PRODUCT in the country concerned; or
9.1.2 in any country upon the expiration of the life of the last to
expire patent included in the ELAN PATENTS in such PRODUCT in
that country;
whichever date is later to occur ("the INITIAL PERIOD").
9.2 At the end of the INITIAL PERIOD, the Agreement shall continue
automatically for rolling [omitted] periods thereafter, unless the
Agreement has been terminated by either of the Parties by serving
[omitted] written notice on the other immediately prior to the end of
the INITIAL PERIOD or any additional 3 year period provided for herein.
9.3 In addition to the rights of termination provided for elsewhere in this
Agreement, either Party will be entitled forthwith to terminate this
Agreement by written notice to the other Party if:
9.3.1 that other Party commits any material breach of any of the
provisions of this Agreement, and in the case of a breach
capable of remedy, fails to remedy the same within 60 days
after receipt of a written notice giving full particulars of
the breach and requiring it to be remedied;
9.3.2 that other Party goes into liquidation (except for the
purposes of amalgamation or reconstruction and in such manner
that the company resulting therefrom effectively agrees to be
bound by or assume the obligations imposed on that other Party
under this Agreement);
9.3.3 an encumbrancer takes possession or a receiver is appointed
over any of the property or assets of that other Party; or
9.3.4 any proceedings are filed or commenced by that other Party
under bankruptcy, insolvency or debtor relief laws or anything
analogous to any of the foregoing under the laws of any
jurisdiction occurs in relation to that other Party;
9.4 For the purposes of Clause 9.3.1, a breach will be considered capable
of remedy if the Party in breach can comply with the provision in
question in all respects other than as to the time of performance
(provided that time of performance is not of the essence).
9.5 In further addition to the rights and termination provided for
elsewhere in this Agreement, ELAN shall be entitled to terminate (i)
the license granted to GEMINI under this Agreement on a PRODUCT by
PRODUCT basis for any country or
22
countries of the TERRITORY in accordance with Clause 9.5.1 or 9.5.2 (in
which event the definition of TERRITORY shall be amended accordingly);
or (ii) this Agreement for the ELAN TECHNOLOGY for all of the TERRITORY
in accordance with Clause 9.5.3, 9.5.4, 9.5.5, 9.5.6 or 9.5.7; in the
event that:-
9.5.1 GEMINI fails to file a REGULATORY APPLICATION for a PRODUCT in
any country of the MAJOR MARKETS within [omitted] from filing
the REGULATORY APPLICATION for such PRODUCT in the first
country of the MAJOR MARKETS;
9.5.2 GEMINI fails to effect any one of the commercial launches
required by Clause 6 in accordance with the provisions
thereof; or
9.5.3 GEMINI fails to pay any monies due to ELAN in accordance with
this Agreement; or
9.5.4 GEMINI notifies ELAN that it does not wish to commercialise
the PRODUCT in any country of the TERRITORY; or
9.5.5 a TECHNOLOGICAL COMPETITOR of ELAN acquires more than
[omitted] of GEMINI's voting stock or where more than
[omitted] of such company's voting stock is acquired by
GEMINI; or
9.5.6 a FINANCIAL INVESTOR acquires ownership or control of more
than [omitted] of the voting rights in GEMINI in any one
transaction or a series of related transactions and which
results immediately or at any subsequent stage in a change of
one-third or more of the board of directors of GEMINI; or
9.5.7 any company other than a TECHNOLOGICAL COMPETITOR or FINANCIAL
INVESTOR acquires ownership or control of more than [omitted]
of the voting rights in GEMINI in any one transaction or a
series of related transactions.
CLAUSE 10 - CONSEQUENCES OF TERMINATION
10.1 Upon exercise of those rights of termination specified in Clauses 9 or
elsewhere in this Agreement, this Agreement shall, subject to the
provisions of the Agreement which survive the termination of the
Agreement, automatically terminate forthwith and be of no further legal
force or effect.
10.2 Upon termination of the Agreement by either Party, or upon termination
by ELAN of a license for the TERRITORY, or for a particular country of
the TERRITORY, under Clause 9.5, the following shall be the
consequences relating to the termination of the Agreement or the
termination of the Agreement with respect to the TERRITORY or the
particular country, as applicable:-
23
10.2.1 any sums that were due from GEMINI to ELAN under the
provisions of Clause 7 or otherwise howsoever prior to the
exercise of the right to terminate this Agreement as set forth
herein shall be paid in full within 30 days of termination of
this Agreement and ELAN shall not be liable to repay to
GEMINI any amount of money paid or payable by GEMINI to ELAN
up to the date of the termination of this Agreement except for
any monies that may be due from ELAN under any audit performed
pursuant to Section 8.8. within the time period specified in
Section 10.2.4;
10.2.2 all confidentiality provisions set out herein shall remain in
full force and effect for a period of 5 years from the date of
such termination;
10.2.3 all responsibilities and warranties shall insofar as are
appropriate remain in full force and effect;
10.2.4 the rights of inspection and audit shall continue in force for
a period of 12 months from the date of termination of this
Agreement;
10.2.5 ELAN shall be entitled to research, develop and commercialise
the ELAN TECHNOLOGY for its own benefit in the TERRITORY or in
the relevant country or countries of the TERRITORY;
10.2.6 each of the Parties shall be entitled to on a royalty free
basis to have access to and to separately exploit any JOINT
IMPROVEMENTS;
10.2.7 GEMINI shall transfer to ELAN or ELAN's designee without
charge, and/or permit ELAN or ELAN's designee without charge
to conduct sufficient cross-referencing to, and have
sufficient access to, any and all pending REGULATORY
APPLICATIONS or granted REGULATORY APPROVALS for the DEVICE or
any PRODUCTS for the relevant country or countries of the
TERRITORY.
10.2.8 GEMINI shall promptly make an accounting to ELAN of the
inventory of the PRODUCT which it has in the TERRITORY or
for such particular country or countries in the TERRITORY
(as the case may be), if any, as of the date of such
termination and GEMINI shall thereafter have the right for
a period of six (6) months after said expiration or
termination to sell such inventory of the PRODUCT in the
TERRITORY or in such particular country or countries in the
TERRITORY (as the case may be) or, if appropriate and legally
permissible, to transport such inventory of PRODUCT for sale
in another country or countries in the TERRITORY within
such six month period; provided that such sale shall be
subject to the royalty provisions of Clause 7 and the other
applicable terms of this Agreement. Thereafter, any
remaining inventory of PRODUCT shall be disposed of by
GEMINI, at GEMINI's cost, in accordance with regulatory
requirements.
24
CLAUSE 11 - REPRESENTATIONS, WARRANTIES AND INDEMNITY
11.1 ELAN represents to GEMINI the following:
11.1.1 ELAN is duly and validly existing in the jurisdiction of its
incorporation and each other jurisdiction in which the conduct
of its business requires such qualification, and is in
compliance with all applicable laws, rules, regulations or
orders relating to its business and assets;
11.1.2 ELAN has full corporate authority to execute and deliver
this Agreement and to consummate the transactions
contemplated hereby; this Agreement has been duly executed
and delivered by ELAN and constitutes the legal and valid
obligations of ELAN and is enforceable against ELAN in
accordance with its terms; and the execution, delivery
and performance of this Agreement and the transactions
contemplated hereby will not violate or result in a default
under or creation of lien or encumbrance under ELAN's
memorandum and articles of association or other organic
documents, any material agreement or instrument binding
upon or affecting ELAN or its properties or assets or any
applicable laws, rules, regulations or orders affecting ELAN
or its properties or assets;
11.1.3 ELAN is not in material default of its memorandum and articles
of association or similar organic documents, any applicable
material laws or regulations or any material contract or
agreement binding upon or affecting it or its properties or
assets and the execution, delivery and performance of this
Agreement and the transactions contemplated hereby will not
result in any such violation;
11.1.4 ELAN represents and warrants that ELAN is the sole and
exclusive owner or licensee of, or controls all right, title
and interest to the ELAN PATENTS and, to the best of ELAN's
knowledge, as of the date of this Agreement, the sole and
exclusive owner of the ELAN KNOW-HOW; ELAN has the right to
grant the licenses granted herein, and the ELAN TECHNOLOGY is
free and clear of any lien, encumbrances, security interest or
restriction on the license granted herein; and
11.1.5 ELAN represents and warrants that the execution of this
Agreement and the full performance and enjoyment of the rights
of GEMINI under this Agreement will not breach or in any way
be inconsistent with the terms and conditions of any license,
contract, understanding or agreement, whether express,
implied, written or oral between ELAN and any third party.
11.2 GEMINI represents to ELAN the following:
11.2.1 GEMINI is duly and validly existing in good standing in the
jurisdiction of its incorporation and each other jurisdiction
in which the conduct of its business requires such
qualification, and GEMINI is in compliance with all applicable
laws, rules, regulations or orders relating to its business
and assets;
25
11.2.2 GEMINI has full corporate authority to execute and deliver
this Agreement and to consummate the transactions
contemplated hereby; this Agreement has been duly executed
and delivered by GEMINI and constitutes the legal and
valid obligations of GEMINI and is enforceable against
GEMINI in accordance with its terms; and the execution,
delivery and performance of this Agreement and the
transactions contemplated hereby will not violate or result
in a default under or creation of lien or encumbrance under
GEMINI's certificate of incorporation, by-laws or other
organic documents, any material agreement or instrument
binding upon or affecting GEMINI or its properties or
assets or any applicable laws, rules, regulations or orders
affecting GEMINI or its properties or assets;
11.2.3 GEMINI is not in material default of its charter or by-laws,
any applicable laws or regulations or any material contract or
agreement binding upon or affecting it or its properties or
assets and the execution, delivery and performance of this
letter agreement and the transactions contemplated hereby will
not result in any such violation; and
11.2.4 GEMINI represents and warrants that it has not granted any
option, license, right or interest to any third party which
would conflict with the terms of this Agreement.
11.3 GEMINI represents and warrants that the PRODUCTS shall be manufactured,
packaged, distributed and sold in accordance with all applicable
regulations and requirements of the RHAs in the TERRITORY, including,
without limitation, the cGP regulations which apply to the manufacture,
storage, packaging and supply of PRODUCT. GEMINI represents and
warrants that the PRODUCTS shall not be adulterated or mis-branded as
defined by the FFDCA (or applicable foreign law) and shall not be a
product which would violate any section of such Act if introduced in
interstate commerce.
11.4 GEMINI represents and warrants that it will fully comply with all
applicable statutes, ordinances and regulations in the TERRITORY with
respect to the manufacture of the PRODUCTS including, but not limited
to, the FFDCA and regulations thereunder and cGP. GEMINI shall
manufacture or procure the manufacture of the PRODUCTS in conformity
with the REGULATORY APPROVALS and in a manner which fully complies with
all applicable United States of America and foreign statutes,
ordinances, regulations and practices.
11.5 Each of the Parties shall indemnify, defend and hold harmless the other
Party and its officers, directors, employees and agents from all
actions, losses, claims, demands, damages, costs and liabilities
(including reasonable attorneys' fees) to which the other Party is or
may become liable insofar as they arise out of any breach by the first
Party of any of its obligations or warranties under this Agreement.
11.6 GEMINI shall indemnify, defend and hold harmless ELAN and its officers,
directors, employees and agents from all actions, losses, claims,
demands, damages, costs and liabilities (including reasonable
attorneys' fees) due to third party claims to which ELAN is or may
become subject insofar as they arise out of or are alleged or claimed
to arise out of activities conducted by GEMINI in the development,
manufacture,
26
transport, packaging, storage, handling, distribution, promotion,
marketing, offer for sale or sale of the PRODUCT, including
any product liability claim or any claim relating to a recall of a
PRODUCT.
11.7 With reference to Clause 2.2.3, GEMINI shall indemnify and hold
harmless ELAN Party and its officers, directors, employees and agents
to the extent that any claims, damages, liabilities, claims, costs or
expenses arise out of any such acts or omissions of any sub-licensee.
11.8 ELAN represents and warrants that, as of the date of this Agreement, no
third party has filed any action against ELAN alleging that the
exploitation of the ELAN PATENTS infringes any INDEPENDENT THIRD PARTY
patent in the TERRITORY.
11.9 As a condition of obtaining an indemnity in the circumstances set out
in Clauses 11.5, 11.6 and 11.7, the Party seeking an indemnity shall:
11.9.1 fully and promptly notify the other Party of any claim or
proceedings, or threatened claim or proceedings for which an
indemnity will be sought;
11.9.2 permit the indemnifying Party to take full control of such
claim or proceedings;
11.9.3 assist in the investigation and defence of such claim or
proceedings;
11.9.4 not compromise or otherwise settle any such claim or
proceedings without the prior written consent of the other
Party, which consent shall not be unreasonably withheld; and
11.9.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceedings.
11.10 Subject to the provisions of Clause 9.5(1), ELAN agrees that during the
TERM, ELAN shall not directly or indirectly, utilise itself, or licence
to any third party, the ELAN TECHNOLOGY for PHARMACEUTICAL USE in the
FIELD in the TERRITORY without the prior written consent of GEMINI.
11.11 Notwithstanding anything to the contrary in this Agreement, ELAN and
GEMINI shall not be liable to the other by reason of any representation
or warranty, condition or other term or any duty of common law, or
under the express terms of this Agreement, for any consequential or
incidental or punitive loss or damage (whether for loss of profits or
otherwise) and whether occasioned by the negligence of the respective
Parties, their employees or agents or otherwise.
CLAUSE 12 - CUSTOMER COMPLAINTS AND PRODUCT RECALL
12.1. GEMINI or its permitted sub-licensees shall have sole responsible for
the reporting and handling of any adverse events associated with
PRODUCTS with the RHA in
27
each country of the TERRITORY. Furthermore, in the event of any recall
of any PRODUCT, as suggested or requested by any governmental
authority, GEMINI shall perform the recall and all
associated costs and liabilities shall be borne by GEMINI.
12.2. GEMINI shall notify ELAN promptly of any complaints from third parties
reported to GEMINI involving any serious and unexpected adverse
reactions resulting from the use any PRODUCT in the TERRITORY. ELAN
shall notify GEMINI promptly of any complaints from third parties
reported to ELAN involving any serious and unexpected adverse reactions
resulting from the use the DEVICE in the TERRITORY.
CLAUSE 13 - MISCELLANEOUS PROVISIONS
13.1 Secrecy:
-------
13.1.1 Any information, whether written or oral (oral information
shall be reduced to writing within one month by the Party
giving the oral information and the written form shall be
furnished to the other Party) pertaining to the PRODUCT that
has been or will be communicated or delivered by ELAN to
GEMINI or any of its AFFILIATES, or by GEMINI to ELAN or any
of its AFFILIATES, including, without limitation, trade
secrets, business methods, and cost, supplier, manufacturing
and customer information, shall be treated by GEMINI and ELAN,
respectively, as confidential information, and shall not be
disclosed or revealed to any INDEPENDENT THIRD PARTY
whatsoever or used in any manner except as expressly provided
for herein; provided, however, that such confidential
information shall not be subject to the restrictions and
prohibitions set forth herein to the extent that such
confidential information:-
(1) is available to the public in public literature or
otherwise, or after disclosure by one Party to the
other becomes public knowledge through no default of
the Party receiving such confidential information; or
(2) was known to the Party receiving such confidential
information prior to the receipt of such confidential
information by such Party, whether received before or
after the date of this Agreement; or
(3) is obtained by the Party receiving such confidential
information from a third party not subject to a
requirement of confidentiality with respect to such
confidential information; or
(4) is required to be disclosed pursuant to: (A) any
order of a court having jurisdiction and power to
order such information to be released or made public;
or (B) any lawful action of a governmental or
regulatory agency provided that each Party shall
notify the other in writing of any disclosure of
information required hereunder prior to such
disclosure.
28
13.1.2 Each Party shall take in relation to the confidential
information of the other Party all such precautions as it
normally takes with its own confidential information to
prevent any improper disclosure of such confidential
information to any INDEPENDENT THIRD PARTY; provided, however,
that such confidential information may be disclosed within
the limits required to obtain any authorisation from the
applicable RHA or any governmental or regulatory agency
(including the patents and trademark office in any country of
the TERRITORY) or with the prior written consent of the other
Party, which shall not be unreasonably withheld, or as may
otherwise be required in connection with the purposes of this
Agreement.
13.1.3 Each of the Parties agrees that it will not use, directly or
indirectly, any know-how of the other Party (ELAN KNOW-HOW or
GEMINI KNOW-HOW, as the case may be), or other confidential
information disclosed to it by the other Party or obtained by
it from the other Party pursuant to this Agreement, other than
as expressly provided herein.
13.1.4 Neither Party will publicise the existence of this Agreement
in any way without the prior written consent of the other
Party, except as required pursuant to the disclosure
requirements of applicable laws and regulations. Excluding any
such required disclosures, in the event that either Party
wishes to make an announcement concerning the Agreement, that
Party will seek the consent of the other Party. The terms of
any such announcement shall be agreed in good faith.
13.2 Assignments/ Sub-contracting:
----------------------------
13.2.1 This Agreement may not be assigned by either Party without the prior
written consent of the other Party, save that either Party may assign
this Agreement in whole or in part and delegate its duties hereunder to
its AFFILIATE or AFFILIATES without such consent provided that such
assignment or delegation has no material adverse tax implications for
the other Party.
13.2.2 Either Party shall also have the right to subcontract all or any
portion of its development, manufacturing or regulatory work under this
Agreement to an INDEPENDENT THIRD PARTY; save that GEMINI may not
assign any such activities to a TECHNOLOGICAL COMPETITOR. Each Party
shall be liable to the other Party for all acts and omissions of any
sub-contractor as though such acts and omissions were by such Party.
13.3 Parties bound:
This Agreement shall be binding upon and enure for the benefit of
Parties hereto, their successors and permitted assigns.
29
13.4 Severability:
------------
If any provision in this Agreement is agreed by the Parties to be, or
is deemed to be, or becomes invalid, illegal, void or unenforceable
under any law that is applicable hereto:-
13.4.1 such provision will be deemed amended to conform to applicable
laws so as to be valid and enforceable or, if it cannot be so
amended without materially altering the intention of the
Parties, it will be deleted, with effect from the date of such
agreement or deletion or such earlier date as the Parties may
agree; and
13.4.2 the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected
in any way.
13.5 Force Majeure:
-------------
Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results
from causes beyond its reasonable control, including, without
limitation, acts of God, fires, strikes, acts of war, intervention of a
government authority, or non-availability of raw materials, but any
such delay or failure shall be remedied by such Party as soon as
practicable.
13.6 Relationship of the Parties:
---------------------------
Nothing contained in this Agreement is intended or is to be construed
to constitute ELAN and GEMINI as partners or members of a joint venture
or either Party as an employee of the other. Neither Party hereto shall
have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other Party or to bind
the other Party to any contract, agreement or undertaking with any
third party.
13.7 Amendments:
----------
No amendment, modification or addition hereto shall be effective or
binding on either Party unless set forth in writing and executed by a
duly authorised representative of both Parties.
13.8 Waiver:
------
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any future breach or failure to perform or of
any other right arising under this Agreement.
13.9 No effect on other agreements:
-----------------------------
No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement
between the Parties unless specifically referred to, and solely to the
extent provided, in any such other agreement.
30
13.10 Governing law and jurisdiction:
------------------------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to principles of
conflicts of laws. For the purposes of this Agreement the Parties
submit to the non-exclusive jurisdiction of the courts of the State of
New York.
13.11 Notice:
------
13.11.1 Any notice to be given under this Agreement shall be sent in
writing in English by registered airmail or telecopied to:
ELAN care of
Elan International Services, Ltd.
000 Xx. Xxxxx'x Xxxxx
Xxxxxx
Xxxxxx, XX00
Bermuda
Attention: President
Telephone: 0 000 000 0000
Telefax : 1 441 292 2224
GEMINI at
Electropharmacology, Inc.
0000 XX 00xx Xxxxx
Xxxxx 000
Pompano Beach
Florida 33069
United States of America
Attention: Chairman, President and Chief Executive Officer
Telephone: 000 000 0000
Telefax: 000 000 0000
or to such other address(es) and telecopier numbers as may
from time to time be notified by either Party to the other
hereunder.
13.11.2 Any notice sent by mail shall be deemed to have been delivered
within 7 working days after despatch and any notice sent by
telex or telecopy shall be deemed to have been delivered
within 24 hours of the time of the despatch.
31
Notice of change of address shall be effective upon receipt.
IN WITNESS of which the Parties have executed this Agreement.
32
SCHEDULE 1
ELAN PATENTS
[omitted]
33
SCHEDULE 2
EXCLUDED TECHNOLOGY
(i) See attached list of issued patents and pending patent applications.
(ii) MEDIPAD(TM) Drug Delivery System
--------------------------------
MEDIPAD(TM) is a disposable single use, drug delivery device that contains a
microinfuser and integral probe to deliver drug subcutaneously.
MEDIPAD(TM) utilises controlled gas generation as the activation
mechanism for drug delivery. Activation of the MEDIPAD(TM) device
results in the generation of gas which compresses a membrane and forces
drug through the probe into the subcutaneous tissue.
(iii) See attached list of issued patents and pending patent applications.
34
SCHEDULE 3
TECHNOLOGICAL COMPETITORS
[omitted]
35
Executed by GEMINI on September 30, 1998
By : /s/ Xxxx Xxx
--------------------
Name: Xxxx Xxx
Title: Chairman & CEO
Executed by ELAN on September 30, 1998
By: /s/ Xxxx Xxxxxx
---------------------
Name: Xxxx Xxxxxx
Title: Director
