Document:

Exhibit 10.9

 

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

 

EXECUTION COPY

 

Date:        September 2003

 

 

ELAN CORPORATION,
PLC.

 

AND

 

ACORDA THERAPEUTICS,
INC.

 

 

SUPPLY AGREEMENT

 

 

Fampridine
SR

 

 

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

  

 

 

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

 

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

 

“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 (12th) month following the

 

2

 

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

 

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

 

 

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

 

1.4.2                             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 [***] 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

 

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

 

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

 

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

 

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

 

(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

 

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

 

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

 

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

 

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

 

13

 

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.

 

14

 

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

 

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 –

 

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

 

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 [***] 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

 

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

 

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
[***] 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

 

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

 

9.6.                                   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 [***].

 

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

 

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

 

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

 

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

 

22

 

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

 

23

 

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.

 

24

 

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.

 

25

 

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

  

 

26

 

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.

 

27

 

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.

 

28

 

	
  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

  	
   

  	
   

  
							

 

 

 

29Exhibit 10.10

 

 

 

LICENSE AGREEMENT

 

by and between

 

RUSH-PRESBYTERIAN-ST. LUKE’S MEDICAL CENTER

 

and

 

ACORDA THERAPEUTICS, INC.

 

1

 

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 LICENSE
AGREEMENT effective as of September 26, 2003 (“Effective Date”), by and
between RUSH-PRESBYTERIAN-ST. LUKE’S MEDICAL CENTER, an
Illinois not-for-profit corporation and having its principal office at 1725 W.
Harrison St. Chicago, Ill. 60612 (“RUSH”) and ACORDA
THERAPEUTICS, INC., a corporation organized and existing under the
laws of the State of Delaware and having its principal office at 15 Skyline
Drive, Hawthorne, New York 10532 (“ACORDA”).

 

W I T N E S S E T H:

 

WHEREAS, RUSH
has conducted investigations of the compound known as 4-aminopyridine for
treatment of the symptoms of multiple sclerosis and has accordingly developed
know-how in relation thereto;

 

WHEREAS, RUSH
has received a notice of designation (the “Rush Orphan Designation”) from the
FDA stating that the Licensed Product (as defined herein) “qualifies for orphan
designation for the relief of symptoms of multiple sclerosis;”

 

WHEREAS,
RUSH’s right and title to the Rush Orphan Designation for the Licensed Product
has been assigned to ACORDA and RUSH has consented to such assignment;

 

WHEREAS, RUSH
has the right to grant licenses in respect of the RUSH Know-How (as defined
herein) and has granted no licenses thereto except (i) the option agreement,
dated September 7, 1990 (the “Option Agreement”), between RUSH and Elan
Pharmaceutical Research Corp. (“EPRC”), a predecessor corporation of Elan Drug
Delivery Inc., a wholly-owned subsidiary of Elan Corporation plc (“ELAN”) and
(ii) the license agreement dated November 13, 1990 (the “Rush/Elan
License”), between RUSH and EPRC, (the Option Agreement and the Rush/Elan
License being collectively referred to herein as the “Rush/Elan Agreements”);

 

WHEREAS,
pursuant to the Side Agreement, as defined below, RUSH and ELAN and EPRC have,
among other things terminated the Rush/Elan Agreements as of the Effective
Date;

 

WHEREAS,
ACORDA desires to obtain exclusive license rights, with a right to grant
sublicenses, under and to the RUSH Know-How (as defined herein), and RUSH
desires to grant such license to ACORDA, upon the terms and conditions set
forth herein; and

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the Parties hereby agree as follows:

 

2

 

ARTICLE I

DEFINITIONS

 

Unless
specifically set forth to the contrary herein, the following terms, where used
in the singular or plural, shall have the respective meanings set forth below:

 

1.1.                              “Act”
shall mean the 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.

 

1.2.                              “Affiliate”
shall mean (i) any corporation or business entity of which more than fifty percent
(50%) of the securities or other ownership interests representing the equity,
the voting stock or general partnership interest are owned, controlled or held,
directly or indirectly, by a Party; (ii) any corporation or business entity
which, directly or indirectly, owns, controls or holds more than fifty percent
(50%) (or the maximum ownership interest permitted by law) of the securities or
other ownership interests representing the equity, voting stock or general
partnership interest of a Party or (iii) any corporation or business entity of
which a Party has the right to acquire, directly or indirectly, at least fifty
percent (50%) of the securities or other ownership interests representing the
equity, voting stock or general partnership interest thereof.

 

1.3.                              “Base
Royalty Term” shall mean, in any country in the Territory, the period
beginning with the date of the First Commercial Sale in such country and
continuing until the earlier of (i) expiration of the last to expire Elan
Patent in such country; or (ii) ten (10) years from the date of First
Commercial Sale in such country; provided however, that, in the event that
ACORDA receives Regulatory Approval in the United States for Licensed Product
with an Orphan Designation for the treatment of multiple sclerosis, then the
Base Royalty Term in the United States shall not be less than seven years from
the date of First Commercial Sale in the United States.  In the event that RUSH’s further development
of the RUSH Know-How results in the issuance to RUSH of a patent in any country
or additional Orphan Drug Designation following the effective date of this
Agreement that provides for a greater period of market exclusivity of the
Product in such country, the Base Royalty Term in such country will continue for
that period of market exclusivity provided by such patent or Orphan Drug
Designation.

 

1.4.                              “Business
Day(s)” shall mean any day that is not a Saturday or a Sunday or a day on
which the New York Stock Exchange is closed.

 

1.5.                              “Calendar
Quarter” shall mean the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and
December 31.

 

1.6.                              “Calendar
Year” shall mean each successive period of twelve (12) months commencing on
January 1 and ending on December 31.

 

1.7.                              “Compound”
shall mean the chemical compound known as 
4-aminopyridine, as diagrammed on Schedule 1.7 hereto.

 

1.8.                              “CFR”
shall mean the United States Code of Federal Regulations.

 

1.9.                              “Effective
Date” shall mean the date first above written.

 

3

 

1.10.                        “Elan/Acorda License”
shall mean the Amended and Restated License Agreement effective as the
Effective Date        by and between ACORDA
and ELAN.

 

1.11.                        “Elan Patent” shall mean
any patent included in the Elan Patent Rights as set forth on
Schedule 1.11 hereto

 

1.12.                        “End of Phase 2 Meeting”
shall mean the first end of Phase 2 meeting with the FDA, as defined in 21 CFR
Section 312.47, intended to determine the safety of proceeding to a  Phase 3 Clinical Trial, evaluate the Phase 3
plan and protocols and identify any additional information necessary to support
the NDA.

 

1.13.                        “FDA” shall mean the
United States Food and Drug Administration and any successor agency having
substantially the same functions.

 

1.14.                        “First Commercial Sale”
shall mean the first commercial sale of Product by ACORDA, its Affiliate or its
sublicensees in a country, for end use or consumption, after all required
Regulatory Approvals have been granted by the governing health authority of
such country. Sales for test marketing, clinical trial purposes, research and
development, or compassionate or similar use where Acorda does not receive
revenue from the sale other than cost recovery, shall not be deemed to
constitute a commercial sale.

 

1.15.                        “GAAP” shall mean
generally accepted accounting principles in the United States, consistently
applied.

 

1.16.                        “Improvement” shall mean
any and all improvements and enhancements, patentable or otherwise, related to
the Compound or Product including, without limitation, in the manufacture,
formulation, ingredients, preparation,
presentation, means of delivery or administration, dosage, indication, use or
packaging of Compound or Product.

 

1.17.                        “Licensed Product” shall
mean any Product that utilizes or exploits the RUSH Know-How in the treatment
of multiple sclerosis.

 

1.18.                        “NDA” shall mean a new
drug application as defined in the Act and applicable regulations promulgated
thereunder that is filed with the FDA to obtain Regulatory Approval of Licensed
Product in the United States.

 

1.19.                        “Neurological Indications”
shall mean indications concerning disorders and conditions of the neuromuscular
system, central, peripheral and autonomic nervous systems, the neuromuscular
junction and/or muscle.  Such indications
shall include, but not be limited to, multiple sclerosis and spinal cord
injury.

 

1.20.                        “Net Sales” shall mean
the gross amount invoiced for commercial sales of Product in the Territory by
ACORDA or its Affiliates to Third Parties commencing upon the date of First
Commercial Sale in any country in the Territory, after deducting the following:

 

(i)                                     trade,
cash and quantity discounts;

 

4

 

(ii)                                  credits
and allowances on account of returned or rejected Product, including allowance
for breakage or spoilage, recalls or Product destruction (whether voluntarily
made or requested or made by a Regulatory Authority)

 

(iii)                               chargebacks, rebates or
similar payments granted to customers, including, but not limited to, managed
health care organizations, wholesalers, distributors, buying groups, retailers,
health care insurance carriers, pharmacy benefit management companies, health
maintenance organizations or other institutions or health care organizations or
to federal, state/provincial, local and other governments, their agencies and
purchasers and reimbursers;

 

(iv)                              sales
or excise taxes, VAT or other taxes, and transportation, freight, postage,
shipping and insurance charges and additional special transportation, custom
duties, and other governmental charges;

 

(v)                                 retroactive
price reductions; and

 

(vi)                              write-offs
or allowances for bad debts, to the extent permitted by GAAP.

 

Sales or other
transfers between ACORDA and its Affiliates shall be excluded from the computation
of Net Sales and no payments will be payable on such sales or transfers
except where such Affiliates are end users, but Net Sales shall include the
subsequent sales to Third Parties by such Affiliates.

 

1.21.                        “Orphan Designation”
shall mean the designation of a drug as a drug for a rare disease or condition
pursuant to Section 526 of the Act.

 

1.22.                        “Party” shall mean RUSH
or ACORDA.

 

1.23.                        “Phase 3 Clinical Trial”
shall mean a clinical trial in patients with multiple sclerosis conducted after
an End of Phase 2 Meeting and conducted on a sufficient number of patients that
is designed to establish that Licensed Product is safe and efficacious for its
intended use, and to define warnings, precautions and adverse reactions that
are associated with Licensed Product in the dosage range to be prescribed, and
supporting  Regulatory Approval of
Licensed Product in the treatment of multiple sclerosis.

 

1.24.                        “Product” shall mean any
finished pharmaceutical formulation for prescription use for the treatment of
any human Neurological Indications which contains Compound as the
therapeutically active ingredient.

 

1.25.                        “Proprietary Information”
shall mean any and all scientific, clinical, regulatory, marketing, financial
and commercial information or data, whether communicated in writing, orally or
by any other means, which is owned and under the protection of one

 

5

 

Party and is being
provided by that Party to the other Party in connection with this Agreement.

 

1.26.                        “Reduced Royalty Term”
shall mean, in any country in the Territory, the period of time beginning with
the date following the expiration of the Base Royalty Term in such country and
continuing until the fifteenth anniversary of the Effective Date.

 

1.27.                        “Regulatory Authority”
shall mean the FDA in the U.S., the EMEA or any agency in the European Union
and any health regulatory authority(ies) in any country(ies) in the Territory
that holds responsibility for granting Regulatory Approval for a Product in
such country(ies), and any successor(s) agency thereto having substantially the
same functions.

 

1.28.                        “Regulatory Approval”
shall mean all approvals (including pricing and reimbursement approvals
required for marketing authorization), product and/or establishment licenses,
registrations or authorizations of all regional, federal, state or local
regulatory agencies, departments, bureaus or other governmental entities,
necessary for the manufacture, use, storage, import, export, transport and sale
of Product in a regulatory jurisdiction.

 

1.29.                        “Royalty Year” shall
mean, (i) for the year in which the First Commercial Sale occurs (the “First
Royalty Year”), the period commencing with the first day of the Calendar
Quarter in which the First Commercial Sale occurs and expiring on the last day
of the Calendar Year in which the First Commercial Sale occurs; and (ii) for
each subsequent year commencing after the end of the First Royalty Year, each
successive Calendar Year.

 

1.30.                        “RUSH Know-How” shall
mean all information and materials, including but not limited to, discoveries,
information, Improvements, processes, formulas, data, inventions, know-how and
trade secrets, patentable or otherwise, which as of the Effective Date or at
any time during the term of this Agreement:

 

(a)                                  relate
to Compound or Product; and

 

(b)                                 were
developed by or on behalf of RUSH, are owned by RUSH or are in RUSH’s
possession or control.

 

Such know-how shall include, without limitation, all
chemical, pharmaceutical, toxicological, preclinical, clinical, assay control,
regulatory submissions, designations  and
approvals, and any other information used or useful for the development,
manufacturing and/or regulatory approval of Compound or Product, including such
rights which RUSH may have to information developed by Third Parties.

 

1.31.                        “Side Agreement” shall mean the Side Agreement by and among
RUSH, ACORDA and ELAN executed as of the Effective Date, a copy of which is
attached hereto as Exhibit 1.31.

 

1.32.                        “Territory” shall mean
all of the countries in the world.

 

1.33.                        “Third Party(ies)” shall
mean a person or entity who or which is neither a Party nor an Affiliate of a
Party.

 

6

 

ARTICLE II

LICENSE; SUBLICENSES

 

2.1.                              License Grant.  RUSH hereby grants to ACORDA an exclusive
(even as to RUSH) license, including the right to grant sublicenses, under the
RUSH Know-How, to develop, make, have made, use, import, offer for sale,
market, commercialize, distribute and sell and otherwise dispose of Product in
the Territory and to use and practice the RUSH Know-How.  Notwithstanding the foregoing grant, Rush is
expressly permitted to use its 4-AP know how for internal development and
research efforts; provided, however, that (i) such use is for non-commercial
academic purposes only, and (ii) that RUSH shall promptly notify ACORDA of any
intellectual property, discovery or invention, once conceived and/or reduced to
practice by RUSH in the course of conducting or performing such non-commercial
activity, which shall be deemed RUSH Know-How for purposes of this Agreement.

 

2.2.                              Improvements by ACORDA.  All rights and title to and interest in any
Improvement developed or discovered by ACORDA in connection with the license
granted under Section 2.1 above or ACORDA’s activities hereunder shall be
vested solely in ACORDA.  Notwithstanding
the provisions of 2.2, Acorda will continue to have royalty obligations set
forth in Article V, to the extent applicable, with respect to any Product
that contains an Improvement and which includes the Compound as the primary
therapeutically active ingredient.

 

2.3.                              Sublicenses.  ACORDA shall have the right to grant
sublicenses of the licenses granted to it under Section 2.1 of this
Agreement to Affiliates or any Third Party. ACORDA shall provide written notice
to RUSH of any such sublicenses.

 

ARTICLE III

DEVELOPMENT AND COMMERCIALIZATION

 

3.1.                              Exchange
of Information.  Following execution
of this Agreement, RUSH shall utilize good faith reasonable efforts to disclose
to ACORDA in English and in writing, all Rush Know-How not previously available
or made available to ACORDA, in electronic format, where available, and hard
copies (or, upon ACORDA’s request, originals), with the intention to make such
information available to ACORDA as soon as reasonably practicable  Throughout the term of this Agreement, and in
addition to the other communications required under this Agreement, RUSH shall
also promptly disclose to ACORDA in English and in writing on an ongoing basis
all Rush Know-How, and any and all additions or revisions thereto.  To the extent not previously assigned to
ACORDA, RUSH hereby conveys, assigns and transfers to ACORDA, free and clear of
all claims, liens and encumbrances and contractually imposed restrictions, all
right, title and interest in and to the Rush Orphan Designation.  RUSH shall assist and cooperate with ACORDA
in the submission of any letters or other documents to the FDA required or
requested in connection with the change in ownership of the Rush Orphan
Designation from RUSH to ACORDA. RUSH shall notify ACORDA promptly of any
request for, or

 

7

 

any expression of
interest in using, Compound for research or any other purpose and shall refer
any such requests or expressions of interest directly to ACORDA. RUSH shall
also promptly notify ACORDA of any intellectual property, discovery or
invention, once conceived and/or reduced to practice by RUSH or any employee or
agent of RUSH, in the course of conducting or performing any activity relating
to Compound or Product.

 

3.2.                              Development
and Commercialization.  ACORDA shall
use commercially reasonable efforts to develop and commercialize Licensed
Product. As used herein, “commercially reasonable efforts” shall mean efforts and
resources normally used by ACORDA for a product owned by it or to which it has
exclusive rights, which is of similar market potential at a similar stage in
its development or product life, taking into account issues of safety and
efficacy, product profile, the competitiveness of the marketplace, the
proprietary position of the compound or product, the regulatory and
reimbursement structure involved, the profitability of the applicable products,
and other relevant factors.  ACORDA shall
provide RUSH with an annual written report summarizing the status of ACORDA’S
clinical development and regulatory activities with respect to Licensed
Product, with the delivery to RUSH of the summary of the annual report to an
IND submitted by ACORDA to the FDA in connection with the periodic reporting
requirements of the IND to be in satisfaction of the foregoing
requirement.  The obligations set forth
in this Section 3.2 are expressly conditioned upon the absence of any
serious adverse conditions or event relating to the safety or efficacy of
Compound or Product including the absence of any action by any regulatory
authority limiting the development or commercialization of Compound or Product.

 

3.3.                              Regulatory
Matters.

 

(a)                                  ACORDA
shall own, control and retain primary legal responsibility for the preparation,
filing and prosecution of all filings and regulatory applications required to
obtain Regulatory Approvals.  ACORDA
shall notify RUSH upon the receipt of Regulatory Approvals and of the date of
First Commercial Sale.

 

(b)                                 Upon
ACORDA’S request, RUSH shall consult and cooperate with ACORDA in connection
with obtaining Regulatory Approval of Product.

 

3.4.                              Trademark.
ACORDA shall select, own and maintain trademarks for Product in the Territory.

 

ARTICLE IV

CONFIDENTIALITY AND PUBLICITY

 

4.1.                              Non-Disclosure
and Non-Use Obligations.  All
Proprietary Information disclosed by one Party to the other Party hereunder
shall be maintained in confidence and shall not be disclosed to any Third Party
or used for any purpose except as expressly permitted herein without the prior
written consent of the Party that disclosed the Proprietary Information to the
other Party during the term of this Agreement. 
The foregoing non-disclosure and non-use obligations shall not apply to
the extent that such Proprietary Information:

 

8

 

(a)                                  is
known by the receiving Party at the time of its receipt, and not through a
prior disclosure by the disclosing Party, as documented by business records;

 

(b)                                 is
or becomes properly in the public domain or knowledge;

 

(c)                                  is
subsequently disclosed to a receiving Party by a Third Party who may lawfully
do so and is not under an obligation of confidentiality to the disclosing
Party; or

 

(d)                                 is
developed by the receiving Party independently of Proprietary Information
received from the other Party, as documented by research and development
records.

 

4.2.                              Permitted
Disclosure of Proprietary Information. 
Notwithstanding Section 4.1, a Party receiving Proprietary
Information of another Party may disclose such Proprietary Information:

 

(a)                                  by
ACORDA to governmental or other regulatory agencies in order to obtain patents
or to gain approval to conduct clinical trials or to market Product;

 

(b)                                 by
ACORDA or its agents, consultants, Affiliates, sublicensees and/or other Third
Parties for the research and development, manufacturing and/or marketing of the
Compound and/or Product (or for such parties to determine their interests in
performing such activities) on the condition that such Third Parties agree to
be bound by the confidentiality obligations consistent with this Agreement; or

 

(c)                                  if
required to be disclosed by law or court order, provided that notice is
promptly delivered to the non-disclosing Party in order to provide an opportunity
to challenge or limit the disclosure obligations; provided, however, without
limiting any of the foregoing, it is understood that ACORDA or its Affiliates
may make disclosure of this Agreement and the terms hereof in any filings
required by the Securities and Exchange Commission (“SEC”) or any other
governmental agency, may file this Agreement as an exhibit to any filing with
the SEC or such agency and may distribute any such filing in the ordinary
course of its business.

 

4.3.                              Publication                                    Neither
RUSH nor any Affiliate or employee of or consultant to RUSH shall make any
publication relating to Compound or Product without the prior consent of
ACORDA. If RUSH proposes to submit for written or oral publication any
manuscript, abstract or the like relating to Compound or Product, it shall
first deliver the proposed publication to ACORDA at least thirty (30) Business
Days prior to planned submission. At the request of ACORDA, the submission of
such publication may be delayed for up to fourteen (14) days in addition to the
said thirty Business Days, including for issues of patent protection or other
matters relating to the development of Compound or Product. If ACORDA requests
modifications to the publication, RUSH shall edit such publication as

 

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.

 

reasonably necessary to prevent disclosure of trade
secret or proprietary business information prior to submission of the
publication or presentation.

 

ARTICLE V

PAYMENTS; ROYALTIES AND REPORTS

 

5.1.                              Up-front
License Fee. In consideration of the rights granted by RUSH hereunder,
ACORDA shall pay RUSH an up-front license fee of $200,000 within five (5)
Business Days after the Effective Date.

 

5.2.                              Milestone
Payments. In further consideration of the rights granted by RUSH hereunder,
ACORDA or its designees shall pay RUSH the following milestone payments,
contingent upon occurrence of the specified event, with each milestone payment
to be made no more than once with respect to the achievement of such milestone
(but payable the first time such milestone is achieved) for Licensed Product:

 

(a)                                  US
$[* *] upon the commencement (first dosing of the first patient) of the
first Phase 3 Clinical Trial;

 

(b)                                 US
$[* *] upon the completion of the first Phase 3 Clinical Trial;

 

(c)                                  US
$[* *] upon the FDA’s acceptance for filing of the NDA; and

 

(d)                                 US
$[* *] upon receipt of first written Regulatory Approval of the NDA for
marketing in the United States by the FDA.

 

ACORDA
shall notify RUSH in writing within thirty (30) Business Days after the
achievement of each milestone and such notice shall be accompanied by the
appropriate milestone payment. The milestone payments described in this
Section 5.2 shall be payable only upon the initial achievement of each
milestone, and no amounts shall be due hereunder for any subsequent or repeated
achievement of such milestones, regardless of the number of Licensed Products
for which such milestone may be achieved.

 

5.3.                              Royalties
and Other Payments.

 

5.3.1.                     Royalties

 

(a)                                  Subject
to the terms and conditions of this Agreement, and in further consideration of
the rights granted by RUSH hereunder, ACORDA or its designees shall pay to RUSH
royalties during the Base Royalty Term in an amount equal to
(i) [* *] of Net Sales in each Royalty Year in the United States; and
(ii) [* *] of Net Sales in each Royalty Year in each country in the
Territory other than the United States. Royalties on Net Sales at the rates set
forth in this Section 5.3.1(a) shall accrue as of the date of First
Commercial Sale of Product in the applicable country and shall continue and
accrue on Net Sales on a country-by-country basis until the expiration of the
Base Royalty Term in such country. Thereafter, ACORDA shall be relieved of any
royalty payment under this Section 5.3.1(a).

 

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.

 

(b)                                 Subject
to the terms and conditions of this Agreement, and in further consideration of
the rights granted by RUSH hereunder, ACORDA or its designees shall pay to RUSH
royalties during the Reduced Royalty Term in an amount equal to
(i) [* *]  of Net Sales in each
Royalty Year in the United States; and (ii) [* *] of Net Sales in
each Royalty Year in each country in the Territory other than the United
States.  Royalties on Net Sales at the
rates set forth in this Section 5.3.1(b) shall accrue as of the
commencement of the Reduced Royalty Term in the applicable country and shall
continue and accrue on Net Sales on a country-by-country basis until the
expiration of the Reduced Royalty Term in such country. Thereafter, ACORDA
shall be relieved of any royalty payment under this Agreement.

 

(c)                                  The
payment of royalties set forth above shall be subject to the following
conditions:

 

(A)                              only
one payment shall be due with respect to the same unit of Product;

 

(B)                                no
royalties shall accrue on the disposition of Product by ACORDA, Affiliates or
sublicensees as samples (promotion or otherwise) or as donations (for example,
to non-profit institutions or government agencies) or to clinical trials or for
research and and/or development or for compassionate or similar use where
ACORDA does not receive revenue other than cost recovery; and

 

(C)                                RUSH
shall be responsible for payment of any royalties or other obligations owed by
RUSH to any Third Party.

 

5.3.2.                     Affiliate
and Sublicensee Sales.  In the event
that ACORDA transfers Compound or Product to one of its Affiliates or
sublicensees, there shall be no royalty due at the time of transfer.  Subsequent sales of Product by the Affiliates
or sublicensees to Third Parties such as patients, hospitals, medical
institutions, health plans or funds, wholesalers (which are not sublicensees),
pharmacies or other retailers, shall be reported as Net Sales hereunder. 

 

5.3.3.                     Third
Party Licenses.  If one or more
licenses from a Third Party or Third Parties are obtained by ACORDA in order to
develop, make, have made, use, sell or import Compound or Product in a
particular country, [* *]  of any
royalties or other payments paid under such Third Party patent licenses by
ACORDA in such country for such Calendar Quarter shall be creditable against
the royalty or other payments payable to RUSH by ACORDA in such country;
provided, however, that the amount credited in any Calendar Quarter shall not
exceed [* *]  of the royalties that
would have otherwise been payable to RUSH for such Calendar Quarter.

 

5.3.4.                     Combination
Product.  Notwithstanding the
provisions of Section 5.3.1, in the event a Product is sold as a
combination product with other biologically active components, Net Sales, for
purposes of royalty payments on the combination product, shall be calculated by
multiplying the Net Sales of that combination product by the

 

11

 

fraction A/B,
where A is the gross selling price of the Product sold separately and B is the
gross selling price of the combination product. 
If no such separate sales are made, Net Sales for royalty determination
shall be calculated by multiplying Net Sales of the combination product by the
fraction C/(C+D), where C (excluding the fully allocated cost of the other
biologically active component in question) is the fully allocated cost of the
Compound and D is the fully allocated cost of such other biologically active
components.

 

5.4.                              Reports;
Payment of Royalty.  During the term
of the Agreement for so long as royalty payments are due, ACORDA shall furnish
to RUSH a written report for each Calendar Quarter showing the Net Sales of all
Products subject to royalty payments during the reporting period and the
calculation of the royalties payable to RUSH under this Agreement, including
deductions from Net Sales.  Reports shall
be due on the forty-fifth (45th) day following the close of each
Calendar Quarter.  Royalties shown to
have accrued by each royalty report, if any, shall be due and payable on the
date such report is due.  ACORDA shall keep
complete and accurate records in sufficient detail to enable the royalties
hereunder to be determined.  ACORDA shall
retain such records for twenty-four (24) months after submission of the
corresponding report.

 

5.5.                              Audits.
Upon the written request of RUSH and not more than once during the twelve (12)
month period next following the expiration of each Royalty Year during the term
of the Agreement, ACORDA shall, at RUSH’s expense, permit an independent
certified public accounting firm selected by RUSH and reasonably acceptable to
ACORDA to have access during normal business hours, upon thirty (30) days prior
notice to ACORDA, to such of the records of ACORDA as may be reasonably
necessary to verify the accuracy of the royalty reports hereunder for any Royalty
Year ending not more than twenty-four (24) months prior to the date of such
request.  The accounting firm shall
provide a written report as soon as practicable, which shall disclose only
whether the royalty reports are correct or incorrect and the specific details
concerning any discrepancies.  This
Section 5.5 shall survive the expiration or termination of this Agreement
for a period of two years.

 

5.5.1.                     If such
accounting firm concludes that additional royalties were owed during such
period, ACORDA shall pay the additional royalties within sixty (60) days of the
date RUSH delivers to ACORDA such accounting firm’s written report so
concluding; provided however, that, in the event that ACORDA shall not be in
agreement with the conclusion of such report (a) ACORDA shall not be required
to pay such additional royalties and (b) such matter shall be resolved pursuant
to the provisions of Section 9.6 herein. 
In the event such accounting firm concludes that amounts were overpaid
by ACORDA during such period, such over payment will be credited against future
royalties; provided, however, that, in the event that RUSH shall not be in
agreement with the conclusion of such report (x) such matter shall be resolved
pursuant to the provisions of Section 9.6 herein and (y) in the event that
the overpayment to RUSH exceeds royalties due and owing to Rush over the term
of the agreement, RUSH shall reimburse ACORDA within 60 days for any remaining
overpayment.  The fees charged by such
accounting firm shall be paid by RUSH; provided, however, that if an error in
favor of RUSH of more than five percent (5%) of the royalties due hereunder for
the period being reviewed is discovered, then

 

12

 

ACORDA shall pay
the reasonable fees and expenses charged by such accounting firm.

 

5.5.2.                     Upon the
expiration of twenty-four (24) months following the end of any Royalty Year
(subject to tolling of such period during the pendency of an audit relating to
such period under Section 5.5.1 above) the calculation of royalties
payable with respect to such year shall be binding and conclusive upon RUSH,
and ACORDA shall be released from any liability or accountability with respect
to royalties for such year.

 

5.5.3.                     RUSH shall
treat all financial information subject to review under this Section 5.5
in accordance with the confidentiality provisions of this Agreement.

 

5.6.                              Payment
Exchange Rate.  All payments to RUSH
under this Agreement shall be made in United States dollars.  In the case of sales outside the United
States, the rate of exchange to be used in computing Net Sales shall be
calculated monthly in accordance with the conversion rates published in the
Wall Street Journal, Eastern edition (if available).

 

5.7.                              Tax
Withholding.  If laws, rules or
regulations require withholding of income taxes or other taxes imposed upon
payments set forth in this Article V, RUSH shall provide ACORDA, prior to
any such payment, annually or more frequently if required, with all forms or
documentation required by any applicable taxation laws, treaties or agreements
to such withholding or as necessary to claim a benefit thereunder (including,
but not limited to Form W-8BEN or any successor forms) and ACORDA shall make
such withholding payments as required and subtract such withholding payments
from the payments set forth in this Article V. ACORDA will use
commercially reasonable efforts consistent with its usual business practices
and cooperate with RUSH to ensure that any withholding taxes imposed are reduced
as far as possible under the provisions of the current or any future taxation
treaties or agreements between foreign countries.

 

5.8.                              Exchange
Controls. Notwithstanding any other provision of this Agreement, if at any
time legal restrictions prevent the prompt remittance of part or all of the
royalties with respect to Net Sales in any country, payment shall be made
through such lawful means or methods as ACORDA may determine.  When in any country the law or regulations prohibit
both the transmittal and deposit of royalties on sales in such a country,
royalty payments shall be suspended for as long as such prohibition is in
effect (and such suspended payments shall not accrue interest), and promptly
after such prohibition ceases to be in effect, all royalties or other payments
that ACORDA or its Affiliates would have been obligated to transmit or deposit,
but for the prohibition, shall be deposited or transmitted, as the case may be,
to the extent allowable (with any interest earned on such suspended royalties which
were placed in an interest-bearing bank account in that country, less any
transactional costs).  If the royalty
rate specified in this Agreement should exceed the permissible rate established
in any country, the royalty rate for sales in such country shall be adjusted to
the highest legally permissible or government-approved rate.

 

13

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

6.1.                              RUSH
Representations and Warranties.  RUSH
represents and warrants to ACORDA that as of the Effective Date:

 

(a)                                  Each
of this Agreement and the Side Agreement has been duly executed and delivered
by RUSH and constitutes legal, valid, and binding obligations enforceable
against RUSH in accordance with their respective terms;

 

(b)                                 no
approval, authorization, consent, or other order or action of or filing with
any court, administrative agency or other governmental authority is required
for the execution and delivery by RUSH of this Agreement or the Side Agreement
or the consummation by RUSH of the transactions contemplated hereby or thereby
except such consents or filings as are contemplated by this Agreement;

 

(c)                                  RUSH
has the full corporate power and authority to enter into and deliver this
Agreement and the Side Agreement, to perform and to grant the licenses granted
under Article II hereof and to consummate the transactions contemplated
hereby and by the Side Agreement;  all
corporate acts and other proceedings required to be taken to authorize such
execution, delivery, and consummation have been duly and properly taken and
obtained;

 

(d)                                 With
the exception of the Rush/Elan Agreements, which have terminated in their
entirety pursuant to the Side Agreement, RUSH has not previously assigned,
transferred, conveyed or otherwise encumbered its right, title and interest in
the Compound or Product or the RUSH Know-How or entered into any agreement with
any Third Party which is in conflict with the rights granted to ACORDA pursuant
to this Agreement;

 

(e)                                  RUSH
is the sole and exclusive owner of the RUSH Know-How, all of which are free and
clear of any security interests, liens, charges, encumbrances or restrictions
on license, and no Third Party has any claim of ownership or other rights with
respect to the RUSH Know-How, whatsoever, except that RUSH agrees and
acknowledges that the Orphan Designation has been assigned to ACORDA;

 

(f)                                    RUSH
has the sole and exclusive authority to grant the rights and licenses granted
under Article II and, with the exception of the Rush/Elan Agreements,
which have terminated in their entirety pursuant to the Side Agreement,  RUSH has not previously granted, and will not
grant, or engage in any discussions to grant, during the term of this
Agreement, any right, license or interest in and to the Compound or Product or
the RUSH

 

14

 

Know-How, or any portion thereof, inconsistent with
the license granted to ACORDA herein;

 

(g)                                 there
are no claims, judgments or settlements against or owed by RUSH or pending or,
to the best of its knowledge, threatened claims or litigation relating to the
Compound or the Rush Know-How;

 

(h)                                 RUSH
will use reasonable efforts to disclose to ACORDA all relevant information
known by it regarding the Rush Know-How reasonably related to the activities
contemplated under this Agreement to the extent such Rush know-how has not
previously been disclosed;

 

(i)                                     in
connection with development of the Rush Know-How, RUSH has complied in all
material respects with applicable U.S. laws and regulations;

 

(j)                                     RUSH
has not filed and is not the owner in any country in the Territory of any
patents or patent applications or of any certificates of invention or
applications for certificates of invention, relating to Compound or Product;
and

 

(k)                                  With
the exception of the Rush/Elan Agreements, which have terminated in their
entirety pursuant to the Side Agreement, there are no contracts, agreements or
any other arrangements between RUSH and any Third Party relating to the
research, development or commercialization of the Compound or Product.

 

6.2.                              ACORDA
Representations and Warranties. 
ACORDA represents and warrants to RUSH that as of the Effective Date:

 

(a)                                  Each
of this Agreement and the Side Agreement have been duly executed and delivered
by it and constitutes legal, valid, and binding obligations enforceable against
ACORDA in accordance with their respective terms;

 

(b)                                 it
has full corporate power and authority to execute and deliver this Agreement
and the Side Agreement and to consummate the transactions contemplated hereby
and thereby.  All corporate acts and
other proceedings required to be taken to authorize such execution, delivery,
and consummation have been duly and properly taken and obtained;

 

(c)                                  no
approval, authorization, consent, or other order or action of or filing with
any court, administrative agency or other governmental authority is required
for the execution and delivery by it of this Agreement or the Side Agreement or
the consummation by it of the transactions contemplated hereby or thereby.

 

15

 

ARTICLE VII

 

7.1.                              Indemnification.  ACORDA shall defend, indemnify and hold
harmless RUSH from and against any and all loss, cost and liability, including
RUSH’s reasonable attorneys fees and costs (“Losses”), arising in connection
with claims made by Third Parties respecting the manufacture, sale or use of
any Product by such Third Party (“Claims”). RUSH shall give ACORDA prompt
notice of any such Loss or claim, shall cooperate in its defense, and shall give
ACORDA full authority to defend and settle such claim on RUSH’s behalf.

 

7.2.                              The
indemnity obligation set forth in Section 7.1 above shall not apply in the
case of Losses or Claims caused by or based on (i) RUSH’s gross negligence or
willful misconduct; (ii) any breach of this Agreement by RUSH; or (iii) any
violation of RUSH’s representations or warranties hereunder.

 

ARTICLE VIII  

TERM AND TERMINATION

 

8.1.                              Term
and Expiration.  This Agreement shall
be effective as of the Effective Date and unless terminated earlier pursuant to
Section 8.2 below, the term of this Agreement shall continue in effect
until expiration of all royalty or other payment obligations hereunder.

 

8.2.                              Termination.

 

8.2.1                        Termination
for Cause.  Either Party may
terminate this Agreement by notice to the other
Party at any time during the term of this Agreement as follows:

 

(a)                                  if
the other Party is in breach of any material obligation hereunder by causes and
reasons within its control, or has breached, in any material respect, any
representations or warranties set forth in Article VI, and has not cured
such breach within ninety (90) days after notice requesting cure of the breach,
provided, however, that if the breach is not capable of being cured within
ninety (90) days of such written notice, the Agreement may not be terminated so
long as the breaching Party commences and is taking commercially reasonable
actions to cure such breach as promptly as practicable; or

 

(b)                                 upon
the filing or institution of bankruptcy, reorganization, liquidation or
receivership proceedings, or upon an assignment of a substantial portion of the
assets for the benefit of creditors by the other Party; provided, however,
in the case of any involuntary bankruptcy, reorganization, liquidation,
receivership or assignment proceeding such right to terminate shall only become
effective if the Party consents to the involuntary proceeding or such
proceeding is not dismissed within ninety (90) days after the filing thereof.

 

16

 

8.2.2                        Licensee Rights Not
Affected.

 

All rights and licenses granted pursuant to this
Agreement are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the Bankruptcy Code licenses of rights to “intellectual
property” as defined under Section 101(35A) of the Bankruptcy Code.  The Parties agree that ACORDA and RUSH shall
retain and may fully exercise all of their respective rights, remedies and
elections under the Bankruptcy Code.  
The Parties further agree that, in the event of the commencement of a
bankruptcy or reorganization case by or against a Party under the Bankruptcy
Code, the other Party shall be entitled to all applicable rights under
Section 365 (including 365(n)) of the Bankruptcy Code.  Upon rejection of this Agreement by a Party
or a trustee in bankruptcy for such Party, pursuant to Section 365(n), the
other Party may elect (i) to treat this  Agreement as terminated by
such rejection or (ii) to retain its rights (including any right to enforce any
exclusivity provision of this Agreement) to intellectual property (including
any embodiment of such intellectual property) under this Agreement and under
any agreement supplementary to this Agreement for the duration of this
Agreement and any period for which this Agreement could have been extended by
such other Party, subject, however, to the continued payment of all amounts
owing under Section 5.3 of this Agreement, all of which amounts shall be
deemed to be royalties for purposes of Section 365(n) of the Bankruptcy
Code.  Upon written request to the
trustee in bankruptcy or bankrupt Party, the trustee or Party, as applicable,
shall (i) provide to the other Party any intellectual property (including such
embodiment) held by the trustee or the bankrupt Party and shall provide to the
other Party a complete duplicate of (or complete access to, as appropriate) any
such intellectual property and all embodiments of such intellectual property
and (ii) not interfere with the rights of the other Party to such intellectual
property as provided in this Agreement or any agreement supplementary to this
Agreement, including any right to obtain such intellectual property (or such
embodiment or duplicates thereof) from a Third Party.

 

8.3.                              Effect
of Expiration or Termination. 
Expiration or termination of this Agreement shall not relieve the
Parties of any obligation accruing prior to such expiration or termination.
ACORDA and its Affiliates and sublicensees shall have the right to sell or
otherwise dispose of the stock of any Product subject to this Agreement then on
hand or in process of manufacture and ACORDA will continue to pay Rush
royalties pursuant to Article V after the expiration or termination of
this Agreement for any such Product sold. 
In addition to any other provisions of this Agreement which by their
terms continue after the expiration of this Agreement, the provision of
Article IV shall survive the expiration or termination of this Agreement
and shall continue in effect for five (5) years from the date of expiration or
termination and the provisions of Article IX shall survive the expiration
or termination of this Agreement.  Upon
any termination of this Agreement, each party shall promptly return to the
other party all Proprietary Information received from the other party (except
one copy of which may be retained for archival purposes).  In addition, any other provision required to
interpret and enforce the Parties’ rights and obligations under this Agreement
shall also survive, but only to the extent required for the full observation
and performance of this Agreement. Any expiration or early termination of this
Agreement shall be without prejudice to the rights of any Party against the
other

 

17

 

accrued
or accruing under this Agreement prior to termination. In the event ACORDA
breaches any of the financial provisions contained in this Agreement, in lieu
of any other remedy that may be available, RUSH shall be entitled to pursue its
remedies at law, but shall not be entitled to injunctive relief.

 

ARTICLE IX

MISCELLANEOUS

 

9.1.                              Right
to Develop Independently.  Nothing in
this Agreement will impair ACORDA’s right to independently acquire, license,
develop, or have others develop for it, products similar to or performing
functions similar to Product, or similar technology performing similar
functions to the Products or to market and distribute products based on other
technology.

 

9.2.                              Force
Majeure.  Neither Party shall be held
liable or responsible to the other Party nor be deemed to have defaulted under
or breached the Agreement for failure or delay in fulfilling or performing any
term of the Agreement during the period of time when such failure or delay is
caused by or results from causes beyond the reasonable control of the affected
Party including, but not limited to, fire, flood, embargo, war, acts of war
(whether war be declared or not), insurrection, riot, civil commotion, strike,
lockout or other labor disturbance, act of God or act, omission or delay in
acting by any governmental authority or the other Party.  The affected Party shall notify the other
Party of such force majeure circumstances as soon as reasonably practicable.

 

9.3.                              Assignment.  The Agreement may not be assigned or
otherwise transferred without the prior written consent of the other Party;
provided, however, that ACORDA may assign this Agreement to an Affiliate or in
connection with the transfer or sale of its business or all or substantially
all of its assets related to Compound or Product or in the event of a merger,
consolidation, change in control or similar corporate transaction. Any
permitted assignee shall assume all obligations of its assignor under this
Agreement.

 

9.4.                              Severability.  In the event that any of the provisions
contained in this Agreement are held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby, unless
the absence of the invalidated provision(s) adversely affect the substantive
rights of the Parties.  In such event,
the Parties shall replace the invalid, illegal or unenforceable provision(s)
with valid, legal and enforceable provision(s) which, insofar as practical,
implement the purposes of this Agreement.

 

9.5.                              Notices.  All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally, sent by facsimile (and promptly confirmed by personal delivery,
registered or certified mail or overnight courier), sent by
nationally-recognized overnight courier or sent by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:

 

18

 

if to ACORDA
to:

 

ACORDA THERAPEUTICS,
INC.

15 Skyline
Drive

Hawthorne, New
York 10532

 

Attention:  : President

Fax No.:  914.347.4560

 

 

if to RUSH to:

 

RUSH-PRESBYTERIAN-ST.
LUKE’S MEDICAL CENTER

1725 W.
Harrison Street

Chicago, Illinois 60612

Attention:
Intellectual Property Office/General Counsel’s Office

Fax
No.: 312-942-2055

 

or to such other address as the
Party to whom notice is to be given may have furnished to the other Parties in
writing in accordance herewith.  Any such
communication shall be deemed to have been given when delivered if personally
delivered or sent by facsimile on a Business Day, upon confirmed delivery by
nationally-recognized overnight courier if so delivered and on the third
Business Day following the date of mailing if sent by registered or certified
mail.

 

9.6.                              Applicable
Law  and Dispute Resolution. 
The Agreement shall be governed by and construed in accordance with the
laws of the United States of America and State of New York without reference to
any rules of conflict of laws.

 

(a)                                  The
Parties agree to attempt initially to solve all claims, disputes, or
controversies arising under, out of, or in connection with this Agreement (a
“Dispute”) by conducting good faith negotiations.  Any Disputes which cannot be resolved by good
faith negotiation within twenty (20) Business Days, shall be referred, by
written notice from either Party to the other, to the Chief Executive Officer
of each Party. Such Chief Executive Officers shall negotiate in good faith to
achieve a resolution of the Dispute referred to them within twenty (20)
Business Days after such notice is received by the Party to whom the notice was
sent. If the Chief Executive Officers are unable to settle the Dispute between
themselves within twenty (20) Business Days, they shall so report to the Parties
in writing. The Dispute shall then be referred to mediation as set forth in the
following subsection (b).

 

(b)                                 Upon
the Parties receiving the Chief Executive Officers’ report that the Dispute
referred to them pursuant to subsection (a) has not been resolved, the
Dispute shall be referred to mediation by written notice from either Party to
the other. The mediation shall be conducted pursuant to the American
Arbitration Association (“AAA”) procedures. 
The place of the mediation shall be Chicago, Illinois.  If the Parties have not reached a settlement
within twenty (20) Business Days of the date of the notice of mediation, the
Dispute shall be referred to arbitration pursuant to subsection (c) below.

 

19

 

(c)                                  If
after the procedures set forth in subsections (a) and (b) above, the Dispute
has not been resolved, a Party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other Party.  The Parties shall refrain from instituting
the arbitration proceedings for a period of sixty (60) days following such
notice.  During such period, the Parties
shall continue to make good faith efforts to amicably resolve the dispute
without arbitration.  If the Parties have
not reached a settlement during that period the arbitration proceedings shall
go forward and be governed by the AAA rules then in force. Each such
arbitration shall be conducted by a panel of three arbitrators: one arbitrator
shall be appointed by each of RUSH and ACORDA and the third arbitrator, who
shall be the Chairman of the tribunal, shall be appointed by the two-Party
appointed arbitrators. Any such arbitration shall be held in Chicago, Illinois,
USA.

 

The
arbitrators shall have the authority to direct the Parties as to the manner in
which the Parties shall resolve the disputed issues, to render a final decision
with respect to such disputed issues, or to grant specific performance with
respect to any such disputed issue.  Judgment
upon the award so rendered may be entered in any court having jurisdiction or
application may be made to such court for judicial acceptance of any award and
an order of enforcement, as the case may be. Nothing in this Section shall
be construed to preclude either Party from seeking provisional remedies,
including but not limited to, temporary restraining orders and preliminary
injunctions, from any court of competent jurisdiction, in order to protect its
rights pending arbitration, but such preliminary relief shall not be sought as
a means of avoiding arbitration.   In no
event shall a demand for arbitration be made after the date when institution of
a legal or equitable proceeding based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitations.  Each Party shall bear its own costs and
expenses incurred in connection with any arbitration proceeding and the Parties
shall equally share the cost of the mediation and arbitration levied by the
AAA.

 

Any mediation or
arbitration proceeding entered into pursuant to this Section 9.6 shall be
conducted in the English language. Subject to the foregoing, for purposes of
this Agreement, each Party consents, for itself and its Affiliates, to the
jurisdiction of the courts of the State of New York, county of New York and the
U.S. District Court for the Southern District of New York.

 

9.7.                              Entire
Agreement.  This Agreement, together
with the exhibits and schedules hereto, contains the entire understanding of
the Parties with respect to the subject matter hereof and supersedes all
previous writings and understandings between the Parties.  This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by all Parties
hereto.

 

9.8.                              Independent
Contractors.  It is expressly agreed
that the Parties shall be independent contractors and that the relationship
between the Parties shall not constitute a partnership, joint venture or
agency. Neither Party shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other Party, without the prior consent of such other Party.

 

20

 

9.9                                 Waiver.  The waiver by a Party hereto of any right
hereunder or the failure to perform or of a breach by another Party shall not
be deemed a waiver of any other right hereunder or of any other breach or
failure by said other Party whether of a similar nature or otherwise.

 

9.10.                        Further Assurances.  At any time or from time to time on and after
the Effective Date, RUSH shall at the request of ACORDA (i) deliver to ACORDA
such records, data or other documents consistent with the provisions of this
Agreement, (ii) execute, and deliver or cause to be delivered, all such consents,
documents or further instruments of transfer or license, and (iii) take or
cause to be taken all such actions as ACORDA may reasonably deem necessary or
desirable in order for ACORDA to obtain the full benefits of this Agreement and
the transactions contemplated hereby.

 

9.11.                        Headings.  The captions to the several Articles and
Sections hereof are not a part of the Agreement, but are merely guides or
labels to assist in locating and reading the several Articles and Sections
hereof.

 

9.12.                        Counterparts.  The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

9.13.                        Use of Names. Except as
otherwise provided in this Agreement, neither Party shall not use the name of
the other Party  in relation to this
transaction in any public announcement, press release or other public document
without the consent of the other Party (which consent shall not be unreasonably
withheld or delayed), except as may be required by applicable law.

 

9.14.                        LIMITATION OF LIABILITY.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR ANY INDIRECT CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER
CAUSED, UNDER ANY THEORY OF LIABILITY.

 

21

 

IN WITNESS WHEREOF, the Parties
have executed this Agreement as of the date first set forth above.

 

 

RUSH-PRESBYTERIAN-ST.
LUKE’S MEDICAL CENTER

 

 

	
  By:

  	
  /s/ James T.
  Frankenbach

  	
   

  	
   

  
	
   

  	
  Name: James
  T. Frankenbach

  	
   

  
	
   

  	
  Title: Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACORDA
  THERAPEUTICS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ron
  Cohen

  	
   

  	
   

  
	
   

  	
  Name: Ron
  Cohen

  	
   

  
	
   

  	
  Title:   President
  and Chief Executive Officer

  	
   

  

 

22

 

SCHEDULE 1.7

 

DIAGRAM OF COMPOUND

 

 

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.

 

SCHEDULE
1.11

 

ELAN PATENT RIGHTS

 

For purposes of this Agreement,
Elan Patent Rights shall mean any
and all rights under any and all patents and patent applications now existing,
currently pending or hereafter filed, owned or acquired or licensed by Elan (and/or
its Affiliates) which would be infringed by the manufacture, use or sale of the
Product, the current status of which is set forth below.  Elan Patent Rights shall also include all
continuations, continuations-in-part, divisionals and re-issues of such patents
and patent applications and any patents issuing thereon and extensions of any
patents licensed hereunder.  Elan Patent
Rights shall further include any patents or patent applications covering any
improved methods of making or using the Product invented or acquired by Elan
(and/or its Affiliates) during the term of the Elan/Acorda Agreement and under
which Elan (and/or its Affiliates) has a right to grant a licence under the
Elan/Acorda Agreement, and Elan’s (and/or its Affiliates) interest in any intellectual
property conceived reduced to practice or otherwise developed in connection
with the Project (as defined in the Elan/Acorda Agreement).

 

	
  1806

  	
   

  	
  Formulations and their use in the treatment of neurological diseases

  	
   

  	
  Pending:

  Canada

  Ireland

  Japan 

  	
   

  	
  [* *] 
[* *] 
[* *]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Issued:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Australia

  Europe

  New Zealand

  South Africa

  United States

  	
   

  	
  657706

  484186

  240439

  91/8711

  5370879

  5540938

  5580580

  	
   

  

 

24

 

EXHIBIT 1.31

 

SIDE AGREEMENT

 

25

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