Licence and Supply Agreement - Elan Corp. plc and Elan Management Ltd. and Ligand Pharmaceuticals Inc.
EXECUTION COPY
Dated December 6, 2002
ELAN CORPORATION, PLC
ELAN MANAGEMENT LIMITED
AND
LIGAND PHARMACEUTICALS INCORPORATED
AMENDED AND RESTATED
LICENCE AND SUPPLY AGREEMENT
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CONTENTS
PAGE
CLAUSE 1 - PRELIMINARY..................................................4
CLAUSE 2 - THE LICENCE..................................................8
CLAUSE 3 - INTELLECTUAL PROPERTY........................................9
CLAUSE 4 - LIGAND COMPETING PRODUCTS...................................13
CLAUSE 5 - ADDITIONAL DEVELOPMENT OF THE PRODUCT.......................13
CLAUSE 6 - PROJECT TEAM AND PROJECT MANAGEMENT.........................13
CLAUSE 7 - REGISTRATION OF THE PRODUCT.................................13
CLAUSE 8 - MARKETING AND PROMOTION OF THE PRODUCT......................16
CLAUSE 9 - SUPPLY OF THE PRODUCT......................................17
CLAUSE 10 - FINANCIAL PROVISIONS.......................................22
CLAUSE 11 - PAYMENTS, REPORTS AND AUDITS...............................25
CLAUSE 12 - DURATION AND TERMINATION...................................27
CLAUSE 13 - CONSEQUENCES OF TERMINATION................................29
CLAUSE 14 - WARRANTY AND INDEMNITY.....................................30
CLAUSE 15 - ADVERSE EVENTS AND PRODUCT RECALL..........................34
CLAUSE 16 - MISCELLANEOUS PROVISIONS...................................35
SCHEDULE 1 ELAN PATENT RIGHTS
SCHEDULE 2 EXAMPLE OF CLAUSE 10.3.2 CALCULATION
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THIS AGREEMENT is made on December 6, 2002.
BETWEEN:
(1) ELAN CORPORATION, PLC, a company incorporated in Ireland having its
registered office at Lincoln House, Lincoln Place, Dublin 2, Ireland
("ELAN")
(2) ELAN MANAGEMENT LIMITED, a company incorporated in Ireland having its
registered office at Lincoln House, Lincoln Place, Dublin 2, Ireland
("EML") and
(3) LIGAND PHARMACEUTICALS INCORPORATED, a company organised under the laws of
Delaware, with offices at 10275 Science Center Drive, San Diego, California
92121, United States of America ("LIGAND").
RECITALS:
A. ELAN and LIGAND previously entered into that certain Development, Licence
and Supply Agreement dated November 9, 1998, as amended pursuant to that
certain Amendment Agreement dated August 20, 1999, that certain Second
Amendment Agreement dated February 28, 2001 and that certain Closing
Agreement dated November 8, 2002 (collectively, the "Prior Agreement").
B. ELAN and LIGAND desire to amend and restate their relationship set forth in
the Prior Agreement as more fully set forth in this Agreement effective as
of the AMENDMENT DATE.
C. ELAN is beneficially entitled to the use of various patents, including the
ELAN PATENTS, which have been granted or are pending under the
International Convention in relation to the development and production of
drug specific dosage forms for pharmaceutical products and processes.
D. LIGAND is desirous of entering into a licensing agreement with ELAN by
virtue of which it will be free to have manufactured in accordance with the
terms of this Agreement and to market the PRODUCT in the TERRITORY without
infringing any of the ELAN INTELLECTUAL PROPERTY rights held by ELAN.
E. ELAN is willing to waive its rights to co-promote the PRODUCT in the
TERRITORY, ELAN is prepared to continue its licence of the ELAN PATENTS in
the TERRITORY to LIGAND and ELAN is prepared to continue its supply of the
PRODUCT to LIGAND.
F. ELAN, EML and LIGAND are desirous of entering into an agreement to give
effect to the arrangements described above.
G. EML is a subsidiary of, and provides services to, ELAN and it has been
agreed that, in order to discharge certain trading balances between the
companies, EML is to be beneficially entitled to *** of the patent royalty
payable by LIGAND under this Agreement.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1 - PRELIMINARY
1.1 DEFINITIONS: In this Agreement unless the context otherwise requires:
1.1.1 AFFILIATE shall mean any corporation or entity controlling or
controlled or under common control with ELAN or LIGAND, as the case
may be. For the purposes of this Agreement, "control" shall mean the
direct or indirect ownership of more than 50% of the issued voting
shares or other voting rights of the subject entity to elect
directors, or if not meeting the preceding criteria, any entity owned
or controlled by or owning or controlling at the maximum control or
ownership right permitted in the country where such entity exists.
1.1.1A AMENDMENT DATE shall mean the date appearing at the top of page 3.
1.1.1B AMENDMENT EXECUTION DATE shall mean 12 November 2002.
1.1.1C ATTORNEY shall mean an independent patent litigation attorney
selected by ELAN and LIGAND, or if agreement on such selection is not
made within fourteen (14) days of the dispute arising, appointed by
the American Arbitration Association.
1.1.1D AVERAGE PRICE shall mean in respect of a particular strength in a
particular period A / B where:
"A" is NSP from that strength in that period, recalculated so
that the deductions permitted in paragraphs (a) and (b) of the
definition of NSP are limited to *** of the aggregate gross IN MARKET
proceeds billed in that period; and
"B" is the number of units of that strength of the PRODUCT
comprising such NSP.
1.1.2 cGMP and cGLP shall mean respectively current Good Manufacturing
Practice and current Good Laboratory Practice as defined in the FFDCA.
1.1.3 CFR shall mean the US Code of Federal Regulations 21, as amended from
time to time.
1.1.4 [Intentionally Omitted]
1.1.5 CMC SECTION shall mean the chemistry, manufacturing, and controls
section of the NDA in the USA as defined in CFR Section 314.50 (1), as
may be amended from time to time, and/or its equivalent in foreign
NDAs.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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1.1.6 COMPOUND shall mean the active drug substance morphine and its salts.
1.1.7 [Intentionally Omitted]
1.1.8 DMF shall mean ELAN's Drug Master File, as defined in the CFR Section
314.420 and/or its equivalent in the other countries of the TERRITORY,
which DMF contains the CMC SECTION.
1.1.9 EFFECTIVE DATE shall mean September 30, 1998.
1.1.10 ELAN shall mean Elan Corporation, plc and any of its AFFILIATES.
1.1.11 ELAN IMPROVEMENTS shall mean any improvement or enhancement to the
ELAN PATENTS that is created, conceived or invented during the INITIAL
PERIOD which (i) would infringe a valid claim of the ELAN PATENTS,
(ii) ELAN is free to license and (iii) are not subject to contractual
obligations with any third party.
1.1.12 ELAN INTELLECTUAL PROPERTY shall mean the ELAN PATENTS and/or the
ELAN KNOW-HOW and shall include the improvements made by LIGAND as
referred to in CLAUSE 3.1.3 to the extent such improvements relate to
the PRODUCT.
1.1.13 ELAN KNOW-HOW shall mean all knowledge, information, trade secrets,
data and expertise relating to the PRODUCT and which is not generally
known to the public, owned or licensed by ELAN as of the EFFECTIVE
DATE, or developed by ELAN whether before or during the INITIAL PERIOD
relating to the PRODUCT, and which ELAN is free to license and which
is not subject to contractual obligations with any third party,
whether or not covered by any patent, copyright, design patent,
trademark, trade secret or other industrial or any intellectual
property rights.
In the event that ELAN acquires or merges with a third party
entity, ELAN KNOW-HOW shall not include any know-how to the extent
that such know-how relates to a product containing the COMPOUND which
has been approved for marketing or is in development by the said third
party entity. For the avoidance of doubt, the occurrence of any such
acquisition or merger shall not affect the licence of the ELAN
KNOW-HOW granted to LIGAND hereunder.
For the avoidance of doubt, ELAN KNOW-HOW shall exclude any
know-how owned, licensed or controlled by AFFILIATES or subsidiaries
of Elan Corporation, plc, including, but not limited to,
***(collectively, the "EXCLUDED KNOW-HOW").
For the avoidance of doubt, ELAN KNOW-HOW shall include any
know-how
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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relating to the PRODUCT owned, licensed or controlled as of the
EFFECTIVE DATE by ***, if any.
1.1.14 ELAN PATENTS shall mean all patents and patent applications listed
in SCHEDULE 1. ELAN PATENTS shall also include all continuations,
continuations-in-part, divisionals, ELAN IMPROVEMENTS, and any patents
issuing thereon, and re-issues or re-examinations of such patents and
extensions of any patents licenced hereunder. Extensions of patents
shall include extensions under the U.S. Patent Term Restoration Act.
For the avoidance of doubt, ELAN PATENTS shall exclude any
patents owned, licenced or controlled as of the EFFECTIVE DATE by
AFFILIATES or subsidiaries of Elan Corporation, plc, including, but
not limited to, ***(the "EXCLUDED PATENTS").
In the event that ELAN acquires or merges with a third party
entity, ELAN PATENTS shall not include any patent rights of such third
party entity to the extent that such patent rights relate to a product
containing the COMPOUND which has been approved for marketing or is in
development by the said third party entity. For the avoidance of
doubt, the occurrence of any such acquisition or merger shall not
affect the licence of the ELAN PATENTS granted to LIGAND hereunder.
For the avoidance of doubt, ELAN PATENTS shall include any
patents relating to the PRODUCT owned, licensed or controlled as of
the EFFECTIVE DATE by ***, if any.
1.1.15 [Intentionally Omitted]
1.1.16 ENFORCEMENT PROCEEDINGS shall mean the proceedings referred to in
CLAUSE 3.3.2.
1.1.17 [Intentionally Omitted]
1.1.18 EX WORKS shall have the meaning as such term is defined in the ICC
Incoterms, 1990, International Rules for the Interpretation of Trade
Terms, ICC Publication No. 460.
1.1.19 FDA shall mean the United States Food and Drug Administration or any
other successor agency whose approval is necessary to market the
PRODUCT in the United States of America and/or its foreign equivalents
in any other country of the TERRITORY.
1.1.20 FFDCA shall mean the US Federal Food, Drug and Cosmetic Act, and the
regulations promulgated thereunder, as may be amended from time to
time.
1.1.21 [Intentionally Omitted]
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Confidential Treatment and filed separately with the Commission
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1.1.22 FULLY ALLOCATED COST shall mean, with respect to a party, the fully
allocated actual cost which is the sum total of all production related
costs for the PRODUCT including direct labour, direct materials and
supplies, variable labour, reasonable overhead and allocable
administration, quality control, quality assurance and other costs;
such costs to be calculated in accordance with a party's standard
accounting principles.
1.1.23 INITIAL PERIOD shall mean the initial period of this Agreement, as
more fully described in CLAUSE 12.1.
1.1.24 IN MARKET shall mean the sale of the PRODUCT by LIGAND or a
permitted sub-licensee, as the case may be, to an unaffiliated third
party including but not limited to a wholesaler, chain store, managed
care organisation, hospital, pharmacy or governmental agency and shall
exclude the transfer of the PRODUCT between LIGAND, its AFFILIATES and
permitted sub-licensees.
1.1.25 [Intentionally Omitted]
1.1.26 LIGAND shall mean Ligand Pharmaceuticals Incorporated and any of its
AFFILIATES.
1.1.27 NDA shall mean the New Drug Application filed by ELAN numbered
21,260 and any supplements or amendments thereto which LIGAND may file
for the PRODUCT in the United States of America and its foreign
equivalent in Canada.
1.1.28 NDA APPROVAL shall mean the final approval to market the PRODUCT in
the United States of America and/or its foreign equivalent in Canada.
1.1.29 NSP shall mean in the case of PRODUCT sold by LIGAND or by a
permitted sub-licensee of LIGAND, that sum determined by deducting
from the aggregate gross IN MARKET proceeds billed for the PRODUCT by
LIGAND in accordance with LIGAND's standard accounting principles and
GAAP, expenses incurred by LIGAND under CLAUSE 3.2.1 if, as a result
thereof, a patent is granted to ELAN and a further deduction to cover
the following:
(a) customs duties or other taxes (excluding income or
corporation tax), directly related to the sale of the
PRODUCT which are paid by LIGAND;
(b) a discount from the gross IN MARKET proceeds to cover
such normal costs as are incurred by LIGAND in
respect of transport, shipping insurance, returns,
rebates, allowances for bad debt actually taken, and
discounts directly related to the sale of the
PRODUCT.
1.1.30 PRODUCT shall mean the 30mg, 60mg, 90mg and 120mg finished dosage
strengths of the once-daily oral dosage microparticulate formulation
developed by ELAN containing the COMPOUND as its primary active
ingredient, and such other dosage strengths as would be covered by
claims included in the ELAN PATENTS.
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1.1.31 [Intentionally Omitted]
1.1.32 [Intentionally Omitted]
1.1.33 SPECIFICATIONS shall mean the specifications for the PRODUCT, as
approved by FDA and effective as of the AMENDMENT DATE and contained
in the NDA in the USA. The SPECIFICATIONS may hereafter be amended as
agreed by the parties or as may otherwise be requested or mandated by
the regulatory authorities in the TERRITORY, most specifically the
FDA.
1.1.34 STATEMENT shall have the meaning given in CLAUSE 11.1.
1.1.35 TERRITORY shall mean the United States of America and its
territories and Canada.
1.1.36 $ shall mean United States Dollars.
1.1.37 US or USA shall mean the United States of America.
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 LICENCE
2.1 LICENCE TO LIGAND:
2.1.1 Subject to the terms of this Agreement, ELAN hereby grants to LIGAND
and LIGAND hereby accepts for the INITIAL PERIOD an exclusive licence
(even as to ELAN) of the ELAN INTELLECTUAL PROPERTY to import, use,
offer for sale and sell the PRODUCT in the TERRITORY; provided that
LIGAND shall grant back to ELAN a non exclusive royalty-free license
to make and use the PRODUCT in the TERRITORY so as to enable ELAN to
perform its obligations pursuant to this Agreement, and for the
avoidance of doubt to conduct further research, development and
manufacturing within the TERRITORY with regard to ELAN's
commercialisation of the PRODUCT outside the TERRITORY. For the
further avoidance of doubt, ELAN shall have no rights to import, offer
for sale or sell the PRODUCT in the TERRITORY during the term of this
Agreement.
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2.1.2 LIGAND shall be entitled to grant sub-licences to import, use, offer
for sale and sell the PRODUCT in any country of the TERRITORY to
parties other than ELAN subject to the prior written consent of ELAN,
which shall not be unreasonably conditioned, withheld or delayed.
Any sub-licence granted hereunder shall be consistent in its
terms and conditions with the terms of this Agreement insofar as they
are applicable, but excluding the right to grant a sub-licence or a
production licence, and shall survive termination of this licence
granted to LIGAND hereunder to the extent set forth in CLAUSE 13.2.
For the avoidance of doubt, LIGAND shall ensure that ELAN shall
have the same rights of audit and inspection vis-a-vis a sub-licensee
as ELAN has vis-a-vis LIGAND pursuant to this Agreement.
LIGAND shall be liable to ELAN for all acts and omissions of any
sub-licensee as though such acts and omissions were by LIGAND.
LIGAND shall undertake to protect the confidentiality of ELAN's
formulation, engineering and manufacturing processes for the PRODUCT
in its dealings with permitted sub-licensees and shall not disclose
any information from the CMC SECTION to any third party, including
without limitation a permitted sub-licensee, without the prior written
consent of ELAN (except as provided in CLAUSE 9.15 or as permitted
under CLAUSE 16.1.2).
2.1.3 ELAN covenants that neither ELAN nor any of its AFFILIATES will
prosecute any suit against LIGAND regarding any EXCLUDED KNOW-HOW and
EXCLUDED PATENTS by reason of LIGAND exercising its rights under this
Agreement. ELAN warrants that (i) between the EFFECTIVE DATE and the
AMENDMENT DATE it did not incorporate any EXCLUDED KNOW-HOW or
EXCLUDED PATENTS into the PRODUCT, and (ii) the manufacture of the
PRODUCT does not require the use of any EXCLUDED KNOW-HOW or EXCLUDED
PATENTS. In addition, ELAN covenants that during the INITIAL PERIOD it
shall not enter into any agreement restricting its ability to license
in connection with the PRODUCT, or imposing third-party contractual
obligations, on ELAN IMPROVEMENTS, without the prior written consent
of LIGAND, which shall not be unreasonably conditioned, withheld or
delayed.
2.2 [Intentionally Omitted]
CLAUSE 3 - INTELLECTUAL PROPERTY
3.1 OWNERSHIP OF ELAN INTELLECTUAL PROPERTY:
3.1.1 ELAN shall remain the sole owner of the ELAN INTELLECTUAL PROPERTY.
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3.1.2 ELAN shall be entitled to use the ELAN INTELLECTUAL PROPERTY, and all
technical, clinical and other data, generated by ELAN and/or by LIGAND
pursuant to this Agreement in connection with:
(a) ELAN's commercial arrangements otherwise than in
relation to the PRODUCT; and
(b) the commercialisation of the PRODUCT in any countries
outside of the TERRITORY or those which cease to be
part of the TERRITORY; and in the TERRITORY following
termination of this Agreement.
LIGAND shall supply to ELAN for such purposes copies of such
technical, clinical and other data generated by LIGAND.
3.1.3 In consideration for the licences granted by ELAN pursuant to this
Agreement, any improvements relating to the ELAN INTELLECTUAL
PROPERTY, including improvements relating to the formulation, process
or manufacturing of the PRODUCT, made solely by LIGAND, its officers,
servants, agents, and pursuant to the conduct of clinical trials
conducted by or on behalf of LIGAND, its officers, servants, agents,
during the INITIAL PERIOD shall be assigned by LIGAND to ELAN and
shall form part of the ELAN INTELLECTUAL PROPERTY licenced to LIGAND
pursuant to CLAUSE 2.1.
3.2 FILING AND MAINTENANCE OF PATENTS:
3.2.1 In the TERRITORY, LIGAND will be entitled but not obliged, at its own
expense, to file and prosecute ELAN PATENTS, to determine the patent
filing strategy in relation to same at its sole discretion and upon
grant of any letters patent of the ELAN PATENTS, to maintain such
letters patent in force.
3.2.2 Should LIGAND elect not to file or not to continue the maintenance or
prosecution of any case under the ELAN PATENTS in the TERRITORY, it
shall notify ELAN of such decision. Upon ELAN's request and at ELAN's
expense, LIGAND shall return control of the ELAN PATENT(S) that were
the subject of the election to ELAN in a timely manner to allow ELAN
to continue with the prosecution or maintenance of the ELAN PATENTS in
the TERRITORY. Any case under the ELAN PATENTS in the TERRITORY that
LIGAND chooses not to continue to maintain or prosecute will be
removed from the license by ELAN to LIGAND under CLAUSE 2.1.
3.3 ENFORCEMENT:
3.3.1 LIGAND and ELAN shall promptly inform the other in writing of any
alleged infringement or unauthorised use of which it shall become
aware by a third party of any intellectual property within the ELAN
INTELLECTUAL PROPERTY and provide such other with any available
evidence of infringement or unauthorized use.
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3.3.2 In the TERRITORY, LIGAND, at its option, shall be entitled to
institute enforcement proceedings ("ENFORCEMENT PROCEEDINGS") in
respect of any infringement or unauthorised use of the ELAN
INTELLECTUAL PROPERTY. ELAN agrees to provide all reasonable
co-operation and assistance to LIGAND in relation to any such
ENFORCEMENT PROCEEDINGS (and agrees to be named as a party if legally
required) at LIGAND's expense. Any reasonable fees and costs borne by
ELAN shall be reimbursed by LIGAND. LIGAND shall be entitled to deduct
its reasonable expenses in relation to such ENFORCEMENT PROCEEDINGS
(including reasonable attorney's fees and expenses) from any recovery
and any remaining amount shall be distributed pro rata among the
parties in which LIGAND shall receive *** of any remaining recovery
and ELAN shall receive *** of any remaining recovery. ELAN and LIGAND
each recognise that it is in both parties interest to enforce ELAN
INTELLECTUAL PROPERTY to the full extent provided by law, and neither
party shall, except as required by law, knowingly make any admission
to jeopardise, compromise or otherwise limit the scope of such ELAN
INTELLECTUAL PROPERTY.
3.3.3 In the event that LIGAND does not want to institute, or to continue
already instituted, ENFORCEMENT PROCEEDINGS in the TERRITORY, then
ELAN, using attorneys of ELAN's choosing reasonably acceptable to
LIGAND, can enforce such rights at its own expense. In such event,
ELAN must keep LIGAND fully and timely informed of the action so as to
enable LIGAND to provide input which ELAN shall reasonably consider.
LIGAND agrees to provide all reasonable co-operation and assistance to
ELAN in relation to any such ENFORCEMENT PROCEEDINGS at ELAN's expense
and agrees to be named as a party in any ENFORCEMENT PROCEEDINGS. Any
reasonable fees and costs borne by LIGAND shall be reimbursed by ELAN.
In the event that ELAN enforces ELAN INTELLECTUAL PROPERTY in
accordance with this paragraph, ELAN shall be entitled deduct its
reasonable expenses in relation to such ENFORCEMENT PROCEEDINGS
(including reasonable attorney's fees and expenses and reimbursements
to LIGAND) from any recovery and any remaining amount shall be
distributed pro rata among the parties in which LIGAND shall receive
*** of any remaining recovery and ELAN shall receive *** of any
remaining recovery.
3.4 DEFENCE:
3.4.1 LIGAND and ELAN shall promptly inform the other in writing of a claim
or proceeding brought against either party by a third party alleging
that the sale, manufacture, offer for sale or use of the PRODUCT
infringes the patent rights of such a third party in the TERRITORY.
The parties shall meet to discuss in what manner such claim or
proceeding should be defended. Such discussion shall include, among
other things, cessation of the manufacture and/or sale of the PRODUCT
and modification of the PRODUCT to avoid unauthorised use.
3.4.2 [Intentionally Omitted]
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3.4.3. LIGAND shall defend such action at its expense including the
reasonable expenses of ELAN (not including ELAN's attorney fees)
incurred in cooperating with LIGAND in such defence. LIGAND shall
indemnify and hold harmless ELAN against, and shall be obligated to
pay, any award of damages to the third party under this CLAUSE 3.4,
except that LIGAND shall not be obligated to indemnify ELAN against
the multiple damages element of an award against ELAN for wilful
infringement as a result of ELAN's
omission or commission of an act without LIGAND's consent (which
shall be deemed given in the event that ELAN seeks confirmation in
writing pursuant to the notice provisions set forth in CLAUSE 16.12 as
to whether it shouldproceed with an act or omission contemplated by
this Agreement and LIGAND does not object within 7 (seven) business
days of receipt of such request for confirmation), except as required
by the terms of this Agreement (the "Multiple Damages Element") that
would yield a ruling of wilful infringement (or, in the U.S., as
otherwise provided in 35 U.S.C. ss. 284) or for any award of attorney
fees (or, in the U.S., as otherwise provided in 35 U.S.C. ss. 285) to
the third party against ELAN arising from such wilful infringement.
LIGAND must keep ELAN fully and timely informed of each action
(whether or not including a Multiple Damages Element), including
offers of settlement made to or by LIGAND, so as to enable ELAN to
provide input which LIGAND shall reasonably consider. LIGAND shall
have the right to settle any claim against LIGAND based on such patent
without ELAN's approval. LIGAND shall have the right to settle a claim
against ELAN, (a) without ELAN's written approval, where such
settlement contains no admission of liability on behalf of ELAN or (b)
with ELAN's reasonable written approval, where such settlement
contains any terms which are not wholly performed by LIGAND. Such
determination of reasonableness shall be determined by the ATTORNEY.
3.4.4 [Intentionally Omitted]
3.4.5 ELAN shall have no liability to LIGAND whatsoever or howsoever
arising for any losses incurred by LIGAND as a result of having to
cease selling the PRODUCT or having to defer the launch of selling the
PRODUCT, whether as a result of a court order or otherwise.
3.5 LIGAND agrees to pursue protection and use of the trademark AVINZA(TM)
("the MARK") only in the TERRITORY. After the AMENDMENT DATE, neither party
shall be entitled to use the MARK outside of the TERRITORY; provided
however LIGAND may use the MARK outside of the TERRITORY without the
consent of ELAN if it has otherwise acquired rights to market the PRODUCT
outside of the TERRITORY.
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CLAUSE 4 - LIGAND COMPETING PRODUCTS
4.1 LIGAND undertakes *** in the TERRITORY during the INITIAL PERIOD and for
*** thereafter.
CLAUSE 5 - ADDITIONAL DEVELOPMENT OF THE PRODUCT
5.1 In the event that LIGAND wishes to have further dosage strengths developed
pursuant to this Agreement (the "ADDITIONAL DEVELOPMENT"), the parties
shall negotiate in good faith as to the additional costs to be paid to ELAN
for such ADDITIONAL DEVELOPMENT and the terms of such development work. The
parties agree that their present intention is that the terms shall so far
as reasonably practicable be consistent with the development terms of the
Prior Agreement and the financial and other terms of this Agreement, with
such amendments as may be reasonably appropriate.
5.2 Additionally in the event that LIGAND wishes to have developed a product
incorporating ELAN IMPROVEMENTS (other than the PRODUCT or further dosage
strengths), the parties shall negotiate in good faith as to the additional
development fees, additional licence fees, milestones, royalties and
manufacturing costs associated with such a product, but so that royalties
and manufacturing costs shall be comparable to those relating to the
PRODUCT in the Prior Agreement.
CLAUSE 6 - PROJECT TEAM AND PROJECT MANAGEMENT
Unless otherwise agreed by the parties, representatives of the parties (the
"PROJECT TEAM") shall meet at least semi-annually throughout the term of this
Agreement. The PROJECT TEAM shall meet at locations alternately designated by
the parties, or if agreed by telephonic or videoconference. Meetings shall be
co-chaired by the chief representatives of the parties. At and between meetings
of the PROJECT TEAM, each party shall keep the other fully and regularly
informed as to its progress with its respective obligations and regulatory
matters pertaining to the use of regulatory and clinical information in relation
to the PRODUCT inside and outside the TERRITORY. To the extent that LIGAND is
permitted to do so, LIGAND shall also keep ELAN generally informed at such
meetings as to LIGAND's commercial progress with the PRODUCT, including
performance against competitors and future objectives for the PRODUCT consistent
with the forecasts provided in CLAUSE 9.8.
7.1 CLAUSE 7 - REGISTRATION OF THE PRODUCT
7.1.1 Prior to the AMENDMENT DATE, ELAN has been responsible for the
compilation, preparation, submission and prosecution to approval of
the NDA for the PRODUCT in each country of the TERRITORY.
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7.1.2 Effective as of AMENDMENT DATE and upon the terms of this Agreement,
ELAN hereby sells, assigns, transfers and conveys to LIGAND, free and
clear of all liens, encumbrances, pledge, security interest or other
restriction or limitation of any kind, all of ELAN's right, title and
interest in, to and under the following PRODUCT NDA registrations in
the TERRITORY and shall formally transfer such ownership to LIGAND as
soon as reasonably practicable after the AMENDMENT DATE, allowing
opportunity to ELAN to file the DMF. To that end, ELAN will also
provide LIGAND with copies of documentation, to the extent that ELAN
has not already done so prior to the AMENDMENT DATE, to include:
(a) The NDA and any and all supplements, amendments and annual
reports thereto and all clinical data, tables, listings and databases
(as electronic SAS data sets) that are a part thereof, including grant
of access to third party data managers for correspondence and
documentation relating to the databases as well as changes, error
corrections and other modifications to the databases (including hard or
soft-coded changes); and
(b) Product registration data consisting of the following
(including electronic copies where no hard copies exist) which are in
ELAN's possession or control: regulatory correspondence files relating
to the PRODUCT in the TERRITORY, other than the NDAs, including, but
not limited to minutes of meetings and correspondence with the FDA, the
investigational new drug applications and amendments, excluding or
making appropriate redactions from any correspondence to the extent
that it is specifically related to the CMC section.
Such materials delivered shall, to the extent previously considered
confidential, be considered confidential information of LIGAND subject
to the provisions of CLAUSE 16.1; provided to the extent that such
materials delivered contain confidential or proprietary information of
ELAN, they shall also be considered confidential information of ELAN,
subject to the provisions of CLAUSE 16.1, which ELAN may use solely in
satisfaction of its obligations under this Agreement or as permitted
hereunder in connection with its activities outside the TERRITORY.
For the avoidance of doubt, LIGAND shall thereafter be solely
responsible for any legal or regulatory obligations pertaining to the
ownership, filing and/or maintenance of the NDA including without
limitation any tracking obligations, periodic reports to regulatory
agencies, post market commitments, and commercialization commitments
(in the form of a Risk Management Program).
LIGAND shall allow ELAN full access upon reasonable request to any of
the above documents and shall notify ELAN forthwith of any and all
amendments and supplements to the above. ELAN shall be entitled to make
and retain copies of the same, and to use such information solely (i)
to permit ELAN to meet its obligations under this AGREEMENT, (ii) to
permit ELAN to file and maintain the CMC SECTION in the DMF and (iii)
to support the registration, marketing and/or manufacture of the
PRODUCT for sale outside the TERRITORY.
LIGAND and ELAN shall each allow the other full access to tclinical
trial data related to the PRODUCT and each shall be permitted to use
such data solely: (i) to permit such party to exercise its rights or
meet its obligations under this AGREEMENT, or (ii) with respect to
ELAN, to (A) permit it to file and maintain the CMC SECTION in the DMF
and (B) support the registration, marketing and/or manufacture of the
PRODUCT for sale outside the TERRITORY.
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7.2
7.2.1 Following the AMENDMENT DATE, each party shall cooperate fully with
the other and provide such information as may reasonably be requested
in preparing and promptly filing all notices, applications,
submissions, reports and other instruments and documents that are
necessary, proper or advisable under applicable laws to consummate and
make effective the transactions contemplated by this Agreement and to
comply with applicable laws.
7.2.2 Following the AMENDMENT DATE, LIGAND shall cooperate fully with and
take all actions reasonably requested by ELAN to permit ELAN, its
AFFILIATES and licensees to obtain and maintain all consents,
approvals, registrations, certificates, permits, licenses or other
approvals of applicable governmental or regulatory authorities
required to export the PRODUCT from the TERRITORY and to import,
market, promote, sell and distribute the PRODUCT in any and all
jurisdictions outside the TERRITORY ("Marketing Authorizations").
Without limiting the generality of the foregoing, LIGAND shall (i)
provide to ELAN or its AFFILIATES for submission to applicable
governmental or regulatory authorities, or provide to such applicable
governmental or regulatory authorities through a right or reference or
otherwise, all data, study results, technical information, or other
information owned or controlled by LIGAND and its AFFILIATES and
necessary to obtain or maintain the Marketing Authorizations, and (ii)
not, without prior written notice to ELAN (in no event less than
thirty days) and opportunity to comment, make any change or
modification to the NDA or the SPECIFICATIONS that would cause the
exportation of the PRODUCT from the TERRITORY or the importation,
marketing, promotion, selling and distribution of the PRODUCT in any
jurisdiction outside the TERRITORY unlawful. LIGAND shall instruct its
employees, counsel and financial advisors to provide such cooperation
to ELAN, it being understood that ELAN shall reimburse LIGAND promptly
for reasonable and necessary expenses incurred by LIGAND in complying
with any such request by or on behalf of ELAN.
7.2.3 Solely with respect to the PRODUCT, (a) LIGAND hereby grants
reference rights under all regulatory approvals, including, without
limitation, any DMF for the PRODUCT, to ELAN and its licensees, (b)
ELAN hereby grants reference rights under any DMF for the PRODUCT, to
LIGAND and its permitted sublicensees and (c) each party agrees to
execute or cause its AFFILIATES, sublicensees or agents to execute any
necessary authorization letters as may be reasonably required. Each
party (the "Requesting Party") shall reimburse the other promptly for
reasonable and necessary expenses incurred by such other party in
complying with any such request by or on behalf of the Requesting
Party.
7.2.4 ELAN shall not, without the prior written consent of LIGAND, make any
material change in the product specifications relating to the CMC
SECTION as of the AMENDMENT DATE. In any event, LIGAND shall be
provided reasonable prior notice of any such proposed change.
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7.3 All costs associated with maintaining the NDA APPROVAL (other than
maintaining ELAN's manufacturer's licence(s) and the DMF, the costs of
which shall be borne by ELAN) in each country of the TERRITORY including
any post approval studies required by the FDA in respect of the PRODUCT
shall be paid by LIGAND; PROVIDED, HOWEVER, if LIGAND requests any change
to SPECIFICATIONS or the form in which the PRODUCT is supplied as at
October 2002, or such a change is mandated by the FDA or other legal or
regulatory authority in the TERRITORY, LIGAND shall reimburse ELAN for its
reasonable expenses associated with required changes to ELAN's
manufacturer's licence(s) and the DMF.
7.4 [Intentionally Omitted]
7.5 ELAN shall at its option file additional Drug Master File(s) for the
PRODUCT in its own name; provided such additional Drug Master File(s) may
only be used in connection with the PRODUCT intended for use or sale
outside the TERRITORY and LIGAND shall have identical rights of access and
reference set forth in this Agreement with respect to the DMF as to any
such additional Drug Master File(s). ELAN shall be responsible for all
interaction with FDA, and where applicable other REGULATORY AUTHORITIES,
concerning such Drug Master File(s) and the DMF.
7.6 [Intentionally Omitted]
7.7 [Intentionally Omitted]
7.8 [Intentionally Omitted]
CLAUSE 8 - MARKETING AND PROMOTION OF THE PRODUCT
8.1 LIGAND shall control and be responsible for the content and format of any
PRODUCT promotional campaign submitted to the FDA.
8.2 [Intentionally Omitted]
8.3 LIGAND shall diligently pursue the commercialisation of the PRODUCT and
shall use all commercially reasonable efforts to market and promote the
PRODUCT throughout the TERRITORY and in doing so, shall use the same level
of effort as with other similar products of similar sales potential which
it markets in the TERRITORY. LIGAND covenants that it shall not use the
PRODUCT as a "loss leader" in its marketing programs.
8.4 [Intentionally Omitted]
8.5 To the extent permitted by law, promotional or other printed materials
which LIGAND proposes at any time to use in relation to the sale of PRODUCT
shall, to the extent applicable, include due acknowledgement that the
PRODUCT is developed and manufactured by ELAN (or, as permitted pursuant to
CLAUSE 16.3, ELAN's assignee or designee). For the purposes of ensuring
compliance with this CLAUSE 8 with and applicable laws and regulations
insofar as they affect ELAN, LIGAND shall provide a copy of all such
promotional and other printed materials for ELAN's information a reasonable
time prior to use of the same.
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8.6 [Intentionally Omitted]
8.7 [Intentionally Omitted]
8.8 LIGAND shall mark or have marked all patent number(s) of the ELAN PATENTS
on all PRODUCT or otherwise communicate to the trade the existence of the
ELAN PATENTS in the countries of the TERRITORY in such a manner as to give
constructive or actual notice of infringement under applicable laws.
CLAUSE 9 - SUPPLY OF THE PRODUCT
9.1 Save as otherwise provided in this Agreement, ELAN shall produce and supply
to LIGAND its entire requirements of the PRODUCT and LIGAND will purchase
the PRODUCT from ELAN in the TERRITORY.
9.2 As a consequence of the restrictions currently imposed upon the
importation, use and distribution of the COMPOUND in and into the countries
of the TERRITORY, the parties acknowledge the requirement to order the
appropriate quantity of COMPOUND in sufficient time to enable the supplier
of the COMPOUND to obtain the appropriate aggregate quota from the Drug
Enforcement Agency in the U.S.A. or its successor agency, and its
equivalent in Canada (where applicable). In this regard, the parties shall
negotiate and agree upon a binding forecast for the supply of COMPOUND for
the applicable calendar year (or part thereof). In the event that LIGAND
does not order sufficient PRODUCT to utilise the quantity of COMPOUND,
LIGAND shall ***. LIGAND further acknowledges that unutilised COMPOUND is
likely materially to affect future quota allocations of that material, and
ELAN's ability to acquire same for future orders.
9.3 The PRODUCT to be supplied to LIGAND by ELAN shall be in one final market
pack form for each presentation (with a similar presentation for each of
the dosage strengths) complying with the SPECIFICATIONS. LIGAND shall keep
ELAN apprised of any proposed revisions in labelling (and their FDA
approval status), so as to mutually understand regulatory conformance with
respect to labelling. ELAN shall deliver the PRODUCT to LIGAND and/or any
party designated by LIGAND in proper packaging so as to permit safe storage
and transport. ELAN shall bear all the costs of labelling the PRODUCT so as
to appropriately display the LIGAND name provided that LIGAND supplies all
the appropriate graphics, designs, logos and related and appropriate
artwork.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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9.4 As a consequence of the restrictions currently imposed upon the
importation, use and distribution of COMPOUND into the countries of the
TERRITORY, the PRODUCT shall be manufactured by ELAN or a nominated
sub-contractor in the USA for supply in the USA and Canada, except as
otherwise provided herein. In the event that the relevant authorities in
Canada prohibit the importation of the PRODUCT from the USA, the parties
shall review alternative arrangements which can be put in place having
regard to such expenditure as is justified and the commercial opportunities
available in the country or countries concerned. In the event that ELAN
appoints a third party manufacturer, such appointment shall be subject to
the secrecy provisions of CLAUSE 16.1 and ELAN shall be solely responsible
and liable to LIGAND for the performance of the said manufacturer. ELAN
shall ensure that the said manufacturer's facility is approved by and
complies in all material respects with the requirements of the FDA of the
country where the PRODUCT is manufactured and sold and that LIGAND has the
customary rights of audit and inspection of such third party manufacturer.
9.5 In each of the calendar years *** through ***, LIGAND shall be obliged to
place firm purchase orders with ELAN for not less than *** whole batches of
the PRODUCT per year, a "whole batch" being approximately *** *** of bead
blend batch for encapsulation and made up of approximately:
***;
***;
***;
***.
9.6 [Intentionally Omitted]
9.7 ELAN shall deliver the PRODUCT to LIGAND within 120 days of the receipt of
a firm purchase order properly placed therefor.
9.8 On or before the 23rd day of each calendar month, LIGAND shall provide a
rolling 18 month-forecast for the period beginning on the first day of the
relevant calendar month. The format of such 18 month-forecasts shall be
comprised of a 12 month-forecast together with 2 quarterly forecasts. The
first calendar quarter of such 18 month-forecast shall be a binding
purchase commitment of LIGAND. In addition to the obligation of LIGAND
regarding rolling 18 month-forecasts outlined herein, LIGAND shall provide
ELAN with rolling 3 years' forecasts on 1 August of each year of this
Agreement.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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9.8A Within thirty (30) days of LIGAND providing ELAN with the rolling 3 years'
forecast described in CLAUSE 9.8 above, the parties shall meet to discuss
the latest rolling 18-month forecast and any capital expenditures specific
to the manufacture of the PRODUCT required to meet any such forecast. In
the event that the parties agree that such capital expenditures are
required or desirable and such capital expenditures are in excess of ***,
the parties shall negotiate a minimum number of batches of PRODUCT which
LIGAND shall be obliged to order in calendar years after *** recognising
the interest of ELAN in the recoupment of such expenditure. For purposes of
determining the amount of such capital expenditures, the parties shall
consider only the capital expenditures specific to the manufacture of the
PRODUCT expended by ELAN from the AMENDMENT DATE through the date of such
meeting and any additional amounts required thereafter to meet any such
forecast.
9.9 Subject to the agreement of ELAN, the 12 month forecasts may increase or
decrease from one quarter to the next, PROVIDED, HOWEVER, ELAN shall not be
obligated to produce an amount of PRODUCT which differs by more than *** in
terms of volume of PRODUCT ordered as compared to the preceding quarter.
Notwithstanding the foregoing, ELAN will use its reasonable efforts to
fulfil LIGAND's requirements in excess of forecasted amounts, but shall not
be obliged to meet such requirements if it is not reasonably practicable to
do so provided that ELAN shall supply the PRODUCT so ordered but not
immediately available as soon thereafter as reasonably practicable.
9.10 Subject to CLAUSE 9.5, the parties shall agree upon a minimum order
quantity for the manufacture and supply of each dosage strength the
PRODUCT. ELAN shall have the right to refuse to fulfil orders which do not
conform with the provisions of this CLAUSE 9.10. Where ELAN in its absolute
discretion, fulfils any order which does not conform with the provisions of
this CLAUSE 9.10, the fulfillment of such order by ELAN shall not affect
ELAN's right to refuse to fulfil any subsequent order which does not
conform with the provisions hereof.
9.10A ELAN shall reasonably co-operate with LIGAND, and shall use commercially
reasonable efforts in good faith with a view to achieving sufficient quota
of COMPOUND from the Drug Enforcement Agency in the U.S.A. or its successor
agency, and/or its equivalent in Canada (where applicable) to meet the
forecasted supply of the PRODUCT. Without prejudice to the foregoing
obligation, ELAN shall not be obliged to fulfil orders where there is
insufficient quota of COMPOUND to do so.
9.11 Save as otherwise agreed between the parties, delivery of consignments of
PRODUCT shall be effected by ELAN EX-WORKS the manufacturing facility
designated by ELAN. Risk of loss of or damage to any consignment of the
PRODUCT shall pass to LIGAND when each such consignment of the PRODUCT is
loaded onto the vehicle of LIGAND's agent on which it is to be despatched
from the manufacturing facility designated by ELAN. LIGAND shall fully
insure or procure the insurance of all consignments of the PRODUCT from the
time when risk passes as aforesaid and shall produce the supporting
insurance when requested by ELAN.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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9.12 All claims for failure of any delivery of the PRODUCT to conform to the
SPECIFICATIONS under CLAUSE 14 shall be made by LIGAND to ELAN in writing
within 60 days following delivery except in the case of latent defects.
Claims for latent defects, which could not reasonably have been discovered
during the routine testing protocol (to be agreed by LIGAND and ELAN),
shall be made by LIGAND to ELAN in writing within 30 days of discovery.
Failure to make timely claims in the manner prescribed shall constitute
acceptance of the delivery.
9.13 PRODUCT which has been delivered and which has been shown within the period
designated in CLAUSE 9.12 not to conform to the SPECIFICATIONS where such
non-conformity is attributable to negligent acts or omissions of ELAN shall
be replaced at ELAN's cost within 90 days of the receipt by ELAN of the
failed PRODUCT except where such non-conformity is attributable to
negligent acts or omissions of LIGAND.
9.14 In the event of an unresolved dispute as to conformity of the PRODUCT with
the SPECIFICATIONS, the parties shall within 30 days appoint an independent
first class laboratory to undertake the relevant testing and its findings
shall be conclusive and binding upon the parties. All costs relating to
this process shall be borne solely by the unsuccessful party. In the event
that the parties should fail to agree a mutually acceptable independent
laboratory within such 30 day period, the Head of the School of Pharmacy,
Trinity College, Dublin, Ireland shall be entrusted with appointing such
independent laboratory.
9.15 LIGAND shall have the option, at its sole cost and expense and subject to
the terms and conditions of this Agreement, to qualify one or more
second-source suppliers for the PRODUCT. Such second-source supplier shall
be subject to the approval of ELAN, which shall not be unreasonably
withheld or delayed, and subject to reasonable and customary undertakings
from such second-source supplier to ELAN to protect ELAN's confidential and
proprietary information. In addition, ELAN shall, effective as of the
AMENDMENT DATE, and subject to the terms and conditions of this Agreement:
9.15.1 grant to LIGAND a production licence in the applicable country or
countries of the TERRITORY so that LIGAND (and its second-source
supplier(s)) may manufacture the relevant PRODUCT without infringing
any of the ELAN INTELLECTUAL PROPERTY. Any such licence shall apply
only in regard to the relevant PRODUCT as well as to the applications
of technology derived from the ELAN PATENT RIGHTS related to its use
with such PRODUCT;
9.15.2 provide LIGAND (and its second-source supplier(s)) with any
technical data incorporated in the ELAN KNOW-HOW, including but not
limited to, access to the DMF, to give effect to the provisions of
CLAUSE 9.15.1 and ELAN shall promptly provide to LIGAND (and its
second-source supplier(s)) the documentation constituting the required
material support, more particularly practical performance advice, shop
practice, specifications as to materials to be used and control
methods; and
9.15.3 assist LIGAND (and its second source supplier(s)) with the working
up and use of the technology and with the training of LIGAND's (and
its second-source supplier(s)) personnel to the extent which may
reasonably be necessary in relation to the manufacture of the PRODUCT
by LIGAND (and its second-source supplier(s)). In this regard, ELAN
will receive LIGAND's (and its second source supplier(s)'s) scientific
staff in its premises for certain periods, the term of which will be
agreed by the parties.
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LIGAND shall pay for work conducted by ELAN or its AFFILIATES under
CLAUSES 9.15.2 and/or 9.15.3 as agreed upon by the parties.
LIGAND shall be solely responsible for filing all submissions or other
correspondence with the applicable governmental or regulatory
authorities in connection with any decision to seek approval of a
second-source manufacturing facility for the PRODUCT ("Back-Up
Facility") as an additional back-up manufacturing facility.
Without prejudice to CLAUSE 9.5, LIGAND shall have the sole right to
determine whether to use the Back-Up Facilities; provided that, subject
to CLAUSES 9.16 and 10.3.5.2, such Back-Up Facilities may not supply
more than (a) *** of LIGAND's and its permitted sublicensee(s)' annual
requirements through the period of time ending 31 December 2007 and (b)
*** of LIGAND's and its permitted sublicensee(s)' annual requirements
thereafter during the term of this Agreement. In the event that LIGAND,
and as applicable its permitted sublicensee(s), obtain more than the
said amounts from Back-Up Facilities, then LIGAND shall pay to ELAN an
additional royalty equivalent to *** of AVERAGE PRICE (calculated by
reference to that calendar year) of the additional quantities of
PRODUCT taken from such Back-Up Facilities, over and above the maxima
referred to in this paragraph. The foregoing shall constitute ELAN's
sole remedies in respect of a failure by LIGAND to comply with its
limitations on amount obtained from Back-Up Facilities set forth in
this CLAUSE 9.15 (but without prejudice to any remedy ELAN may have for
any other breach by LIGAND).
9.16 In the event that ELAN fails to deliver to LIGAND a significant portion of
an order of PRODUCT for a period exceeding *** from the due delivery date
therefor, or there are repeated and serious failures, inability or delays
in filling orders, LIGAND may for so long as such conditions exist fulfil
all of its unmet requirements from the Back-Up Facilities. Additionally,
for so long as such conditions exist, the royalty payable by LIGAND under
CLAUSE 10.2 shall be reduced to *** of NSP for such unmet requirements
attributable to ELAN's default (and for the avoidance of doubt such
failure, inability or delays caused by the supplier of the COMPOUND (other
than by reason of ELAN's failure to use commercially reasonable efforts) or
due to the applicable governmental imposed quota system for the COMPOUND
(other than by reason of ELAN's breach of its obligations in CLAUSE 9.10A)
shall not be considered ELAN's default).
The foregoing shall constitute LIGAND's sole remedies in respect of a
failure by ELAN to supply the PRODUCT.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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9.16A When ELAN has remedied the cause of its failure to satisfy LIGAND's
requirements and is once again able to fulfil its obligations to supply the
PRODUCT, LIGAND's entitlement to obtain supplies of the PRODUCT from its
Back-Up Facilities shall revert to the level set out in CLAUSE 9.15, and
the royalty payable by LIGAND under CLAUSE 10.2 shall revert to *** of NSP.
9.17 In manufacturing the PRODUCT under CLAUSE 9.15, LIGAND shall be responsible
for all process and equipment validation required by the FDA and the
regulations thereunder and shall take all steps reasonably necessary to
pass government inspection by the FDA.
9.18 ***
9.19 ELAN will grant to Elan Pharma Ltd., Elan Holdings, Inc. or any other
subsidiaries of ELAN, as necessary or appropriate, a licence of the ELAN
PATENTS and ELAN KNOW-HOW and other intellectual property rights necessary
for such company or companies to manufacture the PRODUCT in accordance with
the terms of this Agreement.
CLAUSE 10 - FINANCIAL PROVISIONS
10.1 LICENCE ROYALTIES:
10.1.1 In consideration of the licence of the ELAN PATENTS granted to
LIGAND under this Agreement, LIGAND has previously paid to ELAN an
aggregate of ***.
10.1.2. LIGAND shall pay as a patent royalty the non-refundable sums of:
(a) *** *** to ELAN; and
(b) *** *** to EML.
Each such payment shall be effected in U.S. Dollars upon the
AMENDMENT DATE. The said patent royalty shall not be subject
to future performance obligations, shall not be applicable
against any future services provided by ELAN and/or EML to
LIGAND and is independent and distinct from the other terms of
this Agreement.
10.2 ROYALTY ON NSP:
In further consideration of the licence of the ELAN PATENTS granted to
LIGAND under this Agreement, LIGAND shall pay to ELAN a royalty
equivalent to *** of NSP, in respect of IN MARKET sales in the period
from the AMENDMENT DATE to the end of the term of this Agreement. The
said royalty shall be payable quarterly upon delivery of the STATEMENT.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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For the avoidance of doubt, subject to CLAUSES 9.15 and 9.16, the said
royalty shall apply both to PRODUCT manufactured by ELAN and PRODUCT
manufactured by LIGAND or a second-source supplier.
10.3 PRICE OF PRODUCT:
10.3.1 Subject to CLAUSES 10.3.2 and 10.3.3, the unit price of the PRODUCT
to be charged by ELAN to LIGAND for commercial sale shall be *** of
AVERAGE PRICE per strength, payable in $ as follows:
10.3.1.1 ELAN shall initially invoice PRODUCT supplied at *** of
AVERAGE PRICE as shown by the last STATEMENT, and payment shall
be made by LIGAND within 30 days of such invoice;
10.3.1.2 Following delivery of the STATEMENT pertaining to a calendar
quarter, the unit price of PRODUCT supplied in that calendar
quarter shall be readjusted to *** of actual AVERAGE PRICE in
that calendar quarter. An adjusting payment shall accordingly be
made by LIGAND to ELAN with the STATEMENT, or by ELAN to LIGAND
within 5 (five) business days following delivery of the
STATEMENT.
The said price shall apply to PRODUCT supplied EX WORKS ELAN's
facility to LIGAND.
10.3.2 In the event that:
10.3.2.1 during the period up to 31 December 2005 ELAN's aggregate
cost of ***, in each case used in the PRODUCT increases by
reference to such costs as at October 2002 by more than ***;
and/or
10.3.2.2 LIGAND fails to meet its minimum order requirements specified
in CLAUSE 9.5; and/or
10.3.2.3 at any time, LIGAND requests any change to SPECIFICATIONS or
the form in which the PRODUCT is supplied as at October 2002, or
such a change is mandated by the FDA or other legal or regulatory
authority in the TERRITORY -
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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which results in *** , the parties shall negotiate in good
faith adjustments to the price of PRODUCT, having regard only
to those costs in excess of the *** increase described in
CLAUSE 10.3.2.1 and the matters set out in CLAUSES 10.3.2.2
and 10.3.2.3. For the avoidance of doubt, the parties have set
forth an example of the calculation described in this CLAUSE
10.3.2 in Schedule 2 attached hereto.
10.3.3 In the event that:
10.3.3.1 LIGAND requests ELAN to supply the PRODUCT in a form or
presentation other than the standard final market pack form
for the presentation in question as at October 2002; and/or
10.3.3.2 LIGAND requests ELAN to supply promotional samples of
the PRODUCT -
the price of such PRODUCT shall be the price of PRODUCT
specified in CLAUSE 10.3.1, as adjusted pursuant to CLAUSE
10.3.2 if applicable, plus an additional amount equivalent to
the incremental cost after the AMENDMENT DATE to ELAN of
supplying such PRODUCT.
10.3.4 In the event that during the period after 31 December 2005 any of
the conditions set forth in CLAUSES 10.3.2.1 and/or 10.3.2.3 exist
and/or LIGAND fails to place firm orders for at least *** whole
batches of the PRODUCT per calendar year (consisting of the various
possible multiples as described in CLAUSE 9.5), and ELAN's FULLY
ALLOCATED COST of manufacture exceeds *** of the AVERAGE PRICE, the
price of PRODUCT shall be adjusted so that it shall equal ***
provided that in the event that such *** exceeds the price charged for
the PRODUCT by LIGAND's second source supplier(s) (as evidenced to
ELAN), the price of PRODUCT shall instead be ***. The parties shall
meet to discuss such alterations in price.
10.3.5 In the event that (a) pursuant to CLAUSE 10.3.4, the price of the
PRODUCT would be ***, and (b) *** exceeds *** of AVERAGE PRICE, then
at ELAN's option:
10.3.5.1 the price of the PRODUCT shall instead be *** of *** ; or
10.3.5.2 LIGAND shall be released from the limitation upon the
quantity of PRODUCT which may be supplied by Back-Up Facilities
as set out in CLAUSE 9.15; and the price of any PRODUCT supplied
by ELAN to LIGAND thereafter shall be *** .
10.3.6 All prices for the PRODUCT are exclusive of any applicable value
added or any other sales tax, for which LIGAND will be additionally
liable.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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10.3.7 [Intentionally Omitted]
10.3.8 For the avoidance of doubt the parties agree that if for whatever
reason the PRODUCT supplied by ELAN to LIGAND is not sold by LIGAND,
payment to ELAN for such PRODUCT shall nonetheless be effected at the
price calculated in accordance with CLAUSES 10.3.1 to 10.3.3
inclusive.
10.4 TRANSITIONAL PROVISIONS:
In respect of PRODUCT sold IN MARKET prior to the AMENDMENT DATE (the
"TRANSITIONAL PRODUCT"), the Prior Agreement shall apply, with the
effect that:
10.4.1 LIGAND shall pay to ELAN the FLOOR PRICE (as defined in the Prior
Agreement) of TRANSITIONAL PRODUCT; and
10.4.2 LIGAND shall pay to ELAN the amount specified in CLAUSE 10.3.4 of
the Prior Agreement in respect of TRANSITIONAL PRODUCT.
In respect of PRODUCT supplied to LIGAND prior to the AMENDMENT DATE
but not sold IN MARKET prior to the AMENDMENT DATE, LIGAND shall pay to
ELAN the FLOOR PRICE (as defined in the Prior Agreement) as if the
Prior Agreement applied, but the IN MARKET sales of such PRODUCT shall
be subject to the royalty provisions of this Agreement and not to
CLAUSE 10.3.4 of the Prior Agreement.
10.5 METHOD OF CALCULATION OF FINANCIAL PROVISIONS:
The parties acknowledge and agree that the methods for calculating the
royalties and other payments hereunder are for the purposes of the
convenience of the parties, are freely chosen and not coerced.
CLAUSE 11 - PAYMENTS, REPORTS AND AUDITS
11.1 LIGAND shall keep true and accurate records of gross sales of the PRODUCT,
the items deducted from the gross amount in calculating the NSP, the NSP,
the AVERAGE PRICE and the royalties payable to ELAN under CLAUSE 10. LIGAND
shall deliver to ELAN a written statement ("the STATEMENT") thereof within
*** days following the end of each calendar quarter, (or any part thereof
in the first or last calendar quarter of this Agreement) for such calendar
quarter. The STATEMENT shall outline on a country-by-country basis, the
calculation of the NSP from gross revenues during that calendar quarter,
the applicable percentage rate, and a computation of the sums due to ELAN.
The parties' financial officers shall agree upon the precise format of the
STATEMENT.
11.2 Payments due on NSP of the PRODUCT based on sales amounts in a currency
other than US Dollars shall first be calculated in the foreign currency and
then converted to US Dollars on the basis of the exchange rate in effect
for the purchase of US Dollars with such foreign currency quoted in the
Wall Street Journal (or comparable publication if not quoted in the Wall
Street Journal) with respect to the sale of currency of the country of
origin of such payment for the day prior to the date on which the payment
by LIGAND is being made.
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11.3 Any income or other taxes which LIGAND is required by law to pay or
withhold on behalf of ELAN or EML, as the case may be, with respect to
royalties and any other monies payable to ELAN under this Agreement shall
be deducted from the amount of such NSP payments, royalties and other
monies due. LIGAND shall furnish ELAN and/or EML with proof of such
payments. Any such tax required to be paid or withheld shall be an expense
of and borne solely by ELAN and/or EML. LIGAND shall promptly provide ELAN
and/or EML with a certificate or other documentary evidence to enable ELAN
and/or EML to support a claim for a refund or a foreign tax credit with
respect to any such tax so withheld or deducted by LIGAND. The parties will
reasonably cooperate in completing and filing documents required under the
provisions of any applicable tax treaty or under any other applicable law,
in order to enable LIGAND to make such payments to ELAN and/or EML without
any deduction or withholding.
11.4 All payments due hereunder shall be made to the designated bank account of
ELAN or EML, as the case may be, in accordance with such timely written
instructions as ELAN shall from time to time provide.
11.5 LIGAND shall pay interest to ELAN and/or EML at the Prime Rate publicly
announced by Morgan 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% on all late payments more
than 10 days past due under this Agreement applicable from the date on
which payment should have been made pursuant to the applicable provisions
of this Agreement until the date of payment.
11.6 [Intentionally Omitted]
11.7 For the 180 day period following the close of each calendar year of the
Agreement, ELAN and LIGAND will, in the event that the other party
reasonably requests such access, provide each other's independent certified
accountants (reasonably acceptable to the other party) with access, during
regular business hours and subject to the confidentiality provisions as
contained in this Agreement, to such party's books and records relating to
the PRODUCT, solely for the purpose of verifying the accuracy and
reasonable composition of the calculations hereunder for the calendar year
then ended.
11.7A Additionally LIGAND shall upon request provide ELAN or, at LIGAND's
option, an independent third party nominated by ELAN and reasonably
acceptable to LIGAND with access, during regular business hours and subject
to the confidentiality provisions as contained in this Agreement, to
LIGAND's and any second-source manufacturer's books and records relating to
the manufacture of the PRODUCT, solely for the purpose of verifying
LIGAND's compliance with the maximum amounts of supply from Back-Up
Facilities set out in CLAUSE 9.15. Such inspections shall be made not more
than once per year unless such an inspection discloses non-compliance and
thereafter shall continue until the previously disclosed non-compliance is
satisfactorily resolved.
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11.8 In the event of a discovery of a discrepancy which exceeds 5% of the amount
due or charged by a party for any period, or a failure to comply with the
maximum limits on supply from Back-Up Facilities set out in CLAUSE 9.15,
the cost of such accountants shall be borne by the audited party;
otherwise, such cost shall be borne by the auditing party.
11.9 ELAN shall make (and where relevant shall procure that ELAN's
subcontractor, assignee or designee shall make) that portion of its
manufacturing, testing or storage facility where PRODUCT is manufactured,
tested or stored, including all record and reference samples relating to
the PRODUCT available for inspection by LIGAND's duly qualified person or
by the relevant governmental or regulatory authority. The investigation
shall be limited to determining whether there is compliance with cGMP and
with other requirements of applicable law. Such inspection shall be made
not more than once per year, unless based on a for cause requirement.
CLAUSE 12 - DURATION AND TERMINATION
12.1 This Agreement shall be deemed to have come into force on the EFFECTIVE
DATE and, subject to the rights of termination outlined in this CLAUSE 12
will expire on a country by country basis:
12.1.1 on the *** date of the launch of the PRODUCT in the country
concerned; or
12.1.2 in any country upon the expiration of the life of the last to expire
patent included in the ELAN PATENTS in that country;
whichever date is later to occur ("the INITIAL PERIOD").
12.2 [Intentionally Omitted]
12.3 In addition to the rights of termination provided for elsewhere in this
Agreement, either party will be entitled forthwith to terminate this
Agreement by written notice to the other party if:
12.3.1 subject to CLAUSE 12.3A, that other party commits any material
breach of this Agreement, and (A) in the case of a breach capable of
cure, fails to cure the same within 60 days after receipt of a written
notice giving full particulars of the breach and requiring it to be
remedied or (B) in the case of a breach not capable of cure, the
non-breaching party has a remedy at law;
12.3.2 that other party goes into liquidation (except for the purposes of
amalgamation or reconstruction and in such manner that the company
resulting therefrom effectively agrees to be bound by or assume the
obligations imposed on that other party under this Agreement);
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12.3.3 an encumbrancer takes possession or a receiver is appointed over any
of the property or assets of that other party;
12.3.4 any proceedings are filed or commenced by that other party under
bankruptcy, insolvency or debtor relief laws or anything analogous to
any of the foregoing under the laws of any jurisdiction occurs in
relation to that other party, and such proceeding is not dismissed
within ninety (90) days;
12.3A Where the party in breach is LIGAND, ELAN shall not terminate this
Agreement unless and until such breach by LIGAND is admitted or determined
by a court of competent jurisdiction, provided that LIGAND complies with
the following conditions:
12.3A.1 within seven (7) days of ELAN giving notice to LIGAND of ELAN's
intention to terminate, LIGAND shall place all monies allegedly owing
to ELAN pursuant to the terms of this Agreement (as specified in the
notice) in an escrow account with such US attorneys firm as ELAN may
nominate ("Escrow Account"), on terms that it shall be released to
ELAN upon admission or determination of breach by a court of competent
jurisdiction, and other reasonable and customary terms;
12.3A.2 ELAN shall not be obliged to supply PRODUCT unless payment for the
same is made in advance; such payment at LIGAND's option being made to
the Escrow Account but on terms that it shall be released as soon as
such payment would have fallen due, but for this CLAUSE 12.3A; and
12.3A.3 any PRODUCT supplied during such period shall be subject to a
minimum price of ELAN's ***; pursuant thereto, LIGAND shall
additionally remit to the Escrow Account the amount specified by ELAN
in good faith as the excess of such *** over the supply price set
forth in CLAUSE 10.3. For the purposes of clarity, in the event that
it is admitted by ELAN or finally determined by a court of competent
jurisdiction that LIGAND was not in breach, the monies paid into the
Escrow Account pursuant to this Clause 12.3A.3 shall be repaid to
LIGAND.
For the avoidance of doubt, ELAN shall be entitled to terminate this
Agreement in the event that the foregoing conditions are not complied
with.
The foregoing shall be without prejudice to (a) any right ELAN may have
to terminate supply pursuant to CLAUSE 9.18, and (b) ELAN's right to
terminate this Agreement pursuant to Clauses 12.3.2, 12.3.3 and/or
12.3.4.
12.4 For the purposes of CLAUSE 12.3.1, a breach will be considered capable of
remedy if the party in breach can comply with the provision in question in
all respects other than as to the time of performance (provided that time
of performance is not of the essence).
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12.5 All rights and licenses granted under or pursuant to this Agreement are,
and shall otherwise be deemed to be, for purposes of Section 365(n) of the
U.S. Bankruptcy Code or other applicable bankruptcy or insolvency laws,
licenses of rights to "intellectual property" as defined under Section 101
of the U.S. Bankruptcy Code (or comparable sections). The parties agree
that each party that is a licensee of such rights under this Agreement
shall retain and may fully exercise its rights and elections under the U.S.
Bankruptcy Code or other applicable bankruptcy or insolvency laws. The
parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against either party under the U.S. Bankruptcy
Code or otherwise, the party which is not a party to such proceeding shall
be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and the same, if not already in their possession,
shall be delivered to them (i) in the event of any such commencement of a
bankruptcy proceeding, upon their written request therefore, unless the
party subject to such proceeding (or a trustee on behalf of the subject
party) elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, upon the rejection of
this Agreement by or on behalf of the party subject to such proceeding upon
written request therefore by the non-subject party.
CLAUSE 13 - CONSEQUENCES OF TERMINATION
13.1 Upon exercise of those rights of termination specified in CLAUSE 12 or
elsewhere in this Agreement, this Agreement shall, subject to the
provisions of the Agreement which survive the termination of the Agreement
automatically terminate forthwith and be of no further legal force or
effect.
13.2 Upon termination of the Agreement by either party, the following shall be
the consequences relating to the TERRITORY:
13.2.1 any sums that were due from LIGAND to ELAN under the provisions of
CLAUSE 10 or otherwise howsoever prior to the exercise of the right to
terminate this Agreement as set forth herein shall be paid in full
within 30 days of termination of this Agreement and, subject to CLAUSE
13.2.4, ELAN shall not be liable to repay to LIGAND any amount of
money paid or payable by LIGAND to ELAN up to the date of the
termination of this Agreement;
13.2.2 all confidentiality provisions set out herein shall remain in full
force and effect for a period of 7 years from the date of termination
of this Agreement;
13.2.3 all representations and warranties shall insofar are appropriate
remain in full force and effect;
13.2.4 the rights of inspection and audit shall continue in force for the
period referred to in the relevant provisions of this Agreement;
13.2.5 ELAN shall have no further obligation to supply PRODUCT to LIGAND;
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13.2.6 the exclusive licence of the ELAN INTELLECTUAL PROPERTY granted in
CLAUSE 2.1 shall continue, and LIGAND shall continue to pay to ELAN a
royalty equivalent to *** of NSP; provided that the licence shall not
continue in circumstances where this Agreement is terminated by reason
of the applicability of CLAUSE 12.3.2, 12.3.3 and/or 12.3.4 to LIGAND;
and
13.2.7 In the event of any termination of the exclusive license of the ELAN
INTELLECTUAL PROPERTY granted in CLAUSE 2.1, each sub-license granted
by LIGAND pursuant to CLAUSE 2.1.2 shall survive termination and
continue according to its terms, provided that (a) such sub-license
was granted in accordance with all of the terms and conditions of this
Agreement, (b) all applicable terms and conditions of this Agreement
shall apply to such sub-license and the sub-licensee thereunder as
though this Agreement continued in effect, (c) ELAN shall receive all
consideration due in connection with such sub-license as if such
sub-licensee were LIGAND hereunder, and (d) such sub-licensee agrees
with ELAN in writing to be bound by such terms and conditions and to
pay such consideration to ELAN.
CLAUSE 14 - WARRANTY AND INDEMNITY
14.1 ELAN represents and warrants as of each of the AMENDMENT EXECUTION DATE and
the AMENDMENT DATE that it has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by
ELAN and constitutes a valid and legally binding agreement of ELAN
enforceable against ELAN in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought and (B) any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations.
14.2 [Intentionally Omitted]
14.3 ELAN represents and warrants as of each of the AMENDMENT EXECUTION DATE and
the AMENDMENT DATE that the execution of this Agreement and the
consummation of the transactions contemplated hereby will not breach or in
any way conflict with the terms and conditions of any licence, contract,
understanding or agreement, whether express, implied, written or oral
between ELAN and any third party.
14.4 ELAN represents and warrants as of the AMENDMENT EXECUTION DATE that no
consent, approval, authorization or order of any court or governmental
agency or body or third party is required for the execution and delivery by
ELAN of this Agreement of the consummation by ELAN of the transactions
contemplated hereby.
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14.5 ELAN covenants that the PRODUCT supplied by ELAN to LIGAND under this
Agreement will conform to:
14.5.1 the SPECIFICATIONS;
14.5.2 all applicable regulations, requirements, statutes, ordinances and
practices of the FDA and other governmental authorities in the
TERRITORY including the then-cGMP regulations which apply to the
manufacture and supply of the PRODUCT.
EXCEPT AS EXPRESSLY STATED IN THIS CLAUSE 14, ALL OTHER WARRANTIES,
CONDITIONS AND REPRESENTATIONS, EXPRESS OR IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING A WARRANTY AS TO THE QUALITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE PRODUCT ARE HEREBY EXCLUDED AND EXCEPT AS
EXPRESSLY STATED IN THIS CLAUSE 14, ELAN SHALL NOT BE LIABLE IN
CONTRACT, TORT OR OTHERWISE FOR ANY LOSS, DAMAGE, EXPENSE OR INJURY,
ARISING OUT OF OR IN CONNECTION WITH THE PRODUCT OR ANY DEFECT IN THE
PRODUCT OR FROM ANY OTHER CAUSE.
14.6 LIGAND represents and warrants as of each of the AMENDMENT EXECUTION DATE
and the AMENDMENT DATE that it has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized, executed
and delivered by LIGAND and constitutes a valid and legally binding
agreement of LIGAND enforceable against LIGAND in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
14.7 LIGAND represents and warrants as of each of the AMENDMENT EXECUTION DATE
and the AMENDMENT DATE that the execution, delivery and performance by
LIGAND of this Agreement and the consummation by LIGAND of the transactions
contemplated hereby will not conflict with or constitute or result in a
breach of or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any of (i)
the terms or provisions of any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate,
contract or other agreement or instrument to which LIGAND is bound or to
which any of its properties or assets is subject, except for any such
conflict, breach, default, violation or event which would not, individually
or in the aggregate, have a material adverse effect on the business,
assets, liabilities (contingent or otherwise, operations, condition
(financial or otherwise), solvency, properties, prospects or material
agreements of LIGAND (any such event, a "Material Adverse Effect"), (ii)
the certificate of incorporation or bylaws of LIGAND or (iii) any statute,
judgment, decree, order, rule or regulation applicable to LIGAND or any of
its properties or assets, except for any such conflict, breach or violation
which would not, individually or in the aggregate, have a Material Adverse
Effect.
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14.8 LIGAND represents and warrants as of the AMENDMENT EXECUTION DATE that no
consent, approval, authorization or order of any court or governmental
agency or body or third party is required for the execution and delivery by
LIGAND of this Agreement of the consummation by LIGAND of the transactions
contemplated hereby.
14.9 LIGAND covenants to ELAN that in the promotion, marketing, transporting,
storing, handling, distributing and selling the PRODUCT hereunder:
14.9.1 it will exercise all due skill, care and diligence in conducting
such activities; and
14.9.2 it will comply with the provisions of this Agreement, all FDA and
other approvals, all applicable state and local regulatory approvals
and all applicable laws, ordinances and regulations.
14.10 [Intentionally Omitted]
14.11 ELAN represents and warrants as of each of the AMENDMENT EXECUTION DATE
and the AMENDMENT DATE that it is cognisant in all material respects of all
applicable statutes, ordinances and regulations of the TERRITORY with
respect to the manufacture of the PRODUCT including, but not limited to the
FFDCA, including cGLP and cGMP.
14.12 Each of the parties shall indemnify, defend and hold harmless the other
party from all actions, losses, claims, demands, damages, costs and
liabilities (including reasonable attorneys' fees) to which the other party
is or may become liable insofar as they arise out of any breach by the
first party of any of its obligations or warranties under this Agreement or
the Prior Agreement (to the extent such breaches occurred prior to the
AMENDMENT DATE).
14.13 Additionally, save to the extent that ELAN is obliged to indemnify LIGAND
pursuant to CLAUSES 14.12, 14.13A or 14.13C, LIGAND shall indemnify, defend
and hold harmless ELAN from all actions, losses, claims, demands, damages,
costs and liabilities (including reasonable attorneys' fees) made or
brought against ELAN seeking damages for personal injury (including death)
and/or for costs of medical treatment, caused by or attributed to the
PRODUCT in the TERRITORY.
14.13A ELAN shall indemnify and hold harmless LIGAND, its agents and employees
from and against all claims, damages, losses, liabilities and expenses to
which LIGAND, its agents, and employees may become subject related to or
arising out of ELAN's bad faith, gross negligence or intentional misconduct
in connection with the filing or maintenance or failure to file or maintain
or prosecute the NDA to the extent such acts or failures to act occurred
prior to the AMENDMENT DATE and/or relate to activities outside the
TERRITORY.
14.13B LIGAND shall indemnify and hold harmless ELAN, its agents and employees
from and against all claims, damages, losses, liabilities and expenses to
which ELAN, its agents, and employees may become subject related to or
arising out of LIGAND's bad faith, gross negligence or intentional
misconduct in connection with the filing or maintenance or failure to file
or maintain or prosecute the NDA to the extent such acts or failures to act
occurred on or after the AMENDMENT DATE.
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14.13C LIGAND shall indemnify, defend and hold harmless ELAN from all actions,
losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys' fees) made or brought against ELAN arising from the
use in the TERRITORY of clinical and regulatory data relating to activities
outside the TERRITORY supplied by ELAN, save to the extent that such a
claim is attributable to the bad faith, gross negligence or intentional
misconduct of ELAN. ELAN shall indemnify, defend and hold harmless LIGAND
from all actions, losses, claims, demands, damages, costs and liabilities
(including reasonable attorneys' fees) made or brought against LIGAND
arising from the use outside the TERRITORY of clinical and regulatory data
relating to activities in the TERRITORY supplied by LIGAND, save to the
extent that such a claim is attributable to the bad faith, gross negligence
or intentional misconduct of LIGAND.
14.13D LIGAND shall indemnify and hold harmless ELAN from and against all
claims, damages, losses, liabilities and expenses to which ELAN may become
liable arising out of LIGAND's bad faith, gross negligence or intentional
misconduct in connection with the activities described in CLAUSE 8 of this
Agreement.
14.14 As a condition of obtaining an indemnity hereunder, the party seeking an
indemnity shall:
14.14.1 fully and promptly notify the other party of any claim or
proceedings, or threatened claim or proceedings;
14.14.2 permit the indemnifying party to take full control of such claim or
proceedings;
14.14.3 assist in the investigation and defence of such claim or
proceedings;
14.14.4 not compromise or otherwise settle any such claim or proceedings
without the prior written consent of the other party, which consent
shall not be unreasonably withheld; and
14.14.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceedings.
14.15 Except in respect of each party's liability to indemnify the other against
Claims made by a third party, notwithstanding anything to the contrary in
this agreement, Elan and LIGAND shall not be liable to the other by reason
of any representation or warranty, condition or other term or any duty of
common law, or under the express terms of this agreement, for any
consequential, special or incidental or punitive loss or damage (whether
for loss of current or future profits, loss of enterprise value or
otherwise) and whether occasioned by the negligence of the respective
parties, their employees or agents or otherwise, even if advised of the
possibility of such damages, except that this limitation shall not apply to
damages directly or indirectly arising from personal injury or death caused
by the defective design and/or manufacture of the Products.
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14.16 Where this Agreement provides for the indemnification of a party to this
Agreement or for the limitation of a party's liability, such
indemnification and/or limitation (as the case may be) shall also apply for
the benefit of such party's AFFILIATES and the employees, officers,
directors and agents of any of them, acting in such capacity.
14.17 ELAN and LIGAND shall each (either through purchase of a policy from a
nationally recognised third party insurer or through maintenance of a
self-insurance program) maintain comprehensive product liability insurance
in relation to the PRODUCT in an amount of not less than *** for so long
as ELAN supplies LIGAND under this Agreement and for a period of 5 years
thereafter.
Each party shall provide the other party with a certificate from the
insurance company, if applicable, verifying the above and shall notify
the other party in writing at least 30 days prior to the expiration or
termination of such coverage.
CLAUSE 15 - ADVERSE EVENTS AND PRODUCT RECALL
15.1 Each party shall notify the other party promptly:
15.1.1 of any complaints from third parties reported to such party
involving any serious and unexpected adverse reactions resulting from
the use of the PRODUCT; and
15.1.2 of any potential recall of the PRODUCT by any governmental
authority.
15.2 LIGAND shall be responsible for formal adverse event handling and reporting
in the TERRITORY. LIGAND shall be responsible for furnishing post-marketing
reports to the FDA. LIGAND and ELAN shall keep each other informed and
shall copy the other party with all communications with the FDA and other
relevant regulatory agencies with respect to the PRODUCT. LIGAND shall
additionally assume responsibility for the maintenance of a global safety
database relating to the PRODUCT and shall provide access to ELAN to such
database following an agreement between the parties, including without
limitation agreement on what data should be shared and a proportional
sharing of the costs of such database.
15.3 In the event of any recall of the PRODUCT, as suggested or requested by any
governmental authority:
15.3.1 LIGAND shall perform the recall of the PRODUCT in the TERRITORY and
save as provided in CLAUSE 15.3.2, in all events the recall costs
shall be borne by LIGAND.
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15.3.2 If the recall arises from ELAN's negligent acts or omissions in
manufacturing the PRODUCT, the recall costs shall be borne by ELAN
provided that LIGAND could not have discovered the said act or
omission prior to sale of the PRODUCT by exercising the quality
procedures to be agreed upon by the parties for the release of the
PRODUCT.
15.3.3 [Intentionally Omitted]
15.4 Upon request by ELAN, the parties shall negotiate in good faith a safety
data exchange agreement, including without limitation what data will be
exchanged and a proportional sharing of the costs associated with such
exchange.
CLAUSE 16 - MISCELLANEOUS PROVISIONS
16.1 SECRECY:
16.1.1 Any information, whether written or oral (oral information shall be
reduced to writing within one month by the party giving the oral
information and the written form shall be furnished to the other
party) pertaining to the PRODUCT that has been or will be communicated
or delivered by ELAN to LIGAND, or by LIGAND to ELAN, including,
without limitation, trade secrets, business methods, and cost,
supplier, manufacturing and customer information, shall be treated by
LIGAND and ELAN, respectively, as confidential information, and shall
not be disclosed or revealed to any third party whatsoever or used in
any manner except as expressly provided for herein; provided, however,
that such confidential information shall not be subject to the
restrictions and prohibitions set forth herein to the extent that such
confidential information:
(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 EFFECTIVE DATE; 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 and shall use all reasonable efforts to
restrict the scope of disclosure, including without
limitation by agreeing to appropriate redactions
and/or making requests for confidential treatment.
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16.1.2 Each party shall take in relation to the confidential information of
the other party all such precautions as it normally takes with its own
confidential information to prevent any improper disclosure of such
confidential information to any third party; provided, however, that
such confidential information may be disclosed within the limits
required to obtain or maintain any authorisation from the applicable
FDA or any governmental or regulatory agency or, with the prior
written consent of the other party, which shall not be unreasonably
withheld, or as may otherwise be required in connection with the
purposes of this Agreement.
16.1.3 LIGAND agrees that it will not use, directly or indirectly, any ELAN
KNOW-HOW, or other confidential information disclosed to it by ELAN or
obtained by it from ELAN pursuant to this Agreement, other than as
expressly provided herein.
16.1.4 Neither party will publicise the existence of this Agreement in any
way without the prior written consent of the other party subject to
the disclosure requirements of applicable laws and regulations. In the
event that either party wishes to make an announcement concerning the
Agreement, that party will seek the consent of the other party. The
terms of any such announcement shall be agreed in good faith.
16.1.5 At the request of a party in writing, the other party shall not
disseminate any public announcement for a period of sixty (60) days
from the receipt of such request regarding this Agreement or the
transactions contemplated hereby or regarding such requesting party,
without such requesting party's consent, which shall not be
unreasonably withheld, provided, however, a party may disseminate a
public announcement regarding the foregoing if such party obtains an
opinion of independent counsel that such party is obligated by law to
disseminate such information to the public.
16.2 SPECIFIC PERFORMANCE:
Each of ELAN and LIGAND acknowledges and agrees that in the event
either party materially breaches any obligations under this Agreement
which can be specifically performed, the aggrieved party shall be
entitled to seek specific performance of this Agreement and to enjoin
any continuing breach of this Agreement (without the necessity of
proving actual damages and without posting bond or other security), in
addition to any other remedy which such aggrieved party may be entitled
to at law or in equity and each of ELAN and LIGAND will waive the
defence in any action for specific performance or other equitable
relief that a remedy at law would be adequate or that the services
provided hereunder are personal in nature.
16.3 ASSIGNMENTS/SUB-CONTRACTING:
Neither party shall be permitted to assign or sub-licence any of its rights or
obligations under this Agreement without the prior written consent of the other;
provided that:
16.3.1 ELAN and LIGAND may assign its rights or obligations under this
Agreement to an AFFILIATE without such consent provided that such
assignment has no adverse tax implications for the other party and
provided further that such assigning party is not relieved of its
obligations hereunder;
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16.3.2 LIGAND may transfer or assign its rights and obligations under this
Agreement without the prior written consent of ELAN to a person that
acquires all or substantially all of the assets or capital stock of
LIGAND, provided that such assignment has no adverse tax implications
for ELAN under this Agreement;
16.3.3 ELAN may transfer or assign its rights and obligations under this
Agreement insofar as they pertain to the PRODUCT outside the TERRITORY
(including without limitation its rights under CLAUSE 7.2), provided
that such assignment has no adverse tax implications for LIGAND under
this Agreement;
16.3.4 ELAN shall transfer or assign all (but not a portion) of its other
rights and obligations under this Agreement to a person that acquires
all right, title and interest in, to and under the PRODUCT
manufacturing facility and related manufacturing assets provided that
such assignment has no adverse tax implications for LIGAND under this
Agreement; and PROVIDED that following such transfer or assignment
ELAN may solely retain any rights pursuant to CLAUSE 10.2, without the
prior written consent of LIGAND; and
16.3.5 ELAN shall have the right to subcontract all or any portion of the
manufacturing as provided in CLAUSE 9.4 and/or to subcontract the
packaging of the PRODUCT to one or more third parties but shall be
responsible for the acts and/or omissions of such subcontractors.
16.4 PARTIES BOUND:
This Agreement shall be binding upon and inure for the benefit of
parties hereto, their successors and permitted assigns.
16.5 SEVERABILITY:
If any provision in this Agreement is agreed by the parties to be, or
is deemed to be, or becomes invalid, illegal, void or unenforceable
under any law that is applicable hereto:
16.5.1 such provision will be deemed amended to conform to applicable laws
so as to be valid and enforceable or, if it cannot be so amended
without materially altering the intention of the parties, it will be
deleted, with effect from the date of such agreement or such earlier
date as the parties may agree; and
16.5.2 the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected in any
way.
16.6 FORCE MAJEURE:
Neither party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results
from causes beyond its reasonable control, including, without
limitation, acts of God, fires, strikes, acts of war, or intervention
of a government authority, non-availability of raw materials, but any
such delay or failure shall be remedied by such party as soon as
practicable.
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16.7 RELATIONSHIP OF THE PARTIES:
Nothing contained in this Agreement is intended or is to be construed
to constitute ELAN and LIGAND as partners or members of a joint venture
or either party as an employee of the other. Neither party hereto shall
have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other party or to bind
the other party to any contract, agreement or undertaking with any
third party.
16.8 AMENDMENTS:
No amendment, modification or addition hereto shall be effective or
binding on either party unless set forth in writing and executed by a
duly authorised representative of both parties.
16.9 WAIVER:
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any future breach or failure to perform or of
any other right arising under this Agreement.
16.10 NO EFFECT ON OTHER AGREEMENTS:
This Agreement supersedes that certain Letter of Intent dated September
28, 1998 between the parties as such Letter of Intent relates to the
subject matter hereof, and the Prior Agreement, but without prejudice
to CLAUSE 10.4 hereof or to any accrued rights or obligations of the
parties as at the AMENDMENT DATE. For the avoidance of doubt, rights
and obligations in connection with (i) representations and warranties
given by the parties under the Prior Agreement (whether at the
EFFECTIVE DATE or otherwise) or (ii) covenants to be performed by a
party from the EFFECTIVE DATE through the AMENDMENT DATE under the
Prior Agreement shall be unaffected by this amendment and restatement
of the Prior Agreement. Except as limited by the foregoing sentences,
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. There are no agreements
or understandings with respect to the subject matter hereof, either
oral or written, between the parties other than as set forth in this
Agreement.
16.10A FURTHER ASSURANCE:
At the request of any of the parties, each other party shall (and shall
use reasonable efforts to procure that any other necessary persons
shall) execute and perform all such documents, acts and things as may
reasonably be required subsequent to the execution of this Agreement
for assuring to or vesting in the requesting party the full benefit of
the terms hereof.
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16.11 GOVERNING LAW AND JURISDICTION:
This Agreement is construed under and ruled by the laws of New York.
For the purposes of this Agreement the parties submit to the
non-exclusive jurisdiction of the courts of New York.
16.12 NOTICE:
16.12.1 Any notice or communications to be given under this Agreement shall
be written in English and shall be sufficiently given if delivered
personally or sent by nationally recognised overnight delivery
service, or fax (receipt confirmed), addressed as follows:
ELAN at
c/o Elan International Services Ltd.
102 St. James Court
Flatts,
Smiths FL04
Bermuda
Attention: Secretary
Fax: +1 441 292 2224
LIGAND at
Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego
California 92121
Attention: General Counsel
Telephone: (858) 550-7500
Fax: (858) 550-1825
or to such other address(es) and fax numbers as may from
time to time be notified by either party to the other
hereunder.
16.12.2 Any notice sent by mail shall be deemed to have been delivered
within 7 working days after dispatch and any notice sent by fax shall
be deemed to have been delivered within 24 hours of the time of the
despatch. Notice of change of address shall be effective upon receipt.
16.13 ***
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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IN WITNESS of which the parties have executed this Agreement.
Executed by LIGAND on ____________, 2002
By : /S/DAVID E. ROBINSON
Name: David E. Robinson
Title: President & CEO
Executed by ELAN on NOV 12, 2002
By: /S/KEVIN INSLEY
Name: Kevin Insley
Title: Authorised Signatory
Executed by EML on NOV 12, 2002
By: /S/KEVIN INSLEY
Name: Kevin Insley
Title: Authorised Signatory
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SCHEDULE 1
ELAN PATENTS
US Patent No. 6,066,339
Canadian patent application no. 2,306,333
*Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
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SCHEDULE 2
EXAMPLE CALCULATION
Net Sales (Average Price) 100
Elan Price to Ligand **
A B C D
Base Inc Up to Inc Over Add'l Spec Less than Minimum
Line *** *** Requirement
A B A B A B
--------------- ------------- ------------ ------------ ------------ --------------
Elan's Fully Allocated Cost
Material Described in 10.3.2.1 *** *** *** *** *** *** ***
Other Variable Cost *** *** *** *** *** *** ***
Fixed Cost *** *** *** *** *** *** ***
--- --- --- --- --- --- ---
*** *** *** *** *** *** ***
*** *** *** *** *** *** *** ***
Elan Price to Ligand *** *** *** *** *** *** ***
*Increase vs Base Line reflects under absorption variance due to reduce
requirement
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission