Exhibit 10.27


 


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 Commission.


 


 


ELAN
PHARMA INTERNATIONAL LIMITED


 


AND


 


ACORDA
THERAPEUTICS, INC,


 






 


 


ZANAFLEX
SUPPLY AGREEMENT


 






 












 


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 Commission.


 


 


THIS
SUPPLY AGREEMENT (this “Agreement”) is made on July 21, 2004
(the “Effective Date”)


 


BETWEEN:


 


(1)          
ELAN PHARMA INTERNATIONAL LIMITED, a company incorporated in Ireland
(registered no. 222276) (“Elan”); and


 


(2)          
ACORDA THERAPEUTICS, INC., a Delaware corporation whose registered office is at
15 Skyline Drive, Hawthorne, NY 10532 (“Buyer”).


 


RECITALS:


 


(A)          Pursuant
to that certain Asset Purchase Agreement between Buyer and Elan
Pharmaceuticals, Inc. (“EPI”), dated July 21,
2004 (the “Purchase
Agreement”), Buyer acquired
(among other assets) the rights and authorisations necessary to market and sell
the Products (as defined below) in the Territory (as defined in the Asset Purchase
Agreement).


 


(B)          
Elan
has agreed to manufacture and supply the Products to Buyer, and Buyer has
agreed to purchase the Products for onward commercial supply on the terms and
conditions set out in this Agreement.


 


NOW
IT IS HEREBY AGREED AS FOLLOWS:


 


1.            
INTERPRETATION


 


1.1           In this
Agreement:


 


“Affected Item” shall have the meaning given to
such term in Clause 10.3;


 


“Affected
Obligation” shall have the
meaning given to such term in Clause 20.1;


 


“Affected Party” shall have the meaning given to
such term in Clause 20.1;


 


“Affiliate” shall mean, with respect to any
person or entity, any other person or entity which Controls, is Controlled by
or is under common Control with such person or entity;


 


“Alternate
Manufacturer” shall have the
meaning given to such term in Clause 11.4;


 


“Beneficiary” shall have the meaning given to
such term in Clause 13.8.2;


 


“Business Day” shall mean a day other than a
Saturday or Sunday or public holiday in England and Wales, and Ireland;


 


“cGMP” shall mean current Good
Manufacturing Practice under the applicable laws and regulations in the United
States, Ireland and the European Union;


 












 


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 Commission.


 


 


“Confidential
Information” shall have the
meaning given to such term in Clause 15.1;


 


“Control” means (a) ownership (directly
or indirectly) of at least fifty percent (50%) of the shares of stock entitled
to vote for the election of directors in the case of a company or corporation;
or (b) the ability (directly or indirectly) otherwise to direct and
control the actions of a person or entity.


 


“Covenantor” shall have the meaning given to
such term in Clause 13.8.2;


 


“Disclosing
Party” shall have the
meaning given to such term in Clause 17.1;


 


“Due Date” shall have the meaning given to
such term in Clause 9.4;


 


“Elan’s Facility” shall mean Elan’s manufacturing
facility located at Monksland, Athlone, Co. Westmeath, Ireland or Elan’s
Affiliate’s manufacturing facility located at Gainesville, Georgia, U.S.A., or
such other manufacturing facility as Elan may from time to time specify
(provided that any facility so specified has received all required Facility
Licences and Elan has provided Buyer with advance notice sufficient to amend
its NDA to include such facility if Elan intends to use a facility other than
the one located at Monksland, Athlone, described above);


 


“Ex Works” and “EXW” 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;


 


“Facility
Licences” means all required
licenses, approvals, permits and authorizations required by any Governmental
Authority or law or regulation to manufacture, package or store Products, or,
to the extent required for Elan to perform under this Agreement, to ship or
export Products;


 


“Force Majeure
Event” means an event beyond
the control of the Affected Party which makes the Affected Party’s performance
of an obligation impossible (or such an event that makes such performance so
impractical as to be reasonably to be considered impossible) including, without
limitation, strike, lock-out, labour dispute, act of God, war, armed conflict,
terrorism, riot, civil commotion, malicious damage, explosion, earthquake,
fire, flood, storm or other extraordinary adverse weather conditions.


 


“Governmental
Authority” shall mean each
governmental and regulatory body, agency, department or entity, whether or not
located in the Territory, which regulates, directs or controls commerce in or
with any territory or location;


 


 shall mean the Irish
consumer price index or such other index as may replace it from time to time;
or if there is no replacement, such published Irish index as Elan in its
discretion considers to be the closest comparator to the same;


 


“Initial Term” shall have the meaning given to
such term in Clause 11.1;


 


2












 


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 Commission.


 


 


“Knowledge” of a particular fact or other
matter means:  (i) with respect to any individual; (A) the
actual knowledge of such individual concerning such fact or other matter; and
(B) the knowledge that a prudent individual would be expected to discover
or otherwise become aware of in the course of conducting a reasonable
investigation concerning the existence of such fact or other matter; and
(ii) with respect to Elan or Buyer, the Knowledge concerning such fact or
other matter of (1) the officers of such party, (2) the directors of
such party, and (3) the senior managers of such party with responsibility
for, or supervision of, the relevant matters; provided that under no
circumstances shall Knowledge of Elan include any knowledge not actually known
to such persons but imputed to such persons or Elan due to its or its
Affiliates’ relationship with Novartis Pharma AG (“Novartis”) or its
representatives; and provided, further, that none of such persons shall have
any obligation as a result of entering into (or any provision of) this Agreement,
the Purchase Agreement or any related Agreement to make any inquiries of
Novartis or its representatives regarding any matter.


 


“Loss” shall mean any loss, liability, or
cost (including reasonable attorneys’ fees and expenses) which is incurred by a
party;


 


“Medical Claim” shall have the meaning given to
such term in Clause 13.7;


 


“Minor
Deficiencies and Delays” shall mean
(i) shortfalls that are consistent with industry accepted standards, but
not to exceed 10% of the amount ordered (ii) delays in delivery of the
Products not exceeding 30 days from the delivery date or such other period of
delay as may be agreed between the Parties;


 


“Monthly
Forecast Report” shall have the
meaning given to such term in Clause 4.1.1;


 


“Production
Licence” shall have the
meaning given to such term in Clause 11.4;


 


“Products” means pharmaceutical products
containing tizanidine as their active pharmaceutical ingredients and having a
multi-particulate capsule formulation currently approved by the FDA pursuant to
NDA No. 21-447 to be marketed in the Territory.


 


“Product
Specifications” shall mean the
specifications for the Products contained in the relevant Regulatory Approvals
issued by the authorities in the Territory, and such additional or amended
specifications for such Products as may be effected under the terms of this
Agreement;


 


“Regulatory
Application” shall mean any
application for a Regulatory Approval, which is filed in the Territory
following the Effective Date, including any supplements or amendments thereto;


 


“Regulatory
Approval” shall mean the final
approval required from a governmental regulatory authority to market a Product
in the Territory, and any other approval which is required to market or sell
such Product or otherwise necessary for Buyer to perform under this Agreement
or otherwise handle the Products;


 


3












 


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 Commission.


 


 


“Relevant Claim” shall have the meaning given to
such term in Clause 13.8;


 


“Renewal Term” shall have the meaning given to
such term in Clause 11.1;


 


“Serious Failure
to Supply” shall mean that in a
period of a calendar year, for reasons other than Force Majeure, a shortage of
tizanidine caused by events or third parties not under the control of Elan, or
the default of Buyer, Elan fails on at least two consecutive occasions to
supply Buyer’s properly forecasted and ordered requirements of the Products in
accordance with the terms of this Agreement, except for Minor Deficiencies and
Delays, and the cumulative shortfall for such calendar year attributable to
such failure(s) is at least 35% of the aggregate amount properly forecasted and
ordered from Elan for delivery in such calendar year; provided that, for
purposes of this definition the timely supply of Products that breach the
representations and warranties made in Clause 13.2 (excluding such Products
with nonlatent defects) will be deemed not to be a failure to supply Buyer’s
properly forecasted and ordered requirements of the Products in accordance with
the terms of this Agreement;


 


“Specified
Delivery Date” shall have the
meaning given to such term in Clause 4.3;


 


“Technical Agreement” shall have the meaning given to
such term in Clause 3.9;


 


“Technological
Competitors” shall mean those
entities, including any entities that are subsidiaries or successors in
interest to such entities, set out in Schedule 3;


 


“Term” shall mean the Initial Term plus
any applicable Renewal Term;


 


“Territory” means the United States of
America, its territories and possessions and the Commonwealth of Puerto Rico;


 


“VAT” means;  (a) any tax
imposed in compliance with the Sixth Directive of the Council of the European
Economic Communities (77/388/EEC); and (b) any other tax of a similar
fiscal nature, whether imposed in a member state of the European Union in
substitution for or in addition to such tax, or imposed elsewhere;


 


“VAT Amount” shall have the meaning given to
such term in Clause 10.2; and


 


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


 


1.2           In this
Agreement a reference to:


 


1.2.1        the singular includes the
plural and vice versa;


 


1.2.2        a “person” includes a reference to a
corporation, corporate body, association or partnership;


 


1.2.3        any reference to a “Clause” or “Schedule”, unless the context
otherwise requires, is a reference to a clause or schedule of this
Agreement; and


 


4












 


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 Commission.


 


 


1.2.4        any person shall (where
appropriate), in respect of any provisions relating to VAT, be deemed at any
time when such person is a member of a group for the purposes of
section 43 to 43C of the Value Added Tax Act 1994 (or in relation to a
jurisdiction other than the United Kingdom, such legal term or concept as most
closely corresponds to it) to include a reference to the representative member
(or in relation to a jurisdiction other than the United Kingdom, such legal
term or concept as most closely corresponds to it) of such group at such time.


 


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


 


1.4           In this
Agreement, the expressions “include”, “includes” and “including” shall be construed
without limitation.


 


2.            
EXCLUSIVE SUPPLY


 


2.1           During the
Term, subject to Clause 11.4, (Buyer shall purchase all of its (and its
Affiliates) requirements of the Products in the Territory exclusively from
Elan, and Elan shall supply all such Products under the terms of this
Agreement.


 


3.            
REGULATORY MATTERS


 


3.1           Following the
transfer of the Regulatory Approvals to Buyer pursuant to the terms of the
Purchase Agreement, Buyer shall (at its own expense) be responsible for
obtaining and maintaining all Regulatory Approvals for the Products with the
appropriate Governmental Authority.  Subject and pursuant to the
provisions of the Purchase Agreement and Interim Services Agreement between EPI
and Buyer, Elan shall provide all information and assistance reasonably
requested by Buyer needed to transfer and obtain such Regulatory Approvals.


 


3.2           Each of Elan
and Buyer shall, without delay, provide to the other party such copies of all
Regulatory Approvals, Regulatory Applications, Facility Licenses and
communications with any Governmental Authority to the extent necessary for such
other party to comply with its obligations under this Agreement.


 


3.3           Elan shall,
at Elan’s expense, be responsible for obtaining and maintaining any and all
export or import licences or clearances relating to the raw materials and any
other intermediary products contained in the Products, together with any and
all Facility Licenses.  Elan shall provide Buyer copies of all such
Facility Licenses at Buyer’s request.  Elan shall ensure that each Elan
Facility complies with all laws, regulations and licensing requirements
applicable to the manufacture of Products in compliance with the Product
Specifications and cGMP.  At the request of Buyer, Elan shall take the steps
necessary to qualify its Affiliate’s Gainesville, Georgia, U.S.A. facility to
manufacture the Product, including but not limited to obtaining all required
Facility Licenses; provided that


 


5












 


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 Commission.


 


 


all reasonable costs of
Elan, its Affiliates or its consultants actually incurred in connection with
such qualifications shall be borne by Buyer (as long as such costs are approved
by Buyer in advance, such approval not to be unreasonably withheld or delayed).


 


3.4           Buyer shall
promptly provide to Elan the packaging and related artwork for the Products,
which packaging and artwork must comply with the relevant Regulatory
Approvals.  Buyer shall be responsible for granting final approval of the
pre-press proofs of such artwork.


 


3.5           Buyer shall
be responsible for obtaining and maintaining any necessary export or import
licences or clearances in respect of the Products.  Elan shall provide to
Buyer reasonable assistance and any documents in its possession which are
reasonably necessary for that purpose.


 


3.6           Each party
shall notify the other party as soon as possible (and in no event later than
48 hours) of any notification received by it from a Governmental Authority
to conduct an inspection of the facilities used hereunder in the development,
manufacturing, packaging, storage or handling of the Products.  Each party
shall promptly provide to the other party copies of all correspondence with a
Governmental Authority relating to any such notification or inspection received
or sent by it to the extent that such correspondence relates to the
Products.  Each party shall have a duty to reasonably cooperate with the
other party with respect to such inspections at such other party’s facilities.


 


3.7           Upon
reasonable request, Elan shall make that portion of its facility where the
Products are manufactured, tested or stored, including all record and reference
samples, available for inspection:


 


3.7.1        upon reasonable notice and
during normal business hours, by Buyer’s duly qualified employee or, with the
consent of Elan (not to be unreasonably withheld or delayed), by Buyer’s duly
qualified agent or contractor; or


 


3.7.2        by a relevant Governmental
Authority.


 


An inspection under Clause 3.7.1 shall be limited to
determining whether there is compliance with cGMP and other requirements of
applicable law.


 


3.8           To the extent
that any or all of the raw materials or intermediary products contained in the
Products are not produced by Elan, Elan shall ensure that such materials or
products are suitable for manufacturing the Products in compliance with
applicable Regulatory Approvals, Facility Licenses and the Product
Specifications and meet all other applicable legal and regulatory requirements.


 


3.9           As soon as is
practicable after the Effective Date.  Elan and Buyer shall enter into a
mutually-agreeable technical agreement (the “Technical Agreement”) relating


 


6












 


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 Commission.


 


 


to quality assurance,
acceptance testing and other requirements to be agreed by the parties.


 


4.            
FORECASTS AND ORDERS


 


4.1           In order to
permit Elan to allocate its manufacturing capacity and to assist Buyer with its
sales and marketing, Buyer shall provide Elan with bona fide written forecasts
of its requirements for each of the Products as follows:


 


4.1.1        By thirty (30) days after
the Effective Date, and thereafter each calendar month not later than the 23rd
of the month, an 18-month forecast (commencing at the beginning of the
following month), broken down by month (each, a “Monthly Forecast Report”); and


 


4.1.2        not later than 1
July in each year, a two-year forecast, broken down by year.


 


4.2           The aggregate
amount of Products forecasted to be required in the first twelve (12) months of
each Monthly Forecast Report shall, unless otherwise agreed by Elan, not
increase or decrease by more than twenty-five percent (25%) as compared to the
first twelve (12) months of the forecast three months prior; provided, however,
that until there exists a Monthly Forecast Report from three months prior to
the then-current Monthly Forecast Report, the initial Monthly Forecast Report
shall be used for purposes of such comparison.


 


4.3           Buyer shall
be bound to order one hundred percent (100%) of the forecast required
quantities of the Products in each respective month of the period of five (5) months
immediately following each Monthly Forecast Report, but otherwise forecasts
shall not be binding.  With respect to such orders, Buyer shall submit to
Elan a written purchase order for such required quantities of Products,
specifying the order quantity and the date on which delivery of the order is
required (the “Specified
Delivery Date,” which shall in no event be earlier than one
hundred fifty (150) days after the date of Elan’s receipt of such written
purchase order).  For the avoidance of doubt, the parties acknowledge and
agree that, notwithstanding anything to the contrary contained in this
Agreement, other than pursuant to the preceding two sentences Buyer shall not
be obligated to place any minimum number of orders under this Agreement.


 


4.4           Elan shall
not be obligated to supply Products in excess of Buyer’s requirements as
forecast in accordance Clauses 4.1, 4.2 and 4.3.


 


4.5           Notwithstanding
Clauses 4.1, 4.2, 4.3 and 4.4, Elan will use its commercially reasonable
efforts to fulfill Buyer’s requirements in excess of forecasted amounts.


 


4.6           The order
quantity shall be in whole number multiples of the minimum batch size of the
Products, which minimum batch size shall be as set out in Schedule 1;


 


7












 


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 Commission.


 


 


provided, however, that
upon the request of Buyer, Elan will discuss with Buyer in good faith the
reduction of minimum batch sizes set out in Schedule 1 (and any related
amendment to Schedule 1); and provided, further, that all reasonable costs
of Elan, its Affiliates or its consultants actually incurred in connection with
the reduction of such minimum batch sizes shall be paid by Buyer (as long as
such costs are approved by Buyer in advance, such approval not to be
unreasonably withheld or delayed).  Elan shall have the right to refuse to
fulfil any amount of an order which does not conform with the provisions of
this Clause 4.6.  Where Elan in its sole discretion fulfils any order
which does not conform with the provisions of this Clause 4.6, the fulfilment
of such order by Elan shall not affect Elan’s right to refuse to fulfil any
subsequent order which does not conform with the provisions hereof.


 


4.7           Buyer hereby
agrees that it shall not use Products delivered to Buyer in bulk capsule form
for packaging into finished Products for commercial sale.


 


4.8           To the extent
that at any time during the Term Buyer notifies Elan of its intention to sell
finished Products that Buyer is then holding in inventory as “safety stock”,
(a) all then current purchase orders shall remain in place, and
(b) Elan agrees to discuss in good faith with Buyer the modification of
the Monthly Forecast Report most recently submitted by Buyer (including
disregarding the provisions of Clause 4.2 with respect thereto).


 


4.9           The terms of
this Agreement are hereby incorporated by reference into each written purchase
order for Products submitted by Buyer 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.            
SUPPLY OF THE PRODUCTS


 


5.1           Elan shall
supply the Products requested in each written purchase order by the Specified
Delivery Date (subject to the 30-day cure period specified in Clause 11.2.1).


 


5.2           Each Product
supplied by Elan to Buyer shall:


 


5.2.1        be in final market
packaging in accordance with written standards agreed by the parties from time
to time;


 


5.2.2        be Ex Works Elan’s
Facility;


 


5.2.3        be free from any liens or
encumbrances;


 


5.2.4        conform to, and be
manufactured in accordance with, the relevant Product Specifications and all
applicable laws and regulations, including applicable cGMP;


 


8












 


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 Commission.


 


 


5.2.5        be in suitable packaging
in a sealed tamper-evident container and labelled in accordance with Buyer’s
reasonable requirements communicated to Elan, in particular as required
pursuant to any Regulatory Approval and so as to permit safe storage and
transport; and


 


5.2.6        be accompanied by a
certificate of analysis and a certificate of release, in each case in a form
conforming to industry standards as mutually agreed between Elan and Buyer.


 


6.            
CHANGES TO PRODUCT SPECIFICATIONS


 


6.1         
If:


 


6.1.1        changes to the Product
Specifications are required by law or by any Governmental Authority; or


 


6.1.2        Buyer reasonably requests
changes to the Product Specifications;


 


Elan shall promptly implement any such changes at Buyer’s
sole cost (such cost to include but not be limited to Elan’s internal and
external costs relating to changes to artwork and labeling and changes to raw
materials, intermediary products and components, in each case whether such
costs are out-of-pocket costs or write-off charges (to the extent such
write-off charges are actually incurred by Elan and Elan has attempted in good
faith to avoid such write-off charges by making other use of the applicable
materials, products or components); provided, that Elan shall provide Buyer
with advance notice of such changes and the estimated costs thereof and Buyer
shall have the opportunity to discuss with Elan any of such changes or costs
prior to such changes being implemented for up to two (2) weeks after
Buyer receives such notice; and, provided, further, that with respect to
then-outstanding purchase orders submitted by Buyer pursuant to Clause 4.3, to
the extent that applicable law or any Governmental or Regulatory Authority does
not allow Elan to manufacture and deliver to Buyer, or Buyer to sell, Products
ordered under such purchase orders, Elan shall be permitted to delay delivery
of Products ordered thereunder for an amount of time equal to the actual delay
in making the changes required by changes in Product Specifications caused by
compliance with this Clause 6.1 (it being understood and agreed by Buyer that
it shall accept Products ordered under such purchase orders despite such
Products being manufactured to Product Specifications that do not reflect the
changes required by this Clause 6.1, to the extent that applicable law or any
Governmental or Regulatory Authority allows Elan to manufacture and deliver to
Buyer, and Buyer to sell, such Products).  Otherwise, changes shall only
be made to the Product Specifications by agreement between the parties.


 


9












 


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 Commission.


 


 


7.            
DISPUTES AS TO SPECIFICATIONS


 


7.1           All claims
for failure of any Product to conform to the Product Specifications must be
made by Buyer in writing within sixty (60) days following delivery, except in
the case of latent defects.  Claims for latent defects, not discovered
during the routine testing protocol (which is to be agreed between the parties
reasonably and in good faith), shall be made in writing within forty-five (45)
days of discovery.  Except as described in the preceding sentence, failure
to make timely claims in the manner prescribed in this Clause 7.1 shall constitute
acceptance of the delivery.


 


7.2           Where
Products which have been delivered breach the representations and warranties
made in Clause 13.2 (and Clause 7.1 has been complied with) and such
non-conformity is attributable to acts or omissions of Elan:


 


7.2.1        they shall be reworked (to
the extent permitted by applicable law) or replaced at Elan’s cost within
ninety (90) days of the receipt by Elan of the non-conforming Products; and


 


7.2.2        Elan shall reimburse Buyer
in respect of the costs incurred by Buyer in relation to any testing, handling,
destruction or return of the Products.


 


Notwithstanding Clause 11.2.1, no cure period shall apply
with respect to Products described in Clause 7.2 other than that set forth in
Clause 7.2.1.  Other than as expressly set forth elsewhere in this
Agreement in Clause 13.6, and with respect to Serious Failures to Supply and
Product recalls, Buyer shall have no remedies in respect of Elan having
supplied Products that breach the representations and warranties made in Clause
13.2 other than as set out in this Clause 7.2.


 


7.3           In the event
of an unresolved dispute:


 


7.3.1        as to conformity of a
Product with the relevant Product Specifications pursuant to Clause 7.1 or 8.3;
or


 


7.3.2        pursuant to clauses 8.5 or
13.4,


 


the parties shall appoint an independent first-class
laboratory or other appropriate, independent expert to undertake the relevant
testing, and its findings shall be conclusive and binding upon the
parties.  If the parties fail to agree on the appointment of an
independent first-class laboratory or expert, as appropriate, within thirty
(30) days after the parties first discuss such appointment, the parties agree
that an independent party designated by Elan and an independent party
designated by Buyer shall together select a mutually-acceptable, appropriate,
independent expert.  Such independent expert shall undertake the relevant
analysis and/or testing and report its findings within a reasonable time of


 


10












 


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 Commission.


 


 


appointment, which findings shall be conclusive and binding
upon the parties.  All costs relating to this process shall be borne
solely by the unsuccessful party.


 


8.            
ADVERSE EVENTS AND PRODUCT RECALL


 


8.1           Each party
shall, without delay, give notice to the other of any occurrence that involves:


 


8.1.1        any complaint about the
safety, quality, packaging or effectiveness of a Product manufactured or
supplied under this Agreement, including a claim for death or injury following
administration of such Product (that is allegedly related to the administration
of such Product); and


 


8.1.2        any other matter in
connection with a Product manufactured or supplied under this Agreement or
arising out of this Agreement that must be reported to a Governmental
Authority.


 


8.2           The parties
agree that within sixty (60) days following the Effective Date, representatives
of each party with responsibility for the safety, surveillance and
pharmacovigilance of the Products shall meet to develop detailed procedures
regarding the format, timing and content of the safety information to be
exchanged between the parties, and shall meet periodically thereafter to update
the procedures.


 


8.3           If a party:


 


8.3.1        is notified by a
Governmental Authority that a recall of a Product is required, requested or
otherwise advisable; or


 


8.3.2        establishes a need to
recall a Product for non-conformity with the Product Specifications,


 


it shall promptly give to the other party notice of the
same with full details.  Notwithstanding any dispute between the parties
as to whether the Product complies with the Product Specifications, the recall
shall commence but such dispute shall be resolved in accordance with Clause
7.3.


 


8.4           Unless
otherwise agreed or unless Elan elects to take over and perform the recall of
the Product pursuant to Clause 8.6.2, Buyer shall take the lead/coordinating
role in any recall of the Product in a commercially reasonable manner, and Elan
shall afford all reasonable assistance to Buyer in respect of such
recall.  A joint recall administration team shall be established to
support Buyer in such role with an equal number of nominated individuals from
each party participating.  A final report shall be completed by the recall
administration team and delivered promptly to both parties.


 


11












 


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 Commission.


 


 


8.5           The costs of
a recall of the Product, including the cost of replacement quantities of such
Product, shall be borne by Buyer unless (a) the recall arises from Elan’s
supply of Product that breach the representations and warranties made in Clause
13.2 or from the negligent acts or omissions of Elan in manufacturing the
Product, and (b) subject to Clause 13.6, Buyer could not have discovered
such failure or acts or omissions prior to the sale of the Product by
exercising reasonable diligence in conducting acceptance testing pursuant to
the Technical Agreement, in which case Elan shall bear the actual costs of the
recall; provided that each party hereby agrees to use commercially reasonable
efforts to minimize any costs relating to any recall of the Product that may be
borne by the other party.  If the parties are unable to agree who should
bear the cost of the recall, the dispute shall be settled in the manner set
forth in Clause 7.3.


 


8.6           In the event
that Elan is required to bear the costs of any recall of the Product in
accordance with Clause 8.5, Elan shall:


 


8.6.1        reimburse Buyer for all
reasonable and actual costs and expenses which Buyer incurs in connection with
such recall; and


 


8.6.2        be entitled (but not
obliged) to take over and perform the recall of such Product.


 


9.            
PRICE AND PAYMENT


 


9.1           The price of
the Products shall be:


 


9.1.1        until the first
anniversary of the Effective Date, the price set out in Schedule 1;


 


9.1.2        thereafter, (and subject
to Clause 9.2) at such price as Elan notifies to Buyer from time to time,
provided that during the Term (including the Initial Term and any Renewal
Term(s)) price increases for the Products shall be limited to the percentage
increase in the Index, as compared to the most recent price adjustment.


 


9.2           In addition
to any price increases pursuant to Clause 9.1.2, if:


 


9.2.1        the price which Elan must
pay for the active ingredient of, or other raw material used to produce, a Product
increases by a percentage in excess of the percentage increase in the Index (as
compared to the later of the Effective Date or the most recent price adjustment
pursuant to this Clause 9.2);


 


9.2.2        additional regulatory
obligations are imposed on Elan by law or a Governmental Authority; or


 


12












 


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 Commission.


 


 


9.2.3        any other price increase
is required or agreed in accordance with Clause 6,


 


Elan may increase the price of the Products by such amount
as is necessary to recover the additional costs of supplying the
Products.  Elan shall ensure that, where the costs of active ingredients
or other raw materials used to produce the Products increase by a percentage in
excess of the percentage increase in the Index (as compared to the Effective
Date), Elan and Buyer will meet to discuss potential alternative suppliers of
such materials.


 


9.3           Payment for
supply of all Products shall be made by Buyer in US$ within ninety (90) days of
receipt of the relevant invoice.  Payment shall be by means of:


 


9.3.1        wire transfer to an account
designated in writing by Elan from time to time; or


 


9.3.2        a letter of credit issued
by or drawn on by a bank acceptable to Elan.


 


9.4           Buyer shall
pay interest to Elan on sums not paid to Elan on the date on which payment
should have been made pursuant to the applicable provisions of this Agreement (“Due Date”) over the period from
the Due Date until the date of actual payment (both before and after judgement)
at the prime rate publicly announced by Morgan Guaranty Trust Company of New
York at its principal office from time to time plus 2% (or, if less, the
maximum rate allowed to be charged under applicable laws), such interest to be
payable on demand and compounded monthly.


 


9.5           Buyer may
demand, no more than once per year, an audit of the relevant books and records
of Elan in order to verify any price increases proposed by Elan under Clauses
9.1 or 9.2.  Upon no less than sixty (60) days’ prior written notice, Elan
shall grant reasonable access during normal business hours to members of an
independent public accounting firm selected by Buyer to such relevant books and
records of Elan in order to conduct a review or audit thereof.  The
accounting firm shall report its conclusions and calculations to Buyer and
Elan; provided, that in no event shall the accounting firm disclose to Buyer
any information of Elan except to the extent necessary to verify the price
increases; and, at the request of Elan, such accounting firm will execute
appropriate non-disclosure agreements.  Unless the results of any such
audit indicate that a price increase exceeded the limits provided in Clauses
9.1 and 9.2 by more than five percent (5%), Buyer shall bear the full cost of
the performance of such audit including reasonable administrative costs incurred
by Elan during the performance of the audit.  If the results of any such
audit indicate that a price increase exceeded the limits provided in Clauses
9.1 and 9.2 by more than five percent (5%), (i) Elan shall bear the full
cost of the performance of such audit and (ii) the price shall be reduced
to the amount permitted under Clauses 9.1 and 9.2, and (iii) Elan shall
refund to Buyer the amount attributable to the difference between the price
paid by Buyer and the price allowed by Clause 9.6(ii).


 


13












 


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 Commission.


 


 


10.         
VAT


 


10.1         All sums
payable by Buyer to Elan under the terms of this Agreement shall be deemed to
be exclusive of any VAT chargeable on the supply for which that sum is the
consideration (in whole or in part) for VAT purposes.


 


10.2         If under this
Agreement Elan makes a supply to Buyer for VAT purposes, and VAT is or becomes
chargeable on that supply, Buyer shall pay to Elan a sum equal to the amount of
the VAT chargeable (the “VAT Amount”) in addition to the consideration payable for
the supply.  Buyer shall pay the VAT Amount at the same time as paying the
consideration payable for the supply or, if later, within five
(5) Business Days of the receipt of a valid VAT invoice.


 


10.3         If any VAT
Amount is paid by Buyer in respect of any supply made to it by Elan, and it
subsequently transpires that such supply (or any part thereof) (the “Affected Item”) in relation to which
such VAT Amount was paid by Buyer to Elan is not taxable at a positive rate (or
the same positive rate), and, as a result, Buyer is required to repay an amount
in respect of VAT that it has previously recovered from the relevant tax
authority, Elan shall repay to Buyer an amount equal to the difference between
the VAT.  Amount actually paid and the amount of VAT actually chargeable on
the Affected Item within fifteen (15) Business Days of Elan becoming aware of
the error.


 


10.4         Where Buyer
is required by the terms of this Agreement to reimburse Elan for any cost or
expense, Buyer shall reimburse Elan for the full amount of such cost or
expense, including any part of such amount as represents VAT, save to the
extent that Elan obtains credit or repayment in respect of such VAT from a tax
authority.


 


10.5         Where an
amount payable by Buyer to Elan is to be determined or calculated by reference
to any amount incurred or to be incurred by Elan, any part of such latter
amount as represents VAT shall be included in such calculation or
determination.


 


11.         
DURATION AND TERMINATION


 


11.1         This
Agreement shall be deemed to have come into force on the Effective Date and
will expire upon the date that is five (5) years from the Effective Date
(the “Initial Term”); provided,
however, that the term of this Agreement shall be extended automatically for
additional two (2) year periods (each, a “Renewal Term”) unless sooner
terminated by any party by notifying the other party at least twelve (12)
months prior to the expiration of the Initial Term or any Renewal Term.


 


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:


 


14












 


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 Commission.


 


 


11.2.1      the other party commits
any material breach of any of the provisions of this Agreement, and in the case
of a breach capable of cure, fails to cure the same within sixty (60) days
after receipt of a written notice giving full details of the breach and
requiring it to be remedied (which period shall be thirty (30) days for any
failure by Elan to timely deliver properly ordered Product); 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 sixtieth
(60th) (or, if applicable thirtieth (30th)) 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 sixty
(60) days unless otherwise agreed in writing by the parties; and, provided
further, that in the event of a Serious Failure to Supply, Buyer may terminate
the Agreement immediately thereafter, with no cure period being applicable;


 


11.2.2      the 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 such 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 the
other party;


 


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


 


11.2.5      all or substantially all
of the assets of Elan are sold in one or a series of related transactions and
this Agreement is not assumed by the purchaser of such assets (and Elan hereby
agrees to notify Buyer as soon as is practicable, but in no event later than
five (5) business days, after the consummation of such (or, as applicable,
the last of such) transaction(s).


 


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.


 


11.4         The parties
hereby acknowledge that Buyer may, at any time and at its sole expense, take
such steps as are appropriate to manufacture the Products through itself or a
third party as an alternate site of manufacture in the event of (a) a
Serious Failure to Supply, or (b) Elan’s receipt from Buyer of a notice of
termination of this Agreement by Buyer pursuant to Clause 11.2.  In such
event, Elan shall use commercially reasonable efforts to cooperate in and
provide assistance to Buyer in any technology transfer necessary to allow Buyer
or a third party (an “Alternate
Manufacturer”) to manufacture the Products from and after
the occurrence of any of the foregoing events, provided that such Alternate
Manufacturer does not constitute a Technological Competitor. If Buyer notifies
Elan of its intention to secure Product from an Alternate Manufacturer in
compliance with this Clause 11.4, as promptly as is practicable Elan


 


15












 


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 Commission.


 


 


shall grant to Buyer a royalty-free,
fully paid-up licence (a “Production Licence”), with the right, if the Alternate
Manufacturer is other than Buyer, to sublicence to such Alternate Manufacturer
(other than any Technological Competitor), under all of its right, title and
interest in all technical know-how and information related to the composition,
production, packaging and quality control of the applicable Product (including,
without limitation, practical performance advice, shop practice, specifications
as to materials to be used and control methods related thereto), and access and
a right of reference to relevant regulatory filings, which licence shall be
made in a written agreement containing the provisions contained in
Schedule 2 hereto, solely to procure the production of the Product
(including securing required Regulatory Approvals and/or Facility Licenses in
connection therewith) from an Alternate Manufacturer other than a Technological
Competitor. The Production License will include an exclusive, perpetual,
fully-paid-up, royalty free license for Buyer to use the Excluded Intellectual
Property (as such term is defined in the Purchase Agreement) solely to the
extent needed to make Products and improvements thereto and reformulations
thereof (to the extent that any such improvements or reformulations are
developed by the Buyer). The parties shall negotiate in good faith with respect
to other provisions that will be applicable to any Production Licence.


 


11.5         Upon Elan’s
receipt from Buyer of a notice of termination pursuant to Clause 20.2, Buyer
and Elan shall enter into good faith negotiations to preserve continuity of
supply of Product to Buyer, including the possibility of transfer of
manufacture to Buyer or an Alternate Manufacturer.


 


12.         
CONSEQUENCES OF TERMINATION


 


12.1         Upon
termination of this Agreement, this Agreement shall, subject to (a) Clause
12.2, (b) the provisions of the Agreement which by their terms are
reasonably intended to survive the termination of the Agreement and
(c) the provisions of the Agreement that are required to survive in order
for the parties to comply with Clause 12.2, automatically terminate forthwith
and be of no further legal force or effect.


 


12.2         Upon
expiration or termination of this Agreement:


 


12.2.1      any sums that were due
from Buyer to Elan under this Agreement prior to the exercise of the right to
terminate this Agreement, shall be paid in full, subject to setoffs for any
amounts or credits owed to Buyer by Elan under this Agreement;


 


12.2.2      all representations and
warranties contained in Clause 13 shall, insofar as appropriate, remain in full
force and effect;


 


12.2.3      Subject to subclause
12.2.6, Buyer shall be permitted to cancel any outstanding purchase order with
respect to which there is no work-in-process, with no payments owed to Elan
with respect thereto;


 


16












 


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 Commission.


 


 


12.2.4      Elan shall deliver to
Buyer the Products requested in each written purchase order that is not
cancelled pursuant to subclause 12.2.3;


 


12.2.5      immediately upon delivery
of Products pursuant to such written purchase orders, Buyer shall pay in full
all sums due in relation to such delivery; and


 


12.2.6      by Buyer, Buyer shall
reimburse Elan for its costs for raw materials, intermediary products and
components purchased in reliance on any Monthly Forecast Report, including but
not limited to Elan’s costs relating to disposal of such items, but not
including costs that are cancellable or costs for such materials, products and
components that are otherwise useable by Elan; provided that the provisions of
this subclause 12.2.6 shall not apply in the event of an expiration of this
Agreement or termination by Buyer pursuant to subclauses 11.2.1 or
11.2.5.  Elan shall take commercially reasonable steps to mitigate any
costs that Buyer should otherwise reimburse under this subclause 12.2.6.


 


12.3         Clauses 1,
7.3, 8, 9, 10 and 12 through 28 (inclusive) shall survive any expiration or
termination of this Agreement.


 


13.         
WARRANTIES AND INDEMNITIES


 


13.1         Each party
represents and warrants to the other as of the Effective Date, that:


 


13.1.1      it has the right, power
and authority, and has taken all action necessary, to execute, deliver and
exercise its rights, and perform its obligations, under this Agreement; and


 


13.1.2      neither the execution of
nor performance under this Agreement by it will result in a breach of any
agreement or arrangement to which it is a party.


 


13.2         Elan
represents and warrants to Buyer that, at the time of delivery pursuant to
Clause 5.2, the Product delivered to Buyer under this Agreement: 
(i) will not be adulterated or misbranded under the Federal Food, Drug,
and Cosmetic Act, as amended (the “FFDCA”); (ii) will fully
conform to the Product Specifications; (iii) will have been manufactured,
packaged, labeled, held, tested and shipped in accordance with the Product
Specifications, cGMPs, all other applicable laws and regulations and
requirements of all applicable Governmental Authorities and this Agreement;
(iv) may be introduced into interstate commerce in the United States
pursuant to the FFDCA; and (v) will have a remaining shelf life of not
less than the maximum permitted shelf life for Finished Product under
applicable law less six (6) months.


 


13.3         Elan further
represents and warrants to Buyer that (i) neither it nor any of its
Affiliates nor any member of their respective staffs that will be involved in
Elan’s


 


17












 


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 Commission.


 


 


performance under this
Agreement has been disqualified or debarred for any purpose by any Governmental
or Regulatory Authority with jurisdiction over the granting of Regulatory
Approvals or Facility Licenses, and (ii) to the Knowledge of Elan, the
processes used to manufacture the Products do not presently and will not
infringe, misappropriate or otherwise violate, as applicable, the intellectual
property or proprietary rights of any person or entity.


 


13.4         Buyer
represents and warrants to Elan that (i) provided the Products do not
breach the representations and warranties of Elan in Clause 13.2, Buyer’s sale
(and other handling) of the Products will be in compliance with all applicable
laws and regulations and requirements of all applicable Governmental
Authorities, and (ii) the packaging and related artwork for the Products
as approved by Buyer and provided to Elan will fully comply with all applicable
laws and regulations and requirements of all applicable Governmental
Authorities.


 


13.5         Buyer shall
indemnify Elan and its directors, officers, employees, Affiliates, agents
successors and assigns, and keep such persons indemnified, on demand, against
each Loss which such persons incur to the extent such Loss arises out of any
actual (or, in connection with a claim made by a third party, alleged):


 


13.5.1      breach by Buyer of any of
its representations or warranties under this Clause 13 or any of its covenants,
obligations or undertakings elsewhere in this Agreement; or


 


13.5.2      claim (other than a
Medical Claim) against such persons in relation to any Product sold in the
Territory after the Effective Date.


 


13.5.3      Notwithstanding the
foregoing, Buyer shall not be required to indemnify Elan with respect to any
Loss to the extent the same is covered by Elan’s indemnification obligations in
Clauses 13.6.1 and 13.6.2.


 


13.6         Elan shall
indemnify Buyer and its directors, officers, employees, Affiliates, agents
successors and assigns, and keep such persons or entities indemnified, on
demand, against each Loss which such persons incur to the extent such Loss
arises out of any actual (or, in connection with a claim made by a third party,
alleged):


 


13.6.1      breach by Elan of any of
its representations or warranties under this Clause 13 or any of its covenants,
obligations or undertakings elsewhere in this Agreement; or


 


13.6.2      Medical Claim against such
persons in relation to any Product sold in the Territory after the Effective
Date.


 


18












 


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 Commission.


 


 


13.6.3      Notwithstanding the
foregoing, Elan shall not be required to indemnify Buyer with respect to any
Loss to the extent the same is covered by Buyer’s indemnification obligations
in Clauses 13.5.1 and 13.5.2.


 


13.7         A “Medical Claim” means a claim for
personal injury (including death) and/or for costs of medical treatment to the
extent caused by a Product that failed to conform with the Product
Specifications at the time of dispatch from Elan’s Facility.  If the
parties are unable to agree whether a claim constitutes a Medical Claim, the
dispute shall be settled in the manner set forth in Clause 7.3.


 


13.8         If a party
becomes aware of a matter which constitutes or which would or might give rise
to an indemnity claim pursuant to Clause 13.5 or 13.6 (a “Relevant Claim”):


 


13.8.1      party shall immediately
give notice to the other party of the matter and shall consult with such other
party with respect to the matter;


 


13.8.2      the party claiming under
an indemnity (the “Beneficiary”) shall, and
shall ensure that each of its Affiliates will, provide to the indemnifying
party (the “Covenantor”) and its
advisers reasonable access to premises and personnel and to relevant assets,
documents and records within the power or control of the Beneficiary (and its
Affiliates) for the purposes of investigating the matter and enabling the
Covenantor to take the action referred to in this Clause 13.8;


 


13.8.3      the Covenantor (at its
cost) may take copies of the documents or records, and photograph the premises
or assets, referred to in Clause 13.8.2;


 


13.8.4      the Beneficiary shall, and
shall ensure that each of its Affiliates will:


 


(a)           take any
action and institute any proceedings, and give any information and assistance,
as the Covenantor may reasonably request to:


 


(i)           
dispute, resist, appeal,
compromise, defend, remedy or mitigate the matter; or


 


(ii)          
enforce against a person
(other than the Covenantor (or any of its Affiliates)) the rights of the
Beneficiary (and any of its Affiliates) in relation to the matter; and


 


(b)           in connection
with proceedings related to the matter (other than against the Covenantor (or
its Affiliates)) use advisers nominated by the Covenantor and, if the
Covenantor requests, allow the Covenantor the exclusive conduct of the
proceedings;


 


19












 


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 Commission.


 


 


and in each case on the basis that the Covenantor shall
indemnify the Beneficiary, and keep the Beneficiary indemnified, on demand
against all reasonable costs incurred as a result of a request or nomination by
the Covenantor;


 


13.8.5      the Beneficiary shall not,
and shall ensure that none of its Affiliates will, admit liability in respect
of, or compromise or settle, the matter without the prior written consent of
the Covenantor, which shall not be unreasonably withheld or delayed; and


 


13.8.6      the Beneficiary shall take
all reasonable action to mitigate any loss suffered by it (or any of its
Affiliates) in respect of the matter.


 


13.9         Notwithstanding
anything to the contrary contained herein, other than with respect to claims
made by any third party, neither of Elan and Buyer shall be liable to the other
(or any other person to be indemnified hereunder) 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 loss of profit, loss of
enterprise value, indirect, consequential, special or incidental loss or
damage, and whether occasioned by the negligence of the respective parties, their
employees or agents or otherwise.


 


13.10       Each of Elan and Buyer
shall maintain their own comprehensive general liability insurance and shall
note the interest of the other on such policies.


 


14.         
RELATIONSHIP OF THE PARTIES


 


14.1         Elan and
Buyer shall for all purposes be independent contractors, and this Agreement
and/or the performance of the obligations hereunder shall not create any
relationship in which one party or its employees, agents or representatives,
are to be employees, agents, partners, joint venturers or representatives of
the other party.  Consequently, neither party nor its employees, agents
and representatives has any power or right to bind the other party, to settle
any claim by or against such party, to give any warranty or make any claim or
representation on behalf of such party or to subject such party to any
obligation or liability of any kind, unless expressly authorised by such party
in writing.


 


15.         
CONFIDENTIALITY


 


15.1         The parties
agree that it will be necessary, from time to time, to disclose to each other
information that is confidential and/or proprietary to the disclosing party
and/or its Affiliates, including without limitation, inventions, trade secrets,
specifications, designs, data, know-how and other proprietary information
relating to the Products, processes, services and business of the disclosing
party and/or its Affiliates.  The foregoing, together with the existence,
subject matter and terms of this Agreement, shall be referred to collectively
as “Confidential
Information”.


 


20












 


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 Commission.


 


 


15.2         Any
Confidential Information disclosed by the disclosing party shall be used by the
receiving party exclusively for the purposes of fulfilling the receiving party’s
obligations under this Agreement and for no other purpose.


 


15.3         Save as
otherwise specifically provided herein, and subject to Clauses 16 and 17, each
party shall disclose Confidential Information of the other party only to those
employees, representatives, agents and consultants requiring knowledge thereof
in connection with fulfilling such other party’s obligations under this
Agreement, and not to any other third party.


 


15.4         Each party
further agrees to inform all such employees, representatives, agents and
consultants of the terms and provisions of this Agreement relating to
Confidential Information and their duties hereunder and to obtain their written
agreement hereto (or to ensure that such persons or entities are bound by
similar confidentiality obligations relating to Confidential Information that
are at least as strict as those contained herein) as a condition of receiving
Confidential Information.


 


15.5         Each party
shall exercise the same standard of care as it would itself exercise in
relation to its own confidential information (but in no event less than a
reasonable standard of care) to protect and preserve the proprietary and
confidential nature of the Confidential Information disclosed to it by the
other party.


 


15.6         Upon
termination or expiration of this Agreement, each party shall promptly, upon
request of the other party, return (or if requested by the other party,
destroy) all documents and any copies thereof containing Confidential
Information belonging to, or disclosed by, such other party, save that it may
retain one copy of the same solely for the purposes of ensuring compliance with
this Agreement.


 


15.7         Notwithstanding
anything to the contrary contained herein, Elan and Buyer shall be entitled to
pass to regulatory authorities and other distributors, licensees and potential
licensees of the Products outside of the Territory (and in addition, in the
case of Buyer, inside the Territory), information in relation to:


 


15.7.1      any material complaint
about the safety, quality, packaging 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); or


 


15.7.2      any other matter in
connection with a Product or arising out of this Agreement that must be
reported to a Governmental Authority.


 


To the extent that such information is Confidential
Information, the disclosing party shall so inform the recipients and use
reasonable endeavours to ensure that they are bound by appropriate restrictions
as to confidentiality.


 


21












 


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 Commission.


 


 


15.8         Any breach of
this Clause 15 by any person to whom Confidential Information has been
disclosed by one of the parties is considered a breach by the party itself.


 


15.9         The
obligations of confidentiality contained herein shall not apply to Confidential
Information of a disclosing party that the receiving party can demonstrate:


 


15.9.1      is in the public domain or
made public through no breach of this Agreement by the receiving party;


 


15.9.2      is independently developed
by the receiving party without reference to Confidential Information disclosed
hereunder, as evidenced by such party’s records; or


 


15.9.3      becomes available to a
receiving party on a non-confidential basis, whether directly or indirectly,
from a source other than the other party hereto, which source did not acquire
this information on a confidential basis.


 


15.10       The provisions relating to
confidentiality in this Clause 15 shall remain in effect during the term of
this Agreement, and for a period of 7 years following the expiration or earlier
termination of this Agreement.


 


15.11       The parties agree that the
obligations of this Clause 15 are necessary and reasonable in order to protect
the parties’ respective businesses, and each party agrees that monetary damages
may be inadequate to compensate a party for any breach by the other party of
its covenants and agreements set forth herein.  The parties agree that any
such violation or threatened violation may cause irreparable injury to a party
and that, in addition to any other remedies that may be available, in law and
equity or otherwise, each party shall be entitled to seek injunctive relief
against the threatened breach of the provisions of this Clause 15, a
continuation of any such breach by the other party and specific performance and
other equitable relief to redress such breach, together with damages and
reasonable counsel fees and expenses to enforce its rights hereunder.


 


16.         
ANNOUNCEMENTS


 


16.1         Subject to
Clause 17, no announcement or public statement concerning the specific terms of
this Agreement shall be made by or on behalf of any party hereto without the
prior written approval of the other party (such approval not to be unreasonably
withheld or delayed).


 


17.         
PERMITTED DISCLOSURES


 


17.1         A party (the “Disclosing Party”) will be
entitled to make an announcement or public statement concerning the existence,
subject matter or any term of this


 


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 Commission.


 


 


Agreement, or to disclose
Confidential Information that the Disclosing Party is required to make or disclose
pursuant to:


 


17.1.1      a valid order of a court
or Governmental Authority; or


 


17.1.2      any other requirement of
law or any securities or stock exchange,


 


provided that if the Disclosing Party becomes legally
required to make such announcement, public statement or disclosure hereunder,
the Disclosing Party shall, to the extent practicable, give the other party
prompt notice of such fact so as to enable the other party to seek a protective
order or other appropriate remedy concerning any such announcement, public
statement or disclosure.  Notwithstanding the foregoing sentence, the
Disclosing Party shall be entitled to make such announcement, public statement
or disclosure regardless of whether the other party is in the process of
seeking a protective order or other remedy, if the Disclosing Party believes it
is required to do so pursuant to subclauses 17.1.1 or 17.1.2.


 


17.2         The
Disclosing Party shall fully co-operate with the other party in connection with
such other party’s efforts to obtain any such order or other remedy.


 


17.3         If any such
order or other remedy does not fully preclude the announcement, public
statement or disclosure, the Disclosing Party shall make such announcement,
public statement or disclosure only to the extent that the same is legally
required.


 


17.4         Either party
shall notify the other party of any request by a Governmental Authority for
disclosure of any Confidential Information required in connection with a
Regulatory Application, provided that such party shall not disclose the
Confidential Information to such Governmental Authority without the prior
written consent of the other party (such consent not to be unreasonably
withheld or delayed).


 


17.5         Notwithstanding
Clause 15 and this Clause 17, each of the Parties shall be entitled to provide
a copy of this Agreement to a potential assignee in connection with Clause 18,
potential corporate partners, investors, persons having observer rights at its
Board of Director meetings and its consultants; provided that, if such
potential assignee, potential corporate partners, investors, board observers or
consultants are not an Affiliate of the assignor, the proposed assignee has
entered into a confidentiality agreement on terms no less strict than the terms
of Clauses 15, 16 and 17.


 


18.         
ASSIGNMENT / SUB-CONTRACTING


 


18.1         Either party
may assign this Agreement to its Affiliates without the consent of the other
party, provided that:


 


23












 


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 Commission.


 


 


18.1.1      such assignment does not
have any adverse tax consequences (which shall not include consequences of an
administrative nature only) on the other party; and


 


18.1.2      if the assignee ceases to
be an Affiliate of the assignor, the assignor shall procure that this Agreement
is re-assigned to the assignor or another Affiliate of the assignor.


 


18.2         Elan shall
additionally be entitled to:


 


18.2.1      assign this Agreement to a
purchaser of all or substantially all of the assets of its manufacturing
facility in Athlone, Ireland without the consent of Buyer (provided that Elan
must provide Buyer with written notice of such assignment in advance; and
provided, further, that at the request of Buyer, Elan shall confer with Buyer
and discuss in good faith any concerns raised by Buyer relating to such
assignment), provided that the same does not have any adverse tax consequences
(which shall not include consequences of an administrative nature only) on
Buyer and provided that such purchaser agrees in writing to accept and perform
all obligations of Elan under this Agreement; and/or


 


18.2.2      delegate or subcontract
the manufacture of the Products to such person(s) as it sees fit, provided that
Elan has received the prior written consent of Buyer to such delegation or
subcontracting, which consent shall not be unreasonably withheld or delayed.


 


18.3         Buyer shall
additionally be entitled to delegate any of its obligations under this
Agreement to such person(s) as it, in its reasonable discretion, selects, and
Buyer may assign this Agreement to a third party without the consent of Elan to
the extent that such third party is not a Technological Competitor or then in
litigation with Elan or any of its Affiliates.


 


18.4         Except as
otherwise permitted in the foregoing, this Agreement may not be assigned by
either party without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed.


 


18.5         Any
assignment or delegation of a party’s rights or obligations under this
Agreement shall not operate to reduce or limit the assigning party’s
liabilities and obligations to the other party under the terms of this
Agreement, for which the assigning party shall remain responsible.


 


19.         
SEVERABILITY


 


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


 


24












 


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 Commission.


 


 


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


 


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


 


20.         
FORCE MAJEURE


 


20.1         If a party
(the “Affected Party”) is
prevented or delayed from performing any of its obligations under this
Agreement (through no fault of the Affected Party and other than a payment
obligation) (an “Affected
Obligation”) by a Force Majeure Event:


 


20.1.1      the Affected Obligation
shall be suspended while the Force Majeure Event continues to the extent that
the Affected Party is prevented or delayed in performing the Affected
Obligation by such Force Majeure Event, and no party shall be in breach of this
Agreement, or otherwise liable, by reason of such suspension of such Affected
Obligation;


 


20.1.2      as soon as reasonably
possible after the start of the Force Majeure Event, the Affected Party shall
notify the other party in writing of the Force Majeure Event, the date on which
the Force Majeure Event started and the effects of the Force Majeure Event on
its ability to perform the Affected Obligation, and the parties shall meet as
soon as is practicable to discuss the matter in good faith;


 


20.1.3      the Affected Party shall
make all commercially reasonable efforts to mitigate the effects of the Force
Majeure Event on the performance of the Affected Obligation and to bring the
Force Majeure Event to an end; and


 


20.1.4      as soon as reasonably
possible after the end of the Force Majeure Event, the Affected Party shall
notify the other party in writing that the Force Majeure Event has ended and
resume performance of the Affected Obligation.


 


20.2         Where the
Force Majeure Event continues for more than three (3) months, the other
party may terminate this Agreement by giving not less than five
(5) Business Days’ written notice to the Affected Party.


 


25












 


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 Commission.


 


 


21.         
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 each party.


 


22.         
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.


 


23.         
ENTIRE AGREEMENT


 


23.1         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 any document referred to herein.


 


23.2         This
Agreement (together with Schedule 1 and all documents referred to herein)
sets forth all of the agreements and understandings between the parties with
respect to the subject matter hereof, and supersedes and terminates all prior
agreements and understandings between the parties with respect to the subject
matter hereof.  There are no agreements or understandings with respect to
the subject matter hereof, either oral or written, between the parties other
than as set forth in this Agreement (together with Schedule 1 and all
documents referred to herein).


 


23.3         Nothing in
this Clause 23 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 in respect of any statements made fraudulently by the other prior to
the execution of this Agreement or any rights which either of them may have in
respect of fraudulent concealment by the other.


 


24.         
GOVERNING LAW AND JURISDICTION


 


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


 


24.2         For the
purposes of this Agreement the parties submit to the exclusive jurisdiction of
the courts of New York.


 


26












 


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 Commission.


 


 


25.         
NOTICES


 


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


 


25.1.1      Elan at:


 


Address:       
Elan
Pharma International Limited

WIL House, Shannon Business Park

Shannon

County Clare

Ireland


Attention:     
Counsel


Fax:                
+353
902 92427


 


with a courtesy copy (receipt of which shall not
constitute, notice) to each of:


 


Address:       
Elan
Pharma International Limited

WIL House, Shannon Business Park

Shannon

County Clare

Ireland


Attention:     
Company
Secretary


Fax:                
+353
902 92427


 


and


 


Address:       
Elan
Pharmaceuticals, Inc.

800 Gateway Boulevard

South San Francisco, CA 94080


Attention:     
Vice
President, Legal Affairs


Fax:                
(650)
553-7165


 


25.1.2      Buyer at:


 


Address:       
Acorda
Therapeutics

15 Skyline Drive

Hawthorne, NY 10532


Attention:     
General
Counsel


Fax:                
(914)
347-4560


 


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


 


27












 


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 Commission.


 


 


25.2         Any notice
sent by mail shall be deemed to have been delivered seven (7) Business
Days after dispatch or delivery to the relevant courier; any notice sent by
internationally recognized overnight courier shall be deemed to have been
delivered two (2) Business Days after dispatch or delivery to the relevant
courier; and any notice sent by fax shall be deemed to have been delivered upon
confirmation of receipt.


 


26.         
FURTHER ASSURANCES


 


At the request of either party, the other party shall (and
shall use reasonable efforts to procure that any necessary third parties shall)
execute such documents, and do all 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.


 


27.         
COUNTERPARTS


 


This Agreement may be executed by facsimile and 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.


 


28.         
SET-OFF


 


Any payment due hereunder from either party may be set off
against any payment owed hereunder to such party.


 


28












 


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 Commission.


 


 


IN
WITNESS WHEREOF the parties have
executed this Agreement on the Effective Date.


 




	
  SIGNED

  	
   

  
	
   

  	
   

  
	
  /s/ William F. Daniel

  	
   

  	
   

  
	
  for and on behalf of

  	
   

  
	
  ELAN PHARMA INTERNATIONAL LIMITED

  	
   

  
	
  Name:   William F.
  Daniel

  	
   

  
	
  Position:  Director

  	
   

  
	
   

  	
   

  
	
  SIGNED

  	
   

  
	
   

  	
   

  
	
  /s/
  Ron Cohen

  	
   

  	
   

  
	
  for and on behalf of

  	
   

  
	
  ACORDA THERAPEUTICS, INC.

  	
   

  
	
  Name:     Ron
  Cohen

  	
   

  
	
  Position:  President
  and CEO

  	
   

  






 


29












 


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 Commission.


 


 


SCHEDULE 1


 


PRODUCTS


 


	
  Product

  	
   

  	
  Strength

  (mg)

  	
   

  	
  Bottle Size

  (capsules)

  	
   

  	
  Price (per

  bottle)

  	
   

  	
  Minimum Batch Size

  (number of capsules)

  	
   

  
	
  Zanaflex capsules (finished)

  	
   

  	
  2

  	
   

  	
  150

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Zanaflex capsules (finished)

  	
   

  	
  4

  	
   

  	
  150

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Zanaflex capsules (finished)

  	
   

  	
  6

  	
   

  	
  150

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 


	
  Product

  	
   

  	
  Strength

  (mg)

  	
   

  	
  Unit Size

  (capsules)

  	
   

  	
  Price (per unit)

  	
   

  	
  Minimum Batch Size

  (number of capsules)

  	
   

  
	
  Zanaflex capsules (bulk)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 


30












 


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 Commission.


 


 


SCHEDULE 2


 


TERMS OF THE PRODUCTION LICENCE


 


1.            
GRANT AND RECORDAL


 


1.1           Elan hereby
grants to Buyer a royalty-free, fully paid-up licence (a “Production License”), with the
right to sublicence to an Alternate Manufacturer (other than any Technological
Competitor), under all of its right, title and interest in all technical
know-how and information related to the composition, production, packaging and
quality control of the applicable Product (including, without limitation,
practical performance advice, shop practice, specifications as to materials to
be used and control methods related thereto), and access and a right of
reference to relevant regulatory filings, solely to procure the production of
the Product (including securing required Regulatory Approvals and/or Facility
Licenses in connection therewith) from an Alternate Manufacturer other than a
Technological Competitor.  This Production License includes an exclusive,
perpetual, fully-paid-up, royalty-free license for Buyer to use the Excluded
Intellectual Property (as such term is defined in the Purchase Agreement)
solely to the extent needed to make Products and improvements thereto and
reformulations thereof (to the extent that any such improvements or
reformulations are developed by the Buyer).


 


1.2           If so
requested by Buyer at any time during the continuation of this Production
Licence, and at the sole expense of Buyer, Elan shall provide Buyer with all
reasonable assistance and co-operation that Buyer may reasonably require to
record Buyer’s interest under this Production Licence on any applicable
intellectual register.


 


2.            
COMPLIANCE AND INDEMNITY


 


2.1           Buyer shall
comply, and shall be responsible for its sublicensees’ compliance, with all
laws, rules, regulations, orders and codes of practice applicable to the
manufacture, distribution, sale and other handling of the Products under this
Production Licence, including, for the avoidance of doubt and not by way of
limitation, compliance with all such laws, rules, regulations, orders and codes
of practice requiring and regarding product recalls.


 


2.2           All liability
of Elan to Buyer, its officers, directors, employees, agents, sublicensees or
contractors for any product liability or personal injury claim (including
death) or similar claim relating to the Products produced by Buyer or any
person authorised by Buyer during the continuation of this Production Licence
is hereby excluded to the fullest extent permitted by law.  In any event,
Elan shall not be liable to Buyer or its officers, directors, employees,
agents, sublicensees or contractors for any indirect or consequential loss or
damage


 


31












 


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 Commission.


 


 


suffered by Buyer or any
of such persons or entities for any such product liability, personal injury or
similar claim.


 


2.3           Buyer shall
indemnify Elan and its directors, officers, employees, Affiliates, agents
successors and assigns, and keep such persons indemnified, on demand, against
each Loss which such persons incur to the extent such Loss arises out of any
actual (or, in connection with a claim made by a third party, alleged) breach
by Buyer of any its obligations under this Production Licence or the use of the
intellectual property licenced from Elan hereunder by Buyer or any person
authorised by Buyer during the continuation of this Production Licence. 
Notwithstanding anything to the contrary contained herein, other than with
respect to claims made by any third party, neither of Elan and Buyer shall be
liable to the other (or any other person to be indemnified hereunder) 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 loss of
profit, loss of enterprise, value, indirect, consequential, special or
incidental loss or damage, and whether occasioned by the negligence of the
respective parties, their employees or agents or otherwise.


 


2.4           Buyer shall procure
and maintain at its own cost and expense appropriate product liability
insurance covering the Products for the full extent of the territory in which
Buyer is selling or authorizing any other person to sell the Products in a
reasonable amount and form.


 


3.            
WARRANTIES AND REPRESENTATIONS


 


3.1           All
warranties and representations, whether express or implied, are excluded from
this Production Licence to the fullest extent permitted by law.


 


4.            
RELATIONSHIP OF ELAN AND BUYER


 


4.1           Nothing in
this Production Licence shall constitute or be deemed to constitute a
partnership between Elan and Buyer or constitute Buyer as agent for Elan for
any purpose, and Buyer shall have no right or authority to and shall not
purport to perform any act enter into any agreement or arrangement, make any
representation, give any warranty, incur any liability or assume any obligation
(whether express or implied) of any kind for or on behalf of Elan or binding on
Elan in any way.


 


5.            
GENERAL


 


5.1           This
Production Licence and the Supply Agreement constitute the entire agreement
between Elan and Buyer in relation to the intellectual property licensed
hereunder, and supersede any previous agreement between Elan and Buyer relating
thereto.


 


32












 


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 Commission.


 


 


5.2           No
modification, alteration, variation or waiver of any of the provisions of this
Production Licence shall be effective unless in writing and signed on behalf of
each of Elan and Buyer.


 


5.3           The failure
to exercise or delay in exercising a right or remedy provided by this
Production Licence or by law does not constitute a waiver of the right or
remedy or a waiver of other rights or remedies.  No single or partial
exercise of a right or remedy provided by this Production Licence or by law
prevents further exercise of the right or remedy or the exercise of another
right or remedy.


 


5.4           The rights
and remedies contained in this Production Licence are cumulative and not
exclusive of rights or remedies provided by law.


 


5.5           If at any
time any provision of this Production Licence is or becomes illegal, invalid or
unenforceable in any respect under the laws of any jurisdiction, that shall not
affect the legality, validity or enforceability in that jurisdiction or in any
other jurisdiction of any other provision of this Production Licence.


 


5.6           Elan and
Buyer are each entering into this Production Licence for their own benefit and
not for the benefit of any other person other than any indemnitee or permitted
sublicensee hereunder.


 


5.7           Except where
this Production Licence or the Supply Agreement provides otherwise, Elan and
Buyer shall bear its own costs relating to the negotiation, preparation,
execution and implementation by it of this Production Licence.


 


6.            
INCORPORATION OF TERMS


 


6.1           Clauses 1 (Interpretation), 15-17 (Confidentiality), 20 (Force Majeure), 24 (Governing Law and Jurisdiction) and 25 (Notices) of the Supply Agreement will
apply to this Production Licence.


 


6.2           In this
Production Licence, the term “Supply Agreement” means the Zanaflex
Supply Agreement between Elan Pharma International Limited and Acorda
Therapeutics, Inc. dated July 21, 2004.


 


6.3           Capitalized
terms used in herein and not otherwise defined in this Agreement shall have the
meanings assigned to such terms in the Supply Agreement.


 


33












 


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 Commission.


 


 


SCHEDULE 3


 


TECHNOLOGICAL COMPETITORS


 


[***]


 


 


34