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 w