COLLABORATION AND LICENSE AGREEMENT

 

 

Confidential

 

1.	DEFINITIONS		1
2.	LICENSES		17
	2.1	Licenses to Licensee	17
	2.2	Limitation on License Grants	19
	2.3	Acknowledgments Regarding Know-How	21
	2.4	Licenses to Acorda	21
	2.5	Retained Rights	21
	2.6	Non-Compete	22
	2.7	Supply Agreement	22
	2.8	In-Licensed Technology	22
3.	GOVERNANCE		24
	3.1	Joint Steering Committee	24
	3.2	Subcommittees	24
	3.3	Committee Membership	26
	3.4	Committee Meetings	27
	3.5	Decisions	27
	3.6	Authority	29
4.	SHARING OF INFORMATION		30
	4.1	Initial Information Transfer	30
5.	DEVELOPMENT		31
	5.1	Overview	31
	5.2	Development Plan	31
	5.3	Reports	32
	5.4	Updating and Amending Development Plan and Development Budget; Additional Development Activities	33
	5.5	Development Costs	35
	5.6	Development Costs Budget and Timeline Overruns	36
	5.7	Review of Clinical Trial Summaries	37
	5.8	Review of Promotional Material Educational Materials and Activities	38
	5.9	Contracted Services	39
6.	REGULATORY; MARKETING AND MEDICAL AFFAIRS		40
	6.1	Regulatory Filings and Regulatory Approvals	40
	6.2	Pharmacovigilance	42
7.	COMMERCIALIZATION		44
	7.1	Commercialization in the Field in the Territory	44
	7.2	Licensee’s Performance	44

 

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	7.3	Reports	48
	7.4	Promotional Materials and Educational Materials and Activities	49
	7.5	Product Branding	49
8.	PAYMENTS		51
	8.1	Up-front Fee	51
	8.2	Milestone Payments	51
	8.3	Royalties Payable by Licensee	53
	8.4	Restrictions on Sales	54
	8.5	Reports and Payment	54
	8.6	Tax Withholding	55
	8.7	Blocked Payments	55
	8.8	Late Payments	55
	8.9	Financial Records	55
	8.10	Audit Right	55
9.	INTELLECTUAL PROPERTY		56
	9.1	Ownership; Trademarks	56
	9.2	Filing, Prosecution and Maintenance of Patent Rights	58
	9.3	Enforcement	61
	9.4	Invalidity Claims	63
	9.5	Patent Marking	63
10.	CONFIDENTIAL INFORMATION		64
	10.1	Non-Use and Non-Disclosure of Confidential Information	64
	10.2	Permitted Disclosures	64
	10.3	Scientific Publications	65
	10.4	Publicity	65
	10.5	Relationship to the Prior Confidentiality Agreement	67
	10.6	Survival	67
11.	INDEMNIFICATION		67
	11.1	Indemnification by Licensee	67
	11.2	Indemnification by Acorda	67
	11.3	Procedure	68
	11.4	Allocation	68
12.	INSURANCE		69
	12.1	Insurance	69
13.	WARRANTIES AND COVENANTS		69
	13.1	Mutual Warranties	69

 

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	13.2	Additional Acorda Warranties	70
	13.3	Additional Covenants Regarding Acorda Third Party Agreements	71
	13.4	Compliance	72
	13.5	Standstill	72
	13.6	Disclaimer	73
14.	LIMITATION OF LIABILITY		73
	14.1	Limitation of Liability	73
15.	TERMINATION		74
	15.1	Term	74
	15.2	Termination	74
	15.3	Effects Of Termination	75
16.	MISCELLANEOUS		78
	16.1	Assignment	78
	16.2	Change of Control; Licensee Acquisition of Elan	79
	16.3	Guaranty	80
	16.4	Force Majeure	80
	16.5	Notices	80
	16.6	Relationship of the Parties	81
	16.7	Governing Law	81
	16.8	Dispute Resolution	81
	16.9	Injunctive Relief	81
	16.10	Severability	81
	16.11	Entire Agreement	82
	16.12	Amendment and Waiver	82
	16.13	No Implied Waivers	82
	16.14	Export Compliance	82
	16.15	Counterparts and Facsimile Signatures	82
	16.16	Performance by Affiliates	82

 

Exhibit A:  Acorda Patent Rights

Exhibit B:  [Reserved for Future Use]

Exhibit C:  [Reserved for Future Use]

Exhibit D:  Acorda Third Party Agreements

Exhibit E:  Supply Agreement

Exhibit F:  Press Release

Exhibit G:  Regions

Exhibit H:  Parent Guaranty

Exhibit I:  Commercialization Metrics Forecast

 

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1.5           “ Acorda Patent Costs ” means, subject to Section 9.2(e), all Out-of-Pocket Costs incurred by Acorda in preparing, filing, prosecuting and maintaining Licensed Patent Rights in the Territory in the Field and in conducting related interference, opposition and similar proceedings in the Territory.  For the avoidance of doubt, any Out-of-Pocket Costs incurred by Acorda for preparing, filing, prosecuting and/or maintaining Licensed Patent Rights which are reasonably believed by Acorda to be necessary to allow Licensee to use the Licensed Patent Rights in the Territory in accordance with the rights granted to Licensee hereunder shall be deemed Acorda Patent Costs under this Agreement.

 

1.6           “ Acorda Patent Right ” means any Patent Right that (a) is Controlled by Acorda or its Affiliates as of the Effective Date or that comes under the Control of Acorda or its Affiliates during the Term and (b) Covers the composition, use, Manufacture of or otherwise relates to the Compound or the Licensed Product in the Field in the Territory or claims Acorda Know-How or the use thereof, including the Patent Rights set forth in Exhibit A ; provided , however , that Acorda Patent Rights specifically exclude (i) Joint Patent Rights and (ii) the Patent Rights licensed to Acorda pursuant to the License Agreement between Acorda and Cornell Research Foundation, Inc., dated February 3, 2003 as such agreement may be amended.

 

1.7           “ Acorda Royalty Rate ” has the meaning set forth in Section 8.3(a).

 

1.8           “ Acorda Territory ” means the United States, each Terminated Country, and each of their respective territories and possessions, including in the case of the United States, the Commonwealth of Puerto Rico.

 

1.9           “ Acorda Third Party Agreements ” means (a) the agreements which are set forth on Exhibit D , (b) the Acorda Supply Agreements (as defined in the Supply Agreement) and (c) any agreement pursuant to which Acorda licenses or acquires Patent Rights or Know-How that relates to the Compound or the Licensed Product in the Field in the Territory after the Effective Date pursuant to an agreement with a Third Party which Licensee and Acorda agree, pursuant to Section 2.8, shall be deemed an Acorda Third Party Agreement, in which case Exhibit D shall be amended accordingly.

 

1.10         “ Adverse Drug Experience ” has the meaning set forth in Section 6.2(b).

 

1.11         “ Affiliate ” means any Person who directly or indirectly controls or is controlled by or is under common control with another Person.  For purposes of this definition, “control” or “controlled” means ownership, directly or through one or more Affiliates, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interest, in the case of any other type of legal entity, or status as a general partner in any partnership.  The Parties acknowledge that, in the case of certain entities organized under the laws of certain countries, the maximum percentage ownership permitted by Law for a foreign investor may be less than fifty percent (50%), and in such case such lower percentage shall be substituted in the preceding sentence; provided , that such foreign investor has the power to direct the management and policies of such entity.

 

1.12         “ Agreement ” has the meaning set forth in the preamble.

 

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1.13         “ Bankruptcy Code ” has the meaning set forth in Section 2.9.

 

1.14         “ Breaching Party ” has the meaning set forth in Section 15.2(b).

 

1.15         “ Business Day ” means a day other than Saturday or Sunday on which the banks in New York, New York and Boston, Massachusetts are open for business.

 

1.16         “ Buy-In Party ” has the meaning set forth in Section 5.4(b)(ii)(B).

 

1.17         “ Buy-In Amount ” has the meaning set forth in Section 5.4(b)(ii)(C).

 

1.18         “ Calendar Quarter ” means a calendar quarter ending on the last day of March, June, September or December.

 

1.19         “ Calendar Year ” means a period of time commencing on January 1 and ending on the following December 31.

 

1.20         “ CFR ” means the United States Code of Federal Regulations.

 

1.21         “ Change of Control ” means (a) the closing of a merger, tender offer, share exchange, reorganization, consolidation or other similar transaction involving Licensee or Licensee Parent in which its shareholders immediately prior to such transaction would hold [*****] or less of the securities or other ownership or voting interests representing the equity of the surviving or resulting entity immediately after such transaction, (b) the individuals who, as of the Effective Date, constitute the board of directors of Licensee or Licensee Parent (the “ Incumbent Board ”) ceasing for any reason to, as applicable, constitute [*****] or more of the board of directors of Licensee or Licensee Parent; provided , that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by Licensee’s or Licensee Parent’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs (i) as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the board of directors of Licensee or Licensee Parent, or (ii) through the exercise of a contractual or similar right granted by Licensee or Licensee Parent at or around the time of such assumption of office, or (c) any Disposition or series of Dispositions of assets (including securities) of the Licensee Parent, Licensee or any Affiliate of Licensee Parent (each, for the purposes of this Section 1.21, a “ Licensee Change of Control Party ”) which (i) occurs after the Effective Date; and (ii) involves assets that constitute or account for [*****] or more or the consolidated net revenues, net income or assets of the relevant Licensee Change of Control Party (for an individual Disposition, measured as of the time of the Disposition and for a series of Dispositions, measured as of the time of the then-most recent Disposition).  For the purposes of this Section 1.21, a “ Disposition ” means any disposition of assets, including any direct or indirect sale, lease, exchange, transfer, contribution, license, spinoff, recapitalization, dividend, grant or other disposition, with or without value; provided , however that any sale of inventory by a Licensee Change of Control Party in the ordinary course of business, an offering of debt or equity securities in a public financing, or any

 

*****Omitted pursuant to a confidential treatment request.

 

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pledge of assets to secure acquisition debt financing on customary terms which would not involve the issuance of equity that would otherwise result in a Change of Control, shall not be deemed a Disposition hereunder.

 

1.22         “ Clinical Trial ” means a Phase 1 Clinical Trial, a Phase 2 Clinical Trial, a Phase 3 Clinical Trial or a Phase 4 Clinical Trial.

 

1.23         “ Clinical Trial Summary ” has the meaning set forth in Section 5.7(a).

 

1.24         “ CMC ” means the chemistry, manufacturing and controls section of an NDA.

 

1.25         “ Combination Product ” means any product that comprises (a) the Compound and (b) at least one clinically active therapeutic, prophylactic or diagnostic ingredient or component (whether packaged together or in the same formulation) that is not the Compound.

 

1.26         “ Commercialization Force ” has the meaning set forth in Section 16.2(b).

 

1.27         “ Commercialization Plan ” has the meaning set forth in Section 7.2(a)(i).

 

1.28         “ Commercialize ”, “ Commercializing ” or “ Commercialization ” means all activities directed to the marketing, promotion, selling or offering for sale of a product, including obtaining pricing and reimbursement approvals, planning, market research, pre-marketing, advertising, educating, marketing, promoting, importing, exporting, distributing and post-marketing safety surveillance and reporting.  For clarity, “Commercialization” shall not include any activities related to clinical research, Manufacturing or Development of Licensed Product.

 

1.29         “ Commercially Reasonable Efforts ” means, with respect to the efforts to be expended by a Party with respect to any objective, reasonable, diligent, good faith efforts to accomplish such objective as a similarly situated (with respect to size, stage of development, and assets) biotechnology or pharmaceutical company, as the case may be, would use to accomplish a similar objective under similar circumstances exercising reasonable business judgment; provided , that, with respect to the Development and Commercialization of the Compound or the Licensed Product, such efforts shall be substantially equivalent to those efforts and resources that a similarly situated (with respect to stage of development) biotechnology or pharmaceutical company, as the case may be, would typically devote to its own internally discovered compounds or products of similar market potential at a similar stage in their development or product life, including those with respect to which it does not owe license payments, milestone payments, royalties or similar financial obligations to licensors or other Persons, and based on conditions then prevailing, with the goal of maximizing revenue potential.  Commercially Reasonable Efforts shall be determined on a country-by-country basis.

 

1.30         “ Competing Licensed Product ” means any pharmaceutical or biologic product or medical device that either contains (a) the Compound or (b) other compounds that act at least in part through direct interaction with potassium channels to improve neurological function in MS, spinal cord injury or other demyelinating conditions.

 

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1.31                            “ Compound ” means any compound known as an aminopyridine, as well as isomers, salts and derivatives thereof, alone or in combination with other active or inactive components, including 4-aminopyridine and 3-4 di-aminopyridine.

 

1.32                            “ Confidential Information ” means, with respect to a Party or its Affiliates (the “ Disclosing Party ”), information, regardless of the form in which that information is constituted, which (a) is treated by the Disclosing Party as confidential; and (b) relates either directly or indirectly to the business of such Disclosing Party.  For the avoidance of doubt, reports delivered under Sections 5.3 and 7.3 of this Agreement shall be deemed the Confidential Information of the Party delivering such report.

 

Confidential Information of the Disclosing Party excludes any information that the other Party or its Affiliates (the “ Receiving Party ”) can establish by written records:

 

(a)           was known by the Receiving Party prior to the receipt from the Disclosing Party;

 

(b)           was disclosed to the Receiving Party by a Third Party having the right to do so;

 

(c)           was, or subsequently became, publicly known through no fault of the Receiving Party, its Affiliates or any of the officers, directors, employees or agents of the Receiving Party or its Affiliates; or

 

(d)           was concurrently or subsequently developed by personnel of the Receiving Party without having had access to the Disclosing Party’s Confidential Information.

 

1.33                            “ Control ” or “ Controlled ” means, with respect to any Know-How or Patent Right, the possession by a Party or its Affiliate, whether by ownership, license or otherwise (other than pursuant to a license granted under this Agreement), of the ability to grant the right to access or use, or to grant a license or a sublicense under, or to grant the right to disclose or transfer, such Know-How or Patent Right, without violating the terms of any agreement or other arrangement with, or the rights of, any Third Party; provided , however , that any Know-How or Patent Rights licensed or acquired by either Party after the Effective Date pursuant to an agreement with a Third Party shall only be deemed to be Controlled by such Party if the Parties agree to such addition in accordance with Section 2.8.

 

1.34                            “ Cover ”, “ Covered ” or “ Covering ” means, (a) with respect to a patent, that, in the absence of a license granted to a Person under a Valid Claim included in such patent, the practice by such Person of an invention claimed in such patent would infringe such Valid Claim, or (b) with respect to a patent application, that, in the absence of a license granted to a Person under a Valid Claim included in such patent application, the practice by such Person of an invention claimed in such patent application would infringe such Valid Claim if such patent application were to issue as a patent.

 

1.35                            “ Curable Elan Agreement Breach ” has the meaning set forth in Section 7.2(c)(i).

 

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1.36         “ Curable Elan Agreement Cure ” has the meaning set forth in Section 7.2(c)(i).

 

1.37         “ De Minimis Overage Amount ” has the meaning set forth in Section 5.6(a).

 

1.38         “ Develop ” or “ Development ” means discovery, research, preclinical development, clinical development, and regulatory activities with respect to the Compound and/or the Licensed Product, including test method development and stability testing, design, compatibility testing, toxicology, animal efficacy studies, invivo , exvivo and invitro studies, formulation, quality assurance/quality control development, statistical analysis, conducting Clinical Trials, regulatory affairs, product approval and registration, whether before or after Regulatory Approval for the Licensed Product has been obtained.  For the sake of clarity, “ Development ” includes any of the foregoing activities conducted by any Third Party, including any Third Party physician, to whom a Party or its Affiliates have provided financial or other consideration (including providing the Compound or Licensed Product) in order for such Third Party to conduct such activities (“ Funded Development ”).  For clarity, “Development” shall not include any activities related to Manufacturing or Commercialization of Licensed Product.

 

1.39         “ Development Budget ” has the meaning set forth in Section 5.2(b)(iii).

 

1.40         “ Development Collaboration Proposal ” has the meaning set forth in Section 5.4(b)(ii).

 

1.41         “ Development Costs ” means the costs and expenses incurred by a Party or its Affiliates attributable to, or reasonably allocable to, the Development of Licensed Product and that are consistent, if applicable, with the Development Plan and costs for all other Development- related activities that are deemed by the JDC to be useful for the Development of Licensed Product.  “Development Costs” shall include (i) Out-of-Pocket Costs and (ii) FTE Costs of internal personnel that are attributable or reasonably allocable to the Development of Licensed Product determined in accordance with GAAP.

 

1.42         “ Development Plan ” has the meaning set forth in Section 5.2(c).

 

1.43         “ Disposition ” has the meaning set forth in Section 1.21.

 

1.44         “ DMF ” means a Drug Master File, as defined in 21 CFR Section 314.420, as the same may be amended or re-promulgated from time to time, or any successor filing or procedure and/or its foreign equivalents.

 

1.45         “ Disclosing Party ” has the meaning set forth in Section 1.32.

 

1.46         “ Educational Materials and Activities ” means any non-promotional (a) printed materials, visual aids or other materials used to educate Third Parties, including physicians and other medical personnel, and (b) continuing education, seminars, exhibits, advisory boards, consulting meetings and other medical affairs activities and efforts, in each case of clause (a) and (b), relating to or directly or indirectly regarding the (x) Licensed Product in the Field in the Territory or (y) except with respect to materials and activities relating to and intended for the

 

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support of products of a Party and/or its Affiliates other than Licensed Products, disease areas in which the Licensed Product might be used in the Field in the Territory.

 

1.47         “ Effective Date ” has the meaning set forth in the preamble.

 

1.48         “ Elan ” means Elan Pharma International Limited and, as applicable, its Affiliates and its successors and assigns.

 

1.49         “ Elan Consent ” means the consent among Acorda, Licensee and Elan, dated on or about the Effective Date.

 

1.50         “ Elan License Agreement ” means the Amended and Restated License Agreement between Elan (as assignee of Elan Corporation, plc) and Acorda, dated September 26, 2003, as amended from time to time.

 

1.51         “ Elan Know-How ” means all Elan Know-How (as defined in the Elan License Agreement) as licensed and provided to Acorda pursuant to the Elan License Agreement.

 

1.52         “ Elan Patent Rights ” means all Patent Rights licensed to Acorda under the Elan License Agreement, all of which Elan Patent Rights that are in existence as of the Effective Date are included with certain other Patent Rights Controlled by Acorda in Exhibit A .

 

1.53         “ Elan Royalty Rate ” has the meaning set forth in Section 8.3(b).

 

1.54         “ Elan Supply Agreement ” means the Supply Agreement between Elan (as assignee of Elan Corporation, plc) and Acorda, dated September 26, 2003, as amended from time to time.

 

1.55         “ Elan Trademark ” has the meaning set forth in Section 7.5(b)(iii).

 

1.56         “ EMEA ” means the European Medicines Agency or any successor agency thereof.

 

1.57         “ EU ” means the European Union, as it may be expanded or contracted from time to time, Iceland, Liechtenstein and Norway.

 

1.58         “ Excess Overage Amount ” has the meaning set forth in Section 5.6(a).

 

1.59         “ Exchange Act ” has the meaning set forth in Section 13.5(a).

 

1.60         “ Executive Officer ” has the meaning set forth in Section 3.5(b).

 

1.61         “ Expert Panel ” has the meaning set forth in Section 3.5(c)(i).

 

1.62         “ Exploit ” and, with correlative meaning, “ Exploitation ” means to Develop, Commercialize, make, have made, package, use, import, export, promote, distribute, offer for sale, sell and otherwise exploit.

 

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1.63         “ FDA ” means the United States Food and Drug Administration or any successor agency thereto.

 

1.64         “ Field ” means the Treatment of all Indications and all forms of administration in humans; provided , however , that if Licensee declines to participate in the Development of an Indication or form of administration in accordance with Section 5.4(b)(ii), such Indication and/or form of administration (in such case, only with respect to the Indication for which the form of administration is so Developed) shall no longer be deemed part of the Field; provided , further , that notwithstanding anything in this Agreement, in no event shall the following be excluded from the Field:  (a) oral administration of the Licensed Product for the Treatment of MS or any sign or symptom of MS or (b) the Treatment of any Indication through any dosage or form that also Treats or can be reasonably expected to Treat MS or any sign or symptom of MS.  With respect to any intellectual property rights licensed, owned or controlled by Elan, the Field shall be limited to oral prescription medicine for the treatment of humans and shall be subject to and limited by any contractual obligations of Elan under the Technology Transfer and License Agreement dated July 26, 1999 between Merck & Co. Inc. and Elan (the “ Merck/Elan Agreement ”).

 

1.65         “ First Commercial Sale ” means, with respect to the Licensed Product in a country in the Territory, the first sale, for use or consumption by the general public, of the Licensed Product in such country by Licensee or its Affiliate or Third Party Distributors after the granting by the relevant Regulatory Authorities of Regulatory Approval of the Licensed Product in the Field.  Sales or transfers of reasonable quantities of the Licensed Product for Clinical Trial purposes or for compassionate or similar use, shall not be considered a First Commercial Sale.

 

1.66         “ FTE ” shall mean [*****] hours of work devoted to or in support of Development of the Licensed Product in accordance with the Development Plan that is carried out by one or more employees, contract personnel or consultants of a Party, measured in accordance with such Party’s normal time allocation practices from time to time.  In no event shall an individual account for more than one FTE year in any Calendar Year.

 

1.67         “ FTE Cost ” means, for any period, the FTE Rate multiplied by the number of FTEs in such period.

 

1.68         “ FTE Rate ” means a rate of [*****] dollars ($[*****]) per FTE per Calendar Year (pro-rated for the period beginning on the Effective Date and ending at the end of the first Calendar Year) for personnel engaged in Development activities. The FTE Rate is “fully burdened” and will cover employee salaries and such facilities and equipment and other materials and services including ordinary laboratory consumables procured from distributors of laboratory products as they may use.

 

1.69         “ Funded Development ” has the meaning set forth in Section 1.38.

 

1.70         “ GAAP ” means United States Generally Accepted Accounting Principles, consistently applied.

 

1.71         “ Global Branding Strategy ” has the meaning set forth in Section 7.5(a).

 

*****Omitted pursuant to a confidential treatment request.

 

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1.72         “ Incumbent Board ” has the meaning set forth in Section 1.21.

 

1.73         “ IND ” means an Investigational New Drug Application filed with the FDA under 21 CFR Part 312 or similar foreign application or submission in any country or group of countries for permission to conduct human clinical investigations.

 

1.74         “ Indemnified Party ” means (a) Acorda, with respect to any claim for which an Acorda Indemnitee is entitled to indemnification from Licensee pursuant to Section 11.1, or (b) Licensee, with respect to any claim for which a Licensee Indemnitee is entitled to indemnification from Acorda pursuant to Section 11.2.

 

1.75         “ Indemnifying Party ” has the meaning set forth in Section 11.3.

 

1.76         “ Indication ” shall mean any human disease or condition, or sign or symptom of a human disease or condition.

 

1.77         “ JCC ” has the meaning set forth in Section 3.2.

 

1.78         “ JDC ” has the meaning set forth in Section 3.2.

 

1.79         “ Joint IP ” means Joint Know-How and Joint Patent Rights.

 

1.80         “ Joint Know-How ” means all Know-How invented, developed, conceived, reduced to practice or authored jointly by or on behalf of Licensee or its Affiliates, on the one hand, and Acorda or its Affiliates, on the other hand, during the Term that arise out of or relate to this Agreement, including the Exploitation of the Compound or Licensed Product.

 

1.81         “ Joint Patent Rights ” means all Patent Rights throughout the world covering the Joint Know-How.

 

1.82         “ Joint Steering Committee ” or “ JSC ” means the joint steering committee formed by the Parties as described in Section 3.1(a).

 

1.83         “ Know-How ” means any non-public information, ideas, data, inventions, works of authorship, trade secrets technology, or materials, including formulations, molecules, assays, reagents, compounds, compositions, human or animal tissue, samples or specimens, and combinations or components thereof, whether or not proprietary or patentable, and whether stored or transmitted in oral, documentary, electronic or other form, including all Regulatory Documentation.

 

1.84         “ Law ” means any law, statute, rule, regulation, ordinance, regulatory guidance or other pronouncement having the effect of law, of any federal, national, multinational, state, provincial, county, city or other political subdivision, including (a) good clinical practices and adverse event reporting requirements, guidance from the International Conference on Harmonization or other generally accepted conventions, and all other rules, regulations and requirements of the FDA and other applicable Regulatory Authorities, (b) the Foreign Corrupt Practices Act of 1977, as amended, or any comparable laws in any country, and (c) all export control laws.

 

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1.85         “ LIBOR Rate ” means, for any applicable interest period, the rate per annum equal to the average of the one-month U.S. Dollar British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Thomson Reuters (or, if Thomson Reuters does not publish quotations of BBA LIBOR, another commercially available source providing quotations of BBA LIBOR as reasonably selected by agreement of the Parties), with the average determined by adding the BBA LIBOR for each day on which the BBA LIBOR is published during the applicable period, divided by the number of such days during such period.  If such rate is not available at such time for any reason, then the rate for that interest period will be determined by such alternate method as reasonably selected by agreement of the Parties.

 

1.86         “ Licensed IP ” means, collectively, Acorda IP and Acorda’s and its Affiliates’ interest in Joint IP.

 

1.87         “ Licensed Know-How ” means, collectively, Acorda Know-How and Acorda’s and its Affiliates’ interest in Joint Know-How.

 

1.88         “ Licensed Patent Rights ” means, collectively, Acorda Patent Rights and Acorda’s and its Affiliates’ interest in Joint Patent Rights.

 

1.89         “ Licensed Product ” means any pharmaceutical product containing the Compound, alone or in combination with other active or inactive components.  As used in this Agreement, except where not appropriate in context, the Licensed Product also means the Compound contained in the Licensed Product.

 

1.90         “ Licensed Product Trade Dress ” has the meaning set forth in Section 7.5(b)(ii).

 

1.91         “ Licensed Product Trademark ” has the meaning set forth in Section 7.5(b)(ii).

 

1.92         “ Licensee ” has the meaning set forth in the preamble.

 

1.93         “ Licensee Change of Control Party ” has the meaning set forth in Section 1.21.

 

1.94         “ Licensee Indemnitees ” means Licensee, its Affiliates and the directors, officers, employees and agents of Licensee and its Affiliates.

 

1.95         “ Licensee IP ” means, collectively, Licensee Know-How and Licensee Patent Rights; provided , however , that Licensee IP specifically excludes Joint IP.

 

1.96         “ Licensee Know-How ” means all Know-How that is Controlled by Licensee or its Affiliates as of the Effective Date or that comes under the Control of Licensee or its Affiliates during the Term, that arise out of or relate to this Agreement and which (a) is at any time actually used or anticipated or intended to be used by Licensee in connection with the Development or Commercialization of the Licensed Product, (b) is the subject of a joint Development activity conducted by or with the agreement of the Parties in connection with the Development or Commercialization of the Licensed Product or (c) Licensee otherwise agrees is Licensee Know-How; provided, however , that Licensee Know-How specifically excludes Joint Know-How.

 

1.97         “ Licensee Parent ” means Biogen Idec, Inc.

 

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(b)                                  tariffs, duties, excises and sales taxes imposed upon and paid directly with respect to such sales or other dispositions (reduced by any refunds of such taxes deducted in the calculation of Net Sales for prior periods and, for the avoidance of doubt, no deduction shall be permitted for income, withholding, corporate or similar taxes);

 

(c)                                   amounts repaid or credited by reason of rejections, defects, recalls or returns (not to exceed [*****] of amounts invoiced) or because of adjustments or billing errors;

 

(d)                                  amounts invoiced for freight, shipping, insurance and other transportation expenses, provided , that, if a shipment contains product(s) other than the Licensed Product, then a reasonable allocation shall be made that does not allocate freight, shipping, insurance and other transportation expenses disproportionately to the Licensed Product as compared to such other product(s); and

 

(e)                                   government mandated rebates (such as those granted pursuant to programs similar to any state or federal Medicare, Medicaid or similar program).

 

There shall be no double counting in determining the foregoing deductions from gross amounts invoiced to calculate Net Sales.  The deductions set forth above in this Section 1.107 shall be determined in accordance with GAAP, as consistently applied by Licensee and Licensee’s Affiliates and Third Party Distributors across all of their products.  The amounts set forth in clause (a) above shall only be deducted from gross invoiced sales where gross invoiced sales before deductions are non-discounted gross sales amounts.

 

Transfers of the Licensed Product among Licensee, Licensee’s Affiliates and Licensee’s Third Party Distributors for the purpose of subsequent resale to Third Parties will not generate Net Sales; with respect to such transfers, the gross amounts invoiced in connection with the subsequent resale of the Licensed Product to Third Parties will be included in the calculation of Net Sales.

 

In the event Licensee, its Affiliates or Third Party Distributors sells the Licensed Product together with other products to Third Parties in a particular country and the price attributable to the Licensed Product is less than the average price of “arms length” sales of the Licensed Product alone in the particular country for the reporting period in which such sales occur (such sales to be excluded from the calculation of the average price of “arms length” sales), Net Sales for any such sales shall be the average price of “arms length” sales by Licensee, its Affiliates or Third Party Distributors of the Licensed Product alone and in the country during the reporting period in which such sales occur.  If the average price of “arms length” sale of the Licensed Product cannot be determined in any given country, the Net Sales will be determined by the value of the Licensed Product sold to similar customers in countries with similar pricing and reimbursement structures and for similar quantities.  Any dispute as to the determination of fair market value that cannot be resolved through discussion between the Parties shall be determined in accordance with Section 3.5(c)(iii).

 

Notwithstanding the foregoing, in the event a Licensed Product is sold as a Combination Product, in determining the Acorda Royalty Rate due hereunder Net Sales shall be calculated by [*****]. In the event no such separate sales are made by Licensee or its Affiliates or Third Party

 

*****Omitted pursuant to a confidential treatment request.

 

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Distributors, Net Sales of the Combination Product shall be calculated in a manner to be negotiated and agreed upon by the Parties, reasonably and in good faith, prior to any sale of such Combination Product, which shall be based upon the respective fair market values of the active components of such Combination Product.  If the Parties are unable to reach agreement regarding such issue within thirty (30) days after commencing good faith negotiations, the issue shall be referred to the JCC (and will be subject to dispute resolution in accordance with Section 3.5(c)(iii)); provided , that, unless Acorda otherwise agrees, in Acorda’s sole discretion, such negotiated method for calculating Net Sales of a Combination Product shall not result in average per unit attributed price for the Licensed Product, on a per unit of Combination Product basis, that is less than [*****] of the average per unit price over the preceding [*****] for which the Licensed Product was sold in such country as a non-combination product.  For purposes of clarity, this paragraph shall not apply to the Elan Royalty Rate.

 

1.108                      “ Non-Breaching Party ” has the meaning set forth in Section 15.2(b).

 

1.109                      “ Notifying Party ” has the meaning set forth in Section 6.2(b).

 

1.110                      “ Out-of-Pocket Costs ” means, with respect to certain activities hereunder, direct expenses paid or payable by either Party or its Affiliates to Third Parties and specifically identifiable and incurred to conduct such activities for the Licensed Product (which may include items such as general laboratory supplies used in Development or database acquisition or expansion in accordance with Section 6.2(a)).

 

1.111                      “ Party ” means Acorda or Licensee, “ Parties ” means Acorda and Licensee.

 

1.112                      “ Patent Rights ” means (a) patent applications (including provisional applications); (b) any patents issuing from such patent applications (including certificates of invention); (c) all patents and patent applications based on, corresponding to or claiming the priority date(s) of any of the foregoing; (d) rights derived from any of (a)-(c), including any substitutions, extensions (including supplemental protection certificates), registrations, confirmations, reissues, divisionals, continuations, continuations-in-part, re-examinations, renewals, revalidations, revivals, patents of addition and foreign counterparts thereof; and (e) all patents and patent applications claiming overlapping priority therefrom.

 

1.113                      “ Patent Term Extension ” means any patent term extension, adjustment or restoration or supplemental protection certificates.

 

1.114                      “ Person ” means any individual, corporation, limited or general partnership, limited liability company, joint venture, trust, unincorporated association, governmental body, authority, bureau or agency, or any other entity or body.

 

1.115                      “ Person Day ” means eight (8) hours of work.

 

1.116                      “ Pharmacovigilance Agreement ” has the meaning set forth in Section 6.2(f).

 

1.117                      “ Phase 1 Clinical Trial ” means a human clinical trial that provides for the first introduction into humans of the Licensed Product and that is intended to initially evaluate the

 

*****Omitted pursuant to a confidential treatment request.

 

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safety, tolerance or pharmacological or antigenic effects of the Licensed Product in human subjects, or that is otherwise described in 21 CFR §312.21(a) or its foreign counterpart.

 

1.118                      “ Phase 2 Clinical Trial ” means a human clinical trial that is intended to initially evaluate the dosing and effectiveness of the Licensed Product, and to further evaluate the safety of the Licensed Product, or that is otherwise described in 21 CFR §312.21(b) or its foreign counterpart.

 

1.119                      “ Phase 3 Clinical Trial ” means a human clinical trial that is prospectively designed to demonstrate statistically whether the Licensed Product is safe and effective to control, mitigate, prevent, treat or cure a particular Indication in a manner sufficient to obtain Regulatory Approval to market such Licensed Product, or that is otherwise described in 21 CFR §312.21(c) or its foreign counterpart.

 

1.120                      “ Phase 4 Clinical Trial ”  means a human clinical trial (other than a Phase 1 Clinical Trial, Phase 2 Clinical Trial or Phase 3 Clinical Trial) which is conducted on the Licensed Product and after Regulatory Approval of the Licensed Product has been obtained from an appropriate Regulatory Authority, and includes (a) trials conducted voluntarily after Regulatory Approval by one or both of the Parties for enhancing marketing or scientific knowledge of an approved Indication or (b) trials conducted after Regulatory Approval due to request or requirement of a Regulatory Authority or as a condition of a previously granted Regulatory Approval.

 

1.121                      “ Prior Confidentiality Agreement ” means the Confidential Disclosure Agreement between the Parties, dated March 16, 2009, as amended on April 16, 2009.

 

1.122                      “ Promotional Materials ” means any printed or other materials bearing the name (trade name or generic name) used to promote the Licensed Product in any country in the world, including brochures, journal ads, selling aids, posters, reprints, video or audio tapes, press releases, Internet pages and websites, radio or television advertisements and textbooks created or distributed by a Party, its Affiliates or, with respect to Acorda, its licensees (other than Licensee) and, with respect to Licensee, its Third Party Distributors, and any other items defined as labeling or advertisements in accordance with applicable Law.

 

1.123                      “ Proposed Development Plan Amendment ” has the meaning set forth in Section 5.4(b)(i).

 

1.124                      “ Publication ” means any publication in a scientific journal, any abstract to be presented to any scientific audience, any presentation at any scientific conference, any other scientific presentation and any other oral, written or electronic disclosure directed to a scientific audience which pertains to the Compound, the Licensed Product or the use of the Licensed Product.

 

1.125                      “ Receiving Party ” has the meaning set forth in Section 1.32.

 

1.126                      “ Reconciliation Payment ” has the meaning set forth in Section 5.6(c).

 

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1.127                      “ Region ” means each group of countries identified as a “Region” in Exhibit G .

 

1.128                      “ Regulatory Approval ” means, with respect to a pharmaceutical or biological product or medical device in a country or regulatory jurisdiction, the act of a Regulatory Authority necessary for the marketing and commercial sale of such product in such country or regulatory jurisdiction (including pricing and/or reimbursement approval in any country in which pricing and/or reimbursement approval is required by applicable Laws), including the approval of a NDA by the FDA.

 

1.129                      “ Regulatory Authority ” means any applicable government regulatory authority involved in the granting of Regulatory Approval for a Licensed Product in a country or regulatory jurisdiction, including the FDA, the EMEA and foreign equivalents thereof.

 

1.130                      “ Regulatory Documentation ” means, with respect to the Compound and Licensed Product, all INDs or other regulatory applications submitted to any Regulatory Authority, Regulatory Approvals, pre-clinical and clinical data and information, regulatory materials, drug dossiers, master files (including DMFs), and any other reports, records, regulatory correspondence and other materials relating to Development or Regulatory Approval of the Compound or Licensed Product including those materials necessary to Develop, Manufacture, distribute, sell or otherwise Commercialize the Licensed Product, including any information that relates to pharmacology, toxicology, chemistry, manufacturing and controls data, batch records, safety and efficacy, and any safety database.

 

1.131                      “ Regulatory Exclusivity ” means, with respect to a country, any exclusive marketing rights or data exclusivity rights conferred by any applicable Regulatory Authority with respect to the Licensed Product in such country, other than a Patent Right.

 

1.132                      “ Right of Reference or Use ” means a “Right of Reference or Use” as that term is defined in 21 CFR §314.3(b), and any foreign equivalents.

 

1.133                      “ Royalty Term ” means, with respect to the Licensed Product and a country in the Territory, the period of time beginning on the Effective Date and continuing until the earlier of (a) the termination of this Agreement, pursuant to and to the extent set forth in Article 15, and (b) the latest of (i) the expiration of the last Valid Claim of the Licensed Patent Rights which Covers the Exploitation of the Licensed Product in such country; (ii) fifteen (15) years after the First Commercial Sale of the Licensed Product in such country; (iii) the expiration of Regulatory Exclusivity in such country; and (iv) the existence of Competition (as defined in the Elan License Agreement) in such country.

 

1.134                      “ SEC ” has the meaning set forth in Section 10.2(c).

 

1.135                      “ Serious Adverse Drug Experience ” has the meaning set forth in Section 6.2(b).

 

1.136                      “ Severed Clause ” has the meaning set forth in Section 16.10.

 

1.137                      “ Specifications ” means (a) with respect to the bulk Licensed Product, the specifications for the bulk Licensed Product, as determined pursuant to the Elan Supply

 

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Agreement and Section 6.3 of the Elan License Agreement and as may be amended in accordance with the Supply Agreement, and (b) with respect to the packaging and labeling for orders of the Licensed Product for sale in a particular country in the Territory, the specifications therefor mutually agreed upon by the Parties in accordance with the Supply Agreement.

 

1.138                      “ Subject Disclosure ” has the meaning set forth in Section 10.4.

 

1.139                      “ Supply Agreement ” means the supply agreement entered into by Acorda and Licensee as described in Section 2.7.

 

1.140                      “ Term ” has the meaning set forth in Section 15.1.

 

1.141                      “ Terminated Country ” means with respect to a termination of this Agreement pursuant to Section 15.2, 16.2 or 16.4, as applicable, (i) the country(ies) subject to such termination; (ii) with respect to one or more Regions subject to such termination, all country(ies) in such Region(s) and (iii) with respect to termination of this Agreement in its entirety, all countries in the world.

 

1.142                      “ Territory ” means the world, excluding the Acorda Territory.

 

1.143                      “ Third Party ” means any Person other than the Parties and their Affiliates.

 

1.144                      “ Third Party Distributor ” has the meaning set forth in Section 2.1(c)(i).

 

1.145                      “ Time-Constrained Commercial Diligence Determination ” has the meaning set forth in Section 7.2(c)(ii).

 

1.146                      “ Treatment ” (or, when required by context, “ Treat ” or “ Treats ”) means, with respect to an Indication, the treatment, control, mitigation, prevention, cure or diagnosis of such Indication.

 

1.147                      “ Unexpected Adverse Drug Experience ” has the meaning set forth in Section 6.2(b).

 

1.148                      “ Valid Claim ” means a claim (a) of any issued, unexpired patent that has not been revoked or held unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction from which no appeal can be taken, or with respect to which an appeal is not taken within the time (including any extensions) allowed for appeal, and that has not been disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (b) of any patent application that has been pending less than [*****] from the earliest date on which such patent application claims priority and which claim has not been irretrievably cancelled, withdrawn or abandoned, provided , that, if, at any time after such [*****] period, a patent issues from such patent application with such claim, such claim shall be a Valid Claim, effective as of the date of issue of such patent.

 

*****Omitted pursuant to a confidential treatment request.

 

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1.149                      Construction .  In construing this Agreement, unless expressly specified otherwise;

 

(a)                                   references to Sections and Exhibits are to sections of, and exhibits to, this Agreement;

 

(b)                                  except where the context otherwise requires, use of either gender includes the other gender, and use of the singular includes the plural and vice versa;

 

(c)                                   headings and titles are for convenience only and do not affect the interpretation of this Agreement;

 

(d)                                  any list or examples following the word “including” shall be interpreted without limitation to the generality of the preceding words;

 

(e)                                   except where the context otherwise requires, the word “or” is used in the inclusive sense;

 

(f)                                     all references to “dollars” or “$” herein shall mean U.S. Dollars; and

 

(g)                                  each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof.  In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions.

 

2.                                        LICENSES

 

2.1                                  Licenses to Licensee .

 

(a)                                   Licensed IP .  Subject to the terms and conditions of this Agreement, Acorda hereby grants to Licensee and its Affiliates during the Term an exclusive, royalty-bearing, non-sublicenseable (except in accordance with Section 2.1(c)), non-transferable (except in accordance with Section 16.1) license, under the Licensed IP, to (i) Exploit (other than to make or have made) the Licensed Product in the Field in the Territory and (ii) Develop the Licensed Product outside the Territory for the sole purpose of Exploiting the Licensed Product in the Territory; provided , that Licensee has first submitted a proposal to conduct such activity in accordance with Section 5.4(b)(ii), and such proposal has been reviewed by the JDC and all disputes regarding it, if any, have been resolved in accordance with Section 3.5(c).

 

(b)                                  Trademarks and Trade Dress . Subject to the terms and conditions of this Agreement, Acorda hereby grants to Licensee and its Affiliates during the Term a non-exclusive, non-sublicenseable (except in accordance with Section 2.1(c)), non-transferable (except in accordance with Section 16.1) license to use the Licensed Product Trademarks and Licensed Product Trade Dress solely to Exploit (other than to make or have made) the Licensed Product in the Field in the Territory.

 

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(c)                                   Sublicenses to Third Party Distributors .

 

(i)                                      Notwithstanding anything in this Agreement to the contrary, Licensee and its Affiliates shall be permitted to sublicense to a Third Party (such Third Party sublicensee, a “ Third Party Distributor ”) the rights to distribute, import, market, promote and sell the Licensed Product granted to Licensee in Sections 2.1(a) and 2.1(b) in a country or countries in the Territory solely to the extent (A) with respect to any Patent Rights or Know How of Elan, as permitted by Elan; (B) that neither Licensee nor its Affiliates are distributing, marketing, promoting and selling their own products, without the use of a Third Party distributor, in such country or countries; (C) such rights are necessary for such Third Party Distributor to distribute, market, promote and sell the Licensed Product in such country or countries; and (D) Licensee agrees to reimburse Acorda and Elan in respect of any adverse tax consequences for Acorda or Elan resulting from such Third Party Distributor arrangement; provided , however that no Third Party Distributor shall have the right to sublicense the rights granted to it in this Section 2.1(c).

 

(ii)                                   Notwithstanding anything in this Agreement to the contrary but subject to Elan’s consent, during the Term, Licensee and its Affiliates shall be permitted to sublicense to a Third Party Distributor the rights to package and label the Licensed Product in a country or countries in the Territory solely to the extent that such rights are necessary for such Third Party Distributor to package and label the Licensed Product in such country or countries.  Acorda represents and warrants that Elan has agreed in writing to consent to sublicenses to be granted under this Section 2.1(c)(ii) to the extent provided in the Elan Consent.  Except to the extent set forth in Section 2.1(c)(i) above, in no event shall a sublicense granted under this Section 2.1(c)(ii) give a Third Party Distributor the rights to Commercialize a Licensed Product.  Licensee shall provide to Acorda, and Acorda shall provide to Elan, all amounts to which Elan is entitled under the Elan License Agreement and the Elan Supply Agreement as a result of the granting of such rights to such Third Party Distributor.

 

(iii)                                In the event that a Third Party Distributor is entitled to access to Confidential Information disclosed by Acorda to Licensee, the agreement between the Third Party Distributor and Licensee shall contain obligations of confidentiality no less onerous than those set out in this Agreement.  Acorda shall be furnished with a copy of the executed sublicense or other agreement contemplated by this Section 2.1(c).  Any sublicense permitted by this Section 2.1(c) shall be subject to the terms of this Agreement, but excluding the right to grant a further sublicense, and must be consistent with and require the Third Party Distributor to meet all applicable obligations and requirements of this Agreement and the Acorda Third Party Agreements.  Licensee shall ensure that Acorda and Elan shall have the same rights of audit and inspection with respect to a Third Party Distributor as granted to Acorda and Elan, respectively, pursuant to this Agreement concerning Licensee.  Licensee shall remain responsible for all acts and omissions of any Third Party Distributor as if such acts and omissions were by Licensee.  Any sublicense or other agreement permitted by this Section 2.1(c) shall automatically and immediately terminate to the extent of termination of this Agreement in whole or as to the relevant country or countries.

 

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2.2                                  Limitation on License Grants .

 

(a)                                   In the event that Licensee or its Affiliates wish to Exploit a Combination Product for the treatment of spinal cord injury, Licensee shall seek the prior written consent of Acorda to extend the licenses granted by Acorda to Licensee pursuant to this Agreement to Exploit such Combination Product.  Acorda shall not withhold consent to a request by Licensee under this Section 2.2(a) unless Elan withholds its consent under the Elan License Agreement to extend such license.  In the event that Acorda’s consent is furnished, the Parties shall negotiate in good faith the terms of an agreement with respect to such Combination Product, including, where applicable, such amendments as are appropriate to this Agreement.   If the Parties are unable to reach agreement on such terms, the matter shall be referred to resolution in accordance with Section 3.5(c)(iii).

 

(b)                                  Third Party Agreements .  Licensee acknowledges and agrees that it has received a copy of the Acorda Third Party Agreements listed in Exhibit D , including the Elan License Agreement, and that the rights, licenses and sublicenses granted by Acorda to Licensee in this Agreement are subject to the terms of the Acorda Third Party Agreements and the rights granted to the Third Party counterparties thereunder.  Licensee covenants to comply with, and to cause its Affiliates and Third Party Distributors to comply with, the Acorda Third Party Agreements, and to take any action reasonably requested by Acorda, to prevent any potential breach of any terms of such Acorda Third Party Agreements.  To the extent there is a conflict between the terms of any Acorda Third Party Agreement and the rights granted to licensee hereunder, the terms of such Acorda Third Party Agreement shall control solely with respect to the Patent Rights and Know-How owned or controlled by such Third Party licensor.

 

(c)                                   Restrictive Covenants .

 

(i)                                      Subject to the rights granted to Licensee, its Affiliates and its Third Party Distributors in Section 2.1 and applicable Law, Licensee hereby covenants and agrees that it shall not (and shall cause its Affiliates and its Third Party Distributors not to), either directly or indirectly (A) Exploit the Licensed Product outside the Territory or Field, including through the actions of key opinion leaders, or (B) market, detail, promote, offer to sell, sell, have sold, distribute or export the Licensed Product to any purchaser if Licensee, its Affiliate or Third Party Distributor knows or has reason to believe that such purchaser intends to market, detail, promote, offer to sell, sell, have sold, distribute or export the Licensed Product outside the Territory or outside the Field.  If Licensee knows or should reasonably suspect that a customer or distributor, or a customer’s distributor or customer, is engaged in the sale or distribution of the Licensed Product for use outside the Territory or outside the Field, then Licensee shall (1) within three (3) Business Days of gaining knowledge, or a reasonable suspicion, of such activities notify Acorda regarding such activities and provide all information that Acorda may reasonably request concerning such activities and (2) take all reasonable steps (including cessation of sales to such customer) necessary to limit such sale or distribution for use outside the Territory or outside the Field.  All inquiries or orders received by Licensee, its Affiliates or its Third Party Distributors for the Licensed Product to be delivered outside the Territory or outside the Field shall be referred to Acorda.

 

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(ii)                                   Subject to the rights granted to Acorda and its Affiliates in Section 2.4 and applicable Law, Acorda hereby covenants and agrees that it shall not (and shall cause its Affiliates not to), either directly or indirectly, (A) Exploit the Licensed Product in the Field outside the Acorda Territory, including through the actions of key opinion leaders or (B) market, detail, promote, offer to sell, sell, have sold, distribute or export the Licensed Product to any purchaser if Acorda or its Affiliate, knows or has reason to believe that such purchaser intends to market, detail, promote, offer to sell, sell, have sold, distribute or export the Licensed Product in the Field outside the Acorda Territory.  If Acorda knows or should reasonably suspect that a customer or distributor, or a customer’s distributor or customer, is engaged in the sale or distribution of the Licensed Product for use in the Field outside the Acorda Territory, then Acorda shall (1) within three (3) Business Days of gaining knowledge, or a reasonable suspicion, of such activities notify Licensee regarding such activities and provide all information that Licensee may reasonably request concerning such activities and (2) take all reasonable steps (including cessation of sales to such customer) necessary to limit such sale or distribution for use in the Field outside the Acorda Territory.  All inquiries or orders received by Acorda or its Affiliates for the Licensed Product in the Field to be delivered outside the Acorda Territory shall be referred to Licensee.

 

(iii)                                Licensee shall, and shall require its Affiliates and Third Party Distributors to, use Commercially Reasonable Efforts to prevent importation of the Licensed Product into the Acorda Territory, and to use (A) those methods commonly used in the industry for such purpose, including, to the extent reasonably practical, by using different packaging for the Licensed Product in the Territory than that used in the Acorda Territory, and (B) those methods commonly used by Licensee for such purpose, including (1) providing Forecasts (as defined in the Supply Agreement) for supply in each country (including Canada) in the Territory that is generally known to be a source for prescription drugs for purchase for importation to the Acorda Territory, on a country-by-country basis, based on a reasonable assessment of the number of units of Licensed Product expected to be prescribed for use by patients in such country, and (2) limiting the amount of Licensed Product shipped to each country in the Territory from which importation into the Acorda Territory is likely to occur to the percentage of Licensed Product reasonably anticipated to be sold for use in such country, based on such Forecasts provided in the preceding subclause (1).  Licensee shall use Commercially Reasonable Efforts to monitor exports of Licensed Products from the Territory, using methods commonly used in the industry for such purpose and those methods commonly used by Licensee for such purpose, including the utilization of a stock management program.  Licensee shall promptly inform Acorda of any exports of Licensed Products from the Territory and Licensee’s actions taken to prevent such exports.  Licensee shall, and shall require its Affiliates and Third Party Distributors to, take any actions which are reasonably requested by Acorda in writing and permitted by applicable Laws, to prevent exports of Licensed Products from the Territory.  Failure of Licensee to take such action shall be deemed a material breach of this Agreement.

 

(iv)                               To help ensure adequate supply within Canada and to comply with Licensee’s obligation to sell Licensed Product only in the Territory, the Parties agree that, in the event Acorda reasonably believes that the quantity of Licensed Product requested by Licensee pursuant to a Forecast (as defined in the Supply Agreement) for supply in Canada in a [*****] period exceeds a reasonably necessary amount or Acorda otherwise in good faith has concerns

 

*****Omitted pursuant to a confidential treatment request.

 

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(b)            Except as expressly provided in Sections 2.4, 7.5(b) and 15.3, all rights in and to the Licensee IP, and any trademarks or other Patent Rights or Know-How of Licensee and its Affiliates, are hereby retained by Licensee and its Affiliates.

 

(c)            Acorda and Licensee acknowledge that Elan retains, and the Development activities conducted by the Parties pursuant to this Agreement shall not limit, Elan’s rights with respect to the Elan Know-How and Elan Patent Rights as set forth in the Elan License Agreement.

 

2.6            Non-Compete .

 

(a)            Restriction on Licensee .  During the Term, and for a period of [*****] following the Term, Licensee agrees not to, and shall cause its Affiliates not to, directly or indirectly, including through any ownership interest (other than through an ownership interest of [*****] or less of a public company), Exploit any Competing Licensed Product in any country.  For the avoidance of doubt, Licensee may, during the Term, Exploit (other than to make or have made) Licensed Product solely as provided in this Agreement.

 

(b)            Restriction on Acorda .  During the Term, and for a period of [*****] following the Term, Acorda agrees not to, and shall cause its Affiliates not to, directly or indirectly, including through any ownership interest (other than through an ownership interest of [*****] or less of a public company), Exploit any Competing Licensed Product in the Territory.  For the avoidance of doubt, Acorda may, during the Term and thereafter, Exploit Licensed Product (i) in the Acorda Territory, and (ii) in the Territory as provided in Section 2.5(a) or following termination of this Agreement.

 

2.7            Supply Agreement .  Contemporaneously with the execution of this Agreement, the Parties have entered into a supply agreement, in the form set forth in Exhibit E , pursuant to which Acorda will supply the Licensed Product to Licensee.  Licensee shall purchase all of its and its Affiliates’ and Third Party Distributors’ requirements for the Licensed Product from Acorda to the extent required under the Supply Agreement.

 

2.8            In-Licensed Technology .

 

(a)            After the Effective Date, if either Party, its Affiliates or, in the case of Licensee, its Third Party Distributors, identify the need for, or are otherwise offered, a license, covenant not to sue or similar rights to Third Party Patent Rights or Know-How that such Party, its Affiliates or, in the case of Licensee, its Third Party Distributors, in good faith believes are (i) necessary to avoid infringement or misappropriation of such Patent Right or Know-How based on the Exploitation of the Licensed Product in the Field in the Territory or (ii) necessary or useful for the Exploitation of the Licensed Product in the Field in the Territory, prior to commencing negotiations or entering into an agreement with respect to any such Third Party license or covenant, such Party shall promptly notify the other Party.  The Parties shall thereafter conduct good faith discussions regarding whether such Third Party Patent Rights or Know-How are necessary or useful for the Exploitation of the Licensed Product.

 

*****Omitted pursuant to a confidential treatment request.

 

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(b)            If the Parties agree that such Third Party Patent Rights or Know-How are necessary or useful for the Exploitation of the Licensed Product in the Field in the Territory, Acorda shall have the first right to in-license such rights on a worldwide basis; provided , however that no definitive license agreement shall be signed by either Party with regard to such rights without the other Party’s written consent, which shall not be unreasonably withheld or delayed.  The Parties shall share in the costs of such in-licensed rights as follows:

 

(i)             Each Party shall pay [*****] of any up-front license fee or other acquisition cost and milestones based on the principle that such rights in the Acorda Territory constitute [*****] of such cost and such rights in the Territory constitute [*****] of such cost; provided that if such Third Party license rights are available only in one Party’s territory, such Party shall be responsible for [*****] of such costs.  Notwithstanding anything in this Section 2.8(b)(i) to the contrary, if such Third Party license rights are available, necessary or useful in a portion of, but not in the entirety of, a Party’s territory, the Parties shall conduct good faith negotiations regarding the appropriate percentage of acquisition costs to be paid by each Party.

 

(ii)            Regardless of which Party licenses such rights, (A) each Party shall pay to the applicable Third Party licensor (or as applicable, to the licensing Party for delivery to such Third Party) [*****] royalties payable in respect of sales of products by such Party, its Affiliates, Third Party Distributors or sublicensees and (B) to the extent the Parties agree, or to the extent it is decided pursuant to Section 2.8(d), that such in-licensed rights are necessary to Exploit the Licensed Product in the Field and in the Territory without infringing such Third Party Patent Rights, Licensee shall reduce the royalty paid to Acorda pursuant to Section 8.3(a) in accordance with Section 8.3(c).  The Party that receives a sublicense from the other Party under such Third Party Patent Rights or Know-How shall submit payment to the licensing Party of all payments due under Section 2.8(b)(i) and this Section 2.8(b)(ii) promptly (but no later than fifteen (15) days after) receipt of a written request from the licensing Party.

 

(iii)           If Acorda is the Party to license such rights, Acorda’s agreement with such licensor shall thereafter be considered an Acorda Third Party Agreement and such Patent Rights and Know-How shall be included in the Acorda IP licensed hereunder.

 

(c)            To the extent that after the Effective Date either Party enters into an agreement with a Third Party pursuant to which such Party in-licenses intellectual property that is sublicensed to the other Party, the in-licensing Party shall provide a copy of the in-license agreement to the other Party.

 

(d)            If the Parties disagree on whether Third Party Patent Rights or Know-How are necessary or useful for the Exploitation of the Licensed Product in the Field in the Territory, the matter shall be referred to the JDC and any disputes elevated from the JDC shall be resolved in accordance with Section 3.5(c)(iii).

 

2.9            Section 365(n) of the Bankruptcy Code .  All rights and licenses granted under or pursuant to any section of this Agreement are and will otherwise be deemed to be for purposes of Section 365(n) of the United States Bankruptcy Code (Title 11, U.S. Code), as amended (the “ Bankruptcy Code ”), licenses of rights to “intellectual property” as defined in Section 101(35A) of the Bankruptcy Code.  The Parties will retain and may fully exercise all of

 

*****Omitted pursuant to a confidential treatment request.

 

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their respective rights and elections under the Bankruptcy Code.  Each Party agrees that the other Party, as licensee of such rights under this Agreement, will retain and may fully exercise all of its rights and elections under the Bankruptcy Code or any other provisions of applicable Law outside the United States that provide similar protection for “intellectual property.”  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party under the U.S. Bankruptcy Code or analogous provisions of applicable Law outside the United States, the other Party will be entitled to a complete duplicate of (or complete access to, as appropriate) such intellectual property and all embodiments of such intellectual property, which, if not already in such Party’s possession, will be promptly delivered to it upon such Party’s written request thereof.  Any agreements supplemental hereto will be deemed to be “agreements supplementary to” this Agreement for purposes of Section 365(n) of the Bankruptcy Code.

 

3.              GOVERNANCE

 

3.1            Joint Steering Committee .

 

(a)            The Parties shall establish a Joint Steering Committee within thirty (30) days after the Effective Date that will have the responsibility for the overall coordination and oversight of the Parties’ activities under this Agreement.  As soon as practicable following the Effective Date (but in no event more than thirty (30) days following the Effective Date), each Party shall designate its initial representatives on the JSC.  One (1) representative from each Party shall alternate in acting as the chairperson of the JSC for one Calendar Year term, with Acorda’s representative chairing the JSC for the first Calendar Year.  The chairperson shall not have any greater authority than any other representative on the JSC and shall conduct the following activities of the Joint Steering Committee: (a) calling meetings of the JSC, (b) preparing and issuing minutes of each such meeting within thirty (30) days thereafter, and (c) preparing and circulating an agenda for the upcoming meeting; provided , that the chairperson shall include any agenda items proposed by the Party of which the chairperson is not a representative.

 

(b)            Responsibilities .  The JSC shall have responsibility for:  (i) attempting to resolve any disputes and to consider any other issues brought to its attention by the Parties (including disputes regarding any proposed amendments to the Development Plan or the Commercialization Plan); and (ii) performing such other functions as appropriate to further the purposes of this Agreement, as mutually agreed upon by the Parties in writing.

 

3.2            Subcommittees .  Acorda and Licensee may establish such subcommittees of the JSC as deemed necessary by the Parties.  Each such subcommittee shall consist of the same number of representatives designated by each Party, which number shall be mutually agreed by the Parties.  Each Party shall be free to change its representatives on notice to the other or to send a substitute representative to any subcommittee meeting; provided , however , that each Party shall ensure that at all times during the existence of any subcommittee, its representatives on such subcommittee are appropriate in terms of expertise and seniority for the then-current stage of Development and Commercialization of the Licensed Product in the Field in the Territory.  Except as expressly provided in this Agreement, no subcommittee shall have the authority to bind the Parties hereunder and each subcommittee shall report to, and any decisions shall be

 

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made by, the JSC, subject to Section 3.5.  The initial two subcommittees of the JSC will be the joint development committee (the “ JDC ”) and the joint commercialization committee (“ JCC ”).

 

(a)            Joint Development Committee .

 

(i)             The JDC shall oversee Development of the Licensed Product in the Field in the Territory and any joint Development activities undertaken by the Parties.  As soon as practicable following the Effective Date (but in no event more than thirty (30) days following the Effective Date), each Party shall designate its initial representatives on the JDC.  Acorda shall appoint a person from among its representatives on the JDC to serve as the chairperson of the JDC.  The chairperson shall coordinate administrative activities of the JDC, but shall not have any greater authority than any other representative on the JDC.  Each Party shall be free to change its representatives on notice to the other or to send a substitute representative to any JDC meeting; provided , however , that each Party shall ensure that at all times during the existence of the JDC, its representatives on the JDC are appropriate in terms of expertise and seniority (including at least one member of senior management) for the then-current stage of Development of the Licensed Product in the Field in the Territory and have the authority to bind such Party with respect to matters within the purview of the JDC.

 

(ii)            Responsibilities .  The JDC shall have responsibility for (A) setting overall strategic objectives and plans related to the Development of the Licensed Product in the Field in the Territory; (B) reviewing and approving, as applicable, the Development Plan, and any amendments or revisions thereto, including any joint Development activity and all Licensee Development reports provided in accordance with Section 5.3 for the Licensed Product in the Field for the Territory; (C) monitoring each Party’s performance against the then-current Development Plan; (D) reviewing, commenting on and approving, as necessary, any Clinical Trial Summary or Clinical Trial protocol submitted by a Party to the JDC in accordance with Section 5.7; (E) reviewing and approving the Pharmacovigilance Agreement in accordance with Section 6.2; (F) reviewing and approving Licensee’s regulatory strategies for the Licensed Product in the Field for the Territory; (G) reviewing Development activities for Licensed Product for the Territory that may impact Development of the Licensed Product by Acorda for the Acorda Territory; (H) reviewing Development activities for the Licensed Product for the Acorda Territory that Acorda submits to the JDC in accordance with its reporting obligations under Section 5.3(b); and (I) facilitating the exchange of information between the Parties under this Agreement regarding the strategy for implementing the Development activities, including sharing Development data created pursuant to this Agreement and establishing procedures for the efficient sharing of information and materials necessary for the Parties’ Development of the Licensed Product for the Field in the Territory; and (J) such other responsibilities as may be assigned to the JDC pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

 

(b)            Joint Commercialization Committee .

 

(i)             The JCC shall oversee Commercialization of the Licensed Product in the Field in the Territory.  As soon as practicable following the Effective Date (but in no event more than thirty (30) days following the Effective Date), each Party shall designate its initial representatives on the JCC.  Licensee shall appoint a person from among its representatives to

 

25

 

serve as the chairperson of the JCC.  The chairperson shall coordinate administrative activities of the JCC, but shall not have any greater authority than any other representative on the JCC.  Each Party shall be free to change its representatives on notice to the other or to send a substitute representative to any JCC meeting; provided , however , that each Party shall ensure that at all times during the existence of the JCC, its representatives on the JCC are appropriate in terms of expertise and seniority (including at least one member of senior management) for the then-current stage of Commercialization of Licensed Product in the Field in the Territory and have the authority to bind such Party with respect to matters within the purview of the JCC.

 

(ii)            Responsibilities .  The JCC shall have responsibility for (A) setting overall strategic objectives and plans related to Commercialization of Licensed Product in the Field in the Territory; (B) reviewing, commenting on and approving the Commercialization Plan; (C) reviewing, commenting on or approving, as necessary, any Promotional Materials and/or Educational Materials and Activities submitted by a Party to the JCC in accordance with Section 5.8; (D) monitoring Licensee’s performance against the then-current Commercialization Plan; (E) reviewing Commercialization issues for Licensed Product in the Field in the Territory that will have an impact on Commercialization of Licensed Product in the Acorda Territory; (F) reviewing Commercialization activities for the Licensed Product in the Acorda Territory that Acorda submits to the JCC in accordance with its reporting obligations under Section 7.3(b); (G) providing a forum for the Parties to discuss the Commercialization of the Licensed Product in the Field in the Territory in the broader context of the Global Branding Strategy; and (H) such other responsibilities as may be assigned to the JCC pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.  Notwithstanding anything to the contrary in this Agreement, Licensee, its Affiliates and its Third Party Distributors, as applicable, shall determine the price at which Licensee, its Affiliates and its Third Party Distributors offer for sale and sell the Licensed Product in the Field in the Territory and Acorda, its Affiliates, licensees and distributors, as applicable shall determine the price at which Acorda, its Affiliates, licensees and distributors offer for sale and sell Licensed Product in the Acorda Territory or outside the Field (to the extent it is reasonably possible to obtain a separate price for that Indication outside the Field in the Territory).

 

3.3            Committee Membership .

 

(a)            General .  Acorda and Licensee shall each designate three (3) representatives to serve on each of the JSC, JDC and JCC by written notice to the other Party.  Either Party may designate a substitute for any of its representatives who is unable to be present at a meeting.  From time to time each Party may replace its representatives by written notice to the other Party specifying the prior representative(s) and their replacement(s).  Each Party shall ensure that at all times during the existence of the JSC, JDC and JCC, its representatives on such committee are appropriate in terms of expertise and seniority (including at least one member of senior management) for the then-current stage of Development and Commercialization of the Licensed Product in the Field in the Territory and have the authority to bind such Party with respect to matters within the purview of the JSC, JDC or JCC, as applicable.  Each Party’s representatives and any substitute for a representative shall be bound by the obligations of confidentiality set forth in Article 10.

 

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(b)            Appointment is a Right .  The appointment of members of the JSC, JDC, JCC and any other subcommittee of the JSC is a right of each Party and not an obligation and shall not be a “deliverable” as referenced in any existing authoritative accounting literature.  Each Party shall be free to determine not to appoint members to the JSC, JDC, JCC or any other subcommittee of the JSC.

 

(c)            Consequence of Non-Appointment .  If a Party does not appoint members of the JSC, JDC, JCC or any other subcommittee of the JSC, it shall not be a breach of this Agreement, nor shall any consideration be required to be returned, and unless and until such members are appointed, all decisions and obligations within the purview of such committee shall henceforth be handled directly between the Parties; provided , that, in the event of any disputes between the Parties, the dispute resolution procedures set forth in Sections 3.5(b), (c) and (d) shall continue to apply (substituting in the provisions of Sections 3.5(b), (c) and (d) references to “the Parties” instead of “the JSC” or “the Joint Steering Committee”).

 

3.4            Committee Meetings .   The JSC, JDC and JCC shall each hold at least one (1) meeting per Calendar Quarter at such times during such Calendar Quarter as the chairperson elects to do so.  Meetings of the JSC, JDC and JCC, respectively, shall be effective only if at least one (1) representative of each Party is present or participating.  The JSC, JDC and JCC may meet either (i) in person at either Party’s facilities or at such locations as the Parties may otherwise agree or (ii) by audio or video teleconference; provided , that no less than one (1) meeting of the JSC, JDC or JCC, as applicable, during each Calendar Year shall be conducted in person.  Other representatives of each Party involved with the Licensed Product may attend meetings as non-voting participants, subject to the confidentiality provisions set forth in Article 10.  Additional meetings of the JSC, JDC or JCC may also be held with the consent of each Party, or as required under this Agreement, and neither Party shall unreasonably withhold its consent to hold such additional meetings.  Each Party shall be responsible for all of its own expenses incurred in connection with participating in the JSC, JDC and JCC meetings.

 

3.5            Decisions .

 

(a)            Initial Dispute Resolution Procedures .  Subject to the provisions of this Section 3.5, actions to be taken by the JSC, JDC and JCC shall be taken only following a unanimous vote, with each Party having one (1) vote.  If the JDC or JCC fails to reach unanimous agreement on a matter before it for decision for a period in excess of thirty (30) days, the matter shall be referred to the JSC.

 

(b)            Referral to Executive Officers .  If the JSC fails to reach unanimous agreement on a matter before it for decision for a period in excess of thirty (30) days, the matter shall be referred to the Chief Executive Officer of each Party, or a designee of the Chief Executive Officer with decision-making authority (the Chief Executive Officer or such designee, the “ Executive Officer ”) for resolution.  In the event that the Executive Officers are unable to resolve such dispute within ten (10) days of such dispute being referred to the Executive Officers, then the provisions of Section 3.5(c) shall apply.

 

(c)            Subsequent Dispute Resolution Procedures .  To the extent a dispute of the JSC has not been resolved pursuant to Section 3.5(a) or 3.5(b), the following shall apply:

 

27

 

(i)             Subject to Section 3.5(c)(iii), the Licensee Executive Officer shall have the final decision-making authority with respect to any dispute involving the Development or Commercialization of the Licensed Product in the Field in the Territory; provided , that if Acorda reasonably believes that an activity approved by the Licensee Executive Officer (A) will materially adversely affect the Development or Commercialization of the Licensed Product in the Acorda Territory or outside the Field; or (B) will result in a material safety concern, the dispute shall be resolved by an independent three-member expert panel (an “ Expert Panel ”).

 

(ii)            Subject to Section 3.5(c)(iii) and the terms of the Supply Agreement, the Acorda Executive Officer shall have the final decision-making authority with respect to any dispute involving the Development or Commercialization of the Licensed Product in the Acorda Territory or the Manufacture of Licensed Product; provided , that if Licensee reasonably believes that an activity approved by the Acorda Executive Officer (A) will result in a material safety concern, (B) will result in a change in the Manufacturing process for the Licensed Product supplied for the Territory in the Field, or (C) will materially adversely affect the Commercialization or Development of the Licensed Product in or for the Territory, the dispute shall be resolved by an Expert Panel.

 

(iii)           In the event a dispute is submitted to the Expert Panel, each Party shall have the right to select one member of the Expert Panel, with the third member of the Expert Panel jointly selected by the two members selected by the Parties.  Each Party shall provide the other within ten (10) days the name of the member it has selected and, within five (5) days of the members’ selection, the members will jointly select the third member of the Expert Panel and notify the Parties.  All members of the Expert Panel must be free of any conflicts of interest with respect to either or both Parties and their Affiliates and shall have expertise in the matters concerning the unresolved dispute.  In order to align the expertise of the members of the Expert Panels with the subject matter of the respective issues, unless the Parties otherwise agree, a new Expert Panel shall be set up for each dispute.  However, each Party shall be entitled to decide whether to designate the same or a different member for each Expert Panel.

 

(A)           Each Party shall within fifteen (15) days following the designation of all of the members of the Expert Panel present to the Expert Panel a written summary of its position with respect to the issue (including factual and documentary evidence with respect to the issue).  The Expert Panel will establish appropriate rules for such proceeding.  The Expert Panel shall, within fifteen (15) days of the Parties’ submission of written summaries, hold a hearing to review the matter, at which time they will consider the summaries and other evidence submitted by each Party as well as reasonable presentations that each Party may present.

 

(B)            The Expert Panel shall not be permitted to take into account prioritization and resource allocation factors within either Party’s portfolio of products or any matters not raised in the Parties’ written summaries submitted pursuant to Section 3.5(c)(iii)(A). The Expert Panel in resolving disputes shall take into account, giving appropriate weighting depending on the issue raised, the relative merits of the Parties’ positions, the actual and potential commercial market for the Licensed Product in each Party’s territory (including any potential effect a Party’s actions in its territory may have on the Exploitation of the Licensed Product in the other Party’s territory) and public health and safety, provided , that in all cases the

 

28

 

Expert Panel’s decision shall be subject to the relevant provisions of this Agreement and applicable Law.

 

(C)            The issue shall be determined by majority vote of the Expert Panel.  Decisions of the Expert Panel under this Section 3.5 shall be binding.

 

(D)           All proceedings and determinations pursuant to this Section 3.5 and information disclosed in connection therewith, whether or not written, shall remain the Confidential Information of both Parties and shall not be used by either Party for any purpose other than the proceedings set forth in this Section 3.5.

 

(E)            The fees for engaging the Expert Panel shall be shared equally by the Parties.  Each Party shall otherwise bear its own costs.

 

(iv)           Notwithstanding the foregoing provisions of this Section 3.5(c):

 

(A)           neither Party shall exercise its right to finally resolve a dispute pursuant to the foregoing clause (i) or (ii), as applicable, and no Expert Panel shall exercise its right to finally resolve a dispute pursuant to the foregoing clause (iii), in a manner that:  (1) excuses such Party from any of its obligations specifically enumerated under this Agreement, (2) negates any consent rights or other rights specifically allocated to the other Party under this Agreement; (3) would cause Acorda to breach an Acorda Third Party Agreement or to require any Third Party to take any actions not required to be performed by such Third Party under any Acorda Third Party Agreement; (4) increases the Development Plan costs for the other Party for a given Calendar Year by more than [*****] above the then current Development Budget for the Calendar Year; or (5) would require either Party (or require Acorda to require a Third Party) to perform any act that it (or such Third Party) reasonably believes to be inconsistent with any Law or any approval, order, policy or guidelines of a Regulatory Authority; provided , that, if such decision would require Acorda, in order to comply with such decisions, to compel the Third Party counterparty to an Acorda Third Party Agreement to perform any act or to refrain from performing any act, Licensee acknowledges and agrees that Acorda shall only be obligated to use Commercially Reasonable Efforts to compel such activity or to refrain from performing such activity.  In addition, the deciding Party in resolving a dispute pursuant to the foregoing clause (i) or (ii) as applicable, shall act in good faith; and

 

(B)            resolution of any disputes shall be subject to Elan’s rights under Section 10.3 of the Elan License Agreement and any time-frames set forth in this Section 3.5(c) shall, to the extent necessary to comply with such rights, be modified to accommodate the time-frames for dispute resolution under the Elan License Agreement.

 

(d)            No Limitation on Remedies .  Nothing in this Section 3.5 shall affect the right of a Party to exercise its rights or remedies for a breach of this Agreement by the other Party.

 

3.6            Authority .  The JSC and any subcommittee (including the JDC and JCC) shall have only the powers assigned expressly to it in this Article 3 and elsewhere in this Agreement, and shall not have any power to amend, modify or waive compliance with this Agreement.  In

 

*****Omitted pursuant to a confidential treatment request.

 

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furtherance thereof, each Party shall retain the rights, powers and discretion granted to it under this Agreement and no such rights, powers or discretion shall be delegated or vested in the JSC or any subcommittee unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing.  Without limiting the generality of the foregoing, neither the JSC nor any subcommittee shall have any decision-making authority with respect to any matters related to the (i) Manufacture and supply of the Licensed Product for Development or Commercialization in the Field for the Territory (which shall be governed by the Supply Agreement) or (ii) the Development   or Commercialization of the Licensed Product outside the Field or outside of the Territory.

 

4.              SHARING OF INFORMATION

 

4.1            Initial Information Transfer .

 

(a)            Initial Information Transfer to Licensee .  Within a reasonable period of time after the Effective Date (but in no event later than thirty (30) Business Days after the Effective Date), (i) Acorda shall make available to Licensee, in a mutually-agreed upon format, (A) material data included in the Acorda Know-How and (B) other information regarding the Acorda IP that is necessary for Development and Commercialization of the Licensed Product in the Field in the Territory, and (ii) from the Effective Date through the first anniversary thereof, not to exceed a total of [*****] Person Days unless otherwise mutually agreed upon by the Parties, upon Licensee’s request reasonably in advance, Acorda shall make its relevant scientific and technical personnel available to Licensee at Acorda’s offices, at reasonable times during Acorda’s normal business hours, to answer any questions or provide instruction as reasonably requested by Licensee concerning the information delivered pursuant to this Section 4.1(a).  For the avoidance of doubt, Acorda shall transfer to Licensee Manufacturing information and confidential information belonging to or controlled by Elan and its Affiliates, in each case whether or not included in the Acorda IP, only to the extent permitted by Elan and subject to the terms of the Elan License Agreement, the Elan Supply Agreement and the Elan Consent. SUBJECT TO THE REPRESENTATIONS AND WARRANTIES OF ACORDA IN THIS AGREEMENT, ALL ACORDA IP OR OTHER INFORMATION TRANSFERRED PURSUANT TO THIS SECTION 4.1(a) SHALL BE PROVIDED ON AN “AS IS” BASIS AND ACORDA DISCLAIMS ALL IMPLIED WARRANTIES REGARDING SUCH ACORDA IP OR OTHER INFORMATION, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT .

 

(b)            Right of Reference or Use .  Acorda hereby grants to Licensee solely for the purposes set forth in this Agreement a Right of Reference or Use to any and all Regulatory Documentation Controlled by Acorda prior to the Effective Date, including such Regulatory Documentation generated from any Clinical Trial commenced by Acorda prior to the Effective Date, and agrees to sign, and cause its Affiliates to sign, any instruments reasonably requested by Licensee in order to effect such grant.  Notwithstanding the foregoing, nothing in this Section 4.1 is intended to imply the existence of any particular data, information, DMF or other Regulatory Documentation.  Licensee shall not, and shall ensure that its Affiliates do not, exercise such Right of Reference or Use for the purpose of making or having made the Compound or the Licensed Product.

 

*****Omitted pursuant to a confidential treatment request.

 

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(ii)            all regulatory plans and other elements of obtaining and maintaining Regulatory Approvals in the Field in each country in the Territory, consistent with the use of Commercially Reasonable Efforts;

 

(iii)           a detailed annual budget for all Development Costs for the activities in the applicable Development Plan (the “ Development Budget ”);

 

(iv)           the allocation of the Development activities to be conducted by each Party, and as applicable, Elan, and the timeline for completing such Development activities; and

 

(v)            the plans and timeline for preparing the necessary Regulatory Documentation and for obtaining Regulatory Approval in the Field in the Territory.

 

(c)    Each Party shall use Commercially Reasonable Efforts to conduct the activities allocated to such Party for the Development of Licensed Product for use in the Field in the Territory and any joint Development activities undertaken by the Parties, if any, pursuant to a comprehensive Development plan (the “ Development Plan ”).

 

5.3            Reports .

 

(a)            Of Licensee .  In addition to information and reports required elsewhere in this Agreement (including Article 3 and Section 7.3), Licensee shall provide Acorda and the JDC with a written quarterly report summarizing in reasonable detail, on a country-by-country basis, Licensee’s and its Affiliates’ activities and progress related to the Development of the Licensed Product in the Field for the Territory, including conduct of non-clinical activities and Clinical Trials, information regarding the status of Regulatory Approvals, the status of Commercialization activities and any future planned activities.  If an Acorda Third Party Agreement requires that Acorda disclose information in Licensee’s Development reports submitted hereunder, Acorda may make such disclosure to the Third Party counterparties to the Acorda Third Party Agreements; provided , that any such disclosed information shall be deemed “confidential information” of Acorda or the equivalent thereof under each relevant Acorda Third Party Agreement; provided , further , that if an Acorda Third Party Agreement places no confidentiality obligations on the Third Party counterparty, then any disclosure of information under this Section 5.3(a) shall only be made subject to confidentiality obligations no less onerous than the provisions herein.   Acorda shall have the opportunity to reasonably seek further explanation or clarification of matters covered in such reports and to provide observations and suggestions to Licensee regarding the subject matter thereof, and Licensee shall provide such explanation or clarification and shall consider such observations and suggestions in good faith.  Furthermore, if after receiving such a report Acorda wishes to meet with Licensee to discuss such report, Licensee shall meet with Acorda at a site reasonably requested by Acorda within thirty (30) days after Acorda requests such meeting.

 

(b)            Of Acorda .  Acorda shall: (i) provide Licensee and the JDC with a written quarterly report summarizing in reasonable detail the major activities performed by Acorda under the Development Plan during the prior Calendar Quarter, as well as the results and status of such activities; (ii) disclose to Licensee and the JDC a high-level summary of Acorda’s plans

 

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for the Development of the Licensed Product in the Acorda Territory; and (iii) disclose to Licensee and the JDC information regarding any matter that either (A) could reasonably be expected to potentially have an adverse regulatory or safety impact on Licensee’s Development or Commercialization of the Licensed Product in the Field in the Territory or (B) Licensee must or reasonably should disclose to a Regulatory Authority or safety authority.

 

5.4            Updating and Amending Development Plan and Development Budget; Additional Development Activities .

 

(a)            Development Plan Reviews and Updates . On or before January 1st of each Calendar Year during the Term (except as set forth in Section 5.2(a)), the JDC shall review, update and approve the Development Plan (including the Development Budget contained therein) which shall cover the Development activities to be conducted with respect to the Development of Licensed Product for use in the Field in the Territory during the upcoming Calendar Year, and the JDC shall, on at least a quarterly basis, review and update, as appropriate, the then-current Development Plan (including the Development Budget) to reflect any changes, reprioritizations of, or additions to the Development Plan.

 

(b)            Amendments to Development Plan; New Development Collaboration Proposals .

 

(i)             Amendments to Development Plan .  From time to time during the Term, either Party may submit to the JDC any proposed amendment of the Development Plan to amend the then-currently approved Development activities (such proposed amendment, a “ Proposed Development Plan Amendment ”) for the JDC’s review and approval.  Any proposed amendment to the Development Plan shall contain, at a minimum, information supporting the rationale for the Proposed Development Plan Amendment related to the Licensed Product from a scientific, regulatory and commercial standpoint, as well as an estimated developmental critical path, and an estimate of the cost of such Development.  The JDC shall consider any submitted Proposed Development Plan Amendment during its next scheduled meeting.  Once approved by the JDC (or otherwise resolved pursuant to Section 3.5), each amended Development Plan (including the Development Budget contained therein) shall become effective and supersede the previous Development Plan and Development Budget as of the date of such approval or at such other time as decided by the JDC.

 

(ii)            New Development Collaboration Proposals .  If either Party proposes to conduct new Development activities in connection with the Development of a Licensed Product not included in the then approved Development Plan, including any proposal to collaborate to develop new Indication(s), dosage amount(s), dosage form(s) or route(s) of administration with respect to the Licensed Product for use in the Field whether in the Territory or the Acorda Territory (such proposal, a “ Development Collaboration Proposal ”), such Party shall submit the Development Collaboration Proposal to the JDC for its approval.  Every Development Collaboration Proposal shall include a proposal to collaborate with the other Party for such Development activities so that, subject to the terms of this Agreement, with respect to the Development activities underlying the Development Collaboration Proposal, Licensee shall be able to Develop the Licensed Product for Commercialization in the Field in the Territory and Acorda shall be able to Develop the Licensed Product for Commercialization in the Field in the

 

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Acorda Territory.  Any Development Collaboration Proposal approved by the JDC that relates to the Development of the Licensed Product in the Territory shall constitute an amendment to the Development Plan hereunder.

 

(A)           In the event the JDC approves a Development Collaboration Proposal and the Parties agree to collaborate to conduct the Development activities underlying the Development Collaboration Proposal with respect to the Licensed Product, each Party shall use Commercially Reasonable Efforts to perform the activities allocated to it under the approved Development Collaboration Proposal, and the Parties shall share in the payment of Development Costs incurred in connection with such activities in accordance with Section 5.5(c)(i).

 

(B)            In the event the JDC approves a Development Collaboration Proposal submitted by a Party pursuant to Section 5.4(b)(ii) (or such Development Collaboration Proposal has otherwise been approved in accordance with Section 3.5(c)) and the other Party declines to participate in and share the funding of such activity  (the “ Buy-In Party ”), the submitting Party may proceed with the activities described in such Development Collaboration Proposal at its sole expense.  Once during each Calendar Quarter following the commencement of, and until the completion of, the activities described in the Development Collaboration Proposal, the Buy-In Party may request that the Party conducting such Development activity provide a summary of the current status of such Development activity, the Development Costs incurred to date, any significant milestones achieved and any topline initial results of such Development activity.

 

(C)            The Buy-In Party may obtain access to and use of the clinical data generated pursuant to the relevant Development activities in accordance with the procedure described in this paragraph.  Subject to Section 5.4(ii)(D), at any time following the commencement of the activities described in the Development Collaboration Proposal, the Buy-In Party shall provide the other Party with written notice of its election to buy-in to such Development, and promptly thereafter the other Party shall provide the Buy-In Party with an invoice for [*****] of the applicable percentage allocated to the Buy-In Party in Section 5.5(c)(i) of the Development Costs incurred by a Party in the generation of such clinical data as of the date of the Buy-In Party’s written request (the “ Buy-in Amount ”), which invoice the Buy-In Party shall pay within thirty (30) days after receipt.  Each Party shall thereafter share, in accordance with the allocation of costs set forth in Section 5.5(c)(i), in the Development Costs incurred after the date of the Buy-In Party’s written request in connection with such Development activities under such Development Collaboration Proposal.  For the avoidance of doubt, if Acorda is the submitting Party under this Section 5.4(b)(ii)(C), Acorda shall have the ability to conduct the Development activities underlying the Development Collaboration Proposal in the Territory or in the Acorda Territory; provided , however , subject to Acorda’s retained rights set forth in Section 2.5(a), nothing in this Section 5.4(b) shall give Acorda any further right to Exploit (including the right to Commercialize) the Licensed Product in the Field in the Territory.

 

(D)           If (1) Acorda submits a Development Collaboration Proposal to the JDC or Development activities for an Indication other than MS, a form of administration other than oral administration, or other Development of the Licensed Product, and

 

*****Omitted pursuant to a confidential treatment request.

 

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(2) Licensee does not (y) participate in such activity and pay its share of the Development Costs for such activity in accordance with Section 5.4(b)(ii)(A) or (z) prior to completion of such activity, exercise its buy-in right under Section 5.4(b)(ii)(C), then (I) Acorda shall provide Licensee notice when it completes such Development activity and shall deliver to Licensee a topline summary of the final results of such Development activity within thirty (30) days of such completion (or such longer period of time as may be reasonably necessary to prepare such summary) and (II) Licensee may exercise its buy-in right under Section 5.4(b)(ii)(C) within sixty (60) days after Acorda completes such Development activity (extended, as necessary, to reflect any extension pursuant to clause (I)); provided , that, if Licensee does not exercise its buy-in rights as set forth in this Section 5.4(b)(ii)(D), then, subject to Sections 1.64(a) and (b), Licensee will be deemed to have forfeited its rights to Develop and Commercialize the Licensed Product for such Indication, form of administration or other Development and such rights shall revert to Acorda and be excluded from the Field.

 

5.5            Development Costs .

 

(a)            Territory Exclusive Development Activities . Except as provided in Section 5.5(c) and for Development activities conducted by a Party at its own expense pursuant to Section 5.4(b)(ii)(B), Licensee shall be responsible for [*****] of all Development Costs (whether incurred by Licensee or Acorda (if the activities and their cost are agreed to in advance in writing by Licensee) or their respective Affiliates or Elan) set forth in the applicable Development Budget with respect to any Development activities that are conducted for the primary purpose of obtaining or maintaining Regulatory Approval for the Licensed Product in the Field in any country or other regulatory jurisdiction in the Territory.  Licensee shall disclose to Acorda a summary of efficacy results and detailed safety information Controlled by Licensee and generated in the course of such Development activities within sixty (60) days after the completion of such activities.

 

(b)            Acorda Territory Exclusive Development Activities .  Except as provided in Section 5.5(c) and for Development activities conducted by a Party at its own expense pursuant to Section 5.4(b)(ii)(B), Acorda shall be responsible for [*****] of all Development Costs (whether incurred by Licensee (if the activities and their costs are agreed to in advance in writing by Acorda) or Acorda or their respective Affiliates or Elan) set forth in the applicable Development Budget with respect to any Development activities that are conducted for the primary purpose of obtaining or maintaining Regulatory Approval for the Licensed Product in the Field in any country or other regulatory jurisdiction in the Acorda Territory or outside the Field.  Acorda shall disclose to Licensee a summary of efficacy results and detailed safety information Controlled by Licensee and generated in the course of such Development activities within sixty (60) days after the completion of such activities.

 

(c)            Joint Development Activities .  Except for Development activities conducted by a Party at its own expense pursuant to Section 5.4(b)(ii)(B), with respect to any Development activities conducted for the primary purpose of obtaining or maintaining Regulatory Approval for the Licensed Product (i) both in and outside the Field and/or (ii) both in the Field in the Territory and in the Acorda Territory (including Development activities with respect to which a Party has paid the Buy-in Amount in accordance with Section 5.4(b)(ii)(C))

 

*****Omitted pursuant to a confidential treatment request.

 

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pursuant to the Development Plan and, to the extent not included in the Development Plan, any Development Collaboration Proposal:

 

(i)             subject to Section 5.6, Licensee shall pay [*****] and Acorda shall pay [*****] of all Development Costs (whether incurre