Exhibit 10.22

 

Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

EXECUTION COPY

 

Date: 26, September 2003

 

ELAN CORPORATION, PLC.

 

AND

 

ACORDA THERAPEUTICS, INC.

 

SUPPLY AGREEMENT

 

Fampridine SR

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

INDEX

 

CLAUSE 1

 

PRELIMINARY

 

 

 

CLAUSE 2

 

EXCLUSIVE SUPPLY

 

 

 

CLAUSE 3

 

REGULATORY MATTERS

 

 

 

CLAUSE 4

 

FORECASTS AND ORDERS

 

 

 

CLAUSE 5

 

SUPPLY OF THE PRODUCT

 

 

 

CLAUSE 6

 

DISPUTES AS TO SPECIFICATION

 

 

 

CLAUSE 7

 

SECOND SOURCE

 

 

 

CLAUSE 8

 

ADVERSE EVENTS AND PRODUCT RECALL

 

 

 

CLAUSE 9

 

FINANCIAL PROVISIONS

 

 

 

CLAUSE 10

 

PAYMENTS, REPORTS AND AUDITS

 

 

 

CLAUSE 11

 

DURATION AND TERMINATION

 

 

 

CLAUSE 12

 

CONSEQUENCES OF TERMINATION

 

 

 

CLAUSE 13

 

REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

 

 

 

CLAUSE 14

 

MISCELLANEOUS PROVISIONS

 

 

 

SCHEDULE 1

 

MANUFACTURING COST

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

THIS SUPPLY AGREEMENT is made the            September 2003

 

BETWEEN:

 

(1)                                            Elan Corporation, plc., a public
limited company incorporated under the laws of Ireland, and having its
registered office at Lincoln House, Lincoln Place, Dublin 2, Ireland (“ Elan “);
and

 

(2)                                            Acorda Therapeutics, Inc., a
corporation organized under the laws of the State of Delaware and having its
principal office at 15 Skyline Drive, Hawthorne, New York 10532, United States
of America (“ Acorda “).

 

RECITALS:

 

(A)                                          Elan and Acorda have entered into a
Licence Agreement concerning the Product (as each of those terms are defined
below).

 

(B)                                          Elan is prepared to manufacture and
supply the Product to Acorda for onward commercial supply.

 

(C)                                          Elan and Acorda are desirous of
entering into this Agreement to give effect to the arrangements described at
Recitals (A) and (B).

 

NOW IT IS HEREBY AGREED AS FOLLOWS:

 

CLAUSE 1                                  PRELIMINARY

 

1.1.                     Definitions:

 

“Act” shall mean the United States Federal Food Drug and Cosmetic Act of 1934,
and the rules and regulations promulgated thereunder, or any successor act, as
the same shall be in effect from time to time.

 

“Affiliate” shall mean any corporation or entity controlling, controlled or
under common control with Elan or Acorda, as the case may be.  For the purposes
of this Agreement, “control” shall mean the direct or indirect ownership of more
than 50% of the issued voting shares or other voting rights of the subject
entity to elect directors, or if not meeting the preceding criteria, any entity
owned or controlled by or owning or controlling at the maximum control or
ownership right permitted in the country where such entity exists.

 

“Agreement” shall mean this supply agreement (which expression shall be deemed
to include the Recitals and Schedules hereto).

 

1

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

“Batch” shall mean a specific quantity of Product that is produced according to
a single manufacturing order during the same cycle of manufacture, which
quantity shall be agreed in the Technical Agreement.

 

“cGMP” shall mean current Good Manufacturing Practice as defined in the Act and
FDA guidance documents; or as applicable current Good Manufacturing Practice
under applicable regulations in the European Union.

 

“EEA” shall mean the countries comprising the European Economic Area, as the
same may change from time to time .

 

“Effective Date” shall mean the date of this Agreement.

 

“Elan’s Facility” shall mean Monksland, Athlone, Co. Westmeath, Ireland or such
other facility as Elan may use to perform its obligations hereunder and is in
compliance with the NDA and other regulatory requirements.

 

“Elan Territory” shall mean any country or countries in which Elan, or any
licensee of Elan other than Acorda, is permitted to commercialise the Product,
by virtue of termination of the License Agreement in that country or the grant
of a license by Acorda to Elan pursuant to Article 2.11.3 of the License
Agreement.

 

“EXW” or “Ex Works” shall have the meaning as such term is defined in the ICC
Incoterms, 2000, International Rules for the Interpretation of Trade Terms, ICC
Publication No. 560.

 

“Force Majeure” shall mean any cause or condition beyond the reasonable control
of the party obliged to perform, including acts of God, acts of government (in
particular with respect to the refusal to issue necessary import or export
licenses), fire, flood, earthquake, war, riots or embargoes, strikes or other
labour difficulties affecting a party, or either party’s inability to obtain
supplies of components of the Product howsoever arising.

 

“FTE” means Elan’s full time equivalent charging rate for its appropriate
employees or consultants from time to time (based on cost without mark-up) which
as of the Amendment Date is [*****] per day.

 

“Governmental Authority” shall mean the FDA and /or all other governmental and
regulatory bodies, agencies, departments or entities, whether or not located in
the Territory, which regulate, direct or control commercial and other related
activities in or with the Territory.

 

“Launch Stocks” shall mean the quantities of stocks of the Product required by
Acorda in relation to the launch of the Product following Regulatory Approval in
a Major Market, as more fully described in Clause 4.7.

 

“Launch Year” shall mean the period commencing on the date of First Commercial
Sale and expiring on the last day of the month that is the twelfth (12 th )
month following the

 

2

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

date in which the First Commercial Sale occurs. For example, if the First
Commercial Sale occurs on March 15 of any year, the Launch Year shall commence
on March 15 of such year and expire on March 31 of the following year.

 

“Licence Agreement” shall mean that certain Amended and Restated Licence
Agreement between Elan and Acorda of even date herewith.

 

“Major Market(s)” shall mean the US, the UK, France, Germany, Italy and Japan.

 

“Manufacturing Cost” shall mean the costs described in Schedule 1 as they relate
to the Product, PROVIDED THAT if Elan is manufacturing the Product for sale in
an Elan Territory, in no event shall Manufacturing Cost exceed Elan’s own costs
for such manufacture, as calculated based on GAAP.

 

“Maximum Capacity” shall mean Elan’s maximum quarterly manufacturing capacity
for the Product from time to time, as agreed in, or determined pursuant to, the
Technical Agreement.

 

“Minimum Elan Requirements” shall mean for any Year, at least seventy five
percent (75%) of Acorda’s total requirements of the Product .

 

“Minor Deficiencies” shall mean shortfalls or delays that are not inconsistent
with industry accepted standards, which standards applicable to the Product
shall be clarified in the Technical Agreement.

 

“Permitted Elan Assignee” shall mean any entity that purchases all or
substantially all of the assets of Elan’s Facility and has entered into a
written agreement with Elan for the benefit of Acorda whereby (inter alia) it
represents to Acorda that it is (i) reasonably experienced in the field of
pharmaceutical manufacturing (including the existing management of Elan’s
Facility), (ii) in possession of sufficient financial resources and liquidity to
perform the obligations of Elan under this Agreement and (iii) in good standing
with the FDA.

 

A Permitted Elan Assignee shall also include any entity that has been formed for
the purpose of acquiring Elan’s Facility, and shall, following such acquisition,
be under the management of individuals reasonably experienced in pharmaceutical
manufacturing (including the said existing management), in possession of
sufficient financial resources and liquidity to perform the obligations of Elan
under this Agreement, and none of which are debarred individuals or entities
within the meaning of 21 U.S.C. section 335(a) or (b) and have the capacity of
being in good standing with the FDA.

 

“Product” shall mean the oral product developed pursuant to the Project, in
final packaged and labelled form for commercial sale or for distribution as
promotional samples and as defined in the approved NDA or NDA Equivalent.

 

“Recall” means a company’s removal or correction of a marketed Product that the
FDA or equivalent Governmental Authority considers to be in violation of law and
against

 

3

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

which such agency might reasonably be expected to initiate legal action (e.g., a
seizure). A Recall does not include market withdrawal for other reasons, or a
stock recovery.

 

“Serious Failure to Supply” shall mean that in a period of a Year, for reasons
other than Force Majeure or the default of Acorda, Elan fails on at least two
occasions to supply Acorda’s properly forecasted and ordered requirements of the
Product in accordance with the terms of this Agreement, except for Minor
Deficiencies, and the cumulative shortfall for such Year attributable to such
failure(s) is at least 25% of the aggregate amount properly forecasted and
ordered from Elan for delivery in such Year.

 

“Term” shall mean the term of this Agreement, as set out in Clause 11.

 

“$” and “US$” shall mean United States Dollars.

 

“Year” means each consecutive four Calendar Quarters.

 

1.2.                     Further Definitions:

 

In addition, the following definitions have the meanings in the Clauses
corresponding thereto, as set forth below:

 

Definition

 

Clause

 

 

 

 

 

“Discount”

 

9.4

 

“First Approval”

 

4.1.1

 

“Manufacturer”

 

7.1

 

“Resumption Quarter”

 

7.6.1

 

“Second Source”

 

7.1

 

“Second Source Quantity”

 

7.2.1

 

“Supply Price”

 

9.3.1

 

“Technical Agreement”

 

5.5

 

 

1.3.                     Definitions in Licence Agreement:

 

Except as otherwise defined in this Agreement, all capitalised terms used in
this Agreement shall have the same meaning as in the Licence Agreement.

 

1.4.                     Interpretation:

 

In this Agreement:

 

1.4.1                                 the singular includes the plural and vice
versa, the masculine includes the feminine and vice versa and references to
natural persons include corporate bodies, partnerships and vice versa.

 

4

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

1.4.2                                 any reference to a Clause or Schedule,
unless otherwise specifically provided, shall be respectively to a Clause or
Schedule of this Agreement.

 

1.4.3                                 the headings of this Agreement are for
ease of reference only and shall not affect its construction or interpretation.

 

1.4.4                                 the expressions “include”, “includes”,
“including”, “in particular” and similar expressions shall be construed without
limitation.

 

CLAUSE 2                                  EXCLUSIVE SUPPLY

 

2.1.                                       Subject to the terms and conditions
of this Agreement, during the Term, Acorda shall purchase its Minimum Elan
Requirements of the Product in the Territory from Elan, except as provided in
Clause 2.3.

 

2.2.                                       Subject to the terms and conditions
of this Agreement, during the Term, Elan shall not supply the Product to:

 

2.2.1                                 any person other than Acorda outside the
Elan Territory; or

 

2.2.2                                 any person other than Acorda in the Elan
Territory who intends, to the actual knowledge of Elan, to sell the Product
outside the Elan Territory —

 

except as requested by Acorda, PROVIDED THAT to extent required by applicable
law, Elan shall be permitted to:

 

(a)                                             sell the Product to a person in
a country which is both part of the Elan Territory and within the EEA,
notwithstanding that such person may re-sell the Product in another part of the
EEA which is not part of the Elan Territory; and

 

(b)                                             if any country of the EEA is
part of the Elan Territory, sell the Product to a person in another country of
the EEA which is not part of the Elan Territory, provided further that Elan
shall not actively solicit any such sales.

 

2.3.                                       Elan shall not have the obligation to
use commercially reasonable efforts to supply the Product where 140% of
Manufacturing Cost would exceed the Supply Price, subject to Clauses 2.4 and 2.5

 

2.4.                                       In the event that either party is of
the opinion that the circumstances in Clause 2.3 apply or may shortly apply, it
shall promptly notify the other.  In such event the parties shall meet to
discuss,  inter alia , the manner in which Manufacturing Cost is calculated by
Elan and Acorda’s commercialisation plans.

 

2.5.                                       If after such discussions Elan is of
the opinion that if it continues to supply the Product to Acorda, the
circumstances in Clause 2.3 will apply, Elan shall promptly formally so notify
Acorda.  In such event

 

5

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

2.5.1                                 Elan shall use commercially reasonable
efforts to supply Acorda with Product the subject of binding orders issued prior
to Acorda’s receipt of such notification, provided that such orders relate to
Product scheduled for delivery in the period of three (3) months after the date
of the purchase orders, and that such Product shall be invoiced at the
applicable price under Clause 9.2 or 9.3; and

 

2.5.2                                 After the expiration of the period
referred to in Clause 2.5.1, Acorda shall have no further obligation to purchase
Product under this Agreement, provide, however, that Acorda may at its option
place further purchase orders for delivery during up to a six (6) month period
immediately following the period referred to in Clause 2.5.1, subject always to
Clause 4 and Clause 5, provided, further, that (i) any such purchase orders are
placed not later than three (3) months from the date of Elan’s notice under this
Clause 2.5; and (ii) any such Product ordered shall be invoiced at a price equal
to Manufacturing Cost plus [*****].

 

If following the period referred to in Clause 2.5.2, Acorda wishes to continue
to purchase the Product from Elan and Elan is prepared to supply the same, the
Parties shall negotiate in good faith the terms of any such supply and purchase.

 

As from the time of Elan’s notice, Acorda shall be entitled to purchase the
Product from the Second Source, but without prejudice to binding purchase orders
already placed with Elan and subject to the foregoing paragraph.

 

CLAUSE 3                                  REGULATORY MATTERS

 

3.1.                                       Elan shall be responsible, at Elan’s
expense, for filing for and maintaining all license and permits pertinent to
Elan’s Facility, as distinct from the Regulatory Approvals specific to the
Product, without prejudice to Elan’s responsibilities under the Licence
Agreement in respect of preparation and delivery to Acorda for incorporation
into the NDA or any NDA Equivalent, of the CMC Section.

 

3.2.                                       Upon Elan’s prior written notice,
Acorda shall permit Elan or any Affiliate to have access to the NDA and any NDA
Equivalent and Regulatory Approvals and to take photocopies of same, as required
by Elan to fulfil reporting requirements or as otherwise may reasonably be
required by Elan in connection with this Agreement.

 

3.3.                                       Inspections or Inquiries by
Governmental Authorities. With respect to Product supplied by it, Elan shall be
responsible for all process and equipment validation and quality control tests
and procedures required by any Governmental Authority and shall take all steps
necessary to pass inspection by any Governmental Authorities in the Major
Markets, but without prejudice to Article 6.3 of the License Agreement. Elan
shall:

 

3.3.1                                 notify Acorda as soon as possible, but in
any event within the time period to be set forth in the Technical Agreement, of
any notification received by Elan from a Governmental Authority to conduct an
inspection of its manufacturing or other

 

6

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

facilities used in the development, manufacturing, packaging, storage or
handling of the Product;

 

3.3.2                                 without delay make available to Acorda a
copy of any inspection report received by Elan resulting from any inspection of
any of such facilities by such Governmental Authority to the extent such report
relates to Product, the formulation, manufacture, testing, storage and delivery
of the Product or any premises used by Elan in performing Elan’s obligations
under this Agreement;

 

3.3.3                                 provide Acorda with a written copy of any
proposed response(s) thereto at least three Business Days prior to submitting
such response to any Governmental Authority as well as a copy of the response
actually submitted.

 

Representatives of Acorda or its Designee shall have the right to be present
during the inspection and/or during the close-out session with the inspectors. 
Any Form 483 observations or warning letter related to the Product shall be
provided promptly to Acorda, which shall have the right to review and discuss
the proposed written response to such 483 observations or warning letter, and a
copy of the response actually submitted shall be promptly provided to Acorda.
Copies of all other correspondence with any Governmental Authority relating to
that any party’s activities under this Agreement will be provided to the other
party within forty-eight (48) hours.

 

3.4.                                       Inspection by Acorda / Governmental
Authority.  Elan shall make (i) any licenses and permits relating to Elan’s
Facility; and (ii) that portion of Elan’s facility where the Product is
manufactured, packaged, tested or stored, including all record and reference
samples, available for inspection:

 

3.4.1                                 by Acorda’s duly qualified employee or
Designee or, with the consent of Elan, by Acorda’s agent or contractor; or

 

3.4.2                                 by the relevant Governmental Authority.

 

An inspection under Clause 3.4.1 shall be limited to determining whether there
is compliance with cGMP and other requirements of applicable law, including
production or quality issues relating to the Product.  Any consent required
under this Clause 3.4 shall not be unreasonably withheld or delayed.

 

3.5.                                       Preservation Samples/Retained
Samples.  Pursuant to all applicable laws, rules and regulations and to the
Specifications, Elan shall assign and apply lot numbers and shall take from each
lot of (i) the API used to manufacture Product pursuant to this Agreement;
(ii) inactive ingredients used in the manufacture of Product pursuant to this
Agreement; and (iii) the Product shipped to Acorda or its designee pursuant to
this Agreement, preservation samples/retained samples. Elan shall retain and
store the particular lot of API, other ingredients or Product, as applicable, in
accordance with FDA and other applicable regulations, which currently provide
for a period expiring no earlier than two years after the expiration of the
shelf life of the particular lot of Product shipped to Acorda or its Designee
pursuant to this Agreement.  Preservation samples/retained

 

7

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

samples, as referred to herein, do not include samples retained for purposes of
stability testing.

 

3.6.                                       Elan shall at its option be entitled
to change the manufacturing process or site for manufacture of the Product,
provided that (a) Elan provides Acorda with all required information in form and
substance necessary to file any related amendments or supplements to the NDA or
any NDA Equivalent or, if applicable, Elan files with applicable regulatory
authorities any required amendments or supplements to any DMF; (b) no such
change shall take effect until all requisite regulatory approvals have been
obtained, and (c) Elan shall be responsible for the costs associated with such
change.  Acorda shall reasonably co-operate with Elan in obtaining any such
changes requested.

 

CLAUSE 4                                  FORECASTS AND ORDERS

 

4.1.                                       Forecasts.  Acorda shall provide Elan
with bona fide written forecasts of its estimated Minimum Elan Requirements of
the Product as follows:

 

4.1.1                                 within eighteen (18) months prior to the
anticipated date of first Regulatory Approval in any Major Market (“ First
Approval “), Acorda shall provide Elan with an eighteen (18) month forecast,
broken down on a quarterly basis, for the period beginning with the anticipated
date of First Commercial Sale in such Major Market (which date shall be
specified in the forecast);

 

4.1.2                                 thereafter, every three months until First
Approval, Acorda shall provide Elan with an updated forecast on a quarterly
basis;

 

4.1.3                                 within thirty (30) days of First Approval,
and thereafter each calendar month not later than the 23rd of the month, a
rolling 18 month forecast, broken down on a month-by-month and
country-by-country basis, for the period commencing at the beginning of the
following month; and

 

4.1.4                                 not later than 1 August in each year, a
five (5) year forecast, broken down on an annual basis.

 

Except as otherwise provided herein, all forecasts made hereunder shall be made
to assist Elan in planning its production and Acorda in planning marketing and
sales, shall not be binding purchase orders, and shall be without prejudice to
Acorda’s subsequent firm orders for the Product in accordance with the terms of
this agreement. Each forecast provided by Acorda shall supercede any previous
forecast and may be expressed in a reasonable range. After receiving Acorda’s
forecasts, Elan shall notify Acorda within five (5) days if Elan becomes aware
that it will be unable to supply Acorda’s forecasted requirements of Product
and, in such event, the provisions of Clause 4.6 shall be applicable.

 

4.2.                                       Purchase Requirements. Subject to the
agreement between the Parties relating to Launch Stocks under Clause 4.7, Acorda
shall be bound to order one hundred percent

 

8

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

(100%) of the forecasted quantities of the Product for each month of the first 
three (3) months of the most recent rolling forecast referred to in Clause
4.1.3, but otherwise forecasts shall not be binding.

 

4.3.                                       Forecasts and orders shall not
increase or decrease by more than 25% in the aggregate amount of Product
required in a calendar quarter compared to the previous calendar quarter, except
for Launch Stocks or unless otherwise agreed by Elan.  However, Elan shall use
reasonable efforts to fulfil Acorda’s requirements in excess of duly forecasted
and ordered amounts.

 

4.4.                                        Forecasts and orders shall not
exceed the Maximum Capacity during the applicable quarterly period.

 

4.5.                                       Firm Orders.  Acorda or its Designee
shall provide Elan with purchase orders on the standard purchase order forms of
Acorda or its Designee (without prejudice to Clause 5.4) of its Elan Minimum
Requirements at least ninety (90) days before it requires each delivery of
Product (subject to Clause 4.7 with respect to Launch Stocks), specifying the
required delivery date in each purchase order and specifying the quantity of
Product requested for commercial use and the quantity of Product for promotional
and sample use.

 

4.6.                                       Shortages.  Elan agrees that it will
use commercially reasonable efforts to prevent an interruption of supply to
Acorda and shall immediately notify Acorda of any problems or unusual production
situations which may adversely affect production or quality of Product or its
Specifications or its timely delivery to Acorda or its designee.  If, at any
time during the term of this Agreement, Elan becomes aware that it will not be
able to satisfy Acorda’s forecasts or ordered requirements for Product, then
Elan shall:  (i) give Acorda prompt notice thereof, (ii) take all commercially
reasonable steps to enable Acorda to procure adequate quantities of Product from
the Second Source in accordance with the applicable provisions of Clause 7 and
(iii) if such inability is partial, Elan shall fulfill firm orders with such
quantities of Product as are available. and shall continue to use its
commercially reasonable efforts to fulfill orders on a timely basis.

 

4.7.                                       Launch Stocks. Within six months
prior to an anticipated Regulatory Approval in a Major Market, the parties shall
discuss and agree upon the manufacture and purchase of specific quantities of
Launch Stocks for launch of the Product in  the applicable Major Market.

 

4.7.1                                 Launch Stocks shall be ordered not later
than 20 Business Days from receipt by Acorda of an approval letter, from the FDA
or equivalent Governmental Authority in respect of the NDA or an NDA Equivalent
in another Major Market.

 

4.7.2                                 Acorda may use the validation batches of
the Product as Launch Stocks, subject to compliance with applicable laws, the
Licence Agreement and other provisions of this Agreement, provided that in such
event, any amounts previously paid by

 

9

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

Acorda to Elan for such validation batches shall be credited against the
applicable price for Launch Stocks under Clause 9.1.

 

CLAUSE 5           SUPPLY OF THE PRODUCT

 

5.1.                                       Save as otherwise provided in this
Agreement, Elan shall use commercially reasonable efforts to produce and supply
to Acorda its entire Elan Minimum Requirements of the Product as set forth in
and in response to firm purchase orders, within ninety (90) days of the purchase
order, or one hundred and fifty (150) days for Launch Stocks or samples (subject
to any required extension due to the lead times of specific components of
samples).

 

5.2.                                        Elan shall have no obligation to
supply Product:

 

5.2.1                                 For any period, in excess of Acorda’s
properly forecast requirements for such period (but Elan will nevertheless use
its commercially reasonable efforts to fulfil Acorda’s requirements in excess of
such amounts, having regard to its manufacturing capacity);

 

5.2.2                                 for less than a minimum order of one
Batch, or such other minimum quantity as may be agreed in the Technical
Agreement;

 

5.2.3                                 in partial Batches;

 

5.2.4                                 where Clause 2.3 applies; or

 

5.2.5                                 pursuant to an order which does not
conform in all material respects to the provisions of Clause 4 and this Clause
5; provided that if Elan does supply pursuant to such an order in its absolute
discretion, that fulfilment shall not affect Elan’s right to refuse to fulfil
any subsequent order which does not comply in all material respects with those
provisions.

 

5.3.                                       The Product supplied by Elan to
Acorda shall:

 

5.3.1                                 be delivered in finished packaged form in
the dosages and configurations as set forth in the Specifications and agreed by
the parties and included in the NDA and any NDA Equivalent;

 

5.3.2                                 be shipped EXW Elan’s Facility;

 

5.3.3                                 be delivered with a certificate of
analysis and certificate of release in respect of the Product, in a form
reasonably acceptable to Acorda (and Acorda shall be entitled to rely upon such
certificate of analysis without the necessity of performing additional testing),
in accordance with the terms of the Technical Agreement, cGMPs and the NDA or
any NDA Equivalent; and

 

10

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

5.3.4                                 have a shelf life to be determined in the
Technical Agreement.

 

5.4.                                       The terms of this Agreement are
hereby incorporated by reference into each order of Product submitted by Acorda
and accepted by Elan.  In the event of any conflict between an order or other
written instructions and this Agreement, the terms of this Agreement shall
prevail.

 

5.5.                                       Not less than eighteen (18) months
before the anticipated First Approval, or such later date as may be determined
by the Committee, the parties shall negotiate in good faith to conclude a
detailed technical agreement (the “ Technical Agreement “) regulating the
parties’ respective obligations from a technical and quality perspective for the
supply of the Product by Elan to Acorda, subject in all cases to compliance with
cGMPs, the requirements and commitments of the NDA and any NDA Equivalent and
any other applicable laws or regulations governing manufacture and supply of
Product.  Such agreement will include commercially reasonable terms as to:

 

5.5.1                                 the precise procedures regulating the
alleged failure of any shipment of the Product to conform to the Specifications
as a result of an alleged latent defect and the procedures to be adopted for the
return and replacement of such Product;

 

5.5.2                                 the inspection and testing for compliance
with specifications of API to be conducted by Elan prior to incorporation into
Product, the testing and quality analysis of Product to be conducted by Elan
prior to shipment of the Product and the format of the certificate of analysis
and certificate of release to be furnished by Elan to Acorda as well as any
quality analysis to be conducted by Acorda or its Designee;

 

5.5.3                                 the batch manufacturing records and other
documentation to be prepared and maintained by Elan and delivered with each
shipment to Acorda to show compliance with cGMP as well as other applicable
United States of America and foreign laws and regulations;

 

5.5.4                                 the agreed shelf life of the Product as of
the date of shipment;

 

5.5.5                                 the quantity of Product constituting a
Batch and minimum Batch size of each shipment of the Product;

 

5.5.6                                 the manner in which Elan may provide
Acorda with assistance in relation to field alerts, recalls, complaints and
adverse events;

 

5.5.7                                 the notification of change by both
parties;

 

5.5.8                                 the responsibility to collate and write
annual product review and annual reports;

 

5.5.9                                 technical agreements with any
subcontracted parties;

 

5.5.10                          the stability commitments in NDA or amendments
thereto;

 

11

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

5.5.11                          active drug substance, excipient and component
supplier agreements, including audits/inspections of related manufacturing
facilities;

 

5.5.12                          procedures for determining and monitoring the
marginal unit variable element of Manufacturing Cost for purposes of Clause
9.5.1;

 

5.5.13                          such other matters relating to the manufacturing
and supply of Product, including any amendments to any of the terms of this
Agreement, any matters that this Agreement refers to be included in the
Technical Agreement or any other matters that the Parties may mutually agree to
or as may be required by the NDA or any NDA Equivalent.

 

CLAUSE 6           DISPUTES AS TO SPECIFICATION

 

6.1.                                       All claims for failure of any
delivery of the Product to conform to the Specifications must be made by Acorda
in writing within sixty (60) days  following delivery of Product to Acorda or
its Designee except in the case of latent defects.  Acorda shall promptly upon
Elan’s request provide reasonable details of the alleged non-conformance and
supporting evidence, and shall upon request permit Elan to re-test the Product. 
If Elan does not agree with Acorda’s determination of non-conformance, then Elan
shall provide Acorda with a written notice of such disagreement within twenty
(20) days of receipt of the non-conformance notice (adjusted for any delay in
providing appropriate details or permitting re-testing), responding to Acorda’s
claim.  The Parties shall use commercially reasonable efforts to resolve such
disagreement within ten (10) Business Days of Acorda’s receipt of Elan’s notice
of disagreement.

 

6.2.                                       Claims for latent defects, not
discovered during the routine testing protocol (to be agreed in the Technical
Agreement) shall be made in accordance with the Technical Agreement in writing
within thirty (30) days of discovery.  Failure to make timely claims in the
manner to be prescribed in the Technical Agreement shall constitute acceptance
of the delivery.

 

6.3.                                       In the event that the Product
supplied by Elan is not in compliance with the Specifications, or is otherwise
adulterated, misbranded or defective, Elan shall, in addition to any other
applicable remedies:

 

6.3.1                                 be responsible, at the sole cost and
expense of Elan, for re-analysis, sampling, processing, return, disposal or
destruction, including certification of destruction, of such non-conforming
Product; and

 

6.3.2                                 at its cost, replace the nonconforming
Product with Product meeting the Specifications as soon as reasonably
practicable.

 

6.4.                                       In the event that the nonconformity
was due to a fault of Acorda, then, according to Elan’s orders, the Product
shall either be destroyed by Acorda, or returned to Elan for

 

12

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

destruction by Elan, at Acorda’s expense.  In such an event Acorda will not be
entitled to any credit as to the non-conforming Product.

 

6.5.                                       In the event of an unresolved dispute
as to:

 

6.5.1                                 conformity of the Product with
Specifications; or

 

6.5.2                                 whether defects in the Product are
attributable to the negligent acts or omissions of Elan,

 

the parties shall within 30 days after expiration of the ten (10) Business Day
period referred to in Clause 6.1 appoint an independent laboratory to undertake
the relevant testing and its findings shall be conclusive and binding upon the
parties.

 

All costs relating to this process shall be borne solely by the party whose
testing was in error.

 

If the parties are unable to agree as to the independent laboratory to be used,
the matter shall be referred to arbitration in accordance with Article 12.14 of
the License Agreement.

 

CLAUSE 7           SECOND SOURCE

 

7.1.                                       Process Transfer to Second Source:

 

Acorda shall be entitled to qualify  the facility of Patheon Inc. at 2100 Syntex
Court, Mississauga, Ontario as a second source of the Product (“ Second Source
“), subject to Patheon, Inc. (the “ Manufacturer “) undertaking to Elan to
protect the confidentiality of Elan’s manufacturing processes related to Product
and not use them for any other purpose, in terms reasonably satisfactory to Elan
provided that Elan hereby acknowledges that the Manufacturer is in the process
of being qualified as a Second Source Manufacturer.

 

At Acorda’s request, Elan shall use commercially reasonable efforts to assist in
qualifying the Second Source as an alternative site of manufacture of the
Product.  Pursuant to this obligation, Elan shall:

 

7.1.1                                 provide Acorda or the Manufacturer (at
Acorda’s request) with any information necessary to manufacture the Product;

 

7.1.2                                 provide to Acorda or the Manufacturer (at
Acorda’s request) the documentation constituting the required material support,
more particularly practical performance advice, shop practice, specifications as
to materials to be used and control methods;

 

7.1.3                                 assist Acorda and/or the Manufacturer (at
Acorda’s request) with the working up and use of the technology and with the
training of Manufacturer’s personnel to

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

the extent which may reasonably be necessary in relation to the manufacture of
the Product by the Manufacturer.  In this regard, Elan will receive the Acorda’s
and/or Manufacturer’s scientific staff, as applicable, in its premises for
certain periods, the term of which will be agreed by the parties; and

 

7.1.4                                 comply with the other obligations and
responsibilities of Elan relating to technology transfer to Patheon, as set
forth in the Technology Transfer Responsibilities Schedule.

 

Acorda shall comply with its obligations and responsibilities relating to
technology transfer to Patheon, as set forth in the Technology Transfer
Responsibilities Schedule.

 

7.2.                                       Supply of Product from Second Source:

 

Acorda may purchase the following quantities of Product from the Second Source
and, accordingly, if so purchased, Acorda shall have no obligation to purchase
such quantities from Elan and Elan shall have no obligation to supply such
quantities to Acorda:

 

7.2.1                                 In any Year, up to twenty five percent
(25%) of Acorda’s total requirements of Product for such Year, subject to
Clauses 7.3.2 and 9.5 (the “ Second Source Quantity “);

 

7.2.2                                 quantities of the Product which Elan is
not obligated to, and declines to, supply pursuant to Clause 2.3;

 

7.2.3                                 quantities of Product in addition to the
Second Source Quantity required to make up any portion of a valid purchase order
which is either (i) not delivered by Elan by its due date for delivery
(regardless of the cause of late or short delivery), except for Minor
Deficiencies, or (ii) by reason of Force Majeure, to the extent not capable of
being delivered by its due date for delivery, for so long as the Force Majeure
continues;

 

7.2.4                                 where there is a Serious Failure To
Supply, its entire requirements of the Product, subject to Clause 7.6.

 

7.3.                                       Notification of Supply from Second
Source; Equitable Purchase of Samples:

 

7.3.1                                 If Acorda purchases Product from the
Second Source, the amount of the same, together with the quantity so purchased
as samples, shall be notified to Elan in the applicable Statement.

 

7.3.2                                 Acorda shall purchase from the Second
Source at least the same proportion of samples of the Product  to commercial
supply of Product as the proportion of samples to commercial supply purchased by
Acorda from Elan.

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

7.4.                                       No Supply Restrictions On Second
Source:

 

Acorda shall not place or attempt to place any restriction on supply from the
Second Source to Elan or its licensees for sale in the Elan Territory, except to
the extent of the restrictions on supply by Elan under Clause 2.2.  In
particular, Acorda shall not place or attempt to place any restriction on
supplies from the Second Source to Elan for sale in the Elan Territory or its
licensees after the end of the Term.

 

7.5.                                       Responsibility for Second Source:

 

Assuming compliance by Elan with Clause 7.1, Acorda shall be solely responsible
for:

 

7.5.1                                 all process and equipment validation in
the Second Source required by applicable law or regulations and shall take all
steps reasonably necessary to pass inspection by the Governmental Authority;

 

7.5.2                                 Product supplied to Acorda or its
Designees by the Second Source.

 

7.6.                                       Resumption of Elan Supply:

 

7.6.1                                 In the event that Product is being
purchased from a Second Source as a result of Serious Failure To Supply, at such
time as Elan has remedied the situation that caused it and is once again able to
fulfil its obligations to supply Product pursuant to the terms and conditions of
this Agreement, Elan shall so notify Acorda.  Commencing on the first calendar
quarter beginning after the date of such notice (the “ Resumption Quarter “),
Acorda shall resume purchasing and Elan shall resume its obligations to supply
the Minimum Elan Quantities from Elan, subject to the provisions of Clause
7.6.2.

 

7.6.2                                 Acorda shall be entitled to:

 

7.6.2.1                          honor its binding purchase commitments from the
Second Source, incurred reasonably and consistently with its practice of
ordering from Elan and for delivery within three (3) months of the date of such
commitments, prior to the notice referred to in Clause 7.6.1; and

 

7.6.2.2                          subsequent to the commencement of the
Resumption Quarter, in addition to the Second Source Quantity, purchase from the
Second Source up to twenty five percent (25%) of Minimum Elan Requirements, to
the exclusion of Elan, for two consecutive calendar quarters in order to be
satisfied of Elan’s ability to fulfil its obligations in respect of the supply
of Product pursuant to the terms and conditions of this Agreement.

 

7.6.3                                 The Technical Agreement shall contain
terms applicable to the resumption of supply where the cessation is by reason of
Force Majeure, which shall be not less favourable to Elan than the provisions of
Clauses 7.6.1 and 7.6.2 applicable to resumption following Serious Failure to
Supply.

 

15

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

7.7.                                       No Termination Right:

 

Absent Elan’s failure to use commercially reasonable efforts to supply Product
in accordance with the terms of this Agreement, Acorda shall have no right to
terminate this Agreement by reason of failure to supply, except as otherwise
expressly provided herein.

 

7.8.                                       Have Made License:

 

The Parties acknowledge and confirm that:

 

(a)                                            to the extent that Acorda is
permitted hereunder to purchase the Product from Patheon; and

 

(b)                                            following termination of this
Agreement, and until termination of the License Agreement —

 

Acorda is regarded for the purposes of Article 2.1 of the License Agreement as
being permitted to have the Product made by Patheon at the Second Source
(subject always to the terms and conditions of this Agreement) and that the
license grant under such Article 2.1 to make and have made Product extends
accordingly.

 

CLAUSE 8           ADVERSE EVENTS AND PRODUCT RECALL

 

8.1.                                       Each party shall give the other
prompt notice, which shall be promptly confirmed in writing, of any occurrence
that involves:

 

8.1.1                                 any material complaint about the safety or
effectiveness of a Product, including a claim for death or injury following
administration of such Product (that is plausibly related to the administration
of such Product); and

 

8.1.2                                 any other matter arising out of this
Agreement that must be reported to a Governmental Authority.

 

In the case of Acorda reporting to Elan matters described in Clause 8.1.2,
reporting quarterly, or in such other timescale as may be agreed in the
Technical Agreement, shall be considered “prompt”.

 

For the avoidance of doubt, Acorda shall have overall responsibility for adverse
event reporting and medical complaints.

 

8.2.                                       If a party:

 

8.2.1                                 is notified by a Governmental Authority
that a Recall of a Product is required, requested or otherwise advisable as
being probably needed; or

 

8.2.2                                 establishes a need to Recall a Product for
non-conformities with the Specifications —

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

it shall promptly give to the other party written notice of the same with full
details.

 

8.3.                                       Unless otherwise agreed, after
consultation with Elan, Acorda shall take the lead role in any Recall, market
withdrawal, stock recovery or any other corrective action related to Product in
a commercially reasonable manner and Elan shall afford all reasonable
assistance.  A final report shall be completed by Acorda and delivered promptly
to Elan.

 

8.4.                                       If the Recall, market withdrawal,
stock recovery or other corrective action relating to a Product arises from
Elan’s negligent acts or omissions in manufacturing the Product, or failure of
the Product to conform to Specifications, the costs, including the cost of
replacement quantities of Products, of such Recall, market withdrawal, stock
recovery or other corrective action relating to a Product shall be borne by Elan
provided that Acorda could not have discovered the said act(s) or
omission(s) prior to the sale of the Product by exercising reasonable
diligence.  In all other circumstances, such costs shall be borne by Acorda. For
purposes of this Agreement, such costs shall include the expenses of
notification and destruction or return of the Recalled Product and all other
documented out-of-pocket costs incurred in connection with such Recall, market
withdrawal, stock recovery or other corrective action relating to a Product, but
shall not include lost profits or opportunity costs of either Party.

 

In the event that Elan should bear the costs of any recall hereunder, Elan shall
be entitled but not obliged to take over and perform the recall of the Product
and Acorda shall provide Elan at no cost with all such reasonable assistance as
may be required by Elan.

 

CLAUSE 9           FINANCIAL PROVISIONS

 

9.1.                                       Price of Launch Stocks:

 

Elan shall invoice Acorda for Launch Stocks at a price equivalent to
Manufacturing Cost plus [*****], subject to reconciliation pursuant to Clause
9.3.3.

 

9.2.                                       Price of Samples:

 

The price to be charged to Acorda for Product intended for distribution as
free-of-charge promotional samples in its marketing and promotion of the Product
shall be equivalent to Manufacturing Cost plus [*****] which price shall apply
to Product supplied EXW Elan’s Facility to Acorda.  For the avoidance of doubt,
the Parties confirm that if Acorda requires the samples to be supplied in sample
packaging, Manufacturing Cost shall include all costs referable to such
packaging.

 

9.3.                                       Price of Product (General):

 

9.3.1                                 Except for Product referred to in Clauses
9.1 and 9.2, the price of the Product manufactured by Elan to be charged to
Acorda under this Agreement shall be equivalent to eight per cent (8%) of the
NSP as determined by the provisions of Clause 9.3.3 (the “ Supply Price “), less
the Discount to the extent applicable, and

 

17

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

subject to Clause 2.5. The foregoing price shall apply to Product supplied EXW
Elan’s Facility packaged and labelled in final market form and consistent with
the NDA.

 

9.3.2                                 For the avoidance of doubt the Parties
agree that if for whatever reason the Product supplied by Elan to Acorda which
meets the Specifications and the applicable law and regulatory requirements is
not sold by Acorda, payment to Elan for such Product shall nonetheless be
effected and the price of the Product shall be determined by reference to the
NSP calculated pursuant to the provisions of Clause 9.3.3.

 

9.3.3                                 Upon supply, Elan shall render an invoice
in respect of the quantities of Product delivered to Acorda for a sum calculated
by reference to eight per cent (8%) of then-applicable Notional NSP.  The
Parties shall adjust their account as of the end of each calendar quarter during
such calendar year by Acorda paying to Elan, or by Elan crediting Acorda (as the
case may be), the difference between the sum paid pursuant to the previous
sentence and the actual Supply Price calculated each calendar quarter pursuant
by reference to actual NSP in such quarter, within the period specified in
Clause 9.6.

 

9.4.                                       Discount:

 

Where Acorda purchases from Elan for delivery in any Year more than [*****]
tablets of the Product, Acorda shall be entitled to a discount (the “ Discount
“) in respect of the excess equal to [*****] of Elan’s Manufacturing Cost for
such excess tablets.

 

The Discount is without prejudice to Clause 2.3.

 

9.5.                                       Compensating Payment:

 

9.5.1                                 In respect of all Product purchased from
the Second Source pursuant to Clause 7.2.1 and 7.6.2.2, Acorda shall make a
compensating payment to Elan calculated per unit as X — Y, where “X” is the unit
price that would have applied if the Product were purchased from Elan, under
Clause 9.2 or 9.3 as applicable; and “Y” is the marginal unit variable element
of Elan’s Manufacturing Cost applicable to such Product.

 

9.5.2                                 Such compensating payment shall be made in
respect of a particular quarter at the time of provision of the Statement, based
on the then Notional NSP and estimated Manufacturing Cost.  The Parties shall
adjust their account as of the end of each calendar year by Acorda paying to
Elan, or by Elan crediting Acorda (as the case may be), the difference between
the sum paid pursuant to Clause 9.5.1 and the actual payment calculated on the
basis of actual applicable NSP and actual Manufacturing Cost calculated at the
end of the calendar year, or such other period as may be specified in the
Technical Agreementwithin sixty (60) days after the end of the calendar year.

 

18

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

9.6.                                       Time For Payment:

 

For the first two years following First Commercial Sale of the Product in any
country of the Territory, payment for the Product supplied to Acorda shall be
effected in $ within sixty (60) days of the date of the relevant invoice issued
on supply by Elan pursuant to Clause 9.3.3.  Thereafter, payment shall be
effected by Acorda in $ within thirty (30) days of the date of the relevant
invoice issued on supply by Elan pursuant to Clause 9.3.3.

 

The adjusting payments referred to in Clause 9.3.3 shall be made on provision of
the relevant Statement.

 

For the avoidance of doubt, in respect of Product ordered for a particular
country prior to Regulatory Approval in that country, Acorda shall be
responsible for the price of such Product as from its readiness for delivery,
notwithstanding that applicable law or regulations may prevent such Product from
being supplied before Regulatory Approval.

 

9.7.                                       Process Transfer Costs:

 

Except as otherwise set forth in this Agreement, in respect of the
establishment, qualification and operation of the Second Source, Acorda shall be
solely responsible for:

 

9.7.1                                 Acorda’s own costs and expenses;

 

9.7.2                                 all third party costs and expenses,
including out of pocket expenses incurred by Elan, for products or services
previously approved by the Committee; and

 

9.7.3                                 work conducted by Elan, its Affiliates,
and their employees and consultants, under the Technology Transfer
Responsibilities schedule, or as may otherwise be agreed to by the Parties, at
the rate of FTE plus 45%.

 

9.8.                                       VAT:

 

All prices for the Product and other amounts in this Agreement are exclusive of
any applicable value added or any other sales tax, for which Acorda will be
additionally liable, if payable, subject to Clause 10.

 

CLAUSE 10         PAYMENTS, REPORTS AND AUDITS

 

Article 5.9 of the Licence Agreement is hereby incorporated by reference herein
as if restated in its entirety herein.

 

CLAUSE 11         DURATION AND TERMINATION

 

11.1.                                This Agreement shall be deemed to have come
into force on the Effective Date and will expire upon expiry or termination of
the Licence Agreement, howsoever arising.

 

19

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

11.2.                                In addition to the rights of termination
provided for elsewhere in this Agreement, either party will be entitled
forthwith to terminate this Agreement by written notice to the other party if:

 

11.2.1                          that other party commits any breach of any of
the provisions of this Agreement or the Licence Agreement, and in the case of a
breach capable of cure, fails to cure the same within 60 days after receipt of a
written notice giving full particulars of the breach and requiring it to be
remedied; provided, that if the breaching party has proposed a course of action
to cure the breach and is acting in good faith to cure same but has not cured
the breach by the 60th day, such period shall be extended by such period as is
reasonably necessary to permit the breach to be cured, provided that such period
shall not be extended by more than 90 days, unless otherwise agreed in writing
by the parties;

 

11.2.2                          that other party goes into liquidation (except
for the purposes of amalgamation or reconstruction and in such manner that the
company resulting therefrom effectively agrees to be bound by or assume the
obligations imposed on that other party under this Agreement);

 

11.2.3                          an encumbrancer takes possession or a receiver
is appointed over any of the property or assets of that other party;

 

11.2.4                          any proceedings are filed or commenced by that
other party under bankruptcy, insolvency or debtor relief laws or anything
analogous to any of the foregoing under the laws of any jurisdiction occurs in
relation to that other party.

 

11.3.                                For the purposes of Clause 11.2, a breach
will be considered capable of cure if the party in breach can comply with the
provision in question in all respects other than as to the time of performance
(provided that time of performance is not of the essence).

 

11.4.                                Elan may terminate this Agreement by giving
twelve (12) months’ written notice to do so to Acorda.

 

CLAUSE 12         CONSEQUENCES OF TERMINATION

 

12.1.                                Upon exercise of those rights of
termination specified in Clause 11 or elsewhere in this Agreement, this
Agreement shall, subject to the provisions of the Agreement which survive the
termination of the Agreement and Clause 12.2 automatically terminate forthwith
and be of no further legal force or effect, provided, however, that if the
Agreement is terminated by Elan under Clause 11.4 such termination shall not be
effective until the expiration of such twelve (12) month period

 

12.2.                                Upon termination of this Agreement by
either party, the following shall be the consequences:

 

20

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

12.2.1                          any sums that were due from Acorda to Elan under
the provisions of Clause 9 or otherwise prior to the exercise of the right to
terminate this Agreement as set forth herein shall be paid in full forthwith
 provided , that Elan has delivered Product in accordance with the
Specifications and cGMP;  and Elan shall not be liable to repay to Acorda any
amount of money paid or payable by Acorda to Elan up to the date of the
termination of this Agreement;

 

12.2.2                          all confidentiality provisions set out herein
shall remain in full force and effect for a period of 7 years from the date of
termination of this Agreement;

 

12.2.3                          all representations and warranties shall insofar
are appropriate remain in full force and effect;

 

12.2.4                          the rights of inspection and audit shall
continue in force for the period referred to in the relevant provisions of this
Agreement; and

 

12.2.5                          if Elan terminates the Agreement under Clause
11.4, Acorda shall be entitled to purchase all of Acorda’s requirements of
Product from the Second Source as from termination becoming effective.

 

CLAUSE 13         REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

 

13.1.                                The following clauses of the License
Agreement are hereby incorporated by reference herein as if stated herein in
their entirety, except that for purposes of this Agreement, all references in
such clauses to “the Agreement” or “this Agreement” shall be deemed to mean this
Supply Agreement: Articles 8.2, 8.3, 8.4, 8.5, and 8.7.

 

13.2.                                Elan represents and warrants that the
Product supplied to Acorda by Elan under this Agreement shall be free of any
lien, security, interest or other encumbrance on title, conform to the
Specifications and all applicable laws and regulations and requirements of the
FDA and other Governmental Authorities including, without limitation, the cGMP
regulations which apply to the manufacture, storage, packaging and supply of the
Product.  Elan represents and warrants that the Product supplied to Acorda under
this Agreement shall be free of defects in material and workmanship, shall not
be adulterated or mis-branded as defined by the Act (or applicable foreign law)
and shall not be a product which would violate any section of such Act if
introduced in interstate commerce and shall be fit for use as a pharmaceutical
product. Acorda agrees not to assert its right to rescind this Agreement in the
event of a breach of the representations of Elan contained in this Clause 13.2.

 

13.3.                                Elan shall indemnify, defend and hold
harmless Acorda and its officers, directors, employees and agents from all
actions, losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys’ fees) due to Third Party claims to which Acorda is or may
become subject insofar as they arise out of or are alleged or claimed to arise
out of (i) any breach by Elan of any of its obligations under this Agreement,
(ii) any breach of a representation or warranty of Elan made in this Agreement,
(iii) any failure of

 

21

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

the Product provided under this Agreement to meet the Specifications, or (iv)
the manufacture or shipment of the Product provided under this Agreement by
Elan, except in each case to the extent due to the negligence or wilful
misconduct of Acorda.

 

13.4.                                Acorda shall indemnify, defend and hold
harmless Elan and its officers, directors, employees and agents from all
actions, losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys’ fees) due to Third Party claims to which Elan is or may
become subject insofar as they arise out of or are alleged or claimed to arise
out of (i) any breach by Acorda of any of its obligations under this Agreement,
(ii) any breach of any representation or warranty of Acorda made in this
Agreement, (iii) damages for personal injury (including death) and/or for costs
of medical treatment, caused by or attributed to the Product, or (iv) the acts
or omissions of any sub-licensee appointed pursuant to the Licence Agreement,
except in each case to the extent due to the negligence or wilful misconduct of
Elan or to the relative extent that Elan is obliged to indemnify Acorda pursuant
to Clause 13.3.

 

13.5.                                The party seeking an indemnity shall:

 

13.5.1                          fully and promptly notify the other party of any
claim or proceedings, or threatened claim or proceedings;

 

13.5.2                          permit the indemnifying party to take full
control of such claim or proceedings, with counsel of the indemnifying party’s
choice, provided that the indemnifying party shall reasonably and regularly
consult with the indemnified party in relation to the progress and status of
such claim or proceedings;

 

13.5.3                          co-operate in the investigation and defence of
such claim or proceedings; and

 

13.5.4                          take all reasonable steps to mitigate any loss
or liability in respect of any such claim or proceedings.

 

The indemnifying party may settle a Claim on terms which provide only for
monetary relief and do not include any admission of liability.  Save as
aforesaid, neither the indemnifying party nor the party to be indemnified shall
acknowledge the validity of, compromise or otherwise settle any Claim or
proceedings without the prior written consent of the other, which shall not be
unreasonably withheld.

 

13.6.                                TO THE FULLEST EXTENT PERMITTED BY LAW,
APART FROM THE FOREGOING REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITIES,
AND THOSE SET FORTH IN THE LICENSE AGREEMENT ELAN MAKES NO ADDITIONAL
REPRESENTATIONS OR WARRANTIES AND HEREBY DISCLAIMS ALL WARRANTIES,
REPRESENTATIONS, AND LIABILITIES, WHETHER EXPRESS OR IMPLIED, ARISING FROM
CONTRACT OR TORT (EXCEPT FRAUD), IMPOSED BY STATUTE OR OTHERWISE, RELATING TO
THE PRODUCTS AND/OR ANY PATENTS OR TECHNOLOGY USED OR INCLUDED IN THE PRODUCTS,
INCLUDING ANY WARRANTIES AS

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

TO MERCHANTABILITY, FITNESS FOR PURPOSE, CORRESPONDENCE WITH DESCRIPTION, OR
NON-INFRINGEMENT.

 

13.7.                                NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT, ELAN AND ACORDA SHALL NOT BE LIABLE TO THE OTHER BY REASON OF
ANY REPRESENTATION OR WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF COMMON
LAW, OR UNDER THE EXPRESS TERMS OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL,
SPECIAL OR INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF CURRENT OR
FUTURE PROFITS, LOSS OF ENTERPRISE VALUE OR OTHERWISE) AND WHETHER OCCASIONED BY
THE NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR EMPLOYEES OR AGENTS OR
OTHERWISE.

 

13.8.                                Elan and Acorda shall each maintain
comprehensive general liability insurance, insuring against all liability,
including product liability, personal injury, physical injury and property
damage in respective  amounts deemed reasonable in the industry for companies of
their respective size and engaged in their respective activities under this
Agreement for the duration of this Agreement and for a period of 5 years
thereafter.

 

Each party shall provide the other party with a certificate from the insurance
company verifying the above and shall notify the other party in writing at least
30 days prior to the expiration or termination of such coverage.

 

CLAUSE 14         MISCELLANEOUS PROVISIONS

 

14.1.                                Secrecy and Confidentiality.  Article 12.1
of the License Agreement is hereby incorporated by reference herein as if stated
herein in its entirety.

 

14.2.                                Licence to Elan:

 

Acorda hereby grants to Elan and Elan hereby accepts for the Term a
non-exclusive royalty-free license to use such Acorda Patent Rights and Acorda
Know-How as are necessary or useful for the purpose of manufacturing the
Product.  Such rights shall be sub-licensable by Elan to its Affiliates and
sub-contractors, for the sole purpose of manufacturing the Product in accordance
with this Agreement.

 

14.3.                                Assignment:

 

14.3.1                          Subject to the provisions of this Clause 14.3,
each party be entitled without the consent of the other:

 

14.3.1.1               to subcontract or delegate the whole or any part of its
duties hereunder to its Affiliate(s) (but shall remain responsible for its
obligations under this Agreement); and/or

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

14.3.1.2                      to assign this Agreement to its Affiliate,
provided that such assignment has no material adverse tax implications for the
other Party or Parties hereto, and provided further that the assigning Party
shall remain liable and responsible with such assignee to the other Party for
the performance of any obligations, representations or warranties delegated,
contracted, assigned or otherwise transferred to any such assignee.

 

14.3.2                          In the event that Elan agrees to sell all or
substantially all of the assets of Elan’s Facility, Elan shall so notify
Acorda.  In such event, Elan may (a) terminate this Agreement by ninety (90)
days’ written notice to Acorda; or (b) assign all (but not, subject to the
following sentences, a portion) of its rights and obligations under this
Agreement to a Permitted Elan Assignee, provided that such transfer or
assignment has no adverse tax implications for Acorda.

 

14.3.3                          Each Party may assign all (but not a portion) of
its rights and obligations under this Agreement to an entity that acquires all
or substantially all of its business or assets to which this Agreement pertains,
whether by merger, reorganisation, acquisition, sale or otherwise, provided,
that in the case of an assignment by Elan, the assignee is a Permitted Elan
Assignee.

 

14.3.4                          Except as provided for in this Clause 14.3, this
Agreement may not be assigned by a party without the prior written consent of
the other Party, which shall not be unreasonably withheld or delayed.

 

14.3.5                          Any permitted assignee of a Party under this
Clause 14.3 shall assume all related obligations of its assignor under this
Agreement.

 

14.4.                                Parties bound:

 

This Agreement shall be binding upon and enure for the benefit of parties
hereto, their successors and permitted assigns.

 

14.5.                                Severability:

 

If any provision in this Agreement is deemed to be, or becomes invalid, illegal,
void or unenforceable under applicable laws:

 

14.5.1                          such provision will be deemed amended to conform
to applicable laws so as to be valid and enforceable; or

 

14.5.2                          if it cannot be so amended without materially
altering the intention of the parties, it will be deleted the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
impaired or affected in any way.

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

14.6.                                Force Majeure:

 

14.6.1                          Neither party to this Agreement shall be liable
for delay or failure in the performance of any of its obligations hereunder if
such delay or failure results from Force Majeure.

 

14.6.2                          If Force Majeure prevents or delays the
performance by a party of any obligation under this Agreement, then the party
claiming Force Majeure shall promptly notify the other party thereof in
writing.  The parties shall thereafter as soon as practicable discuss how best
to continue their operations in accordance with this Agreement and shall
thereafter continue such discussions on a regular basis while Force Majeure
continues.

 

14.6.3                          Where a party claims Force Majeure, the other
party’s obligations under this Agreement shall be suspended for the period while
Force Majeure continues, but only to the extent reasonably required by the Force
Majeure.

 

14.6.4                          The party claiming Force Majeure shall use all
reasonable efforts to avoid, minimise or remove the cause of such
non-performance and to mitigate its effects and shall continue performance with
due dispatch whenever such causes are removed.

 

14.6.5                          Where Force Majeure continues for a period of
six (6) months the other party shall have the right to terminate this Agreement,
provided that it has complied with its obligations under this Clause 14.6.

 

14.7.                                Relationship of the parties:

 

14.7.1                          Nothing contained in this Agreement is intended
or is to be construed to constitute any of the parties hereto as partners or
members of a joint venture or any party as an employee of another party.

 

14.7.2                          No party hereto shall have any express or
implied right or authority to assume or create any obligations on behalf of or
in the name of any other party or to bind another party to any contract,
agreement or undertaking with any third party.

 

14.8.                                Amendments:

 

No amendment, modification or addition hereto shall be effective or binding on
any party hereto unless set forth in writing and executed by a duly authorised
representative of all parties hereto.

 

14.9.                                Waiver:

 

No waiver of any right under this Agreement shall be deemed effective unless
contained in a written document signed by the party charged with such waiver,
and no waiver of any breach or failure to perform shall be deemed to be a waiver
of any future breach or failure to perform or of any other right arising under
this Agreement.

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

14.10.                         Entire Agreement:

 

14.10.1                   Each of the parties hereto hereby acknowledges that in
entering into this Agreement it has not relied on any representation or warranty
except as expressly set forth herein or in the License Agreement or in any other
document referred to herein.

 

14.10.2                   This Agreement and the Licence Agreement, together
with the exhibits and schedules hereto and thereto, together set forth all of
the agreements and understandings between the parties with respect to the
subject matter hereof, and supersede and terminate all prior agreements and
understandings between the parties with respect to the subject matter hereof,
including the SCI Agreement and the MS Agreement.

 

14.10.3                   Nothing in this Clause 14.10 shall exclude any
liability which any party would otherwise have to the other party or any right
which either of them may have to rescind this Agreement for fraud.

 

14.11.                         Governing law and jurisdiction:

 

14.11.1                   This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, excluding its conflict of
laws rules.

 

14.11.2                   Article 12.14 of the License Agreement is hereby
incorporated by reference herein as if stated herein in its entirety.

 

14.12.                         Notices:

 

14.12.1                   Any notice to be given under this Agreement shall be
sent in writing in English by registered or recorded delivery post, reputable
overnight courier or fax to:

 

Elan at

 

c/o Elan Pharma Ltd.

Monksland

Athlone

Co. Westmeath

Ireland

Attention:

General Manager

Fax:

+353 906 492427

 

Acorda at

 

15 Skyline Drive

Hawthorne, New York 10532

United States of America

Attention:

President

Fax:

914.347.4560

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

or to such other address(es) and fax numbers as may from time to time be
notified by either party to the other hereunder.

 

14.12.2                   Any notice sent by mail shall be deemed to have been
delivered within 7 working days after despatch or delivery to the relevant
courier and any notice sent by fax shall be deemed to have been delivered upon
confirmation of receipt.  Notice of change of address shall be effective upon
receipt.

 

14.13.                         Further assurances:

 

At the request of any of the parties, the other party or parties shall (and
shall use reasonable efforts to procure that any other necessary third parties
shall) execute and do all such documents, acts and things as may reasonably be
required subsequent to the signing of this Agreement for assuring to or vesting
in the requesting party the full benefit of the terms hereof.

 

14.14.                         Counterparts:

 

This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and all of which when taken
together shall constitute this Agreement.

 

14.15.                         Set-off:

 

Each of the parties will be entitled but not obliged to set-off against any
amount of money payable to it by the other party hereunder, any amount of money
payable by it to the other party hereunder.

 

IN WITNESS WHEREOF the parties have executed this Agreement on the day and date
appearing at the top of page 1.

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

SCHEDULE 1  MANUFACTURING COST

 

“Manufacturing Cost” shall mean fully absorbed cost of manufacture (including
packaging) which shall be determined on the basis of the following elements:

 

(a)                          Direct material, labour and overhead cost; and

 

(b)                          Such indirect labour, factory, laboratory and other
overhead costs properly allocable.  Overhead allocations shall include, but not
be limited to, expenses of plant maintenance and engineering, plant management,
receiving and warehousing, disposal and treatment of waste, building occupancy,
quality control, costs of services provided to manufacturing and insurance
provided to manufacturing.

 

Such allocations shall be in a manner consistent with GAAP from time to time and
in a manner consistent with expenses and overhead allocated to other products
manufactured by Elan or its Affiliates.

 

Where some part(s) of the manufacture or packaging is/are conducted by
unaffiliated third party(ies), Manufacturing Cost shall be the amount paid to
such third party(ies) plus any of the aforementioned costs incurred by Elan or
its Affiliates in completing the manufacture, packaging or delivery of the
Product.

 

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Certain portions of this Exhibit have been omitted pursuant to a request for
confidentiality. Such omitted portions, which are marked with brackets [     ]
and an asterisk*, have been separately filed with the Securities and Exchange
Commission.

 

SIGNED

 

Monksland Holdings BV

 

 

 

By:

/s/ Pieter Bosse

 

By:

/s/ Klaas van Blanken

 

 

 

 

for and on behalf of

 

ELAN CORPORATION, PLC.

 

 

 

Name:

Monksland Holdings BV

 

Title:

Proxyholder

 

 

 

 

 

 

 

SIGNED

 

 

 

By:

/s/ Ron Cohen

 

 

 

 

for and on behalf of

 

ACORDA THERAPEUTICS, INC.

 

 

 

Name:

Ron Cohen

 

Title:

President & Chief Executive Officer

 

 

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