Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

 

Exhibit 10. 1

PATENT PURCHASE AGREEMENT

 

This PATENT PURCHASE AGREEMENT (the “Agreement”) is entered into as of September
26, 2017 (the “Effective Date”) by and between Durect Corporation, a Delaware
corporation with its principal place of business at 10260 Bubb Road, Cupertino,
CA 95014 (“Seller”), and Indivior UK Limited (Co. No. 7183451) with a registered
address of 103-105 Bath Road, Slough, Berkshire, SL1 3UH (“Purchaser”). Each of
Seller and Purchaser may be hereinafter referred to together as the “Parties”
and individually as a “Party” when convenient.

 

BACKGROUND

 

A.Seller owns certain Patent Rights (as defined below in Section 1);

 

B.Seller wishes to assign to Purchaser all of Seller’s right, title, and
interest in the Patent Rights; and

 

C.Purchaser wishes to purchase from Seller all of Seller’s right, title, and
interest in the Patent Rights, all on the terms and conditions set forth below.

 

NOW, THEREFORE, in consideration of the terms and provisions contained herein
and other good and valuable consideration, the receipt, adequacy, and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

 

1.DEFINITIONS; INTERPRETATION

 

(a)The following capitalized terms shall have the meanings given in this Section
1 or elsewhere in this Agreement when used in this Agreement:

 

“Accounting Standards” means, [***].

 

“Affiliate” means, with respect to an Entity, any other Entity in whatever
country organized, that controls, is controlled by, or is under common control
of such first Entity.  The term “control” means possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
an Entity, whether through the ownership of voting securities, by contract, or
otherwise, which control shall be presumed with respect to an Entity by another
Entity when such other Entity owns more than fifty percent (50%) of the first
Entity’s voting securities.

 

“Cover” means, with respect to any subject matter, the manufacture, use, sale,
offering for sale or other exploitation of such subject matter would infringe
(whether direct or

 

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

contributorily) or induce the infringement of a claim of any Patent Right (in
the absence of a license under or ownership of such claim) at the time thereof,
including with respect to a claim within a pending patent application, “Cover”
includes infringing such claim if it was issued as then prosecuted in good
faith.  “Covered” or “Covering” have their correlative meanings.

 

“Entity” means any person, corporation, partnership, limited liability company
association, joint stock company, trust, joint venture, unincorporated
organization, governmental entity (or any department, agency, or political
subdivision thereof), or any other legal entity.

 

“Executed Assignment” means the Assignment of Patent Rights attached hereto as
Exhibit B signed by a duly authorized representative of each Party.

 

“Grant-back Product” means [***].

 

“NDA Approval” means the receipt by Purchaser [***] of written notice from the
United States Food and Drug Administration of the approval of a New Drug
Application (as defined in 21 CFR §314.50) for any Product.

 

“Net Sales” means [***] invoiced amounts by Purchaser, its Affiliates and their
assignees in interest and direct and indirect licensees with respect to the
Patent Rights ([***]) (each, a “Selling Party”) for sales or other transfers of
Product to Third Parties in the United States, [***]:

 

(i)[***];

 

(ii)[***];

 

(iii)[***]; and

 

(iv)[***];

 

in each case (i)-(iv) as determined from books and records of the Selling Party
maintained in accordance with applicable Accounting Standards.  Amounts invoiced
for sales or other transfer of Product between or among Purchaser, its
Affiliates and other Selling Parties shall be [***] from the computation of Net
Sales [***].

 

“Patent Rights” means, individually and collectively, the patent rights
described on Exhibit A.

 

“[***]” means [***] (“[***]”) together with its Affiliates.

 

“Product” means [***].

 

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

“Third Party” means any Entity that is not a Party or an Affiliate of a Party
(and in the case of Net Sales, any Entity that is not a Selling Party).

 

(b)Interpretation.  The captions and headings to this Agreement are for
convenience only, and are to be of no force or effect in construing or
interpreting any of the provisions of this Agreement.  Unless specified to the
contrary, references to Sections or Exhibits mean the particular Sections or
Exhibits to this Agreement and references to this Agreement include all Exhibits
hereto.  Unless context otherwise clearly requires, whenever used in this
Agreement:  (i) the words “include” or “including” shall be construed as
incorporating, also, “but not limited to” or “without limitation”; (ii) the word
“will” shall be construed in the imperative having the same meaning as the word
“shall”; (iii) the word “day” or “year” means a calendar day or year; (iv) the
word “notice” requires notice in writing (whether or not specifically stated)
and shall include notices, consents, approvals and other written communications
contemplated under this Agreement; (v) the words “hereof,” “herein,” “hereby”
and derivative or similar words refer to this Agreement (including any
Exhibits); (vi) the word “or” shall be construed as the inclusive meaning
identified with the phrase “and/or”; (vii) provisions that require that a Party
or the Parties “agree,” “consent” or “approve” or the like shall require that
such agreement, consent or approval be specific and in writing, whether by
written agreement, letter, approved minutes or otherwise; (viii) words of any
gender include the other gender; (ix) words using the singular or plural number
also include the plural or singular number, respectively; (x) references to any
specific law, rule or regulation, or article, section or other division thereof,
shall be deemed to include the then-current amendments thereto or any
replacement law, rule or regulation thereof; (xi) the words “Seller’s knowledge”
or “knowledge of Seller” shall be construed as the actual knowledge of Seller;
and (xii) neither Party nor its Affiliates shall be deemed to be acting “on
behalf of” or “under authority of” the other Party hereunder.

 

2.PAYMENTS; DELIVERY

 

(a)Payments.  

 

(i)Upfront Fee.  Within [***] after the Effective Date and in partial
consideration of the rights granted to Purchaser hereunder, Purchaser shall pay
to Seller an initial fee in the amount of Twelve Million Five Hundred Thousand
Dollars ($12,500,000) (“Upfront Fee”).  Such Upfront Fee shall be
non-refundable, and shall not be creditable against any other amount due
hereunder.

 

(ii)Other Payments.  Purchaser shall make the other payments to Seller as set
forth in Exhibit C (the “Financial Exhibit”).

 

(iii)Payment Method.  All payments due under this Agreement shall be made by
bank wire transfer in immediately available funds to an account designated by
Seller.  All payments hereunder shall be made in the legal currency of the
United States of America,

3

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

and all references to “$” or “Dollars” shall refer to United States
dollars.  The Parties agree that payments hereunder shall not be subject to any
withholding.  

 

(iv)Acknowledgement.  The Parties acknowledge that the economic terms and
conditions set forth herein were negotiated and agreed to and represent a fair
and equitable valuation of the Patent Rights.  

 

(b)Delivery.  On the Effective Date, (i) Seller will deliver to Purchaser the
Executed Assignment, duly executed by Seller and (ii) Purchaser will deliver to
Seller the Executed Assignment, duly executed by Purchaser.

 

3.TRANSFER OF PATENTS AND ADDITIONAL RIGHTS

 

(a)Assignment of Patent Rights.  As of the Effective Date and subject to the
terms and conditions of this Agreement, Seller hereby sells, assigns, transfers,
and conveys to Purchaser, and Purchaser hereby accepts, all right, title, and
interest in and to the Patent Rights.

 

(b)Assignment of Additional Rights.  As of the Effective Date and subject to the
terms and conditions of this Agreement, Seller hereby also sells, assigns,
transfers, and conveys to Purchaser all right, title and interest in and to all
causes of action (whether known or unknown or whether currently pending, filed,
or otherwise) and all other enforcement rights under, or on account of, any of
the Patent Rights, including all causes of action and other enforcement rights
for (i) damages, including but not limited to the right to recover for past
infringement, (ii) injunctive relief, and (iii) any other remedies of any kind
for past, current, and future infringement, in each case (i), (ii) and (iii)
solely with respect to matters in the United States. For the avoidance of doubt,
acts constituting infringement in the United States under 35 U.S.C. 271(f) or
(g), are deemed to be “matters in the United States”, even if the infringement
includes certain actions taken outside the United States.

 

4.ADDITIONAL OBLIGATIONS

 

(a)Grant-Back License.  Subject to the terms and conditions of this Agreement,
Purchaser hereby grants to Seller a [***] license under the Patent Rights to
develop, make, have made, use, sell, offer for sale and import any Grant-back
Products.  

 

(b)Covenant Not to Sue.   Subject to the terms and conditions of this Agreement,
Seller hereby covenants, on behalf of itself and its Affiliates, not to sue
Purchaser and its Affiliates, their direct and indirect licensees, or (solely
with respect to the use of Ex-US Products (as defined below)) their customers,
in each case under any counterparts of or patents claiming priority to any of
the Patent Rights outside of the United States (individually and collectively,
the

4

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

“Ex-US Counterparts”) solely with respect to the development, manufacture, sale,
offer for sale, import, export and/or use of products containing risperidone
Covered by a claim included within the Ex-US Counterparts on and after the
Effective Date (collectively, “Ex-US Products”), nor to bring any exclusion or
nonimportation actions or similar proceedings based on such Ex-US Counterparts
in any country against any such Ex-US Products imported or sold by Purchaser and
its Affiliates or their respective direct and indirect licensees or customers.

 

(c)Covenant Not to Challenge.  Subject to the terms and conditions of this
Agreement, Purchaser hereby covenants, on behalf of itself and its Affiliates
and other Selling Parties, not to challenge under any court action or
proceeding, or before any patent office, the validity, patentability or
enforceability of any Ex-US Counterpart, including not to initiate a
reexamination of any Ex-US Counterpart, or assist any Third Party with respect
to any of the foregoing activities. Subject to the terms and conditions of this
Agreement, Seller hereby covenants, on behalf of itself and its Affiliates, not
to challenge under any court action or proceeding, or before any patent office,
the validity, patentability or enforceability of any Patent Rights, including
not to initiate a reexamination of any Patent Right, or assist any Third Party
with respect to any of the foregoing activities.

 

(d)Covenant Not to Exploit Certain Products.  During the Earn-Out Term, subject
to the terms and conditions of this Agreement, Purchaser hereby covenants, on
behalf of itself and its Affiliates and other Selling Parties, not to (i)
conduct, participate in or sponsor, directly or indirectly, the development,
manufacture or commercialization of [***] (collectively, such activities
“Prohibited Activities”), or (ii) appoint, license or otherwise authorize any
Third Party, whether pursuant to license, appointment, or authorization or
otherwise, to perform any Prohibited Activities.  

 

(e)[***].  Purchaser acknowledges that the Patent Rights and Ex-US Counterparts
[***].  Without limiting the foregoing, with respect to the activities by or
under authority of Purchaser and its Affiliates, including by any Selling Party,
under any Patent Rights, including the sale or transfer of Products
(collectively, the “Purchaser Activities”), Purchaser shall [***].  For purposes
of this Section 4(e), [***].

 

(f)Documentation.  At the reasonable request of Purchaser, Seller will execute
and deliver such other instruments and do and perform such other acts as may be
necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby, including execution, acknowledgment, and
recordation of other such papers, and using commercially reasonable efforts to
obtain the same from the respective inventors, as necessary or desirable for
fully perfecting and conveying unto Purchaser the benefit of the Patent Rights.

 

(g)Prosecution and Maintenance.  [***] shall: (i) prosecute and maintain the
Patent Rights in good faith; (ii) use reasonable efforts to defend the Patent
Rights; and (iii) not take any

5

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

action, or refrain from taking any action, with respect thereto with the
substantive intent of avoiding the payment of the Milestone Payment or any
Earn-Out payments.  [***].

 

5.REPRESENTATIONS AND WARRANTIES

 

(a)Representations and Warranties By Seller. Seller hereby represents and
warrants to Purchaser as follows that, as of the Effective Date:

 

(i)Organization and Good Standing.  Seller is a corporation duly formed, validly
existing, and in good standing under the laws of the jurisdiction of its
formation.

 

(ii)Authority.  Seller has the full power and authority and has obtained all
Third Party consents, approvals, and/or other authorizations required to enter
into this Agreement and to carry out its obligations hereunder.

 

(iii)Valid and Binding Agreement.  This Agreement has been duly executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its terms, except to the
extent that the enforceability thereof may be limited by (A) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws from time to time in effect affecting generally the enforcement of
creditors’ rights, and (B) general principles of equity.

 

(iv)Non-Contravention.  Seller has not entered into any license or other
agreement, written or oral, with any other Entity which conflicts with or
otherwise limits its ability to grant to Purchaser all of the rights provided
for in this Agreement.

 

(v)[***].

 

(1)Seller has provided Purchaser with a true and complete copy of the [***], in
effect as of the Effective Date, [***].

 

(2)There are no redacted terms in the [***].

 

(3)Neither the Seller nor, to the Seller’s knowledge, [***] is in [***].

 

(vi)Title and Contest.  

 

(1)[***];

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

 

(2)[***];

 

(3)[***];

 

(4)[***];

 

(5)[***];

 

(6)[***];

 

(7)[***];

 

(8)[***]; and

 

(9)[***].

 

(vii)No Retained Rights.  After the Effective Date, none of Seller, its
Affiliates, any prior owner or any inventor or other Entity other than Purchaser
will retain any rights or interest in the Patent Rights, except as set forth or
described herein.  

 

(viii)Validity and Enforceability.  [***].

 

(ix)Conduct.  

 

(1)[***];  

 

(2)[***];  

 

(3)[***]; and  

 

(4)[***].

 

(x)Fees.  [***].

 

7

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

(b)Representations and Warranties By Purchaser.  Purchaser hereby represents and
warrants to Seller as follows that, as of the Effective Date:

 

(i)Organization and Good Standing.  Purchaser is a corporation duly formed,
validly existing, and in good standing under the laws of the jurisdiction of its
formation.

 

(ii)Authority.  Purchaser has the full power and authority and has obtained all
Third Party consents, approvals, and/or other authorizations required to enter
into this Agreement and to carry out its obligations hereunder.

 

(iii)Valid and Binding Agreement.  This Agreement has been duly executed and
delivered by Purchaser and constitutes the legal, valid and binding obligation
of Purchaser enforceable against Purchaser in accordance with its terms, except
to the extent that the enforceability thereof may be limited by (A) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws from time to time in effect affecting generally the enforcement of
creditors’ rights, and (B) general principles of equity.

 

(iv)Non-Contravention.  Purchaser has not entered into any license or other
agreement, written or oral, with any other Entity which conflicts with or
otherwise limits its ability to grant to Seller all of the rights provided for
in this Agreement.

 

(c)Disclaimer of Representations and Warranties.  NEITHER PARTY MAKES ANY
REPRESENTATION OR WARRANTY EXCEPT FOR THEIR RESPECTIVE REPRESENTATIONS AND
WARRANTIES SET FORTH IN THIS SECTION 5, AND OTHERWISE EACH PARTY DISCLAIMS ALL
IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.

 

6.INDEMNIFICATION; LIMITATIONS.

 

(a)Indemnification.  

 

(i)Seller shall indemnify and hold harmless Purchaser and its Affiliates,
principals, employees, officers, directors, stockholders, successors and assigns
(each, a “Purchaser Indemnified Party”) from and against all claims, disputes,
controversies, demands, causes of action in each case of the foregoing brought
by a Third Party (any, a “Third Party Claim”) and debts, obligations, judgments,
liens, liability, damages, costs and expenses (including reasonable attorneys’
fees and expenses of litigation) from a Third Party Claim (collectively,
“Purchaser Liability”) which a Purchaser Indemnified Party may incur, suffer, or
be required to pay resulting from or arising in connection with any Third Party
Claim

8

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

arising out of or relating to (a) any breach of any representations and
warranties or covenants of Seller set forth in this Agreement or (b) any
exploitation of Grant-back Products by or under authority of Seller, except to
the extent such Third Party Claim is indemnifiable by Purchaser pursuant to
Section 6(a)(ii); and

 

(ii)Purchaser shall indemnify and hold harmless Seller and its Affiliates,
principals, employees, officers, directors, stockholders, successors and assigns
and the [***] (a “Seller Indemnified Party”) from and against all Third Party
Claims and debts, obligations, judgments, liens, liability, damages, costs and
expenses (including reasonable attorneys’ fees and expenses of litigation) from
a Third Party Claim (collectively, “Seller Liability”) which a Seller
Indemnified Party may incur, suffer, or be required to pay resulting from or
arising in connection with any Third Party Claims arising out of or relating to
any (a) breach of any representations and warranties or covenants of Purchaser
set forth in this Agreement or (b) any exploitation of the Patent Rights, Ex-US
Products and/or Products (or other products Covered by a claim included within
the Patent Rights) by or under authority of Purchaser, except to the extent such
Third-Party Claim is indemnifiable by Seller pursuant to Section 6(a)(i).

 

(iii)If either Party entitled to indemnification hereunder (“Indemnified Party”)
receives notice of the assertion or commencement of Third Party Claim which has
given or could reasonably be expected to give rise to a right of indemnification
of such Indemnified Party by the Indemnifying Party under this Agreement, the
Indemnified Party shall give the other Party (the “Indemnifying Party”) prompt
written notice of the Third Party Claim giving rise to the indemnification
obligation pursuant to this Section 6(a).  [***].  The Indemnifying Party shall
have the right to participate in, or if it shall have acknowledged in writing
its obligation to provide indemnification to the Indemnified Party in respect
thereof, to assume the defense of any Third Party Claim at the Indemnifying
Party’s expense and by the Indemnifying Party’s own counsel; [***].  The
indemnifying Party shall not enter into any settlement without the Indemnified
Party’s written consent, such consent not to be unreasonably withheld,
conditioned or delayed; provided that the Indemnified Party’s consent shall not
be required if the settlement provides, in customary form, for the unconditional
release of each Indemnified Party from all liabilities and obligations in
connection with such Third Party Claim. If the Indemnifying Party assumes the
defense of the Third Party Claim, the Indemnified Party shall have the right to
participate, [***], in the defense of any claim or suit that has been assumed by
the indemnifying Party, [***].

 

(b)Limitation of Liability.  EXCEPT PURSUANT TO SECTION 6(a), NEITHER PARTY’S
TOTAL LIABILITY UNDER THIS AGREEMENT WILL EXCEED [***].  THE PARTIES ACKNOWLEDGE
THAT THE LIMITATIONS ON POTENTIAL LIABILITIES SET FORTH IN THIS SECTION 6(b)
WERE AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION UNDER THIS AGREEMENT.

 

9

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

(c)Limitation on Consequential Damages.  OTHER THAN DIRECT CONTRACTUAL DAMAGES
AND WITHOUT LIMITING EITHER PARTY’S OBLIGATIONS UNDER SECTION 4(c) OR SECTION
6(a), NEITHER PARTY WILL HAVE ANY OBLIGATION OR LIABILITY [***].  THE PARTIES
ACKNOWLEDGE THAT THESE EXCLUSIONS OF POTENTIAL DAMAGES WERE AN ESSENTIAL ELEMENT
IN SETTING CONSIDERATION UNDER THIS AGREEMENT.

 

7.CONFIDENTIALITY; PRESS RELEASE.  

 

(a)Confidentiality.  For a period of [***] from the Effective Date, neither
Party will disclose to any Third-Party the specific Earn-Out percentage set
forth in Paragraph II(a) of Exhibit C of this Agreement (and any related
Earn-Out reports or related information delivered by Purchaser), except (i) with
the prior written consent of the other Party; (ii) as otherwise may be required
by law or legal process; (iii) during the course of litigation (including the
enforcement of this Agreement), so long as the disclosure of such terms or
reports is restricted in the same manner as other confidential information of
the litigants; and (iv) in confidence to its legal counsel, accountants, tax
advisors, insurers, indemnitors, indemnitees, banks and financing sources and
their advisors solely in connection with complying with its obligations under
this Agreement; provided that, in the case of (ii) and (iii) above, (A) to the
extent permitted by law, the disclosing Party will use all legitimate and legal
means available to minimize the disclosure to Third Parties, including seeking a
confidential treatment request or protective order whenever appropriate or
available; and (B) the disclosing Party will, when reasonably possible, provide
the other Party with [***] prior written notice of such disclosure.
Notwithstanding the foregoing, either Party may inform its existing licensees,
potential acquirers/merger partners or prospective licensees of the specific
Earn-Out percentage set forth in Paragraph II(a) of Exhibit C of this Agreement
(and any related Earn-Out reports or related information delivered by Purchaser)
under circumstances that reasonably protect the confidentiality thereof.  

 

(b)Press Release.  Each Party shall have the right, but not the obligation, to
issue a press release announcing the execution of this Agreement, including the
identity of the Parties and a summary of the key terms without disclosing the
Earn-Out percentage set forth in Paragraph II(a) of Exhibit C or other payment
terms hereunder.  Each Party will provide the other Party with the proposed text
of such press release prior to issuance so that the other Party may review and
comment and approve such press release, such approval not to be unreasonably
withheld, conditioned or delayed; provided that any press release shall, absent
notice from the other Party, be deemed approved by such other Party [***]
following delivery by the issuing Party.  The Party issuing the press release
shall consider reasonable comments from the other Party in good faith.
Thereafter, Seller and Purchaser may each disclose to Third Parties the
information contained in such press release(s) without the need for further
approval by the other Party.

 

10

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

8.MISCELLANEOUS

 

(a)Governing Law.  This Agreement will be interpreted, construed, and enforced
in all respects in accordance with the laws of the [***], without reference to
its choice of law principles to the contrary.

 

(b)Notices.  Any notice, request, delivery, approval or consent required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been sufficiently given upon delivery in person, transmission by
email (provided that if such email is not sent during normal business hours,
such notice or communication shall be deemed to have been sent on the next
business bay), the next day after delivery by express courier service (signature
required) or [***] after the date of mailing by registered or certified mail,
return receipt requested (or its equivalent), as the address shown below or such
other address as a Party provides in accordance with this Section 8(b).  Email
notice shall be provided for any postal or certified mailing.

 

If to Seller:

 

Durect Corporation

10260 Bubb Road

Cupertino, CA 95014

Attention: Legal Department

Email: **********

Telephone: (408) 777-3577

 

If to Purchaser:

 

Indivior UK Limited

103-105 Bath Road

Slough, Berkshire

SL1 3UH

Attention:  Assistant General Counsel, EMEA

Email: **********

 

With a copy to:

 

Indivior Inc.

10710 Midlothian Turnpike

Suite 430

Richmond, VA 23235

Attention:  Chief Legal Officer

Email:  ***********

Telephone:  (804) 594-4442

11

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

 

(c)Relationship of Parties.  The Parties hereto are independent
contractors.  Nothing in this Agreement will be construed to create a
partnership, joint venture, franchise, fiduciary, employment, or agency
relationship between the Parties.  Neither Party has any express or implied
authority to assume or create any obligations on behalf of the other or to bind
the other to any contract, agreement, or undertaking with any Third Party.

 

(d)Severability.  If any provision of this Agreement is found to be invalid or
unenforceable, then the remainder of this Agreement will have full force and
effect, and the invalid or unenforceable provision will be modified, or
partially enforced, to the maximum extent permitted to effectuate the original
objective.

 

(e)Waiver.  Failure or delay by either Party to enforce any term of this
Agreement will not be deemed a waiver of future enforcement of that or any other
term in this Agreement or any other agreement that may be in place between the
Parties.  All waivers shall be obtained in writing signed by an authorized
representative of the Party granting the waiver.

 

(f)Section Headings.  The section headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.  

 

(g)Assignment.  This Agreement shall not be assignable by either Party to any
Third Party without the written consent of the other Party.  Notwithstanding the
foregoing, (i) either Party may assign this Agreement, without the written
consent of the other Party, to an Affiliate of such Party or to a Third Party
that acquires all or substantially all of the business or assets of such Party
to which this Agreement pertains (whether by merger, reorganization,
acquisition, sale, operation of law or otherwise), and (ii) Seller may assign
its right to collect Earn-Out payments under this Agreement, without the written
consent of Purchaser, to a Third Party.  No assignment or transfer of this
Agreement shall be valid and effective unless and until the assignee/transferee
agrees in writing to be bound by the provisions of this Agreement.  Except as
expressly provided in this Section, any attempted assignment or transfer of this
Agreement shall be null and void.  Subject to the foregoing, the terms and
conditions of this Agreement shall be binding on and inure to the benefit of the
permitted successors and assigns of either Party.  

 

(h)Third Party Beneficiaries.  Except as expressly provided in Section 6(a),
this Agreement is not intended to confer any right or benefit on any Third Party
(including, but not limited to, any employee or beneficiary of any Party), and
no action may be commenced or prosecuted against a Party by any Third Party
claiming as a third-party beneficiary of this Agreement or any of the
transactions contemplated by this Agreement.  Only the Parties hereto and their
permitted heirs, successors, and assigns shall have any rights hereunder.

 

12

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

(i)Entire Agreement.  This Agreement, including its Exhibits, constitutes the
entire agreement between the Parties with respect to the subject matter hereof
and merges and supersedes all prior agreements, understandings, negotiations,
and discussions.  Neither Party will be bound by any conditions, definitions,
warranties, understandings or representations with respect to the subject matter
hereof other than as expressly provided herein.

 

(j)Counterparts.  This Agreement may be executed in counterparts, each of which
will be deemed an original, and all of which together constitute one and the
same instrument.

 

[SIGNATURES ON FOLLOWING PAGE]

 

13

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute this Agreement as of the Effective Date.

 

 

Durect Corporation

INDIVIOR UK LIMITED

 

/s/ Matthew J. Hogan/s/ Richard Simkim

___________________________________________________________

SignatureSignature

 

Matthew J. HoganRichard Simkim

__________________________________________________________

Print NamePrint Name

 

Chief Financial OfficerChief Commercial Officer

__________________________________________________________

TitleTitle

 

9/26/20179/26/2017

__________________________________________________________

DateDate

 

 

 

 

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

EXHIBIT A – PATENT RIGHTS

 

 

•

U.S. Patent Nos. [***].

 

•

All substitutions, continuations, continuations-in-part, divisions and renewals
relating to the foregoing, solely to the extent filed in the United States; and

 

•

All patents-of-addition, reissues, reexaminations, extensions, or registrations
of any and all of the foregoing.

 

•

All causes of action and remedies related to the Patents in the United States
(including, but not limited to, the right to sue for past, present or future
infringement, provisional rights under 35 U.S.C. §154, misappropriation or
violation of rights related to the Patents, and all rights to pursue damages,
injunctive relief and other remedies for past and future infringement of the
Patents in the United States);

 

•

All rights to collect royalties and other payments under or on account of any of
the Patents; and

 

•

Any and all other rights and interests arising out of, in connection with, or in
relation to the Patents, solely to the extent in the United States.

 

 

 

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

EXHIBIT B – ASSIGNMENT OF PATENT RIGHTS

 

This ASSIGNMENT OF PATENT RIGHTS (the “Assignment”) is executed, acknowledged,
and delivered by Durect Corporation, a Delaware corporation with its principal
place of business at 10260 Bubb Road, Cupertino, CA 95014 (“Assignor”), and
Indivior UK Limited (Co. No. 7183451) with a registered address of 103-105 Bath
Road, Slough, Berkshire, SL1 3UH (“Assignee”), in accordance with, and pursuant
to the terms and conditions of the Patent Purchase Agreement dated as of
September 26, 2017 (the “Patent Agreement”), between Assignor and Assignee.  

 

Capitalized terms used herein and not expressly defined shall have the meaning
ascribed to such terms in the Patent Agreement.

 

NOW, THEREFORE, TO ALL WHOM IT MAY CONCERN:

 

Assignor desires to assign its entire right, title and interest in and to the
Patent Rights (as defined below) to Assignee.  Therefore, for good and valuable
consideration, the receipt and sufficiency of which Assignor acknowledges,
Assignor hereby irrevocably sells, assigns, transfers, and conveys to Assignee,
and Assignee hereby accepts, all of the full extent of Assignor’s right, title,
and interest in and to any and all of the following (collectively, the “Patent
Rights”):

 

 

•

U.S. Patent No. [***]  (the “Patents”);

 

•

All substitutions, continuations, continuations-in-part, divisions and renewals
relating to the Patents, solely to the extent filed in the United States;

 

•

All patents-of-addition, reissues, reexaminations, extensions, or registrations
of any and all of the Patents;

 

•

All causes of action and remedies related to the Patents in the United States
(including the right to sue for past, present or future infringement,
provisional rights under 35 U.S.C. § 154, misappropriation or violation of
rights related to the Patents, and all rights to pursue damages, injunctive
relief and other remedies for past and future infringement of the Patents in the
United States);

 

•

All rights to collect royalties and other payments under or on account of any of
the Patents; and

 

•

Any and all other rights and interests arising out of, in connection with, or in
relation to the Patents, solely to the extent in the United States.

 

Assignor intends all rights transferred herein to be held and enjoyed by said
Assignee for Assignee’s own use, and for the use of its successors, assigns, or
other legal representatives to the end of the term or terms for which the Patent
Rights may be granted as fully and entirely as the same would have been held and
enjoyed by Assignor if this Assignment had not been made.

 

Notwithstanding anything to the contrary herein, Assignor is executing and
delivering this Assignment in accordance with and subject to all of the terms
and provisions of the Patent

 

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

Agreement.  In the event of any conflict between the terms of this Assignment
and those of the Patent Agreement, the terms of the body of the Patent Agreement
shall be controlling.

 

Assignor will not sign any writing or do any act conflicting with this
Assignment, and, without further compensation, will sign all documents and do
such additional acts as Assignee, its successors, legal representatives, and
assigns deem necessary or desirable to: perfect enjoyment of the Patent Rights;
conduct proceedings regarding the Patent Rights, including any litigation or
interference proceedings; or perfect or defend title to the Patent
Rights.  Assignor requests and authorizes the respective patent office or
governmental agency in each jurisdiction to issue any and all patents,
certificates of invention, utility models or other governmental grants or
issuances that may be granted upon any of the Patent Rights in the name of
Assignee, as the assignee to the entire interest therein.

 

The terms and conditions of this Assignment will inure to the benefit of
Assignee, its successors, legal representatives and assigns and will be binding
upon Assignor, its successors, legal representatives and assigns in accordance
with the Patent Agreement.

 

This Assignment shall be governed by, and construed in accordance with, the laws
of the United States in respect to patent issues and in all other respects by
the laws of the State of Delaware, without giving effect to the conflict of laws
rules thereof.

 

IN WITNESS WHEREOF, Assignor and Assignee each has caused this Assignment to be
executed as of this __ day of __________.

 

ASSIGNOR:ASSIGNEE:

Durect CorporationINDIVIOR UK LIMITED

 

_____________________________________________________________

SignatureSignature

______________________________________________________________

Print NamePrint Name

_______________________________ _______________________________

TitleTitle

 

 

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Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

EXHIBIT C – FINANCIAL EXHIBIT

 

I.Milestone Payment.

 

a)

Milestones:  Purchaser shall pay to Seller Five Million Dollars ($5,000,000)
(the “Milestone Payment”) upon the first NDA Approval for a Product hereunder
(the “Milestone Event”).

 

b)

Payment Terms.  The Milestone Payment set forth in Paragraph I(a) shall be due
and payable to Seller within [***] days of the first accomplishment of the
Milestone Event.  Purchaser shall notify Seller [***] and pay the Milestone
Payment [***].

 

II.Earn-out Payments.

 

a)

Earn-out Payments.  Purchaser shall pay to Seller quarterly earn-out payments
equal to [***] percent ([***]%) of [***] (“Earn-Out).  [***].

 

b)

Earn-out Term.  Purchaser’s Earn-Out obligation shall commence on the Effective
Date and continue until the later of: (i) the date upon which the last claim
included within the Patent Rights Covering any Product expires, or (ii) [***]
from the first commercial sale of Product following NDA Approval (the “Earn-Out
Term”). Notwithstanding anything to the contrary herein, the Earn-Out Term shall
terminate if all Patent Rights Covering Products are found to be invalid and/or
unenforceable by a court of competent jurisdiction or by the USPTO in a
post-grant proceeding, in each case with no further right of appeal.

 

c)

Payment/Reports.  All Earn-Out payments shall be due and payable within [***]
days after the last day of the calendar quarter [***].  Together with any such
payment, Purchaser shall deliver a [***].  Within [***] days after the last day
of each calendar quarter during the Earn-Out Term, [***].

 

d)

Inspection of Records.  Purchaser shall, and shall cause each of its Affiliates
and other Selling Parties to, keep full and accurate books and records setting
forth gross invoiced amounts for Product, Net Sales of Product, itemized
deductions from gross invoiced amounts taken to calculate Net Sales and other
amounts payable hereunder to Seller under this Paragraph II.  During the
Earn-Out Term and for a period of [***] thereafter, Purchaser shall permit
Seller, by independent qualified public accountants (which shall not be
compensated on a contingent fee basis) engaged by Seller and reasonably
acceptable to Purchaser, to examine such books and records upon reasonable
advance notice but, in any event, no more than [***].  Such accountants shall be
required by

 

--------------------------------------------------------------------------------

Confidential treatment has been sought for portions of this agreement. The copy
filed herewithin omits the information subject to the confidential treatment
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.

 

 

Purchaser to enter into a reasonably acceptable confidentiality
agreement.  Seller shall bear the cost of any such examination and review;
[***].

 

e)

Late Payment.  Any payments or portions thereof due hereunder which are not paid
when due (and which amounts are not being disputed in good faith) shall bear
interest equal to [***].  This Paragraph II(e) shall in no way limit any other
remedies available to Seller.