LICENSE AND COLLABORATION AGREEMENT

Collaboration Agreement

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Tercica, Inc

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Title: LICENSE AND COLLABORATION AGREEMENT
Date: 3/9/2007
Industry: Biotechnology and Drugs Law Firm: Cooley Godward Sector: Healthcare

LICENSE AND COLLABORATION AGREEMENT, Parties: tercica inc

E XHIBIT 10.14D

Execution Copy

[*] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24B-2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

S OMATULINE ^®

L ICENSE AND C OLLABORATION A GREEMENT

T HIS S OMATULINE ^® L ICENSE AND C OLLABORATION A GREEMENT (the “ Agreement ”), is entered into as of the Effective Date (defined below) by and between SCRAS, a company incorporated under the laws of France with offices at 42 rue du Docteur Blanche, 75016 Paris, France (“ SCRAS ”) and Beaufour Ipsen Pharma, a company incorporated under the laws of France with offices at 24 rue Erlanger, 75016 Paris, France (“ BIP ”) (SCRAS and BIP acting jointly being together referred to as “ Licensors ”), and Tercica, Inc. a company incorporated under the laws of Delaware with offices at 2000 Sierra Point Parkway, Suite 400, Brisbane, CA 94005, United States of America (“ Licensee ”). BIP, SCRAS, either individually or acting jointly as Licensors on the one hand, and Licensee, on the other hand, are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

Whereas , Licensors are engaged in the business of developing and marketing of pharmaceutical products; and

Whereas , BIP, as of the Execution Date has obtained regulatory approval for, and is marketing the Initial Product (as defined below) under the tradename Somatuline Autogel ^® in the European Union and is currently conducting additional research and development activities with respect to obtaining regulatory approval for the Licensed Product in the United States (the “ Licensor On-going Development ” as further defined below); and

Whereas , Licensors are seeking a partner for the development and, following regulatory approval, distribution of the Licensed Product in the Territory (as defined below); and

Whereas, Licensee has the marketing and sales force in the Territory to enable it to effectively market the Licensed Product in the Territory; and

Whereas , Licensee and an Affiliate of BIP, on the Execution Date, also are entering into that certain Stock Purchase and Master Transaction Agreement, and will enter into pursuant thereto such other agreements, including the Voting Agreement, Registration Rights Agreement, Investor Rights Agreement, Convertible Note Agreement, and related transaction documents, including the issuance of a Warrant to purchase shares of Common Stock of Licensee (collectively, the “ Equity Transaction Documents ”); and

[*]= C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , IS FILED WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

Whereas , Licensee and BIP, on the Effective Date, are also entering into that certain Increlex License and Collaboration Agreement pursuant to which, among other things, Licensee will exclusively license to BIP, Licensee’s product Increlex™, for sale by BIP in all countries of the world, excluding the United States, Canada, Japan and certain other countries (the “ Increlex Agreement ”).

T HE P ARTIES DO HEREBY AGREE AS FOLLOWS :

1.	DEFINITIONS AND INTERPRETATION

1.1 “18-Month Rolling Order Forecast” has the meaning set forth in Section 6.7.1 of this Agreement.

1.2 “Affiliate” means, in respect of any Person (i.e. any individual or any corporation, limited liability company, partnership, trust, association or other entity of any kind, a Person that is directly or indirectly controlling, controlled by, or under common control with such first-mentioned Person or any of its Subsidiaries, and for the sole purpose of this paragraph, the term “control” (including the terms “controlled by” and “under common control with”) means having, directly or indirectly, the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or by contract or otherwise. As used in this Section 1.2, “Subsidiary” means any corporation or other organization, whether incorporated or unincorporated, of which (i) at least fifty percent (50%) of the securities (or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization) is directly or indirectly owned or controlled by the relevant Person or (ii) the relevant Person (or any other subsidiary of the relevant Person) is a general partner.

1.3 “Agreement” shall have the meaning set forth in the preamble.

1.4 “Binding Order” has the meaning set forth in Section 6.7.2 of this Agreement.

1.5 “BLA” means a Biologics License Application (as defined in Title 21 of the United States Code of Federal Regulations, Section 600 et seq, as amended from time to time), or such application’s foreign equivalent, filed pursuant to the requirements of a Regulatory Authority for Marketing Authorization of a Licensed Product.

1.6 “Calendar Quarter” means the respective period of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.7 “Calendar Year” means the respective period of twelve (12) consecutive months commencing on January 1 and ending on December 31.

1.8 “Combination Product” shall mean a pharmaceutical formulation or product for use in the Field that contains somatostatin or any somatostatin analog, which somatostatin analogs include, but are not limited to, lanreotide, and any other active ingredient.

1.9 “Commercialization Plan” shall mean the most recent version of any given three (3) Calendar Year rolling plan as from First Commercial Sale until termination or expiration of the Agreement (the first Calendar Year being for the purpose of this clause, the period starting from the date of the First Commercial Sale in the country until December 31 of the same year), with respect to the promotion, sales plan and budget for each Licensed Product in each country of the Territory including in particular: (a) the Promotional Efforts planned for such three Calendar Years and (b) the Sales Forecast anticipated for such three Calendar Years. Such Commercialization Plan shall also include provisions for the manufacturing, supply and distribution planning of Licensed Products for sale in the Territory.

1.10 “Commercial Sale” means the sale of Licensed Products whether by Licensee or Licensee’s Affiliates or Sub-licensees to a third party and shall exclude (i) any transfer of Licensed Product by Licensee to its Affiliates or Sub-licensees and (ii) any distribution of Licensed Product for use in Development activities or as Samples.

1.11 “Confidential Information” has the meaning set forth in Section 10.1 of this Agreement.

1.12 “Control” with the correlative meaning “Controlled by” means, with respect to intellectual property, possession of the right to grant a license or sublicense as provided for herein without violating (a) any law or governmental regulation applicable to such license or sublicense or (b) the terms of any agreement or other arrangement with any third party that exists as of the Effective Date, or if such right is acquired after the Effective Date, as of the date a Party first gained possession of such right.

1.13 “Cover” and with correlative meaning “ Covered ” shall mean with respect to Patent Rights, that such Patent Rights claim the composition of matter, method of making or any use of such Licensed Product.

1.14 “current Good Manufacturing Practices” or “cGMP” shall mean the requirements found in the legislation, regulation and administrative provisions for methods to be used in, and the facilities or controls to be used for, the manufacturing, processing, packing and/or holding of a drug to assure that such drug meets the requirements as to the safety and has the identity and strength and meets the quality characteristics that it purports or is represented to possess, all of which as defined by the competent authorities of each country of the Territory where and at the time Licensee sells the Licensed Products in each such country and by the competent authorities of the country where any manufacturing or testing operation is conducted.

1.15 “Delivery Point” shall have the meaning ascribed to it in Section 6.4 of this Agreement.

1.16 “Developing Party” shall mean a Party Developing solely a Product Improvement, a Combination Product or an Other Product under a Subsequent Development Plan as set forth in Section 4.4.4 (i) of this Agreement.

1.17 “Development” and with correlative meaning “ Develop ” and “ Developing ” means all activities related to preclinical testing, toxicological, pharmacokinetic, metabolic, or clinical aspects of the Licensed Product (or where applicable an Other Product), process development, stability studies, formulation development, clinical studies regulatory affairs, and other development activities for the Licensed Product (or where applicable an Other Product).

1.18 “Development Costs” shall mean costs incurred jointly by the Parties under the Initial Development Plan or Joint Subsequent Development Plan or solely by a Developing Party under a Subsequent Development Plan as determined in accordance with Section 4.4.2 of this Agreement.

1.19 “Development Plan” shall mean either the Initial Development Plan or any Subsequent Development Plan.

1.20 “Diligent Efforts” shall mean the efforts consistent with the exercise of prudent scientific and business judgment, consistent with the effort applied to other pharmaceutical products of similar potential and market size by the Party in question (or, if the Party in question has no other pharmaceutical product of similar potential and market size, by other similarly sized pharmaceutical companies that do).

1.21 “Dominating Patent” means with respect to a given country in the Territory, an unexpired patent of a third party which has not been finally invalidated by a court or other governmental agency of competent jurisdiction and which would be infringed by the use, manufacture, sale or import of the Licensed Product in such country under this Agreement.

1.22 “Effective Date” shall mean the date of the First Closing.

1.23 “EMEA” means the European Medicine Agency, a decentralized body of the European Union.

1.24 “Excluded Indications” shall mean the use of somatostatin or any somatostatin analog, which somatostatin analogs include, but are not limited to, lanreotide, as a therapeutic or potential therapeutic for any opthalmic indications.

1.25 “Execution Date” shall mean July 18, 2006, the date of execution of the Purchase Agreement.

1.26 “Field” means all uses in humans and all in vitro uses excluding the Excluded Indications.

1.27 “First Closing” shall have the meaning ascribed to it in the Purchase Agreement.

1.28 “First Commercial Sale” means the first Commercial Sale in the relevant countries of the Territory, as evidenced by the first payment received by Licensee, its Affiliates or Sub-licensees in connection with this Commercial Sale on a country-by-country basis.

1.29 “ FTE ” shall mean full time equivalent of, and is equal to the amount of work one full time employee would accomplish during any one year period.

1.30 “IND” means an investigational new drug application as defined under US law and foreign equivalents.

1.31 “Indication” means the prevention, therapeutic treatment, or diagnosis of any particular human disease or, disorder or condition, but shall not include the Excluded Indications.

1.32 “Initial Development Plan” means the plan for the conduct of specified Development activities with regards to the Initial Product, or Product Improvements or Combination Products as agreed between the Parties pursuant to Section 4.3.1 of this Agreement for the purpose of obtaining initial Marketing Authorization or Marketing Authorization for label expansion for such Licensed Product, which shall exclude any Licensors On-going Development.

1.33 “Initial Product” means that certain pharmaceutical formulation for use in the Field containing lanreotide and as of the Execution Date marketed by Licensors or their Affiliates in any country in the European Union under the tradename Somatuline ^® Autogel ^® , the specifications of which, as of the Execution Date are attached as Schedule 2 to this Agreement, which specifications may be amended from time to time by the written agreement of the Parties.

1.34 “JFC” shall mean the joint finance committee as defined in Section 3.2 of this Agreement.

1.35 “Joint Know-How” shall mean any and all Know-How owned jointly by BIP and Licensee pursuant to Section 8.3.

1.36 “Joint Patents” shall mean any and all Patent Rights owned jointly by SCRAS and Licensee pursuant to Section 8.3.

1.37 “Joint Patent Committee” shall mean the committee defined in Section 8.3.

1.38 “Joint Subsequent Development Plan” shall mean a Subsequent Development Plan conducted and funded jointly by the Parties in accordance with Section 4.4.3 of this Agreement.

1.39 “JSC” shall mean the joint steering committee as defined in Section 3.1 of this Agreement.

1.40 “Know-How” means all non public proprietary information, trade secrets, techniques and data of a Party (including Confidential Information as defined in Section 10.1) including, but not limited to, discoveries, formulae, materials, practices, methods, knowledge, know-how, processes, experience, test data (including pharmacological, toxicological and clinical information and test data), analytical and quality control data, marketing, pricing, distribution, cost and sales data or descriptions and any and all submissions to Regulatory Authorities with respect to Licensed Products, and preclinical and clinical data, assays and associated materials, and protocols and procedures and documentation associated with the foregoing.

1.41 “Licensed Know-How” shall mean Know-How owned or Controlled by BIP that is reasonably necessary for the characterization, optimization, assaying, Development, import, offer for sale, use or sale of somatostatin or any somatostatin analog, which somatostatin analogs include, but are not limited to, lanreotide, or any Licensed Product in the Field including without limitation all Know-How resulting from Licensors On-going Development.

1.42 “Licensed Patent Rights” shall mean all Patent Rights owned or Controlled by SCRAS in the Territory which Cover the Licensed Product, but excluding Licensor Related Patent Rights except and to the extent agreed by the Licensor and Licensee pursuant to Section 2.6,. As at the Execution Date, Licensed Patent Rights include all Patent Rights listed in Schedule 1 of this Agreement.

1.43 “Licensed Product” means, as the context requires, the Initial Product, and any Product Improvements and/or any Combination Products that accrue from the Initial Development Plan and/or Joint Subsequent Development Plans, and/or any Subsequent Development Plan as to which the Opt-in Party (as that term is defined in Section 4.4.4(ii)(F)(a) below) has exercised its rights to Opt-In (as that term is described in Section 4.4.4(ii)(F)(a) below) pursuant to Section 4.4.4(ii)F.

1.44 “Licensed Trademarks” shall mean the trademarks listed in Schedule 3 .

1.45 “Licensee Allocation” shall have the meaning ascribed to it in Section 4.4.3.

1.46 “Licensee Group” means Licensee and its Affiliates.

1.47 “Licensee Independent Patent Rights” shall have the meaning set forth in Section 2.4.2 of this Agreement.

1.48 “Licensee Related Patent Rights” means, any Patent Rights owned or Controlled by Licensee which Cover a Licensed Product other than the Initial Product in the Licensor Territory and either (i) are acquired by or licensed to Licensee from a third party and as to which Licensee would owe such third party royalties or other payments

for the license to such Patent Rights in the Licensor Territory based on Licensee’s (or Licensor’s) use and exploitation of such Patent Rights; or (ii) do not cover inventions made in the conduct of the Development or a Development Plan under this Agreement, which such inventions are solely or jointly owned by Licensee as provided in Section 8.3.

1.49 “Licensors Allocation” shall have the meaning ascribed to it in Section 4.4.3.

1.50 “Licensors IP Rights” means any and all Licensed Patent Rights and Licensed Know-How.

1.51 “Licensors On-going Development” shall mean those clinical, non-clinical studies and regulatory activities anywhere including in the Territory either (a) ongoing as of the Execution Date and set forth in Schedule 11 hereto or (b) that either (i) are required for securing Marketing Authorization for the Initial Product for the Target Label in the Territory, or (ii) the conduct of which is a condition upon which such Marketing Authorization has been granted by a Regulatory Authority in the Territory. Licensors On-going Development activities are carried out and funded solely by Licensors.

1.52 “Licensors Related Patent Rights” means, any Patent Rights owned or Controlled by Licensors that are other than those listed on Schedule 1 , but which Cover any Licensed Product other than the Initial Product, and either (i) are acquired by or licensed to Licensors from a third party and as to which Licensors would owe such third party royalties or other payments for the license to such Patent Rights in the Territory based on Licensors’ (or Licensee’s) use and exploitation of such Patent Rights or (ii) do not cover inventions made in the conduct of the Development or a Development Plan under this Agreement, which inventions are solely or jointly owned by Licensors as provided in Section 8.3.

1.53 “Licensors Territory” means all countries in the world, excluding the United States of America and Canada, its territories and possessions.

1.54 “Market Competition” means with respect to a given country of the Territory, the written notification to Licensors by Licensee that the sale in a given country of the Territory of one or more products containing lanreotide by one ore more third parties that are not Sub-licensees of Licensee has achieved greater than twenty five percent (25%) Market Share. For purposes of this Section 1.54, “ Market Share ” shall mean the percentage market share in value for the product or products in question containing lanreotide, such percentage to be established by measuring a full Calendar Quarter of reported prescription data for the applicable product(s) and any competing products (including Licensed Products) sold in the relevant country of the Territory. If the Parties are unable to mutually agree on the Market Share of a given product or products based on such prescription data, the Parties shall submit the issue to a mutually-agreeable third party market research firm having expertise in pharmaceutical sales in the relevant country of the Territory (the “ Research Firm ”). The Research Firm shall be instructed to provide an independent assessment of the Market Share for purposes of determining

Market Competition hereunder. Licensee shall bear all costs associated with the services of the Research Firm; provided that in the event that the Research Firm establishes that the Market Share is twenty five percent (25%) or higher for a particular Indication, Licensors shall reimburse Licensee for the full cost of the Research Firm’s services for such assessment.

1.55 “Marketing Authorizations” means the regulatory authorizations required to sell the Licensed Product in the Territory on a country-by country basis

1.56 “Milestone Event” means the occurrence of either of the two Approval Milestone events set forth in 7.1.2(i) upon which or upon the determination of which the Approval Milestones Payments set forth in Section 7.1.2(i) paid by Licensee.

1.57 “Net Sales” means the consolidated gross amount recognized as sold for any particular period using GAAP (i.e., Generally Accepted Accounting Procedures) for sales recognition for the Licensed Product by Licensee or its Affiliates or Sublicensees to third parties, minus the following as applicable, using GAAP criteria, (a) returned goods; (b) trade cash, and quantity discounts accrued and actually taken from the invoiced amount; (c) rebates, including payments in respect of any governmental subsidized programs, rebate payments given to wholesalers or other Licensee buying groups, healthcare insurance carriers or other institutions; (d) credits or allowances actually given or made for rejection or return of previously sold Licensed Products or for retroactive price reductions (including government mandated rebates and chargebacks); (e) sales, value added or other taxes or duties levied on or measured by the billing amount for Licensed Products, to the extent billed separately on the invoice and paid for by the customer, as adjusted for rebates and refunds, as applicable; (f) a flat rate of one percent (1%) of such consolidated gross amount recognized as sold to account for estimated charges for freight and insurance directly related to the delivery or return of Licensed Products to the extent billed separately on the invoice and paid for by the customer; (g) adjustments for Combination Products as mutually agreed upon in good faith by the Parties, (h) uncollectible debts, as incorporated in Licensee Group’s consolidated accounts consistently applied to all products of Licensee Group, provided however that if collected at a later date such amounts will be added to Net Sales in the Calendar Quarter in which it is received, in all cases as adjusted periodically to reflect amounts actually incurred in the Territory for items (a) through (f). If a Licensed Product is sold for consideration other than cash, the fair market value of such other consideration shall be included in Net Sales.

1.58 “Opt-In” shall have the meaning assigned to it in Section 4.4.4(ii)(F)(a).

1.59 “Opt-in Information” shall have the meaning assigned to it in Section 4.4.4(iii)(A)(b).

1.60 “Opt-in Notice Date” shall have the meaning assigned to it in Section 4.4.4(iii)(A)(a).

1.61 “Other Product” shall mean any chemical entity or pharmaceutical product other than a Licensed Product which is acquired, owned, Controlled or being the object of research and development activities by Licensors in the field of endocrinology, or other areas as may be mutually agreed by the Parties in writing.

1.62 “Patent Rights” means any patents, patent applications, certificates of invention, or applications for certificates of invention and any supplemental protection certificates together with any extensions, registrations, confirmations, reissues, substitutions, divisions, continuations or continuations-in-part, reexamination or renewals thereof.

1.63 “Phase I Clinical Trials” shall mean those clinical trials on sufficient number of volunteers/subjects that are designed to establish safe drug doses and to support testing in Phase II Clinical Trials.

1.64 “Phase II Clinical Trials” shall mean those clinical trials on sufficient number of patients that are designed to explore the dosage, safety and biological activity of a drug for intended use, and to define warnings, precautions and adverse reactions that are associated with the drug in the dosage range to be prescribed.

1.65 “Phase III Clinical Trials” shall mean those clinical trials on sufficient number of patients that are designed to establish that a drug is safe and efficacious for its intended use, and to define warnings, precautions, and adverse reactions that are associated with the drug in the dosage range to be prescribed and supporting Marketing Authorization of such drug or label expansion of such drug.

1.66 “Product Improvement” shall mean any improvements and/or enhancements or other desirable change to the technical/pharmacological characteristics of the Initial Product (or an enhanced or improved version of the Initial Product), whether patentable or not, including, without limitation, improvements or enhancements in the manufacture, formulation, ingredients, preparation, presentation, means of delivery or administration, dosage, indication for use or packaging of the Initial Product. For the sake of clarity, Product Improvements shall include without limitation any pharmaceutical product containing an active ingredient that is somatostatin or any somatostatin analog other than lanreotide.

1.67 “Promotional Efforts” shall mean, as to a given Licensed Product, the annual sales, medical and marketing efforts planned by the Licensee in the promotion and marketing of such Licensed Product in a country of the Territory after the First Commercial Sale in such country. The Promotional Efforts shall be detailed in the Commercialization Plan which shall include without limitation sales plan, number of calls by medical representatives, intended Phase IV (post-approval) studies and budget related thereto for such Licensed Product in such country (although the actual Phase IV study design and budget therefor will be addressed in a Development Plan for such Licensed Product).

1.68 “Purchase Agreement” means that certain Stock Purchase and Master Transaction Agreement, dated as of July 18, 2006, by and between BIP’s Affiliate, and Licensee.

1.69 “Regulatory Authority” means any government agency having the responsibility for granting Marketing Authorizations and any other government entities with authority over the manufacturing and the marketing of the Licensed Product.

1.70 “Related Patent Rights” shall have the meaning set forth in Section 2.6 of this Agreement.

1.71 “Royalty Term” shall mean, on a country-by-country basis the period starting upon the First Commercial Sale of the Licensed Product until the later of (i) the expiry date of the last Valid Claim in such country, or (ii) the expiry date of the orphan drug status granted to the Licensed Product by Regulatory Authorities in such country, or (iii) the expiry date of the regulatory protection (if any) preventing any competitor to cross-refer any data of the Marketing Authorizations files of the Licensed Product in such country; or (iv) the date which is fifteen (15) years from such First Commercial Sale.

1.72 “Sales Forecasts” shall mean, as to a given Licensed Product, the annual sales forecasts for the Licensed Product in a country of the Territory with respect to the Indication(s) for which Licensee has obtained Marketing Authorization.

1.73 “Sample” means Licensed Product delivered to Licensee by Licensors for distribution by Licensee or otherwise, to health care professionals for trial use by patients at no cost to the patient and not for re-sale pursuant to applicable laws.

1.74 “Schedule(s)” refers to the Schedules attached to this Agreement and incorporated herein by this reference.

1.75 “SKU” shall mean stock-keeping unit.

1.76 “Specifications” means the standards and specifications relating to the manufacture, testing and packaging of the Licensed Product, which shall be those approved by the Regulatory Authorities in the Territory from time to time and on a country-by-country basis. The Specifications of the Initial Product as at the Execution Date are set forth in Schedule 2 attached hereto.

1.77 “Sub-licensee” means a third party to whom Licensee or its Affiliates sublicenses, assigns or otherwise delegates some or all of their rights and obligations under this Agreement. Sub-licensee shall also include any third party who purchases its supply of Licensed Product, in finished form from Licensee, its Affiliates or Sublicensee for resale into the market, where, as a partial or full consideration for such purchase, such third party has a payment obligation to Licensee, its Affiliates or Sublicensee that is a percentage of its net sales, including without limitation a royalty obligation.

1.78 “Subsequent Development Plan” shall mean the specific plan for Development activities to obtain initial Marketing Authorization or Marketing Authorization for a Product Improvement, Combination Product or, as the case may be and where agreed pursuant to Section 4.3.3, Other Product, submitted by one Party to the other Party pursuant to Sections 4.3.2 and 4.3.3 of this Agreement.

1.79 “Supply Price” shall have the meaning ascribed to it in Section 6.5 of this Agreement.

1.80 “Target Label” shall mean the Indication for which the Parties intend that the Marketing Authorization will be granted and the correlative estimated patient population which the Parties expect may be treated by such Indication with respect to the Initial Product in the United States of America (the “Target Population” ), all as described further in Schedule 4 .

1.81 “Technical Agreement” shall have the meaning ascribed to it in Section 6.1.1 of this Agreement.

1.82 “Territory” means United States of America and Canada.

1.83 “USD” means United States dollars.

1.84 “Valid Claim” means any claim of a pending patent application of a Licensed Patent Rights which has not been abandoned or finally rejected without the right of appeal or which is not known to be unpatentable, or any claim from an issued and unexpired Licensed Patent Rights which has not been revoked or held unenforceable or invalid by a decision of a court or other governmental authority of competent jurisdiction without the right of appeal, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

1.82 Rule of Construction. The Parties acknowledge and agree that for the purposes of this Agreement, where references are made to the “Licensors” the following shall apply:

(i) if and to the extent that the Licensors have a right (for example to terminate the agreement or to Opt-In), BIP and SCRAS shall exercise the right jointly and the Licensee shall be entitled to assume that the exercise of the right by BIP or SCRAS is an exercise of the right by both Licensors;

(ii) BIP and SCRAS shall be jointly and severally liable for the full and timely performance of all obligations of the Licensors under this Agreement and for any indemnities and warranties given by the Licensors under this Agreement;

(iii) if and to the extent the Licensee is required to obtain the consent of the Licensors, the consent of BIP or SCRAS shall be exercised jointly and the Licensee shall be entitled to assume that the exercise of the right by either BIP or SCRAS is an exercise by both Licensors;

(iv) if and to the extent the Licensee if required to give notice to the Licensors, notice in accordance with Section 16 shall be deemed to be notice to both Licensors.;

(v) the Licensors may perform their obligations under this Agreement directly or through one or more of Licensors’ Affiliates, provided that the Licensors shall remain jointly and severally liable for the full and timely performance pursuant to this Agreement. Unless and until advised otherwise in writing by Licensor (a) Licensee may rely, without inquiry, on all actions taken by Licensors’ Affiliates or their employees in connection with this Agreement, which purport to be on behalf of Licensor; and (b) Licensee may rely on acts to the benefit of Licensors’ Affiliates and employees as being acts to the benefit of Licensors. All rights to the benefit of Licensors’ Affiliates or employees under this Agreement shall vest in and benefit to Licensors.

2.	LICENSE GRANT

2.1 Exclusive License.

2.1.1 Subject to the terms and conditions of this Agreement:

(A) SCRAS grants to Licensee and Licensee’s Affiliates (for so long as they remain Affiliates of Licensee):

(i) an exclusive, royalty-bearing license right, with the right to grant sublicenses pursuant to Section 2.2, to use and exploit Licensed Patent Rights (including SCRAS’ interest in any and all Joint Patents) to import, have imported, use, have used, to research and Develop the Initial Product and those other Licensed Products which are jointly Developed by the Parties or solely developed by Licensee or as to which Licensee elects to exercise its Opt-in rights pursuant to Section 4.4.4(ii)F, in the Field and in the Territory, as and to the extent permitted under this Agreement;

(ii) a non- exclusive, royalty-bearing license right, to use and exploit Licensed Patent Rights (including SCRAS’ interest in any and all Joint Patents) to use and have used to research and Develop the Initial Product and those other Licensed Products which are jointly Developed by the Parties or solely developed by Licensee or as to which Licensee elects to exercise its Opt-in rights pursuant to Section 4.4.4(ii)F, in the Field and in the Licensor Territory, as and to the extent permitted under this Agreement; and

(iii) an exclusive (even as to Licensor or Licensor’s Affiliates), royalty-bearing license right, with the right to grant sublicenses pursuant to Section 2.2, to use and exploit Licensed Patent Rights (including SCRAS’ interest in any and all Joint Patents) to use, have used, import, have imported, offer for sale, sell and have sold Licensed Products in the Territory, in the Field.

(B) BIP grants to Licensee and Licensee’s Affiliates (for so long as they remain Affiliates of Licensee):

(i) an exclusive, royalty-bearing license right, with the right to

grant sublicenses pursuant to Section 2.2, to use and exploit Licensed Know-How (including BIP’s interest in any and all Joint Know-How) to import, have imported, use, have used, to research and Develop the Initial Product and those other Licensed Products which are jointly Developed by the Parties or solely developed by Licensee or as to which Licensee elects to exercise its Opt-in rights pursuant to Section 4.4.4(ii)F, in the Field and in the Territory, as and to the extent permitted under this Agreement;

(ii) a non- exclusive, royalty-bearing license right, to use and exploit Licensed Know-How (including BIP’s interest in any and all Joint Know-How) to use and have used to research and Develop the Initial Product and those other Licensed Products which are jointly Developed by the Parties or solely developed by Licensee or as to which Licensee elects to exercise its Opt-in rights pursuant to Section 4.4.4(ii)F, in the Field and in the Licensor Territory, as and to the extent permitted under this Agreement; and

(iii) an exclusive (even as to Licensor or Licensor’s Affiliates), royalty-bearing license right, with the right to grant sublicenses pursuant to Section 2.2, to use and exploit Licensed Know-How (including BIP’s interest in any and all Joint Know-How) to use, have used, import, have imported, offer for sale, sell and have sold Licensed Products in the Territory, in the Field.

(C) The grant of exclusive rights to Licensee in Sections 2.1.1(A) (i) and (iii) and 2.1.1(B) (i) and (iii) shall be subject to Licensors’ reservation of the right to use, have used, import, and have imported in the Territory Initial Product and those other Licensed Products which are jointly Developed by the Parties or solely developed by Licensors or as to which Licensors elect to exercise their Opt-in rights pursuant to Section 4.4.4(ii)F, for the purpose of supporting Development of Initial Product or such other Licensed Products in the Field for sale in Licensors Territory, as and to the extent permitted under this Agreement.

2.1.2 Notwithstanding the foregoing, Licensors reserve all rights:

(i) under the Related Patent Rights Controlled by Licensors unless otherwise agreed among the Parties pursuant to Section 2.6 of this Agreement in a separate written agreement, and

(ii) under the Licensors IP Rights to the extent necessary to conduct or have conducted research, use, manufacture or Development of Licensed Products for sale in the Licensors Territory, as and to the extent permitted under this Agreement.

2.1.3 Subject to the terms and conditions of this Agreement, SCRAS hereby grants to Licensee and Licensee’s Affiliates (for so long as they remain Affiliates of Licensee) an exclusive (even as to Licensors and their respective Affiliates), royalty-bearing license right, with the right to grant sublicenses, to use and exploit the Licensed Trademarks on and solely in connection with the Development and commercialization of the Licensed Product throughout the Territory, in the Field.

2.2 Sublicense Rights, Third Party Distributors. Licensee shall have the right to sublicense the rights granted in Section 2.1 to Sub-licensees and/or to appoint third party distributors, subject to the prior written consent of Licensors which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Licensee shall remain responsible for complying and for ensuring that such Sub-licensees and distributors comply with this Agreement, all relevant laws, regulations and requirements relating to the importation, distribution, marketing, promotion and sale of the Licensed Product in the Territory. Any sub-license and distributorship agreement shall contain terms and conditions that are not inconsistent with those of this Agreement.

2.3 Excluded Indications. In the event at any time after the Effective Date, Licensors possess, acquire, or regain rights to Develop, sell, offer for sale, use, export and/import the Licensed Product for the Excluded Indications, such Excluded Indications shall be automatically included in the Field.

2.4 Licenses to BIP and SCRAS

2.4.1 Licensee hereby grants to BIP and SCRAS:

(i) a non-exclusive, sublicensable license under Licensee’s interest in any Joint Patent Rights to SCRAS and any Joint Know-How to BIP to use, have used, make, have made, research and Develop the Initial Product and those other Licensed Products which are jointly Developed by the Parties or as to which Licensors elect to exercise their Opt-in rights pursuant to Section 4.4.4(ii)F, in the Field and in the world, as and to the extent permitted under this Agreement; and

(ii) an exclusive, sublicensable license under Licensee’s interest in any Joint Patent Rights to SCRAS and any Joint Know-How to BIP to sell, offer for sale, import, have imported and export in the Field and in the Licensors Territory the Initial Product and those other Licensed Products which are jointly Developed by the Parties or as to which Licensors elect to exercise their Opt-in rights pursuant to Section 4.4.4(ii)F.

2.4.2 Licensee hereby represents and warrants that, as of the Execution Date, Licensee does not own or Control any Patent Rights that claim the composition of matter of, or the method of making or any use of, the Initial Product in the Licensors Territory (“ Licensee Independent Patent Rights ”). Notwithstanding the foregoing, to the extent any such Licensee Independent Patent Rights are after the Execution Date found to exist, Licensee hereby covenants that, during the term of this Agreement, neither it, nor its Affiliates, shall assert against Licensors, their respective Affiliates or any sublicensees, a claim of infringement of such Licensee Independent Patent Rights based upon the research, development, use, manufacture, sale, offer for sale, import and export of the Initial Product in the Field and in the Licensors Territory or the research, development, use and manufacture of the Initial Product in the Field and in the Territory. Provided however that Licensors acknowledge and agree that Licensee does not covenant that, during the term of this Agreement, neither it, nor its Affiliates, would not assert against Licensors, their respective Affiliates or any sub-licensees, a claim of infringement of Related Patent Rights Controlled by Licensee unless otherwise agreed among the Parties pursuant to Section 2.6 of this Agreement in a separate written agreement.

2.5 Right of First Negotiation for Other Products.

2.5.1 When acquiring or gaining Control of any Other Product with respect to the Licensors Territory, to the extent it is on commercially reasonable terms and does not have an adverse effect on the interests of Licensors to do so, Licensors shall endeavor to acquire or obtain Control of such Other Product with respect to the Territory. With respect to those Other Products owned or Controlled by Licensors as of the Effective Date, Licensors shall provide or cause to be provided to the JSC a list of such Other Products and their status of development.

2.5.2 For a period of six (6) years from the Execution Date (the “Option Period” ) Licensee shall have a right of first negotiation with respect to the development and commercialization of Other Products for the Territory as set forth in this Section 2.5. During the Option Period, promptly following the acquisition or obtaining Control of any Other Product by Licensors for the Territory, Licensors shall notify Licensee of such Other Product and simultaneously provide to Licensee all necessary information relating to such Other Product to enable Licensee to decide as to whether it wishes to exercise its right to negotiate with Licensors to obtain the exclusive rights to develop and/or commercialize the Other Product in the Territory, as the case may be, depending upon the development stage of such Other Product and Licensors shall not market or commercialize such Other Product in the Territory (either themselves or through their respective Affiliates, Sub-licensees or other third party) unless and until Licensee has either notified Licensors of its decision to negotiate rights on such Other Product for the Territory or the time for such notification has lapsed. Licensee shall notify Licensors of its decision to so negotiate within thirty (30) days as from receipt of the above information. Failure by Licensee to make such notification will be deemed as a refusal of its first right of negotiation for the development and/or commercialization of the Other Product in the Territory.

2.5.3 In the event Licensee notifies Licensors of its decision to develop and commercialize the Other Product in the Territory, the Parties shall have one hundred-twenty (120) days or more if mutually agreed in writing (the “Negotiation Period” ) to negotiate exclusively the terms and conditions applicable to such collaboration, including, as appropriate, any co-development of such Other Product, and the payment of any license fees or other payments owed any third party by Licensors with respect to the development or commercialization of the Other Product in the Territory.

2.5.4 In case of failure by Licensee to notify Licensors of Licensee’s decision to exercise its right of first negotiation within the thirty-day (30) period or failure of the Parties to reach an agreement within the Negotiation Period, Licensors shall be free to themselves develop and commercialize such Other Product in the Territory and/or enter into any agreement with any third parties to develop and/or commercialize the Other Product in the Territory, provided, however, that for a period of twelve (12)

months after the end of the Negotiation Period, Licensors shall not enter into any agreement with such a third party for rights to such Other Product in the Territory on terms less favorable to Licensors, when viewed in their totality, than those last offered by or to Licensee.

2.5.5 Notwithstanding Licensee’s right of first negotiation as set forth above, Licensors may propose to Licensee that the Parties conduct a Joint Subsequent Development Plan for such Other Product or that a Subsequent Development Plan for such Other Product be conducted solely by the Licensors with the right for the Licensee to Opt-in, pursuant to the provisions of Sections 4.4.3 and 4.4.4 either prior to, or subsequent to any exercise by Licensee of its rights to negotiate for the exclusive license to such Other Product as provided for above. It is expressly understood and agreed however that nothing in this Agreement shall be interpreted as a license by Licensors to Licensee of any rights to such Other Product and that any such license will be only as may be agreed upon in writing by the Parties following the Effective Date.

2.6 Other Cross Licenses. In the event either Party desires to incorporate technology in the discovery, research, composition of matter of, or the making or using of Licensed Products pursuant to a Development Plan ( “Technology” ), and if such Technology is Covered by Patent Rights which are necessary for the performance of the works contemplated by such Development Plan, in that such Patent Rights would be infringed by the commercial exploitation of the Licensed Product resulting from the performance of such Development Plan and which either are (i) Licensor Related Patent Rights; or (ii) Licensee Related Patent Rights, or (iii) owned by a third party (collectively, “Related Patent Rights” ) such Party shall inform the JSC of such Related Patent Rights for the JSC’s consideration as part of its consideration of the Development Plan at issue. If the JSC approves incorporation of such Related Patent Rights, it shall determine (i) the allocation between the Parties of any costs owed or to be owed to such third party owning or Controlling such Patent Rights; or (ii) the consideration to be paid by one Party to the other Party for obtaining a cross license under such Related Patent Rights. If the JSC does not approve such incorporation or the Parties cannot agree upon such allocation of costs or consideration to be paid to the other Party, then the Party that made the proposal (Licensors or Licensee) may incorporate such Technology in the discovery, research or Development of the Licensed Product within the framework of a sole Development Plan, as and to the extent permitted under this Agreement, and use, have used import, have imported offer for sale, sell and have sold the result of such sole Development Plan in the Licensors Territory or Licensee Territory, as the case may be. The foregoing shall remain subject to the Opt-in right of the other Party as set out in Section 4.4.4 of this Agreement, itself subject to prior written agreement among the Parties on the consideration to be paid by the Opt-in Party to the Developing Party for a license under such Related Patent Rights, without which prior written agreement such Opt-in right shall not include a license under such Related Patent Rights.

3.	GOVERNANCE

3.1 Joint Steering Committee.

3.1.1 Constitution and Powers.

The Parties shall establish a Joint Steering Committee ( “JSC” ) which will consist of an equal number of representatives of each Party, initially designated at four (4) representatives appointed by each Party among its employees or consultants. Each Party shall, within thirty (30) days after the Effective Date, select its initial representatives and inform the other Party of such representatives and set a date shortly thereafter (no later than thirty (30) days) for the first meeting of such JSC, provided that such representatives shall be senior persons responsible for the applicable functional area (i.e., research, clinical development and regulatory, manufacturing, or commercialization) within each Party. The initial representatives from the Parties are set forth in Schedule 12 . Each Party may replace its representatives at any time on prior written notice to the other Party. Each Party will have the right from time to time to invite to JSC meetings employees or consultants other than its representatives to address specific issues discussed at such JSC meetings. The chairperson of the JSC shall be appointed by Licensors.

The JSC shall act as a consultative and decision making body for the purpose of designing and monitoring the implementation of Development Plans and generally shall act as the forum for information sharing among the Parties with respect to the Development of the Licensed Product, Commercialization Plans, Product Improvements, Combination Products and potentially Other Products (as and to the extent agreed by the Parties), their manufacture, supply and marketing. In particular, the JSC shall:

(i) exchange information (including Development, manufacture, supply and marketing information) related to the Licensed Product, Product Improvements, Combination Products and potentially Other Products and facilitate cooperation and coordination between the Parties as they exercise their respective rights and meet their respective obligations under this Agreement,

(ii) design an Initial Development Plan within one hundred and eighty (180) days following the Effective Date and which shall be undertaken by the Parties jointly as set forth in Section 4.3.1,

(iii) review proposals from either Party on any Subsequent Development Plans,

(iv) review and decide on any changes to the Development Plans,

(v) with respect to the Initial Development Plan and Joint Subsequent Development Plans:

(A) Allocate the duties among the Parties,

(B) Implement all activities and monitor and coordinate all activities, including scheduling and prioritization thereof,

(C) Develop a publication strategy and a calendar of key scientific and clinical meetings or other events,

(D) Determine the priorities with respect to seeking Marketing Authorization.

(vi) with respect to Subsequent Development Plans that is the object of sole Development by a Developing Party:

(A) Review the activities of the Developing Party under such Subsequent Development Plan,

(B) Review all Opt-In Information.

(vii) appoint working sub-groups whose duties and power shall be determined by the JSC and who shall meet as necessary to provide relevant information for the JSC to carry out its duties under this Agreement; and

(viii) Liaise with and manage the JFC.

(ix) promptly following the Effective Date, itself or through an appointed sub-group, become the forum for the discussion and analysis of the handling of regulatory matters in the Territory and the specific determination of the role of Licensee in acting as Licensor’s regulatory agent under Section 5.1.

3.1.2 Meetings of the Joint Steering Committee and Minutes.

The JSC shall meet at least twice (2) per Calendar Year for so long as the Initial Development Plan is being carried out by the Parties and Subsequent Development Plans are being jointly Developed by the Parties. Meetings of the JSC may be attended in person or by telephone or video conference. If in person, the location of the meeting shall alternate at a place decided by Licensors and Licensee, sequentially. The chairperson of the JSC shall be responsible for providing an agenda for each meeting at least ten (10) business days in advance of such meeting.

In the event one Party solely carries out Development under a Subsequent Development Plan, the JSC shall meet once a Calendar Year, unless otherwise mutually agreed (on a date and location to be mutually agreed in good faith between the Parties) only to review (i) the Subsequent Development Plan and material modifications thereto, (ii) implementation thereof and progress and (iii) Opt-in Information during the Opt-in Notice Period as set forth in Section 4.4.4 of this Agreement.

Responsibility for the preparation of minutes setting forth discussions held at each JSC meeting shall alternate between the Parties as directed by the chairperson, provided, however, that such minutes will not become official until agreed upon by the JSC representatives of both Parties . The minutes of such JSC meetings shall be reasonably detailed and distributed in draft minutes to all members of the JSC for comment and review within ten (10) business days after the relevant meeting. The JSC members shall have seven (7) business days to provide comments. The Party preparing the minutes shall incorporate timely received comments and distribute finalized minutes to all members of the JSC within twenty-four (24) business days of the relevant meeting.

3.1.3 Decision-making Authority.

Decisions of the JSC shall be taken unanimously. In the event of a disagreement or a deadlock, the matter shall be referred to senior executives of the Parties pursuant to Section 15.1. If the disagreement or deadlock persists and is not resolved in the period provided for in Section 15.1, Licensors shall have the right to cast a tie-breaking vote which shall be reasonably exercised. It is understood and agreed that the exercise by Licensors of a tie-breaking vote so as to resolve a disagreement or deadlock at the JSC shall in no way result in the elimination or reduction of Licensors’ obligation to use Diligent Efforts to participate and co-fund the Initial Development Plan and any Joint Subsequent Development Plans under the terms of this Agreement.

However, in the event that a dispute referred to the Parties pursuant to Section 15.1 is in relation to matters contemplated in Section 3.2.3 as to which the JFC is to agree of this Agreement or with respect to matters related to the manufacture, supply and marketing of Licensed Product in the Territory is referred to the JSC, Licensors shall have no tie-breaking vote in which event the provisions of Article 15 shall apply. For clarity, it is understood that as between the Parties, Licensors shall at all times have the right to control all decisions relating to the marketing and selling of the Licensed Product in the Licensors Territory.

3.2 Joint Finance Committee.

3.2.1 Membership. Upon the establishment of the JSC, the Parties shall establish a Joint Finance Committee ( “JFC” ) to be composed of one (1) employee representative appointed by each Party. Such representative shall be an employee with expertise and responsibilities in the areas of accounting, cost allocation, budgeting and financial reporting. The JFC representative of each Party may call on any additional employee of that Party to attend the JFC meeting on an ad hoc basis.

3.2.2 Meetings. The JFC will meet as appropriate but at least quarterly to review the following, as applicable: (i) each Party’s Development Costs; (ii) Net Sales, milestone payments, royalty payments; (iii) the results of any completed audits conducted in accordance with Section 7.2.4. In addition to the foregoing, in the event one Party solely conducts any Subsequent Development Plan, the JFC shall meet (on a date and location to be mutually agreed in good faith between the Parties) to review the Pre Opt-in Development Costs during the Opt-in Notice Period after receipt of the Opt-in Information.

3.2.3 Decisions of JFC. The JFC shall operate by consensus and decisions of the JFC shall be taken unanimously. If the JFC is unable to resolve a dispute regarding any issue presented to it, such dispute shall be referred to the JSC for resolution. The JFC shall operate under the direction of the JSC to provide services to and consult with the JSC in order to address the financial, budgetary and accounting issues under the Agreement. The JFC members may participate in any meetings of the JSC upon request of the JSC.

3.3 Coordination of JSCs and JFCs. The Parties acknowledge and agree that there is to be a separate Joint Steering Committee and Joint Finance Committee created pursuant to the Increlex Agreement, with equal and potentially overlapping membership as that present on the JSC and JFC created pursuant to Section 3.1 and 3.2 above. Where possible, the Parties shall endeavor to coordinate and potentially combine meetings of the respective Joint Steering Committees and Joint Finance Committee meetings so as to ensure efficient governance and oversight of both collaborations between the Parties, including for example, holding such meetings on the same dates and/or same locations.

4.	DEVELOPMENT PLAN AND CONDUCT OF DEVELOPMENT ACTIVITIES

4.1 Licensors On-going Development.

Licensors shall be solely responsible for the completion of the Licensors On-going Development at its own cost and expense with a view to obtain Marketing Authorization in the Target Label in the countries in the Territory. Licensors shall promptly provide (or make available) to Licensee all relevant information relating to such Licensors On-going Development including without limitation the clinical data reports, regulatory files and submissions and correspondence with Regulatory Authorities resulting therefrom.

4.2 Development Plan – General.

Any Development Plan shall provide for the Development activities to be carried out by the Parties, either jointly or separately as the case may be. A Development Plan should avoid unnecessary duplication by the Parties in any activity and have a goal of an appropriate allocation of responsibilities in light of the Development activities involved. Each Party shall provide information to the JSC (including Confidential Information) necessary for the JSC coordinating and deciding on such Development Plan activities with the other Party.

Consistent with the above principles, the Development Plan should include:

•

specific tasks, location of work, milestones, budgets (determined with reference to Development Costs), estimated timelines, immediate objectives, and long term objectives and a determination of the various research and development activities that shall be performed by each Party:

•

provisions for manufacturing and supply of Licensed Product for clinical uses;

•

Development activities including preclinical safety and other studies to support Phase I Clinical Trials, Phase II Clinical Trials and/or Phase III Clinical Trials and/or filing for and obtaining and maintaining Marketing Authorization; and

•

identification of resource requirements of the Development Plan and allocation of those resources between the Parties.

4.3 Initial Development Plan and Subsequent Development Plans of Licensed Products and Other Products.

4.3.1 Initial Development Plan.

Each Party shall require its representatives at the JSC to use their Diligent Efforts to negotiate in good faith and prepare an Initial Development Plan within one hundred and eighty (180) days following the Effective Date along the guidelines set out in Schedule 6 to this Agreement. If the JSC approves an Initial Development Plan, it shall be attached hereto as Schedule 6-bis and may be amended or updated only upon approval by the JSC. The Initial Development Plan shall be updated annually by the JSC at a time decided by the JSC and suitable for all Parties’ planning and budgeting processes. The Initial Development Plan and any modifications thereto (including a change of scope of the responsibilities of the Parties or changes to the budgets) shall be approved by the JSC in the written minutes of the applicable JSC meeting. In the event the Parties agree on such Initial Development Plan, the Parties shall jointly perform and fund such Initial Development Plan as set forth in Section 4.4.3 and the Parties shall each have access to, and the rights to use in their respective territory, data arising out of such Initial Development Plan and shall jointly own the same (as Joint Know-How) as set forth in Section 8.3 of this Agreement.

4.3.2 Subsequent Development Plans for Product Improvements and Combination Products.

All Development activities for the Initial Product, Product Improvements or Combination Products (other than those set forth in the Initial Development Plan), shall be conducted pursuant to a Subsequent Development Plan in conformance with this Section 4.3.2, unless otherwise agreed by the Parties in writing. Each Party may propose to the other Party to perform a Subsequent Development Plan for a Product Improvement or a Combination Product: the JSC shall reasonably consider such proposals and the other Party may make comments or counter proposals with respect to all parameters of such proposal, including budget and the Parties shall thereafter negotiate in good faith with a view to agreeing on a Subsequent Development Plan.

In the event the Parties agree on such Subsequent Development Plan, the Parties shall jointly perform and fund such Subsequent Development Plan as set forth in Section 4.4.3 and the Parties shall each have access to, and the rights to use in their respective territory, data arising out of such Subsequent Development Plan and shall jointly own the same (as Joint Know-How) as set forth in Section 8.3 of this Agreement.

In the event a Party does not agree with and does not want at such time to participate in, a Subsequent Development Plan proposed by the other Party, the proposing Party may, at its own risk, decide unilaterally to perform such Subsequent Development Plan and may subcontract whole or part of such Subsequent Development Plan to the extent such subcontract is not detrimental to the Opt-In rights of the non-Developing Party set forth in Section 4.4.4(ii)(F) of this Agreement; provided , however , that at any time during the Opt-In Period, the non-Developing Party may opt to perform and/or co-fund such Subsequent Development Plan, in which event the Opt-in Party may develop, market, promote, sell, have sold the Product Improvement or Combination Product arising from such Subsequent Development Plan in the Territory (where the Opt-in Party is the Licensee) or in the Licensors Territory (where the Opt-in Party is the Licensors).

Notwithstanding the foregoing paragraph, Licensors may only conduct Development activities in a Subsequent Development Plan and designed to take place in the Territory with the prior written agreement of Licensee, which shall not be unreasonably withheld or delayed; provided, however, that nothing herein shall be deemed to prevent Licensors from applying for a Marketing Authorization in the Territory as Licensors may deem appropriate. Once granted, the agreement of Licensee can not be withdrawn unless otherwise agreed with Licensors.

For the avoidance of doubt, Licensee shall have no right to carry out any Development activity with regards to the Initial Product, Product Improvements, or Combination Products, except in the context of a Subsequent Development Plan, in compliance with this Section 4.3.2. In addition, Licensee may only conduct Development activities in a Subsequent Development Plan which are designed to take place in the Licensors Territory with the prior written agreement of Licensors, which shall not be unreasonably withheld or delayed, and which agreement, once granted, cannot be withdrawn unless otherwise agreed with Licensee.

4.3.3 Subsequent Development Plans For Other Products.

Notwithstanding each Party’s right of first negotiation for Other Products as set forth in Section 2.6, either Party may propose to the other Party, through the JSC, to participate in and perform a Subsequent Development Plan for an Other Product in which event the JSC shall reasonably consider such proposals and the other Party may make counter proposals with respect to all parameters of such proposal, including budget and the Parties shall thereafter negotiate in good faith with a view to agreeing on a Subsequent Development Plan for such Other Product.

In the event the Parties agree on such Subsequent Development Plan for an Other Product, the Parties shall jointly perform and fund such Subsequent Development Plan for an Other Product as set forth in Section 4.4.3. The Parties shall each have access to, and the rights to use in their respective territory, data arising out of such Subsequent Development Plan and shall jointly own the same (as Joint Know-How) as set forth in Section 8.3 of this Agreement.

In the event a Party does not agree with a Subsequent Development Plan for an Other Product proposed by the other Party, such other Party may, at its own risk, decide to perform such Subsequent Development Plan for an Other Product wherever in the world. To the extent a Party does not agree to participate in such Subsequent Development Plan, it shall not forfeit its rights of first negotiation under Section 2.6 but such Party shall not have any Opt-In right under Section 4.4.4(ii)F with respect to such Other Product unless and until mutually agreed upon by the Parties. The Developing Party may subcontract whole or part of such Subsequent Development Plan provided however that if such Developing Party is Licensors, such subcontract shall not be detrimental to the right of first negotiation of Licensee as set forth in Section 2.6 of this Agreement.

4.4 Conduct of Development Activities.

4.4.1 General Rules Applicable to Joint and Sole Development.

The Parties shall use Diligent Efforts to conduct their tasks and obligations under any Development Plan:

•

in accordance with good laboratory, good clinical and current Good Manufacturing Practices, to the extent these are applicable;

•

in accordance with all relevant legal requirements and shall be responsible for obtaining all necessary approvals therefor from any Regulatory Authorities or applicable competent authority; and,

•

keeping or causing to be kept written laboratory notebooks and other records and reports of the results and progress of the works to be performed in sufficient detail for the Parties to accomplish their obligations under this Agreement.

The Parties acknowledge that time shall be of the essence in this Agreement and thus that the time deadlines defined in the Initial Development Plan and any Joint Subsequent Development Plan should be complied with and, as a matter of principle, not be postponed. However, the Parties agree that the time deadlines defined in the Initial Development Plan and any Joint Subsequent Development Plan may be reasonably modified by the JSC.

The obligations of any Developing Party pursuing sole Development under a Subsequent Development Plan shall be as set forth in Section 4.4.4.

Licensors reserve the right to reasonably exercise a tie breaking vote at the JSC at any time to change or modify the Initial Development Plan or any Joint Subsequent Development Plan, or to abandon whole or part thereof, if (i) it is required by Regulatory Authorities, (ii) there are duly justified scientific constraints, (iii) there are significant increases in the anticipated costs of Development, (iv) there are significant adverse events or conditions relating to the safety or efficacy of the Licensed Product, (v) there are significant, duly justified changes in the anticipated costs of manufacturing or (vi) the benefits of continued Development do not outweigh the risks. In the event Licensors request a modification or successive modifications of the Initial Development Plan or of a Joint Subsequent Development Plan which shall, individually or cumulatively, result in an increase of the aggregate Development Costs to be incurred by more than fifty percent (50%), such modification shall not be effective unless and until approved by the senior executives of the Parties as provided for in Section 15.1. In case of failure of the senior executives of the Parties to find a common agreement on such modification, Licensee shall have the right to terminate its performance and funding of the Initial Development Plan or the Joint Subsequent Development Plan, as the case may be, provided however that Licensee shall nonetheless retain it’s Opt-In rights set forth in Section 4.4.4 (ii) F of this Agreement.

4.4.2 Determination of Development Costs.

All Development Costs associated with the Development activities carried out by the Parties jointly under the Initial Development Plan or any Joint Subsequent Development Plans or solely by the Developing Party shall be accounted for as follows:

•

Internal costs of Licensee: EUR [*] per FTE; and Internal costs of Licensors : $ [*] per FTE. This reference unit cost shall be reviewed annually by the Parties on the basis of the inflation rate in the European Union and the U.S., respectively.

•

External costs: at cost, as properly documented and consistent with the cost recorded for services rendered by third parties in the Developing Party’s books in any corresponding period.

4.4.3 Funding of Joint Development.

The Initial Development Plan shall be jointly performed and funded by the Parties. To the extent any Subsequent Development Plan is agreed upon by all Parties pursuant to Sections 4.3.2 or 4.3.3, the Parties shall be obligated to jointly perform or fund such Subsequent Development Plan at the percentage set forth below (“ Joint Subsequent Development Plan ”).

All activities undertaken by the Parties pursuant to the Initial Development Plan and any Joint Subsequent Development Plan shall be funded by the

Parties in the following proportion: Licensors shall be responsible for forty percent (40%) of all Development Costs, and Licensee shall be responsible for sixty percent (60%) of all Development Costs, provided however that with respect to Development that is to be carried out with a view to obtain Marketing Authorization or extension thereof in both the Territory and the Licensor Territory, Licensor and Licensee shall each be responsible for a specific percentage of all Development Costs related thereto, as determined by the JSC at the time of review and approval of such Development Plan, it being understood that in the event the Parties do not reach agreement on such new allocation, Licensor and Licensee shall be responsible respectively for forty percent (40%) and sixty percent (60%) respectively, but only, in the case of each of (i) and (ii), to the extent the foregoing Development Costs are set forth in the Initial Development Plan and Joint Subsequent Development Plan or properly approved revisions thereof. As used in this Agreement, “Licensee Allocation” shall mean such sixty percent (60%) or other allocation of the Development Costs as provided in the foregoing sentence with respect to Licensee, as the case may be, and “Licensor Allocation” shall mean such forty percent (40%) or other allocation of the Development Costs as provided in the foregoing sentence with respect to Licensor, as the case may be. Within thirty (30) days of the end of each Calendar Quarter, each Party will notify the JFC in writing of the Development Costs incurred by such Party during such Calendar Quarter, and the JFC shall aggregate such Development Costs and allocate them to the Parties in accordance with the percentages set forth in the foregoing sentence. Where needed in order to reflect such allocated Development Costs, corresponding “true up” payments will be made by the Party underpaying its share of Development Costs to the Party having overpaid its share, quarterly within sixty (60) days following the end of each Calendar Quarter.

4.4.4 Sole Development by one Party and Opt-in Rights.

(i) Decision for Sole Development . In the event that the Parties have not agreed to jointly perform or fund any Subsequent Development Plan pursuant to Section 4.3.2, either Party may pursue and fund at its own risk the Subsequent Development Plans (the “ Developing Party ”) as and to the extent permitted by this Agreement, in which case the provisions of this Section 4.4.4 shall apply.

(ii) Development Efforts.

(A) General. Subject to the restrictions set forth in subsection B below regarding conducting Development activities in the non-Developing Party’s territory, the Developing Party shall make Diligent Efforts (without the duty to make additional expenditures beyond that required to obtain regulatory approval in its own Territory) to perform pre-clinical and clinical activities in a manner that would be suitable for filings for Marketing Authorization in the Licensors Territory (if Licensee is the Developing Party) or in the Territory (if Licensors are the Developing Party), as applicable, should the non-Developing Party subsequently exercise its Opt-in rights pursuant to subsection F below. The Developing Party shall provide the JSC with quarterly reports outlining the results of each completed material pre-clinical and clinical study during the preceding Calendar Quarter. Notwithstanding the foregoing, the Developing Party shall not be required to continue any Subsequent Development Plan or to complete any tasks enumerated therein, prior to the time the other Party exercises its rights to Opt-in.

(B) Territorial Restrictions. If Licensee is the Developing Party, it shall only carry out the Development activities in the Territory or, outside the Territory but only with the prior written consent of Licensors. If Licensors are the Developing Party, they shall only carry out Development activities outside the Territory or, in the Territory, but only with the prior written consent of Licensee.

(C) Supply Obligations . If Licensee is the Developing Party, Licensors shall supply Licensee with lanreotide or Licensed Product as clinical supplies in accordance with Article 6 and in quantities to be reasonably determined by the JSC.

(D) Subsequent Development Plan.

Each Party shall have the opportunity to provide input and suggestions with regard to such Subsequent Development Plan. Notwithstanding the foregoing, Licensors shall have the sole right to prohibit any activity related to any Development under a Subsequent Development Plan pursued by the Licensee as Developing Party if Licensors exercise a tie breaking vote as set forth in Section 4.4.1. If Licensors prohibit such activity, the JSC and the Developing Party shall comply with such decision and such activity shall be excluded from the Subsequent Development Plan. The Subsequent Development Plan shall be updated by the Developing Party in accordance with the next sentence and be presented to the JSC at its next meeting. Material modifications to the Subsequent Development Plan shall be submitted to the JSC for review.

(E) Development Costs under Subsequent Development Plan . The Developing Party shall be responsible for all Development Costs related to such Subsequent Development Plan, subject to Opt-in by the other Party and sharing of costs pursuant to Section 4.4.4(ii)(F) below. The Developing Party shall record separately in its books in an auditable manner, all its Pre Opt-in Development Costs.

(F) Opt-in.

(a) General . With respect to each Subsequent Development Plan pertaining to the Development of a Licensed Product for a particular Indication, the non-Developing Party (the “Opt-in Party” ) shall have the option to decide to participate ( “Opt-In” ) in the performance and the funding of such Subsequent Development Plan at such times during the performance of the Subsequent Development Plan as are set forth below (each, an “ Opt-In Period ”):

•

At any time during pre-clinical development and up to the date of allowance of the first IND in the Licensors Territory or the Territory under the relevant Subsequent Development Plan (“ Opt-In Period 1” );

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Within thirty (30) days of receipt of data following completion of each Phase I Clinical Trial under the relevant Subsequent Development Plan (“ Opt-in Period 2” );

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Within sixty (60) days of receipt of data following completion of each Phase II Clinical Trial under the relevant Subsequent Development Plan (“ Opt-in Period 3 ”);

•

Within thirty (30) days of receipt of data following completion of each Phase III Clinical Trial with the Licensed Product under the relevant Subsequent Development Plan and until the filing of a New Drug Application (or equivalent in any country of the Territory) under such relevant Subsequent Development Plan, (“ Opt-in Period 4 ”);

•

At any time after the filing of the first New Drug Application (or equivalent in any country of the Territory) under the relevant Subsequent Development Plan and before the end of the thirty (30)-day period following the date of obtaining the first Marketing Authorization under such relevant Subsequent Development Plan (“ Opt-in Period 5 ”),

•

Within the thirty (30) day period after expiry of Opt-in Period 5 (i.e., following expiration of the initial thirty-day period following the date of obtaining Marketing Authorization) (“ Opt-in Period 6 ”). In the event the Licensors are the Developing Party and the Licensee has failed to Opt-in by the end of the Opt-in Period 6, through the failure to deliver either the Opt-in Notification or Opt-in Payment as set forth below to the Developing Party, Licensors shall be entitled to serve a termination notice pursuant to Section 4.4.4(iii)D(a).

Notwithstanding the foregoing general framework, the Parties agree that at the time the non-Developing Party elects not to pursue a Subsequent Development Plan, they shall also agree upon in good faith, through the JSC, for that Subsequent Development Plan, and depending upon the nature and subject matter thereof, which trials proposed to be conducted thereunder shall comprise a “Phase I Clinical Trial” or “Phase II Clinical Trial” or “Phase III Clinical Trial” to best provide a fair and reasonable opportunity for

the non-Developing Party to Opt-in at appropriate value creation events, and the Developing Party to receive the appropriate Opt-in Payment associated with those value creation events, as specified in Section 4.4.4(ii)F(c) below. Upon generation of the statistical analyses for the primary endpoint(s) for any such trial, the Developing Party shall provide a report of such statistical analyses and all other

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