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5.3 Grants to Licensor. Upon the Effective Date, AbbVie grants to Licensor a non-exclusive, royalty-free license, without the right to grant sublicenses, under the AbbVie Program Patents, AbbVie Program Know-How, and AbbVie's interests in the Joint Program Patents and the Joint Program Know-How, to Develop and Manufact... |
5.4 Sublicenses. AbbVie shall have the right to grant sublicenses (or further rights of reference), through multiple tiers of sublicensees, under the licenses and rights of reference granted in Section 5.2, to its Affiliates and other Persons; provided that any such sublicenses shall be consistent with the terms and co... |
5.5 Distributorships. AbbVie shall have the right, in its sole discretion, to appoint its Affiliates, and except as provided in Section 5.4 above with respect to Sublicensees in Major Markets, AbbVie and its Affiliates shall have the right, in their sole discretion, to appoint any other Persons, in the Territory or in ... |
5.6 Co-Promotion Rights. For purposes of clarity, AbbVie and its Affiliates shall have the right, in their sole discretion, to co-promote the Licensed Products with any other Person(s), or to appoint one (1) or more Third Parties to promote the Licensed Products without AbbVie in all or any part of the Territory. |
5.7 Third Party Intellectual Property. With respect to any Third Party Information, inventions or Patents that are in-licensed or otherwise acquired by Licensor and fall within the definition of Licensor Background Know-How or Licensor Background Patents, including any Information, inventions or Patents that were in-li... |
5.7.1 In the case of Third Party Technology in-licensed by Licensor pursuant to an Existing In-License Agreement, (a) Licensor shall be solely responsible for any milestone payments, royalties or other amounts that become owing to such Third Party at any time prior to the Option Exercise Date for the Collaboration Prog... |
5.7.2 Licensor may not enter into any In-License Agreements on or after the Effective Date except in accordance with this Section 5.7.2 if such In-License would require the payment of any amounts by AbbVie or would limit AbbVie's Exploitation in accordance with this Agreement of the Licensed Product with respect to whi... |
5.7.3 To the extent that any such payments made by Licensor under an agreement to acquire Third Party Technology are not specifically attributable to the Exploitation of a Licensed Antibody or Licensed Product, but are attributable to the acquisition of rights to both (a) Third Party Technology used for the Licensed Pr... |
5.7.4 For clarity, regardless of whether Licensor has provided AbbVie with an option to do so pursuant to Section 5.7.2, AbbVie or its Affiliates may choose to enter into license agreements with Third Parties as necessary or useful for AbbVie and its Affiliates, and its and their Sublicensees to Develop, Manufacture, a... |
5.8 Retention of Rights. |
5.8.1 Notwithstanding the exclusive licenses granted to AbbVie pursuant to Section 5.2, Licensor retains the right to practice under the Licensor Background Patents, the Licensor Background Know-How, the Licensor Program Patents, the Licensor Program Know-How, Licensor's interests in the Joint Program Patents and the J... |
5.8.2 Except as expressly provided herein, AbbVie grants no other right or license, including any rights or licenses to the AbbVie Background Patents, the AbbVie Program Patents, the AbbVie Background Know-How, the AbbVie Program Know-How, the Regulatory Documentation, or any other Patent or intellectual property right... |
5.9 Confirmatory Patent License. Licensor shall if requested to do so by AbbVie immediately enter into confirmatory license agreements in the form or substantially the form reasonably requested by AbbVie for purposes of recording the licenses granted under this Agreement with such patent offices in the Territory as Abb... |
5.10 Exclusivity. |
5.10.1 Licensor Covenant. |
(a) During the Term, except under a Collaboration Program, Licensor shall not, and shall cause its Affiliates not to (i) directly or indirectly, develop, commercialize or manufacture any Antibody, either alone or in combination with any other therapeutically active ingredients (or any product incorporating such Antibod... |
(b) Notwithstanding the provisions of Section 5.10.1(a), if, during the Term, Licensor undergoes a Change in Control and the acquirer is either then commercializing a Licensor Competing Product in the Field, or has in Development any Licensor Competing Product in the Field, such Change in Control, and the commercializa... |
5.10.2 AbbVie Covenant. |
(a) During the Term, except under a Collaboration Program, AbbVie shall not, and shall cause its Affiliates not to (i) directly or indirectly, develop, commercialize or manufacture any Antibody, either alone or in combination with any other therapeutically active ingredients (or any product incorporating such Antibody)... |
(b) Notwithstanding the provisions of Section 5.10.2(a), if, during the Term, (i) AbbVie or any of its Affiliates acquires rights to an AbbVie Competing Product through an Acquisition, such Acquisition, and the commercialization of such AbbVie Competing Product in the Field thereafter, shall not constitute a breach of ... |
ARTICLE 6. PAYMENTS AND RECORDS |
6.1 Upfront Payment. AbbVie shall pay Licensor an upfront amount equal to Two Hundred Five Million Dollars ($205,000,000), Five Million Dollars ($5,000,000) of which shall be due no later than thirty (30) days following the Execution Date, with the remaining Two Hundred Million Dollars ($200,000,000) due on January 5, ... |
6.2 Development Milestones. In partial consideration of the rights granted by Licensor to AbbVie hereunder and subject to the terms and conditions set forth in this Agreement, AbbVie shall pay to Licensor a milestone payment within sixty (60) days after the achievement of each of the following milestones for the first ... |
6.2.1 upon AbbVie's exercise of its Option with respect to such Collaboration Program, Two Hundred and Fifty Million Dollars ($250,000,000); and |
6.2.2 upon the occurrence of both of the following (a) AbbVie's exercise of its Option with respect to such Collaboration Program and (b) Regulatory Approval of the first three (3) Additional Indications (on an Additional Indication by Additional Indication basis) to be obtained for a Licensed Product within such Colla... |
(i) One Hundred Million Dollars ($100,000,000) for the first such Additional Indication; |
(ii) Seventy-Five Million Dollars ($75,000,000) for the second such Additional Indication; and |
(iii) Fifty Million Dollars ($50,000,000) for the third such Additional Indication. |
(iv) For clarity: |
(A) The Licensed Product and Major Market for which Regulatory Approval is obtained for any of such three (3) distinct Additional Indications may, but need not, be the same Licensed Product or Major Market, respectively; provided that once a milestone payment has been paid for receiving Regulatory Approval in a Major M... |
(B) For purposes of this Section 6.2, any patient population within a given Additional Indication shall be deemed an Additional Indication, but once a milestone payment is made under this Section 6.2.2 for any patient population within a given Additional Indication (i.e. disease category, as defined in Section 1.112 ab... |
(C) The total amount payable under this Section 6.2.2 with respect to a Collaboration Program shall not exceed Two Hundred Twenty-Five Million Dollars ($225,000,000). |
6.2.3 Upon enrollment of the first patient in an Open Label Extension Study for a Licensed Product containing a Licensed CD33 Antibody, AbbVie shall pay to Licensor a milestone payment in the amount of Seventeen Million Eight Hundred Thousand Dollars ($17,800,000). |
6.2.4 Upon enrollment of the first patient in an Open Label Extension Study for a Licensed Product containing a Licensed Trem2 Antibody, AbbVie shall pay to Licensor a milestone payment in the amount of Seventeen Million Eight Hundred Thousand Dollars ($17,800,000). |
6.2.5 Each milestone payment in Section 6.2.1, 6.2.2, 6.2.3, and 6.2.4 shall be payable only upon the first achievement of such milestone with respect to a Collaboration Program and no amounts shall be due for subsequent or repeated achievements of such milestone with respect to such Collaboration Program, whether for ... |
6.3 Profit and Loss. |
6.3.1 Licensor Commercialization Opt Out. If Licensor has not already exercised a Development Opt Out for the applicable Collaboration Program, Licensor, may, upon ninety (90) days advance written notice to AbbVie, opt out of sharing US Net Losses for one or both Collaboration Programs, as applicable (a "Licensor Comme... |
6.3.2 Profit and Loss Sharing. If AbbVie has exercised its Option with respect to a given Collaboration Program or AbbVie has exercised the AbbVie Opt In with respect to an AbbVie Opt In Product and, in either case, Licensor has not exercised its Licensor Opt Out with respect to such Collaboration Program(s)or AbbVie O... |
(a) United States. Subject to Section 6.4, (i) Licensor shall receive fifty percent (50%) of all US Net Profits, and bear fifty percent (50%) of all US Net Losses, as applicable, attributable to Licensed Products for the United States, and (ii) AbbVie shall receive fifty percent (50%) of all US Net Profits, and bear fi... |
(b) Rest of World. Subject to Section 6.4, (i) AbbVie shall receive one hundred percent (100%) of ROW Profit for each Collaboration Program until the aggregate Row Profit received by AbbVie reaches three hundred fifty million dollars ($350,000,000) (the "ROW Profit Threshold") for such Collaboration Program; and (ii) t... |
6.4 Calculation and Payment of US Net Profit, US Net Loss or ROW Profit Share. |
6.4.1 United States Reports and Payments. If AbbVie has exercised its Option with respect to a given Collaboration Program or AbbVie has exercised the AbbVie Opt In with respect to an AbbVie Opt In Product and, in either case, Licensor has not exercised a Licensor Opt Out with respect to the applicable Collaboration Pr... |
6.4.2 ROW Reports and Payments. If AbbVie has exercised its Option with respect to a given Collaboration Program or AbbVie has exercised the AbbVie Opt In with respect to an AbbVie Opt In Product and, in either case, Licensor has not exercised a Licensor Opt Out with respect to the applicable Collaboration Program or A... |
6.4.3 Last Calendar Quarter. No separate payment shall be made for the last Calendar Quarter in any Calendar Year. Instead, at the end of each such Calendar Year, a final reconciliation shall be conducted by comparing the share of ROW Profit, US Net Profit or US Net Loss, as applicable, to which a Party is otherwise en... |
6.4.4 FTE Records and Calculations. Each Party shall record and account for its FTE effort with respect to each Licensed Antibody or Licensed Product to the extent that such FTE efforts are included in Manufacturing Costs, Development Costs or Allowable Expenses that are, or may in the future be, shared under this Agre... |
6.4.5 Methodology of Allocations for Allowable Expenses. Prior to Regulatory Approval for the applicable Licensed Product or as reasonably requested thereafter (but no more than once annually), AbbVie shall provide Licensor with its methodologies for allocations of Allowable Expenses between the United States and the R... |
6.5 Royalties. If AbbVie has exercised its Option with respect to a given Collaboration Program or AbbVie has exercised the AbbVie Opt In with respect to an AbbVie Opt In Product and, in either case Licensor has exercised a Licensor Opt Out with respect to such Collaboration Program or AbbVie Opt In Product, as applica... |
6.5.1 Royalty Rates. As further consideration for the rights granted to AbbVie hereunder, subject to Sections 6.5.2 and 6.5.4 below, commencing upon the First Commercial Sale of a Licensed Product in the Territory, on a Licensed Product-by-Licensed Product basis, AbbVie shall pay to Licensor a royalty on Net Sales of e... |
6.5.2 Adjustment Based on Development Costs Paid by Licensor. |
(a) Adjusted Royalty Rate. If Licensor exercises a Licensor Opt Out with respect to a Collaboration Program after it has shared a portion of Development Costs of Post Exercise Development Activities under Section 3.7.1(b) above, the royalty rate under Section 6.5.1 shall be increased with respect to such Collaboration ... |
(b) Second Generation Products; Additional Indications. If, after Licensor exercises a Licensor Opt Out for a Collaboration Program and Regulatory Approval is obtained for a Licensed Product within such Collaboration Program, AbbVie desires to pursue Regulatory Approval for one or more additional Licensed Products (eac... |
(i) Notice of Approval. Within thirty (30) days after AbbVie's receipt of the first Regulatory Approval for such Second Generation Product or for such Additional Indication in the first Major Market, AbbVie shall provide Licensor with written notice of the receipt of such Regulatory Approval, together with a statement ... |
(ii) Licensor Continued Funding. Within sixty (60) days after receiving such Notice of Approval, Licensor may, at its election, notify AbbVie that Licensor will reimburse AbbVie for one hundred and fifty percent (150%) of Licensor's Proportionate Share of the Additional Development Costs so reflected in the Notice of A... |
(iii) Licensor Election Not to Continue Funding an Additional Indication. If Licensor does not provide to AbbVie a Licensor Continued Funding Notice in accordance with Section 6.5.2(b)(ii) above with respect to a given Notice of Approval, then the following shall apply: |
(A) Second Generation Products. If the Notice of Approval pertained to the first Regulatory Approval for a Second Generation Product, then the Adjusted Royalty Rate under Section 6.5.2(a) for the applicable Collaboration Program shall not apply to such Second Generation Product, and only the Base Royalty specified in S... |
(B) Excluded Indications. If the Notice of Approval pertained to the first Regulatory Approval for the applicable Additional Indication for a Licensed Product, then the Adjusted Royalty Rate under Sections 6.5.1(b) for the applicable Collaboration Program shall not apply to Net Sales of such Licensed Product for such A... |
(c) Adjustment Based on COGS. Notwithstanding Sections 6.5.1 and 6.5.2(a) and (b) above, if (i) the Manufacturing Costs of the units of a particular Licensed Product for which Net Sales were received in a Calendar Quarter, expressed as a percentage of such Net Sales exceeds ten percent (10%) of such Net Sales, and (ii)... |
6.5.3 Royalty Term. AbbVie shall have no obligation to pay any royalties under this Section 6.5 with respect to Net Sales of any Licensed Product in any country or other jurisdiction after the Royalty Term for such Licensed Product in such country or other jurisdiction has expired. |
6.5.4 Reductions. Notwithstanding the foregoing: |
(a) in the event that in any country or other jurisdiction in the Territory during the Royalty Term for a Licensed Product there is Biosimilar Competition resulting in at least a twenty percent (20%) loss in Net Sales of such Licensed Product in such country or other jurisdiction in a Calendar Year from the Net Sales o... |
(b) in the event that AbbVie enters into an agreement with a Third Party in order to obtain a license or right under a Patent or intellectual property right owned or controlled by such Third Party in a particular country or other jurisdiction or in the event of any Third Party Technology as set forth in Section 5.7, fo... |
(c) in the event that a court or a governmental agency of competent jurisdiction requires AbbVie or any of its Affiliates or Sublicensees to grant a compulsory license to a Third Party permitting such Third Party to make and sell a Licensed Product in a country or other jurisdiction in the Territory, sales of such Lice... |
(d) For clarity, the reductions in Sections 6.5.2(c), and 6.5.4(b) above shall be applied prior to determining the reductions under Section 6.5.4(a) above (i.e., so that the fifty percent (50%) reduction under Section 6.5.4(a) shall apply to the net royalty determined after applying any reductions in Section 6.5.2(c) o... |
(e) AbbVie shall similarly have the right to deduct from Net Sales of the applicable Licensed Product in the applicable country those costs that would have been includable as Allowable Expenses in accordance with Sections 7.2.1, 7.2.2, 7.4 and 7.5.5 if Section 6.3.2 had applied, for purposes of calculating the royalty ... |
6.6 Payments and Reports. |
6.6.1 Royalties. AbbVie shall calculate all amounts payable to Licensor pursuant to Section 6.5 at the end of each Calendar Quarter, which amounts shall be converted to Dollars, in accordance with Section 6.7. AbbVie shall pay to Licensor the royalty amounts due with respect to a given Calendar Quarter within ninety (9... |
6.6.2 Compliance with Public Reporting Obligations. In the event Licensor becomes a public reporting company in the United States pursuant to an effective registration statement under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (or corresponding Applicable Law of another c... |
6.7 Mode of Payment; Offsets. All payments to either Party under this Agreement shall be made by deposit of Dollars in the requisite amount to such bank account as the receiving Party may from time to time designate by notice to the paying Party. For the purpose of calculating any sums due under, or otherwise reimbursa... |
6.8 Accounting Procedures. For purposes of determining Development Costs and Allowable Expenses, any expense allocated by either Party to a particular expense category of Development Costs or Allowable Expenses shall not also be allocated to another category under Development Costs or Allowable Expenses. Subject to Sec... |
6.9 Withholding Taxes. Where any sum due to be paid to either Party hereunder is subject to any withholding or similar tax, the Parties shall use their commercially reasonable efforts to do all such acts and things and to sign all such documents as will enable them to take advantage of any applicable double taxation ag... |
6.10 Indirect Taxes. All payments are exclusive of value added taxes, sales taxes, consumption taxes and other similar taxes (the "Indirect Taxes"). If any Indirect Taxes are chargeable in respect of any payments, the paying Party shall pay such Indirect Taxes at the applicable rate in respect of such payments followin... |
6.11 Interest on Late Payments. If any payment due to either Party under this Agreement is not paid when due, then such paying Party shall pay interest thereon (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of three hundred (300) basis points above the thirty (30)-day Lo... |
6.12 Financial Records. Each Party shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to Development Costs and AbbVie shall, and shall cause its Affiliates and Sublicensees to, keep complete and accurate books and records pertaining to Net Sales of Licensed Products and, i... |
6.13 Audit. At the request of the other Party, each Party shall, and shall cause its Affiliates to, permit an independent public accounting firm of nationally recognized standing designated by the other Party and reasonably acceptable to the audited Party, at reasonable times during normal business hours and upon reaso... |
6.14 Audit Dispute. In the event of a dispute with respect to any audit under Section 6.13, Licensor and AbbVie shall work in good faith to resolve the disagreement. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within thirty (30) days, the dispute shall be submitted for resolu... |
6.15 Confidentiality. The receiving Party shall treat all information subject to review under this ARTICLE 6 in accordance with the confidentiality provisions of ARTICLE 9 and the Parties shall cause the Audit Arbitrator to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating s... |
6.16 Diagnostic. The regulatory milestones and royalties in Sections 6.2 and 6.5 shall not apply to Development and Commercialization of Licensed Antibodies or Licensed Products for diagnostic use, or for uses solely for screening patients who have been diagnosed with a disease, state, or condition for eligibility to b... |
6.17 No Other Compensation. Each Party hereby agrees that the terms of this Agreement fully define all consideration, compensation and benefits, monetary or otherwise, to be paid, granted or delivered by one (1) Party to the other Party in connection with the transactions contemplated herein. Neither Party previously h... |
ARTICLE 7. INTELLECTUAL PROPERTY |
7.1 Ownership of Intellectual Property. |
7.1.1 Licensor Ownership. As between the Parties, Licensor shall own all right, title and interest in and to any and all Licensor Background Patents, Licensor Background Know-How, Licensor Program Patents and Licensor Program Know-How. |
7.1.2 AbbVie Ownership. As between the Parties, AbbVie or an Affiliate designated by AbbVie shall own and retain all right, title, and interest in and to any and all AbbVie Background Patents, AbbVie Background Know-How, AbbVie Program Patents and AbbVie Program Know-How. |
7.1.3 Ownership of Joint Program Patents and Joint Program Know-How. Subject to Section 3.8.2(a), as between the Parties, the Parties shall each own an equal, undivided interest in any and all Joint Program Patents and Joint Program Know-How. Subject to the licenses and rights of reference granted under Sections 5.2 an... |
7.1.4 United States Law. The determination of whether Information and inventions are conceived, discovered, developed, or otherwise made by a Party for the purpose of allocating proprietary rights (including Patent, copyright or other intellectual property rights) therein, shall, for purposes of this Agreement, be made... |
7.1.5 Assignment and Disclosure Obligation. |
(a) Each Party and its Affiliates shall cause all of their employees who perform Development activities, Manufacturing activities or regulatory activities for such Party under this Agreement to be under an obligation to assign their rights in any Information and inventions resulting therefrom to such Party. For clarity... |
(b) Each Party shall disclose to the other Party, and shall cause its Affiliates, licensees and sublicensees or subcontractors to so disclose, any Joint Program Patents, Licensor Program Patents or AbbVie Program Patents it proposes to file reasonably in advance of filing. Each Party shall use Commercially Reasonable E... |
7.1.6 Ownership of Corporate Names. As between the Parties, Licensor shall retain all right, title and interest in and to its Corporate Names. |
7.2 Maintenance and Prosecution of Patents. |
7.2.1 Patent Prosecution and Maintenance of Licensor Background Patents and Licensor Program Patents. Licensor shall have the right, but not the obligation, through the use of internal or outside counsel reasonably acceptable to AbbVie, to prepare, file, prosecute, and maintain worldwide the Licensor Background Patents... |
Notwithstanding the foregoing, Licensor shall promptly inform AbbVie of any adversarial patent office proceeding or sua sponte filing, including a request for, or filing or declaration of, any interference, opposition, or post-grant proceeding or reexamination relating to such a Patent in the Territory. The Parties sha... |
7.2.2 Patent Prosecution and Maintenance of Joint Program Patents. Prior to the Option Exercise Date for a given Collaboration Program, Licensor shall have the right, but not the obligation, through the use of internal or outside counsel reasonably acceptable to AbbVie, to prepare, file, prosecute, and maintain worldwi... |
The Controlling Party shall keep the Non-Controlling Party fully informed of all steps with regard to the preparation, filing, prosecution, and maintenance of such Patents, including by providing the Non-Controlling Party with a copy of material communications to and from any patent authority in the Territory regarding... |
Notwithstanding the foregoing, the Controlling Party shall promptly inform the Non-Controlling Party of any adversarial patent office proceeding or sua sponte filing, including a request for, or filing or declaration of, any interference, opposition, or post-grant proceeding or reexamination relating to such a Patent i... |
In the event that the Controlling Party decides not to prepare, file, prosecute, or maintain such a Patent in a country or other jurisdiction in the Territory, the Controlling Party shall provide reasonable prior written notice to the Non-Controlling Party of such intention (which notice shall, in any event, be given n... |
7.2.3 Patent Prosecution and Maintenance of AbbVie Background Patents and AbbVie Program Patents. AbbVie shall have the sole right, but not the obligation, to prepare, file, prosecute and maintain the AbbVie Background Patents and AbbVie Program Patents worldwide, at AbbVie's sole cost and expense. AbbVie shall keep Li... |
7.2.4 Cooperation. The Parties agree to cooperate fully in the preparation, filing, prosecution, and maintenance of the Licensor Background Patents, Licensor Program Patents, AbbVie Program Patents, and Joint Program Patents in the Territory under this Agreement. Cooperation shall include: |
(a) executing all papers and instruments, or requiring its employees or contractors to execute such papers and instruments, so as to (i) effectuate the ownership of intellectual property set forth in Section 7.1; (ii) enable the other Party to apply for and to prosecute Patent applications in the Territory; and (iii) o... |
(b) consistent with this Agreement, assisting in any license registration processes with applicable governmental authorities that may be available in the Territory for the protection of a Party's interests in this Agreement; and |
(c) promptly informing the other Party of any matters coming to such Party's attention that may materially affect the preparation, filing, prosecution, or maintenance of any such Licensor Background Patents, Licensor Program Patents, AbbVie Program Patents, and Joint Program Patents worldwide in the Territory. |
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