Exhibit 10.28.1

CONFIDENTIAL

 

 

 

 

 

LICENSE agreement

 

by and between

 

ALBIREO AB

 

and

 

 

AJINOMOTO PHARMACEUTICALS CO., LTD.

 

 

 

 

 

April 2, 2012

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

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CONFIDENTIAL

 

Table of Contents

 

 

 

 

Page

1

DEFINITIONS.

1

2

GRANT OF LICENSES.

15

2.1.

License to Ajinomoto.

15

2.2.

License to Albireo.

15

2.3.

Restrictions.

16

2.4.

Joint Technology.

16

2.5.

Sublicensing.

16

2.6.

Right of Reference.

18

2.7.

Technology Transfer.

18

2.8.

No Other Rights.

19

3

DECISION MAKING AND DISPUTE RESOLUTION.

19

3.1.

Joint Development Committee.

19

3.2.

Joint Commercialization Committee.

21

3.3.

Other Committees.

22

3.4.

Elevation and Dispute Resolution.

22

4

DEVELOPMENT, REGULATORY, COMMERCIALIZATION.

23

4.1.

Development

23

4.2.

Global Development Plan and Local Studies.

25

4.3.

Regulatory Matters.

27

4.4.

Manufacture.

29

4.5.

Commercialization in the Territory.

30

4.6.

Publication Strategy.

30

5

CONSIDERATION.

31

5.1.

Upfront Payments.

31

5.2.

Milestones.

31

5.3.

Royalties.

32

5.4.

Payment of Albireo Territory Development Costs and Expert Costs.

34

1

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

Table of Contents (continued)

 

 

 

Page

5.5.

Reports and Payments.

35

6

MUTUAL COVENANTS.

38

6.1.

Confidentiality.

38

6.2.

Compliance with Law.

41

6.3

Non-Competition.

42

6.4.

Non-Solicitation.

42

7

REPRESENTATIONS AND WARRANTIES.

43

7.1.

Representations and Warranties of Each Party.

43

7.2.

Additional Representations and Warranties of Albireo.

43

7.3.

Representation by Legal Counsel.

45

7.4.

No Inconsistent Agreements.

45

7.5.

Disclaimer.

45

8

INTELLECTUAL PROPERTY.

45

8.1.

Disclosure.

45

8.2.

Ownership.

45

8.3.

Filing, Prosecution and Maintenance of Patent Rights.

46

8.4.

Ajinomoto Patent Rights.

47

8.5.

Joint Patent Rights outside the Territory.

47

8.6.

Trademarks.

48

8.7.

Enforcement of Technology Rights.

48

8.8.

Third Party Claims.

50

8.9.

Patent Marking.

50

8.10.

No Implied Licenses.

50

8.11.

Privileged Communications.

51

8.12.

Recordation of License.

51

9

GOVERNMENT APPROVALS.

51

10

TERM AND TERMINATION.

51

2

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

Table of Contents (continued)

 

 

 

Page

10.1.

Term.

51

10.2.

Rights of Termination.

52

10.3.

Effects of Termination or Expiration.

53

11

PRODUCT LIABILITY, INDEMNIFICATION AND INSURANCE.

56

11.1.

Indemnification by Albireo.

56

11.2.

Indemnification by Ajinomoto.

56

11.3.

Procedure.

57

11.4.

Insurance.

57

11.5.

Liability Limitations.

57

12

MISCELLANEOUS.

58

12.1.

Governing Law, Jurisdiction; Dispute Resolution.

58

12.2.

Force Majeure.

60

12.3.

Waiver and Non-Exclusion of Remedies.

61

12.4.

Notices.

61

12.5.

Entire Agreement.

62

12.6.

Amendment.

62

12.7.

Assignment.

63

12.8.

No Benefit to Others.

63

12.9.

Counterparts.

63

12.10.

Severability.

63

12.11.

Further Assurance.

63

12.12.

Publicity.

63

12.13.

Relationship of the Parties.

64

12.14.

Headings.

64

 

 

 

3

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

 

LICENSE AGREEMENT

This LICENSE AGREEMENT (the “Agreement”) is entered into on this 2nd day of
April, 2012 (the “Effective Date”), by and between Albireo AB, a company
organized under the laws of Sweden with its principal place of business at Arvid
Wallgrens Backe 20, 413 46 Gothenburg, Sweden (“Albireo”) and Ajinomoto
Pharmaceuticals Co., Ltd., a company organized under the laws of Japan with its
principal place of business at 1-1, Irifune 2-chome, Chuo-ku, Tokyo 104-0042,
Japan (“Ajinomoto”).  Albireo and Ajinomoto may each be referred to herein
individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Albireo owns or otherwise controls certain patents, patent
applications, technology, know-how, scientific and technical information and
other proprietary rights and information relating to the research, development
and manufacture of the Albireo Compound (as defined below);

WHEREAS, Ajinomoto is engaged in the research, development, manufacture and
commercialization of pharmaceutical products, and desires to acquire an
exclusive license in the Territory (as defined below) under Albireo’s patents,
patent applications, technology, know-how, scientific and technical information
and other proprietary information relating to the Albireo Compound; and

WHEREAS, subject to the terms of this Agreement, Albireo wishes to grant to
Ajinomoto, and Ajinomoto wishes to receive from Albireo, an exclusive license in
the Territory to use, research, develop, manufacture and commercialize the
Albireo Compound and Products (as defined below) in the Field (as defined
below).

agreement

NOW THEREFORE, in consideration of the mutual promises and covenants set forth
below and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:

1.

DEFINITIONS.  

1.1.“Administrator” has the meaning set forth in Section 12.1.4.

1.2.“Adverse Event” means any adverse medical occurrence in a patient or
clinical investigation subject that is administered a pharmaceutical product, as
designated in any Applicable Law in the Territory and that is required to be
reported to a Regulatory Authority.

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.3.“Affiliate(s)” means, with respect to a Person, any other Person that
controls, is controlled by, or is under common control with such first
Person.  For purposes of this definition only, “control” means (i) to possess,
directly or indirectly, the power to direct the management or policies of
another Person, whether through ownership of voting securities or by contract
relating to voting rights or corporate governance; or (ii) to own, directly or
indirectly, more than fifty percent (50%) of the outstanding voting securities
or other ownership interests of the other Person.

1.4.“Ajinomoto Data” has the meaning set forth in Section 10.3.1(d).

1.5.“Ajinomoto Indemnified Party” has the meaning set forth in Section 11.1.

1.6.“Ajinomoto Know-How” means (i) Know-How that Ajinomoto Controls as of the
Effective Date, if any, or that comes into the Control of Ajinomoto during the
Term  to the extent actually used by Ajinomoto to Develop, Manufacture, or
Commercialize the Albireo Compound or Products in the Field, including, without
limitation, any method of making the Albireo Compound or Products, any
composition or formulations of the Albireo Compound or Products, or any method
of using or administering the Albireo Compound or Products; and (ii) Know-How
that is conceived, developed and, in the case of patentable Know-How, Invented
solely by employees of Ajinomoto or its Affiliates, or Third Parties acting on
behalf of Ajinomoto or its Affiliates during the Term in the course of
Ajinomoto’s performance under this Agreement.  For the avoidance of doubt,
neither Joint Know-How nor Know-How which is Albireo Know-How licensed to
Ajinomoto pursuant to this Agreement are included in the definition of Ajinomoto
Know-How.

1.7.“Ajinomoto Patent Rights” means (i) any Patent Right that Ajinomoto Controls
as of the Effective Date, if any, or that comes into the Control of Ajinomoto
during the Term to the extent such rights Cover the Ajinomoto Know-How or
otherwise Cover the Albireo Compound or Products in the Field, any method of
making the Albireo Compound or Products, any composition or formulations of the
Albireo Compound or Products, or any method of using or administering the
Albireo Compound or Products as actually made, used or sold by Ajinomoto; and
(ii) any Patent Right that is conceived, developed and Invented solely by
employees of Ajinomoto or its Affiliates, or Third Parties acting on behalf of
Ajinomoto or its Affiliates during the Term in the course of Ajinomoto’s
performance under this Agreement. For the avoidance of doubt, neither Joint
Patent Rights nor Patent Rights which are Albireo Patent Rights licensed to
Ajinomoto pursuant to this Agreement are included in the definition of Ajinomoto
Patent Rights.

1.8.“Ajinomoto Technology” means Ajinomoto’s interest in (i) the Ajinomoto
Know-How and (ii) the Ajinomoto Patent Rights, and all other intellectual
property rights in any of the foregoing.

1.9.“Albireo Compound” means Albireo’s proprietary compound designated by
Albireo on the Effective Date as “A3309” which has the chemical structure set
forth in Schedule 1.9, including, without limitation, all [***] thereof.  

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.10.“Albireo Indemnified Party” has the meaning set forth in Section 11.2.

1.11.“Albireo Know-How” means (i) Know-How that Albireo or its Affiliates
Control as of the Effective Date or that comes into the Control of Albireo or
its Affiliates during the Term to the extent necessary or useful to Manufacture,
Develop or Commercialize the Albireo Compound or Products in the Field,
including, without limitation, any method of making the Albireo Compound or
Products, any composition or formulations of the Albireo Compound or Products,
or any method of using or administering the Albireo Compound or Products; (ii)
Know-How that is conceived, developed and, in the case of patentable Know-How,
Invented solely by employees of Albireo or its Affiliates, or Third Parties
acting on behalf of Albireo or its Affiliates during the Term in the course of
Albireo’s performance under this Agreement; and (iii) any data or results
described in the proviso in Section 1.70.  For the avoidance of doubt, Joint
Know-How and Know-How which is Ajinomoto Know-How licensed to Albireo pursuant
to this Agreement are not included in the definition of Albireo Know-How.

1.12.“Albireo Patent Rights” means any Patent Right that Albireo or its
Affiliates Control as of the Effective Date or that comes into the Control of
Albireo or its Affiliates during the Term, including, without limitation, any
Patent Right that is conceived, developed and Invented solely by employees of
Albireo or its Affiliates, or Third Parties acting on behalf of Albireo or its
Affiliates, during the Term in the course of Albireo’s performance under this
Agreement to the extent such rights are necessary or useful to Manufacture,
Develop or Commercialize the Albireo Compound or Products in the Field,
including, without limitation, any method of making the Albireo Compound or
Products, any composition or formulations of the Albireo Compound or Products,
or any method of using or administering the Albireo Compound or Products;
provided, however, that “Albireo Patent Rights” shall not include any Patent
Rights to the extent that they Cover the use of the Albireo Compound or related
products for the treatment of Liver Diseases.  For the avoidance of doubt, Joint
Patent Rights and Patent Rights which are Ajinomoto Patent Rights licensed to
Albireo pursuant to this Agreement are not included in the definition of Albireo
Patent Rights. A list of the Albireo Patent Rights is set forth on Schedule
1.12, which Schedule shall be amended on a timely basis during the Term to
reflect changes to the list of Albireo Patent Rights, provided that failure to
include an Albireo Patent Right or otherwise update Schedule 1.12 shall not
limit the scope of the definition of “Albireo Patent Rights.”  For the sake of
clarity, if a Valid Claim is included within a Patent Right listed on Schedule
1.12, such Valid Claim shall only provide Innovator Protection if such Valid
Claim satisfies the requirements of Section 1.66.

1.13.“Albireo Technology” means Albireo’s interest in (i) the Albireo Know-How
and (ii) the Albireo Patent Rights, and all other intellectual property rights
in any of the foregoing.

1.14.“API Manufacturing” means the manufacture, production and supply of the
Albireo Compound for inclusion in a Product Developed and Commercialized in
accordance with this Agreement.

1.15.“Applicable Laws” means all applicable statutes, ordinances, regulations,
rules, or orders of any kind whatsoever of any regulatory authority.

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.16.“Arbitrators” has the meaning set forth in Section 12.1.4.

1.17.“Audited Party” has the meaning set forth in Section 5.5.6.

1.18.“Auditing Party” has the meaning set forth in Section 5.5.6.

1.19.“BAS” means any compounds or compositions of matter that [***] in the [***]
and prevent [***] the same.

1.20.“Bulk Price” means, on a Product-by-Product basis, with respect to any
period, the purchase price of the Albireo Compound per dosage unit.

1.21.“Calendar Quarter” means each of the three (3) consecutive month periods
ending on March 31, June 30, September 30 and December 31.

1.22.“Change of Control” means, with respect to Albireo or any of its
Affiliates, (i) any sale, transfer, assignment, or other disposition, whether by
operation of law or otherwise, of the voting stock or other securities, which
results in any single Third Party owning directly or indirectly more than a
majority of voting stock or other securities; (ii) the sale of substantially all
assets in one or a series of transactions to a Third Party buyer; (iii) a merger
or consolidation with any Third Party, as a result of which the equity holders
of Albireo or any of its Affiliates immediately prior to such event hold less
than a majority of the outstanding capital stock of the surviving entity or
parent of the surviving entity; or (iv) the acquisition by a Third Party of the
right to nominate a controlling majority of members of the board of directors.  

1.23.“Chronic Idiopathic Constipation” or “CIC” has the meaning set forth on
Schedule 1.23.

1.24.“Claim” has the meaning set forth in Section 12.1.4.

1.25.“Clinical Supply” has the meaning set forth in Section 4.4.1.

1.26.[***] means any pharmaceutical product in finished form that contains an
Albireo Compound [***] at least [***] and all [***] thereof, provided that [***]
contained in such [***] are [***].  Notwithstanding the foregoing, [***] shall
not be deemed to be [***] and [***] in a Product [***] Combination Product.

1.27.“Commercialization” means any and all activities of using, importing,
marketing, promoting, distributing, offering for sale or selling a Product in
the Territory, including, for example, pre-commercial launch market development
activities conducted in anticipation of Regulatory Approval which approves
selling and/or marketing a Product, seeking pricing and reimbursement approvals
for a Product, if applicable, preparing advertising and promotional materials,
sales force training, all interactions and correspondence with a Regulatory
Authority regarding Post-Approval Clinical Trials.  When used as a verb,
“Commercialize” means to engage in Commercialization.

4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.28.“Commercialization Plan” has the meaning set forth in Section 4.5.1.

1.29.“Commercially Reasonable Efforts” means those efforts and resources
normally used by [***] for a product or compound owned by it or to which it has
rights of the type it has hereunder, which is of [***].  Without limiting the
foregoing, Commercially Reasonable Efforts as it applies to the clinical
development of the Albireo Compound and Products hereunder means adherence to
the activities and timelines set forth in the Territory Development Plan, as may
be amended from time to time.  “Commercially Reasonable” as used herein shall be
interpreted in a corresponding manner.

1.30.“Competing Product” means a product that (i) is offered in the [***] and
[***] as a Product or another [***] or [***] that may reasonably be expected to
be substituted for a Product by a pharmacy; (ii) is approved for
Commercialization by the Regulatory Authority in a country; (iii) contains an
Albireo Compound as an active pharmaceutical ingredient; and (iv) is, in whole
or in part, approved by such Regulatory Authority, where the Third Party granted
such approval has provided the applicable Regulatory Authority with scientific
data to substantiate a claim of equivalence to a Product containing the same
Albireo Compound as the approved pharmaceutical product.  

1.31.“Confidential Information” means, with respect to a Party, all information
(and all tangible and intangible embodiments thereof), which is Controlled by
such Party, and is disclosed by such Party to the other Party pursuant to this
Agreement.  Any technical information disclosed at a meeting of the JDC, JCC or
any other committee established pursuant to this Agreement shall constitute
Confidential Information unless otherwise specified.  

1.32.“Control” or “Controlled” means, with respect to any intellectual property
of a Party, that the Party or its Affiliates (i) owns, has an interest in, or
other than pursuant to this Agreement, has a license to such intellectual
property; and (ii) has the ability to grant access, a license or a sublicense to
such intellectual property to the other Party as provided in this Agreement
without violating an agreement with or other rights of any Third Party, provided
that, in the event a Future Acquirer becomes Albireo’s Affiliate or succeeds the
position of Albireo as a Party, any intellectual property right controlled by
such Future Acquirer shall be excluded from intellectual property Controlled by
Albireo for purposes of this Agreement to the extent that, and only to the
extent that, such intellectual property right (a) is not actually used by
Albireo or its Affiliates or Licensees to develop, manufacture or commercialize
the Albireo Compound or Products after the Future Acquirer qualified as such;
(b) comes under the control of such Future Acquirer without any reference or
access, by such Future Acquirer, to (A) Albireo Technology, Joint Technology,
Ajinomoto Technology, Licensee Know-How, or Licensee Patent Rights; (B)
Albireo’s Confidential Information or Ajinomoto’s Confidential Information or
any other information under this Agreement related to the Albireo Compound or
Products, or related to Ajinomoto or its Affiliates or Sublicensees; or (C) any
information which such Future Acquirer obtains by being qualified as such; and
(c) is not any intellectual property which would have been granted to Ajinomoto
but for any occurrence of Change of Control. The Parties agree that, in the
event a Future Acquirer becomes Albireo’s Affiliate or succeeds the position of
Albireo as a Party, each Party shall, if requested by the other Party, discuss
in good faith whether

5

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

maintaining the language of this Section 1.32 as it is should be adequate in
order to maintain the relationship of the Parties contemplated herein. For the
purpose of this Section 1.32, “control” or “controlled” means, with respect to
any intellectual property of a Future Acquirer, that the Future Acquirer (i)
owns, has an interest in, or other than pursuant to this Agreement, has a
license to such intellectual property; and (ii) has the ability to grant access,
a license or a sublicense to such intellectual property to Ajinomoto as provided
in this Agreement without violating an agreement with or other rights of any
Third Party.

1.33.“Cover” means, with respect to a Patent Right, that (i) making, using,
selling, offering for sale, disposing of or importing of a given compound,
product, composition or formulation; (ii) using of a given method or use; (iii)
making use of given Know-How; or (iv) performance of a given invention [***].

1.34.“Development” means all activities performed by or on behalf of either
Party in the performance of any Territory Development Plan for the Albireo
Compound and Products in the Field.  Development shall include, without
limitation, all activities related to research, preclinical testing, test method
development and stability testing, toxicology, formulation, clinical studies,
seeking Regulatory Approval and otherwise handling regulatory affairs,
statistical analysis and report writing performed pursuant to the Territory
Development Plan with respect to Products.  Development shall not include
Manufacturing or Commercialization.  When used as a verb, “Develop” means to
engage in Development.

1.35.“Development Costs” means Albireo’s direct costs specifically identifiable
or allocable to Development of a Product pursuant to a Territory Development
Plan and actually and reasonably incurred by Albireo or its Affiliates,
including FTE Costs, costs of supplies and materials and amounts paid to Third
Parties performing activities on behalf of Albireo or its Affiliates.

1.36.“Development Milestone” has the meaning set forth in Section 5.2.1.

1.37.“Disclosing Party” has the meaning set forth in Section 6.1.1.

1.38.“Drug Price” means, on a Product-by-Product basis, Japan’s National Health
Insurance drug price, per dosage unit, assigned to a given Product by the
Ministry of Health, Labour and Welfare of Japan, minus any consumption taxes
contained in such drug price.

1.39.“Effective Date” means the date of this Agreement first set forth above.

1.40.“Effective Filing Date” means, with respect to a patent application, the
earlier of (i) the filing date of such patent application or (ii) the earliest
filing date of any earlier applications, in any jurisdiction, from which such
patent application is entitled to claim the benefit of an earlier filing date
under the Applicable Law.

1.41.“Elected Patent Rights” has the meaning set forth in Section 8.3.1.

6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.42.“External Factor” means one or more of the following events or
circumstances occurred in Development or Manufacturing or regulatory conditions
relating to the Albireo Compound or a Product that delays the further
Development of a Product or results in delayed achievement of the enrollment of
the first human subject in Japan in any clinical trial, including, without
limitation, a Phase I clinical trial, by [***], provided that such events or
circumstances were not caused by the negligent act or omission of Ajinomoto, its
Sublicensees or any of its Affiliates: (i) the clinical trial of the Albireo
Compound or Product is [***]; (ii) [***] difficulties, with respect to [***],
for which Albireo receives written notice from Ajinomoto within [***] of
becoming aware of such difficulty; (iii) [***] difficulties due to (A)
incomplete conduct of activities undertaken by Albireo under the Territory
Development Plan, for which Albireo receives written notice from Ajinomoto
within [***] of becoming aware of such incompleteness, (B) Albireo’s notice
pursuant to Section 4.1.4 which delays or withholds a Territory Study for a
period greater than [***], or (C) [***] by Albireo, the adverse effects of which
[***], in whole or in part, uncured by Albireo [***] after Albireo’s receipt of
notice from Ajinomoto alerting Albireo to such inadequacy; or (iv) Albireo’s
breach of this Agreement, which breach remains uncured for [***] measured from
the date written notice of such breach is given to Albireo by Ajinomoto.

1.43.“FD&C Act” means the United States Federal Food, Drug, and Cosmetic Act, as
amended, and the regulations promulgated thereunder.

1.44.“Field” means all prophylactic and therapeutic uses of a pharmaceutical
product in any formulation or dosage form: (i) to treat or prevent
Gastrointestinal Diseases, symptoms of constipation of all causes, and
postoperative ileus; and (ii) for use in colonoscopy cleansing procedures.

1.45.“Financial Records” has the meaning set forth in Section 5.5.5.

1.46.“First Commercial Sale” means, with respect to a Product and any country of
the Territory, the first sale of such Product under this Agreement for use in
the Field to a Third Party in such country, after such Product has been granted
Regulatory Approval which approves selling and/or marketing such Product for use
in the Field by the competent Regulatory Authorities in such country.

1.47.“First Indication” has the meaning set forth in Section 5.2.1.

1.48.“Force Majeure” has the meaning set forth in Section 12.2.

1.49.“FTE” means a full-time scientific or technical person, or in the case of
less than a full-time scientific or technical person, a full-time equivalent
scientific or technical person year, carried out by an employee of Albireo or
its Affiliates.

1.50.“FTE Costs” means the actual FTEs employed by Albireo or its Affiliates in
the conduct of Development activities under the Territory Development Plan
multiplied by the applicable FTE Rate.

7

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.51.“FTE Rate” means the rate that is applicable to an FTE. The rate is based
on [***] which is demonstrated by [***] and is intended to capture [***].

1.52.“Future Acquirer” means the Third Party to any Change of Control
transaction and any of such Third Party’s Affiliates.

1.53.“GAAP” means generally accepted accounting principles in each country in
the Territory, as in effect from time to time.

1.54.“Gastrointestinal Diseases” means Functional Gastrointestinal Diseases in
humans as defined by the Rome Foundation in “Rome III Diagnostic Criteria for
Functional Gastrointestinal Disorders,” which is attached hereto as Exhibit
1.54. “Gastrointestinal Diseases” shall not include any Liver Diseases.

1.55.“Global Development Plan” has the meaning set forth in Section 4.2.1.

1.56.“Good Clinical Practice” or “GCP” means the then current standards for
clinical trials for pharmaceuticals, as set forth in Applicable Laws and
regulations promulgated thereunder, as amended from time to time.

1.57.“Good Laboratory Practice” or “GLP” means the then current standards for
laboratory activities for pharmaceuticals, as set forth in Applicable Laws and
regulations promulgated thereunder, as amended from time to time.

1.58.“Good Manufacturing Practice” or “GMP” means the then current standards for
manufacturing activities for pharmaceuticals, as set forth in Applicable Laws
and regulations promulgated thereunder, as amended from time to time.

1.59.“Government Authority” means any court, agency, department, authority or
other instrumentality of any national, state, county, city or other political
subdivision.

1.60.“Grace Period” has the meaning set forth in Section 4.1.2.

1.61.“IBS-C” has the meaning set forth in Section 3.4.  

1.62.“Indemnified Party” has the meaning set forth in Section 11.3.

1.63.“Indemnifying Party” has the meaning set forth in Section 11.3.

1.64.“Indemnity Cap” has the meaning set forth in Section 11.5.2.

1.65.“Infringement” has the meaning set forth in Section 8.7.1.

1.66.“Innovator Protection” means, with respect to a given Product sold by
Ajinomoto, its Affiliates or its Sublicensees in a given country in the
Territory, that (i) at least one Valid Claim of an Albireo Patent Right (other
than an Albireo Patent Right that is Controlled by Albireo or its Affiliates
non-exclusively with respect to such Product in such

8

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

country) or a Joint Patent Right in such country Covers [***]; (ii) such [***]
in such country; and/or (iii) at least one Valid Claim of an Ajinomoto Patent
Right (other than an Ajinomoto Patent Right that is Controlled by Ajinomoto
non-exclusively pursuant to a Third Party License with respect to such Product
in such country) in such country Covers [***]; provided, however, that any
Innovator Protection provided pursuant to clause (iii) of this Section 1.66
shall expire no later than fifteen (15) years after the First Commercial Sale of
the first Product sold under this Agreement in such country.  For purposes of
this Section 1.66 and Section 5.3.2(b), “[***]” means, with respect to a
Product, [***] by Ajinomoto, its Affiliates or its Sublicensees, or a Third
Party acting on their behalf; and, for purposes of this Section 1.66 and Section
10.3.1(d), “[***]” means, with respect to a Product in a country in the
Territory, [***].      

1.67.“Invented” means the act of invention by inventors, as determined in
accordance with the patent laws of England.  

1.68.“JCC” has the meaning set forth in Section 3.2.

1.69.“JDC” has the meaning set forth in Section 3.1.

1.70.“Joint Know-How” means any Know-How that is conceived, developed and/or, in
the case of patentable Know-How, Invented jointly by an employee of Albireo or
its Affiliates (or a Third Party acting on any of their behalf) and an employee
of Ajinomoto or its Affiliates (or a Third Party acting on any of their behalf);
provided, however, that, notwithstanding the foregoing, any data or results
generated from studies funded, at least in part, by Albireo, shall not
constitute “Joint Know-How” under this Agreement.

1.71.“Joint Patent Right” means any Patent Right that Covers Joint Know-How.

1.72.“Joint Technology” means Joint Know-How, Joint Patent Rights, and all other
intellectual property rights therein.

1.73.“Know-How” means all inventions, discoveries, data, information (including,
without limitation, scientific, technical or regulatory information), processes,
methods, techniques, materials, technology, results, analyses, laboratory,
pre-clinical and clinical data, or other know-how, whether or not patentable,
including, without limitation, pharmacology, toxicology, drug stability,
manufacturing and formulation methodologies and techniques, clinical and
non-clinical safety and efficacy studies, marketing studies, absorption,
distribution, metabolism and excretion studies.

1.74.“Legal Action” has the meaning set forth in Section 8.7.2

1.75.“Liability” has the meaning set forth in Section 11.1.

9

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.76.“Licensee” means any Albireo Affiliate or a Third Party (other than
Ajinomoto’s Sublicensee) that is granted a license, sublicense, covenant not to
sue or other grant of rights directly or indirectly by Albireo with respect to
development, manufacture, and/or commercialization of the Albireo Compound
and/or Product.  “License” means an agreement or arrangement pursuant to which
such a license, sublicense, covenant not to sue or other grant of rights has
been granted to a Licensee.  

1.77.“Licensee Know-How” means Know-How that Licensee controls as of the
effective date of the License or that comes into the control of Licensee during
the term of the License to the extent actually used by Licensee to develop,
manufacture, or commercialize the Albireo Compound or Products, including,
without limitation, any method of making the Albireo Compound or Products, any
composition or formulations of the Albireo Compound or Products, or any method
of using or administering the Albireo Compound or Products.

1.78.“Licensee Patent Rights” means any Patent Right that Covers Licensee
Know-How.

1.79.“Liver Diseases” means the following diseases, including manifestations,
symptoms and signs thereof: (i) cirrhosis/fibrosis; [***].  

1.80.“Local Study” has the meaning set forth in Section 4.2.3.

1.81.“Manufacture,” “Manufactured” or “Manufacturing” means all activities
involved in the production of the Albireo Compound and Products to be Developed
and/or Commercialized under this Agreement, including, without limitation, API
Manufacturing and having the Albireo Compound or Products manufactured by a
Third Party.  

1.82.“Names and Terms” has the meaning set forth in Section 6.1.6.

1.83.“NDA Approval” means the Regulatory Approval of an NDA for the applicable
Product in any country or regulatory jurisdiction.

1.84.“NDA Filing” means submission to the applicable Regulatory Authority of the
NDA for the applicable Product in any country or regulatory jurisdiction.

1.85.“Net Price” means, on a Product-by-Product basis, with respect to any
period, Net Sales of a Product in the Field divided by the corresponding sold
units of dosage of the Product.

1.86.“Net Sales” means, on a country-by-country and Product-by-Product basis,
with respect to any period for each country in the Territory, the gross amounts
invoiced by Ajinomoto, its Sublicensees or its Affiliates, as applicable, to
unrelated Third Parties for sales of a Product in the Field in such country,
less the following deductions to the extent included in the gross invoiced sales
price for such Product or otherwise directly paid or incurred by Ajinomoto, its
Sublicensees or its Affiliates with respect to the sale of such Product in such
country: (i) any rebates, trade, quantity and cash discounts, and other usual
and customary discounts to

10

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

customers; (ii) retroactive price reductions, credits, adjustments and
allowances, including, without limitation, rejections and returns (including,
without limitation, recalls, market withdrawals, damaged goods, and other
corrective actions), and including, without limitation, allowances and credits
related to inventory management or similar agreements with wholesalers; (iii)
compulsory payments, rebates and chargebacks and any payments of similar nature
including, without limitation, those for managed health care organizations or
federal, state, and local governments, their respective agencies (including,
without limitation, Relief System for Sufferers from Adverse Drug Reactions in
Japan), purchasers and reimbursers; (iv) sales, excise, turnover, inventory,
use, and similar taxes and import/export duties actually due or incurred with
respect to the sale of such Product, including, without limitation, value-added
taxes and consumption taxes; (v) [***]; and (vi) freight, postage, shipping and
insurance charges actually paid for local and international delivery of such
Product.  Net Sales will be determined in accordance with GAAP.  Without
limiting the generality of the foregoing, the following shall not be deemed
sales: [***].

In the event that a Product is sold as a [***] in a country, Net Sales from the
sale of such [***] in such country shall be calculated for each applicable
period by multiplying the Net Sales (as determined without reference to this
paragraph) of such [***] (in its entirety) in such country by the fraction
A/(A+B), where A is the average gross invoice price of the Product containing
the same Albireo Compound included in such [***] as the sole active ingredient
when sold separately in finished form in such country and B is the average gross
invoice price of the product containing the other prophylactically and/or
therapeutically active pharmaceutical ingredient(s) included in the [***] when
sold separately in finished form in such country each during the applicable
period or, if sales of all products did not occur during such period, the most
recent such period in which sales of all products occurred in such country. In
the event no such separate sales are made by Ajinomoto, its Affiliates or
Sublicensees in such country, Net Sales of the [***] in such country shall be
calculated by multiplying such Net Sales by a fraction fairly and reasonably
reflecting the relative value contributed by the Albireo Compound to the total
value of the [***] as determined by the Parties in good faith.  In the event
that the Parties are unable to mutually agree upon the fair market value of any
products for which no sales exist, then the matter shall be resolved pursuant to
Section 12.1.3.  To be a [***], products must be invoiced as a single product.

1.87.“New Drug Application” or “NDA” means, with respect to a Product in a
country or regulatory jurisdiction, an application to obtain Regulatory Approval
which approves selling and/or marketing such Product in such country or
regulatory jurisdiction.

11

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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

CONFIDENTIAL

 

1.88.“Patent Right” means any and all (i) patent applications filed under
Applicable Law in any jurisdiction in the Territory, including, without
limitation, all provisional applications, substitutions, continuations,
continuations-in-part, divisions, renewals, and all patents granted thereon;
(ii) all patents, reissues, reexaminations and extensions or restorations by
existing or future extension or restoration mechanisms, including, without
limitation, supplementary protection certificates or the equivalent thereof; and
(iii) any other form of government-issued right substantially similar to any of
the foregoing.

1.89.“Person” means an individual, sole proprietorship, partnership, limited
partnership, limited liability partnership, corporation, limited liability
company, business trust, joint stock company, trust, incorporated association,
joint venture, or similar entity or organization, including, without limitation,
a government or political subdivision or department or agency of a government.

1.90.“Pharmacovigilance Agreement” has the meaning set forth in Section 4.3.4.

1.91.“Phase I” in reference to a clinical trial means a trial defined in 21
C.F.R. 312.21(a), as may be amended from time to time, or any equivalent thereto
in any other jurisdiction in the Territory.

1.92.“Phase III” in reference to a clinical trial means a trial defined in 21
C.F.R. 312.21(c), as may be amended from time to time, or any equivalent thereto
in any jurisdiction in the Territory.

1.93.“Phase IV” in reference to a clinical trial means a trial conducted after a
product achieves Regulatory Approval which approves selling and/or marketing
such product, carried out for purposes of conducting safety surveillance and
ongoing technical support of the product.

1.94.“Post-Approval Clinical Trial” means any clinical trial for use of a
Product in an indication, other than a Phase III or Phase IV clinical trial, to
be conducted after a Regulatory Approval which approves selling and/or marketing
such Product for such indication.

1.95.“Product” means any pharmaceutical product in finished form that contains
the Albireo Compound, either as the sole active ingredient [***], and all
present and future formulations, dosages and dosage forms thereof.

1.96.“Quality Agreement” has the meaning set forth in Section 4.4.1.

1.97.“Receiving Party” has the meaning set forth in Section 6.1.1.

1.98.“Recipients” has the meaning set forth in Section 6.1.1.

1.99.“Regulatory Approval” means the approval and authorization of a Regulatory
Authority in a country or regulatory jurisdiction necessary to develop,
manufacture, distribute, sell or market a Product in that country or regulatory
jurisdiction, including pricing and reimbursement approval, where required.  

12

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

1.100.“Regulatory Authority” means any national, regional, state or local
regulatory agency, department, bureau, commission, council or other governmental
entity in each country of the world involved in the granting of regulatory
approval for a pharmaceutical product.

1.101.“Regulatory Exclusivity” means any rights or protections which are
recognized, afforded or granted by any Regulatory Authority in any country or
region of the Territory in association with the Regulatory Approval of a Product
in the Field, providing such Product: (i) a period of marketing exclusivity
during which a Regulatory Authority that recognizes, affords or grants such
marketing exclusivity shall refrain from either reviewing or approving a
marketing authorization application or similar regulatory submission submitted
by a Third Party seeking to market a Competing Product; or (ii) a period of data
exclusivity during which a Third Party seeking to market a Competing Product is
precluded from either referencing or relying upon, without an express right of
reference from the dossier holder, such Product’s clinical dossier or relying on
previous Regulatory Authority findings of safety or effectiveness with respect
to such Product to support the submission, review or approval of a marketing
authorization application or similar regulatory submission before the applicable
Regulatory Authority.  

1.102.“Regulatory Submissions” means applications for Regulatory Approval,
notifications and other submissions made to or with a Regulatory Authority that
are necessary to Develop, Manufacture or Commercialize a Product in the Field in
a particular country, whether obtained before or after a Regulatory Approval in
the country.  Regulatory Submissions include, without limitation, investigative
new drug applications and NDAs, and amendments and supplements to any of the
foregoing and their foreign counterparts, applications for pricing and
reimbursement approvals, and all proposed labels, labeling, package inserts,
monographs and packaging for a Product in a particular country.

1.103.“Relevant Countries” has the meaning set forth in Section 10.3.1.

1.104.“Restricted Product” has the meaning set forth in Section 6.3.1.

1.105.“Right of Reference” means the authority to rely upon, and otherwise use,
an investigation for the purpose of obtaining approval of an application to a
Regulatory Authority, including, without limitation, the ability to make
available the underlying raw data from the investigation for audit by such
Regulatory Authority, if necessary.

1.106.“Royalty Period” means, on a country-by-country and Product-by-Product
basis, the period of time commencing on the date of First Commercial Sale of a
Product in a country and extending until the date on which [***].

1.107.“Sales Milestone” has the meaning set forth in Section 5.2.2.

1.108.“Sublicensee” means, with respect to a Party, an Affiliate of such Party
or a Third Party that is granted a license, sublicense, covenant not to sue or
other grant of rights under this Agreement by such Party pursuant to
Section 2.5.1 or 2.5.2 of this Agreement, as the case may be.  “Sublicense”
means an agreement or arrangement pursuant to which such a license, sublicense,
covenant not to sue or other grant of rights under this Agreement has been

13

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

granted by such Party to a Sublicensee pursuant to Section 2.5.1 or 2.5.2.  For
the sake of clarification, an Affiliate of Albireo or a Third Party shall become
a Sublicensee on the effective date of the relevant Sublicense between Albireo
and such Affiliate or Third Party, regardless of whether any Ajinomoto
Technology or Joint Technology exists on the effective date of such Sublicense.

1.109.“Sublicensee Material Breach” has the meaning set forth in Section 2.5.4.

1.110.“Sued Party” has the meaning set forth in Section 8.8.2.

1.111.“Supply Agreement” has the meaning set forth in Section 4.4.1.

1.112.“Technology” means Know-How and Patent Rights.

1.113.“Term” has the meaning set forth in Section 10.1.

1.114.“Territory” means Japan, the Kingdom of Thailand, the Republic of Korea,
the Republic of Indonesia, the Socialist Republic of Vietnam and Taiwan.

1.115.“Territory Development Plan” means the plan for the Development of the
Albireo Compound and Products for Regulatory Approval in the Field in the
Territory approved by the JDC and as amended or updated from time to time, but
in no event less frequently than once a year, in accordance with this
Agreement.  The initial Territory Development Plan as of the date hereof is
attached hereto as Exhibit 1.115.

1.116.“Territory Study” has the meaning set forth in Section 3.1.2(e).

1.117.“Third Part(y/ies)” means any Person other than Albireo and its Affiliates
and Ajinomoto and its Affiliates.

1.118.“Third Party License” means a license, sublicense, covenant not to sue or
other grant of rights directly or indirectly to either Party by a Third Party,
including, without limitation, a Licensee.

1.119.“Trademark” has the meaning set forth in Section 8.6.1.

1.120.“Valid Claim” means any claim of (i) any issued and unexpired Patent Right
in the Territory that has not been (A) revoked or held unenforceable,
unpatentable or invalid by a Government Authority of competent jurisdiction in a
decision that is not appealable or that has not been appealed within the time
allowed for appeal or (B) abandoned, disclaimed, denied or admitted to be
invalid or unenforceable through reissue, re-examination or disclaimer or
otherwise; or (ii) any patent application in the Territory that has not been (A)
cancelled, withdrawn or abandoned or (B) finally rejected by an administrative
agency or Government Authority of competent jurisdiction in a decision that is
not appealable or that has not been appealed within the time allowed for appeal,
provided that, on a country-by-country basis, a Valid Claim shall exclude any
[***] claim of such patent application that (x) has not been

14

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

granted within [***] from the Effective Filing Date of the patent application
unless and until a patent issues from such application or (y) does not have a
reasonable bona fide basis for patentability and enforceability.

1.121.“Year” means each twelve (12) month period ending December 31st.

2.

GRANT OF LICENSES.  

2.1.License to Ajinomoto.  Subject to the terms and conditions of this
Agreement, Albireo hereby grants to Ajinomoto, effective on the Effective Date,
a royalty-bearing, exclusive license (even as to Albireo), with the right to
sublicense as set forth in Section 2.5, under the Albireo Technology and
Albireo’s interest in the Joint Technology to (i) Develop, Manufacture and
Commercialize the Albireo Compound and Products in the Field in the Territory;
and (ii) conduct pre-clinical Development and Manufacture of the Albireo
Compound and Products in any country in the world for Commercialization in the
Field in the Territory.  For the sake of clarity, neither Ajinomoto nor any of
its Sublicensees or Affiliates shall conduct clinical Development activities
related to the Albireo Compound or Products outside of the Territory.

2.2.License to Albireo.  Subject to the terms and conditions of this Agreement,
Ajinomoto hereby grants to Albireo (i) a royalty-free, non-exclusive license,
with the right to sublicense as set forth in Section 2.5, under the Ajinomoto
Technology and Ajinomoto’s interest in the Joint Technology to the extent
necessary for Albireo to exercise its rights and perform its obligations under
this Agreement; (ii) a royalty-free, non-exclusive license, with the right to
sublicense as set forth in Section 2.5, under the Ajinomoto Technology to
conduct development and manufacture of the Albireo Compound and Products in any
field in any country in the world (except to conduct clinical development of the
Albireo Compound and Products in the Territory during the Term) and to
commercialize the Albireo Compound and Products in any field outside of the
Territory; and (iii) a royalty-free, exclusive license, with the right to
sublicense as set forth in Section 2.5, under Ajinomoto’s interest in the Joint
Technology to conduct development and manufacture of the Albireo Compound and
Products in any field in any country in the world (except to conduct clinical
development of the Albireo Compound and Products in the Territory during the
Term) and to commercialize the Albireo Compound and Products in any field
outside of the Territory, provided that Ajinomoto reserves the right under its
interest in the Joint Technology to, and to have Third Parties acting on
Ajinomoto’s behalf, conduct pre-clinical Development and Manufacture of the
Albireo Compound and Products in any country in the world for Commercialization
in the Field in the Territory.  Neither Albireo nor its Affiliates shall
directly or indirectly (through Licensees or otherwise) commercialize a Product
outside the Field in the Territory during the Term of this Agreement. Ajinomoto
acknowledges and confirms that Albireo or its Affiliates may commercialize a
product other than the Product, outside the Field in the Territory during the
Term and that such commercialization is not prohibited by the immediately
preceding sentence or this Agreement.

15

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

2.3.Restrictions.  Except as permitted by this Agreement, Albireo will not
exercise or otherwise exploit the Ajinomoto Technology for any purpose other
than to commercialize the Albireo Compound and Products in the Field outside the
Territory.  Except as permitted by this Agreement, Ajinomoto will not exercise
or otherwise exploit the Albireo Technology to commercialize the Albireo
Compound and Products (i) in the Field outside of the Territory; or (ii) outside
the Field.  Neither Albireo nor its Affiliates shall, directly or indirectly,
through Licensees or otherwise, commercialize the Albireo Compound and/or a
Product as a pharmaceutical product to treat or prevent Liver Diseases. Neither
Albireo nor its Affiliates shall directly sell or distribute for sale any
Product through channels that are intended to permit importation of a Product
into the Territory, other than pursuant to the rights granted to Ajinomoto under
this Agreement, and Albireo shall ensure that each License contains a provision
prohibiting the relevant Licensee from undertaking any such sales or
distribution.  Likewise, neither Ajinomoto nor its Affiliates shall directly
sell or distribute for sale any Product through channels that are intended to
permit importation of a Product outside the Territory, other than pursuant to
the rights granted to Albireo under this Agreement, and Ajinomoto shall ensure
that each Sublicense to which it is a party contains a provision prohibiting the
relevant Sublicensee from undertaking any such sales or distribution.

2.4.Joint Technology.  Except as otherwise granted by each Party to the other
pursuant to Section 2.1 and Section 2.2, each Party hereby grants the other
Party a world-wide, non-exclusive, perpetual, royalty-free, fully paid up,
freely sublicenseable right and license to exploit the Joint Technology in any
manner without compensating or accounting to the other Party.

2.5.Sublicensing.  

2.5.1.Ajinomoto Right to Sublicense.  Ajinomoto shall have the right to grant
sublicenses under the rights granted to Ajinomoto in Section 2.1 to its
Affiliates and to [***] for the Development, Manufacture and Commercialization
of the Albireo Compound and Products in the Field in any country in the
Territory and for the pre-clinical Development and Manufacture of the Albireo
Compound and Products in any country in the world, provided that Ajinomoto shall
obtain the prior written consent of Albireo prior to granting any sublicense
under this Section 2.5.1, such consent not to be unreasonably withheld and,
further provided that Ajinomoto shall remain responsible for its obligations
under this Agreement, including the obligations to make payments to Albireo
hereunder.  Ajinomoto shall be responsible for the performance of each
Sublicensee and shall ensure that each Sublicensee complies with all relevant
provisions of this Agreement.

2.5.2.Albireo Right to Sublicense.  Albireo shall have the right to grant
sublicenses under the rights granted to Albireo in Section 2.2 to its Affiliates
and to Third Parties (i) to the extent necessary for Albireo, to exercise its
rights and perform its obligations under this Agreement, (ii) to develop and
manufacture the Albireo Compound and Products in any field in any country in

16

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

the world (except to conduct clinical development of the Albireo Compound and
Products in the Territory during the Term), and (iii) to commercialize the
Albireo Compound and Products in any field outside of the Territory, provided
that Albireo shall remain responsible for its obligations under this
Agreement.  Albireo shall be responsible for the performance of each Sublicensee
and shall ensure that each Sublicensee complies with all relevant provisions of
this Agreement.  Albireo shall not grant a sublicense of the rights described in
clauses (ii) and (iii) of this Section 2.5.2 unless the potential Sublicensee is
a Licensee who has agreed to (a) grant to Albireo a license to Licensee Know-How
and Licensee Patent Rights with respect to such Licensee, with, at least, the
right to grant a sublicense to Ajinomoto with the right to further sublicense or
(b) assign such Licensee Know-How and Licensee Patent Rights to
Albireo.  Albireo hereby confirms that the Licensee Know-How and Licensee Patent
Rights so granted or assigned to Albireo are included in Albireo Know-How and
Albireo Patent Rights.

2.5.3.Sublicense Requirements.  Each Sublicense of a Party (i) shall be subject
and subordinate to, and consistent with, the terms and conditions of this
Agreement; (ii) shall not diminish, reduce or eliminate any of such Party’s
obligations under this Agreement; (iii) shall require the Sublicensee(s) to
comply with all applicable terms of this Agreement; (iv) shall require that the
Sublicensee(s) of such Party grant to the other Party a Right of Reference to
the same extent of the Right of Reference granted to such other Party pursuant
to Section 2.6; (v) shall include an irrevocable commitment to make available
any data controlled by such Sublicensee(s) arising out of such Sublicensee(s)’
development activities under the Global Development Plan or the Territory
Development Plan, or Local Studies performed by such Sublicensee(s), (including,
without limitation, by granting to the sublicensing Party a sublicenseable
license under such data) to the non-sublicensing Party and its Sublicensees to
the extent necessary for the non-sublicensing Party and its Sublicensees to
exploit the rights granted under Sections 2.1 and 2.2, as applicable; and (vi)
shall prohibit further sublicensing on terms which are not consistent with the
other terms for Sublicense under this Section 2.5.  Each Party shall provide the
other Party with a complete (excepting financial terms) copy of each Sublicense
within thirty (30) days after execution thereof.  

2.5.4.Breach of Sublicense.  In the event of an uncured material breach by any
Sublicensee under a Sublicense that would constitute a material breach of such
Party’s obligations under this Agreement (a “Sublicensee Material Breach”), such
Party shall provide prompt written notice of such Sublicensee Material Breach to
the other Party and shall use Commercially Reasonable Efforts to remedy such
Sublicensee Material Breach; provided, however, that if such Party is unable to
cure such Sublicensee Material Breach in accordance with Section 10.2.1 of this
Agreement, such Sublicensee Material Breach shall be deemed to be an uncured
material breach by such Party under this Agreement.

17

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

2.6.Right of Reference.  Each Party hereby grants to the other Party and its
Sublicensees a Right of Reference to all data included in the regulatory
submissions and Regulatory Approvals Controlled by such Party (including,
without limitation, Regulatory Submissions and Regulatory Approvals assigned by
Ajinomoto to Albireo pursuant to clause (i) of Section 10.3.1(c)), and to all
data Controlled by such Party included in Regulatory Submissions and Regulatory
Approvals Controlled by such other Party, relating to Products to the extent
necessary or useful for such other Party to (i) in the case of Ajinomoto, (A)
Develop, Manufacture and Commercialize the Albireo Compound and Products in the
Field in the Territory and (B) conduct pre-clinical Development and Manufacture
of the Albireo Compound and Products outside of the Territory, and (ii) in the
case of Albireo, (A) develop and manufacture the Albireo Compound and Products
in any field in any country in the world (except to conduct clinical development
of the Albireo Compound and Products in the Territory during the Term) and (B)
commercialize the Albireo Compound and Products in any field outside of the
Territory.  Each Party shall provide a signed statement to the other Party that
such other Party may rely on, in support of the approval of such other Party’s
Regulatory Submissions, and provide the applicable Regulatory Authority access
to, the underlying raw data included in such regulatory submissions and
Regulatory Approvals Controlled by such Party and the underlying raw data
Controlled by such Party included in such Regulatory Submissions and Regulatory
Approvals Controlled by such other Party.  Any Right of Reference granted
pursuant to this Section 2.6 shall be effective during the Term; provided,
however, that with respect to any data included in a Regulatory Approval granted
during the Term which approves selling and/or marketing a Product and the
relevant Regulatory Submissions (including Regulatory Submissions filed after
such Regulatory Approval that are required by the competent Regulatory Authority
and/or Applicable Law), the Right of Reference to such data shall extend until
the later of (a) the [***] the Term or (b) [***] after the grant of such
Regulatory Approval.  Each Party shall maintain, at its expense, during the
Term, all data, and the underlying raw data thereof, Controlled by such Party
included or to be included in Regulatory Submissions and Regulatory Approvals
Controlled by the other Party to the extent necessary or useful for such other
Party to maintain and/or file the Regulatory Submissions for and to maintain
Regulatory Approvals of Products; provided, however, that with respect to any
data, and the underlying raw data thereof, included in a Regulatory Approval
granted during the Term which approves selling and/or marketing a Product and
the relevant Regulatory Submissions (including Regulatory Submissions filed
after such Regulatory Approval that are required by the competent Regulatory
Authority and/or Applicable Law) that is Controlled by such other Party, such
Party shall maintain such data until the later of (x) the [***] the Term or (y)
[***] after the grant of such Regulatory Approval.  

2.7.Technology Transfer.  Within thirty (30) days after the Effective Date,
Albireo shall use Commercially Reasonable Efforts to make available all Albireo
Know-How to Ajinomoto, at Ajinomoto’s expense. With respect to any data, study
results, and other information relating to the Albireo Compound and Products
presented by Albireo to Ajinomoto prior to the Effective Date or during the
Term, Albireo shall promptly notify Ajinomoto if Albireo should become aware of
any material incompleteness and/or material inaccuracy of such data, study
results, and other information.

18

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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2.8.No Other Rights.  No rights, other than those expressly set forth in this
Agreement are granted to either Party hereunder, and no additional rights shall
be deemed granted to either Party by implication, estoppel or otherwise.  All
rights not expressly granted by either Party to the other hereunder are
reserved.  

3.

DECISION MAKING AND DISPUTE RESOLUTION.  

3.1.Joint Development Committee.  Within thirty (30) days of the Effective Date,
the Parties shall establish a joint development committee (the “JDC”) that will
be responsible for overseeing the Development of Products in the Field in the
Territory, and will serve as a forum for exchanging data, information and
Development strategy regarding the Products.  In addition, the JDC will serve as
a forum for sharing and discussing material data and information regarding
development of Products by Albireo or its Licensees for commercialization
outside of the Territory.  Within sixty (60) days of the Effective Date, the JDC
shall adopt a charter consistent with the terms of this Agreement.

3.1.1.Membership.  The JDC will consist of three (3) senior representatives from
each Party.  Albireo and Ajinomoto will each designate a co-chair for the
JDC.  The co-chairs will be responsible for calling meetings and setting the
agenda (which shall include a list of all participants expected at a meeting)
and circulating such agenda at least [***] prior to each meeting and
distributing minutes of the meetings within [***] following such meeting, but
will not otherwise have any greater power or authority than any other member of
the JDC.  JDC members shall have such expertise as appropriate to the activities
of the JDC from time to time and the JDC may invite personnel of the Parties
having formulation, manufacturing, commercial, marketing and other expertise to
participate in discussions of the JDC from time to time as appropriate to assist
in the activities of the JDC.  The JDC may appoint additional committees as
desired.

3.1.2.Responsibilities.  The JDC’s responsibilities will include, among
others:  

(a)reviewing and approving amendments to the Territory Development Plan;

(b)establishing target product profiles for Products in the Territory (including
indications for which Products will be Developed and Commercialized in the
Territory, key labeling claims required for commercial success of Products given
the competitive environment, and any other key product features and benefits
which will be used to Develop or support a promotional message or reimbursement
status for Products);

(c)reviewing and evaluating progress under the Territory Development Plan on a
quarterly basis;

19

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

(d)allocating and assigning Development activities in the Territory Development
Plan between the Parties;

(e)reviewing protocols (including their modification) for pre-clinical or
clinical studies relating to the Products in the Territory (each, a “Territory
Study”);

(f) monitoring progress of Territory Studies and proposing additional studies
for Products;

(g)recommending whether to jointly Develop a Product in the Territory for new
indications or new formulations;

(h)reviewing and commenting on Regulatory Submissions in the Territory relating
to Products;

(i)facilitating the exchange of all data, information, material or results
relating to Development of Products;

(j)establishing procedures regarding the collection, sharing and reporting of
Adverse Event information related to Products consistent with the
Pharmacovigilance Agreement to be entered into in accordance with Section
4.3.4;    

(k)arranging for each Party to discuss and agree upon the appropriate [***] for
the [***] in the [***] activities under the [***] and to [***]; and

(l) receiving and discussing all material data, information, material or results
relating to development of Products by Albireo or Licensees for
commercialization outside of the Territory.

3.1.3.Meetings.  During Development, the JDC will meet at such frequency as
shall be established by the Parties (but not less frequently than four (4) times
per Year).  Meetings of the JDC shall alternate between the offices of the
Parties, unless otherwise agreed upon by the members of the JDC, or may be held
telephonically or by video conference.  Meetings of the JDC shall be effective
only if at least one (1) representative of each Party is in attendance or
participating in the meeting.  Members of the JDC shall have the right to
participate in and vote at meetings by telephone.  Each Party shall be
responsible for expenses incurred by its employees and its members of the JDC in
attending or otherwise participating in JDC meetings.  Each Party shall use
reasonable efforts to cause its representatives to attend the meetings of the
JDC.  If a representative of a Party is unable to attend a meeting, such Party
may designate an alternate to attend such meeting in place of the absent
representative.

20

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

3.1.4.Minutes and Agendas.  The minutes of each JDC meeting shall provide a
description in reasonable detail of the discussions held at the meeting and a
list of any actions, decisions or determinations approved by the JDC.  Minutes
of each JDC meeting shall be approved or disapproved, and revised as necessary,
at the next meeting.  

3.2.Joint Commercialization Committee.  No later than the dosing of the first
patient in the first Phase III clinical trial for the Product in the Territory,
the Parties will establish a joint commercialization committee (“JCC”) that will
oversee the Commercialization of the Product in the Field in the Territory.  The
JCC will coordinate selling and marketing efforts under the Commercialization
Plan and will serve as a forum regarding Product Commercialization in the Field
in the Territory.  In addition, the JCC will serve as a forum for sharing and
discussing material data and information regarding commercialization of Products
by Albireo or Licensees outside of the Territory. No later than sixty (60) days
after the JCC is established, the JCC shall adopt a charter consistent with the
terms of this Agreement.

3.2.1.Membership.  The JCC will consist of three (3) senior representatives from
each Party.  Albireo and Ajinomoto will each designate a co-chair for the
JCC.  The co-chairs will be responsible for calling meetings and setting the
agenda for and distributing minutes of the meetings, but will not otherwise have
any greater power or authority than any other member of the JCC.  JCC members
shall have such expertise as appropriate to the activities of the JCC from time
to time and the JCC may invite personnel of the Parties having development,
formulation, manufacturing, financial and other expertise to participate in
discussions of the JCC from time to time as appropriate to assist in the
activities of the JCC.

3.2.2.Responsibilities.  The JCC’s responsibilities will be limited to the
following:  

(a)reviewing the strategy for the Commercialization of Products in the Field in
the Territory;

(b)reviewing the Commercialization Plan for Products in the Field in the
Territory, as well as updating the Commercialization Plan on an annual basis to
reflect materially changed circumstances, and amending the Commercialization
Plan from time to time as appropriate;

(c)overseeing the implementation of the strategy for Commercializing Products in
the Field in the Territory (including strategies related to Regulatory
Approvals, reimbursement, publications, advertising and promotion, brand
integrity, sales, and launch sequence as set forth in the Commercialization
Plan);

(d)providing input to the JDC regarding the target product profile for Products
and making recommendations regarding changes to the same;

21

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

(e)reviewing the annual marketing plans and life cycle management plans for
Products in the Field in the Territory;

(f)reviewing usage rules for the Trademarks; and

(g)receiving and discussing material data and information regarding
commercialization of the Products by Albireo or Licensees outside of the
Territory.

3.2.3.Meetings.  The JCC will meet at such frequency as shall be established by
the Parties (but not less frequently than two (2) times per Year commencing
twelve (12) months prior to the anticipated final Regulatory Approval necessary
for the First Commercial Sale of the initial Product in the Territory and during
the first five (5) years of Commercialization).  Meetings of the JCC shall
alternate between the offices of the Parties, unless otherwise agreed upon by
the members of the JCC, or may be held telephonically or by video
conference.  Meetings of the JCC shall be effective only if at least one (1)
representative of each Party is in attendance or participating in the
meeting.  Members of the JCC shall have the right to participate in and vote at
meetings by telephone.  Each Party shall be responsible for expenses incurred by
its employees and its members of the JCC in attending or otherwise participating
in JCC meetings.

3.2.4.Minutes and Agendas.  The minutes of each JCC meeting shall provide a
description in reasonable detail of the discussions held at the meeting and a
list of any actions, decisions or determinations approved by the JCC.  Minutes
of each JCC meeting shall be approved or disapproved, and revised as necessary,
at the next meeting.

3.3.Other Committees.  The Parties may establish other committees or
sub-committees as the Parties deem appropriate.

3.4.Elevation and Dispute Resolution.  Each Party’s representatives on any
committee will collectively have one vote on all matters that are within the
responsibility of such committee.  The members of each committee will use
reasonable efforts to reach consensus on all decisions.  In the event that the
members of the JDC or JCC are unable to agree on a particular issue within [***]
days of such issue being first presented to such committee, such issue shall be
referred to [***] of each Party or their designees for resolution and, in the
event such individuals are unable to resolve such issue within [***] days,
[***], provided that [***] shall reasonably consider [***] hereunder and shall
[***] consistent with the goal of obtaining Regulatory Approval for Products as
soon as practicable and to commercialize the Products where all Regulatory
Approval necessary for marketing and distribution is obtained and, provided
further, that no amendment to the Territory Development Plan that allocates
responsibilities or activities to Albireo may be approved by [***].  For the
avoidance of doubt, no decision of the JDC, JCC or [***] may be made that would
(i) reduce the obligations of the Parties under this Agreement; or (ii)
reasonably be expected to have a material adverse effect on

22

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

the Global Development Plan or commercialization of the Albireo Compound in
China, the US and/or the EU.  Notwithstanding clause (ii) of this Section 3.4,
the JDC, JCC and [***] may decide to undertake any activity required pursuant to
Applicable Law and/or written instructions from the competent Regulatory
Authority in a country in the Territory to obtain Regulatory Approval of a
Product for CIC or Constipation-Predominant Irritable Bowel Syndrome (“IBS-C”)
in such country, provided that, [***] and shall use Commercially Reasonable
Efforts to [***] to avoid or minimize the adverse effects of such activity.

4.

DEVELOPMENT, REGULATORY, COMMERCIALIZATION.  

4.1.Development

4.1.1.Territory Development Plan.  The initial Territory Development Plan for
the initial Product in the Field is set forth in Exhibit 1.115.  Ajinomoto will
direct, coordinate and manage the Development of the initial Product in the
Field in the Territory in accordance with the Territory Development Plan.  The
Territory Development Plan will include, among other things, the indications in
the Field for which each Product is to be Developed and other exploratory
indications in the Field for which a Product may be developed, critical
activities to be undertaken, timelines, Go/No Go decision points and relevant
decision criteria and allocations of responsibilities between the Parties for
the various activities to be undertaken under the Territory Development
Plan.  During the Term, Ajinomoto will amend the Territory Development Plan on
an ongoing basis as necessary, any amendments (other than amendments required to
comply with Applicable Laws or written requirements imposed by Regulatory
Authorities) being subject to review by the JDC, and any amendments required to
comply with Applicable Laws or written requirements imposed by Regulatory
Authorities being subject to report to the JDC, provided that the Territory
Development Plan will at all times contain terms that reflect the use of
Commercially Reasonable Efforts to Develop the Product to obtain Regulatory
Approval in the Field in Japan and, after the first patient is dosed in a Phase
III trial of the Product in Japan, in the other countries throughout the
Territory as soon as practicable and provided further that Ajinomoto will not
assign any Development activities to Albireo beyond those set forth in the
initial Territory Development Plan without Albireo’s prior consent, such consent
not to be unreasonably withheld.  

4.1.2.Development Activities.  Except for the specific responsibilities
allocated to Albireo as set forth in the Territory Development Plan or assigned
to Albireo by Ajinomoto after receiving Albireo’s prior consent and subject to
Section 4.1.4, Ajinomoto will be responsible for all aspects of Development of
Products, including conducting all clinical trials for Products and payment of
all costs associated with the Development activities undertaken by Albireo in
accordance with the Territory Development Plan; provided, however, that if such
activities undertaken by Albireo or its Affiliate are also a

23

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

part of the Global Development Plan, Albireo shall be responsible for all costs
associated with such activities, unless such activities are also (i) specific to
or primarily related to obtaining Regulatory Approval in the Territory and (ii)
specifically requested by Ajinomoto, in which case Ajinomoto shall be
responsible for all costs associated with such activities.  Ajinomoto shall use
Commercially Reasonable Efforts to implement, conduct and complete the
Development activities under the Territory Development Plan, and, to the extent
the Territory Development Plan contemplates activities by Albireo, to cooperate
with and provide reasonable support to Albireo in Albireo’s conduct of
activities under the Territory Development Plan.  Without limiting the
foregoing, Ajinomoto shall use Commercially Reasonable Efforts to enroll the
first human subject in Japan in any clinical trial for the purpose of Regulatory
Approval of a Product, including, without limitation, a Phase I clinical trial,
by the [***] of the Effective Date.  In the event Ajinomoto fails to enroll such
human subject in Japan by the [***], this Agreement shall automatically
terminate on the [***] following such [***]; provided, however, that Ajinomoto
may maintain this Agreement if, within [***] after such [***], Ajinomoto (a)
enrolls the first human subject in a clinical trial in Japan or (b) pays the
first milestone payment set forth in Section 5.2.1 to Albireo; and provided,
further, that if Ajinomoto’s failure to enroll the first human subject in a
clinical trial in Japan by [***] is attributable to an External Factor, the
Parties shall promptly meet to discuss in good faith an appropriate grace period
beyond such [***] period (such grace period, the “Grace Period”).  Once the
Grace Period is agreed upon by the Parties, such [***] period shall be extended
by such Grace Period.  Payment of the first milestone pursuant to this Section
4.1.2 shall terminate any obligation to pay such milestone upon actual
enrollment of the first human subject in any clinical trial in Japan.  Each
Party will undertake its Development activities in accordance with all
Applicable Laws, GCP, GLP and GMP.

4.1.3.Reports of Development Activities.  Each Party shall report on Development
activities undertaken by such Party or its Sublicensees in accordance with the
Territory Development Plan, including, without limitation, by providing a
reasonably detailed summary of all results, data and material inventions, if
any, obtained from such activities.  Such reports shall be provided by each
Party to the other at least [***] prior to each meeting of the JDC, but not less
frequently than quarterly.  In addition, each Party shall, upon the other
party’s request and at the other party’s expense, make appropriate scientific
and regulatory personnel available to the other Party, either by telephone or in
person as the Parties may mutually agree, as reasonably required to keep the
other Party informed of Development activities.    

4.1.4.Territory Studies.  Ajinomoto, its Affiliates, and/or its Sublicensees may
conduct Territory Studies if the following conditions have been met: (i) such
Territory Study is included in an approved Territory Development Plan; and (ii)
Ajinomoto has provided written notice to Albireo of

24

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

its (or its Affiliates’ or Sublicensees’) intent to commence any such Territory
Study, which notice shall include a copy of the Territory Study protocol, and
Albireo has not, within [***] of receipt of such notice, notified Ajinomoto that
it has made a good faith determination that the conduct of such Territory Study
will adversely affect the development or commercialization of the Product by
Albireo, its Licensees or its Sublicensees in [***], the US and/or the EU.   In
the event Albireo provides the notice to Ajinomoto described in the prior
sentence, Ajinomoto shall consult with Albireo and shall use Commercially
Reasonable Efforts to implement all reasonable requests of Albireo made to avoid
or minimize the adverse effects of such Territory Study prior to conducting such
Territory Study.  If Albireo determines, in its sole discretion, that the
adverse effects of a Territory Study cannot be mitigated through the requested
changes agreed to be implemented by Ajinomoto, Ajinomoto, its Affiliates and/or
its Sublicensees shall not commence such Territory Study; provided, however,
that Ajinomoto, its Affiliates and/or Sublicensees may commence such Territory
Study if such Territory Study is required to obtain Regulatory Approval of a
Product for CIC or IBS-C in a country in the Territory pursuant to Applicable
Laws or written instruction from the competent Regulatory Authority in such
country.  Albireo may share the protocol, data and results of any Territory
Study with Licensees, provided that such Licensee shall be subject to a
confidential disclosure agreement that is at least as protective of such
information as the confidentiality restrictions in this Agreement and provided
further that Albireo shall have the right to share with Ajinomoto, its
Affiliates, and its Sublicensees and shall provide promptly, at least, to
Ajinomoto any of such Licensee’s similar protocols, data and study
results.  Each Party and its Sublicensee will undertake its Territory Studies
activities in accordance with all Applicable Laws, GCP, GLP and GMP.

4.1.5.Regulatory Diligence Obligations.  Ajinomoto shall use Commercially
Reasonable Efforts to apply for and obtain Regulatory Approval throughout the
Territory as soon as practicable.

4.2.Global Development Plan and Local Studies.

4.2.1.Global Development Plan.  A summary of Albireo’s Global Development Plan
is set forth in Exhibit 4.2.1 (the “Global Development Plan”).  The Global
Development Plan will include, among other things, Phase III clinical studies,
pre-clinical studies and CMC (chemistry, manufacturing, and controls) for
obtaining Regulatory Approval in the US and the EU. Albireo shall use
Commercially Reasonable Efforts to implement and conduct the development
activities identified under the Global Development Plan.  Albireo shall be
responsible for all aspects of the Global Development Plan and payment of all
costs associated with the development activities undertaken by Albireo in
accordance with the Global Development Plan; provided, however, that if such
activities are also the Development activities undertaken by Albireo or its

25

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

Affiliate in accordance with the Territory Development Plan and further are also
(i) specific to or primarily related to obtaining Regulatory Approval in the
Territory and (ii) specifically requested by Ajinomoto, Ajinomoto shall be
responsible for all costs associated with such activities.  Ajinomoto
acknowledges that the Global Development Plan is subject to change (including,
without limitation, the inclusion of additional studies) at any time by Albireo
or its Licensees, in Albireo’s or such Licensee’s reasonable discretion;
provided, however, that Albireo shall provide Ajinomoto with [***] prior written
notice of such changes and provided further that in the event that Ajinomoto
notifies Albireo that it has made a good faith determination that such changes
proposed to the revised Global Development Plan will adversely affect
Development, Manufacture or Commercialization of the Albireo Compound and/or
Product by Ajinomoto or its Sublicensees, Albireo shall consult with Ajinomoto
and shall use Commercially Reasonable Efforts to implement all reasonable
requests of Ajinomoto made to avoid or minimize the adverse effects of such
changes proposed to the revised Global Development Plan. Albireo will conduct
its development activities under the Global Development Plan in accordance with
all Applicable Laws, GCP, GLP and GMP.

4.2.2.Reports of Development Activities.  Albireo shall report on development
activities undertaken by Albireo in accordance with Global Development Plan,
including, without limitation, by providing a reasonably detailed summary of all
results, data and, material inventions, if any, obtained from such
activities.  Albireo shall report on development activities of each of its
Licensees, including, without limitation, by providing a reasonably detailed
summary of all results, data and, to the extent such Licensee is a Sublicensee
of Albireo pursuant to clause (ii) or (iii) of Section 2.5.2, Licensee Know-How
and Licensee Patent Rights, if any, obtained from such activities; provided,
however, that Albireo’s reporting obligations with respect to each Licensee’s
activities under this Section 4.2.2 shall exist if, and only to the extent that,
Ajinomoto agrees in writing to permit Albireo to report to such Licensee on
Ajinomoto’s development activities on terms substantially similar to this
Section 4.2.2.  Albireo shall provide reports of its and its Licensees
development activities to Ajinomoto [***]. Additionally, at least [***] prior to
each meeting of the JDC, Albireo shall provide Ajinomoto with updates of such
development activities to the previous meeting of the JDC.  In addition, Albireo
shall, upon Ajinomoto’s request and at Ajinomoto’s expense, make appropriate
scientific and regulatory personnel available to Ajinomoto, either by telephone
or in person as the Parties may mutually agree, as reasonably required to keep
Ajinomoto informed of development activities under the Global Development Plan.

4.2.3.Local Studies.  Albireo or its Licensee may conduct pre-clinical and
clinical studies relating to Products outside of the Global Development Plan but
not in the Territory (each, a “Local Study”) if the following conditions have
been met: (i) Albireo has provided written notice to

26

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

Ajinomoto of its or its Licensee’s intent to commence any such Local Study,
which notice shall include a copy of synopsis of the Local Study protocol; and
(ii) Ajinomoto has not, within [***] of receipt of such notice, notified Albireo
that [***].  In the event Ajinomoto provides the notice to Albireo described in
the prior sentence, Albireo shall consult with Ajinomoto and shall use
Commercially Reasonable Efforts to implement all reasonable requests of
Ajinomoto made to avoid or minimize such adverse effects of such Local Study
prior to conducting such Local Study. Albireo will conduct its Local Studies in
accordance with all Applicable Laws, GCP, GLP and GMP.

4.2.4.Reports of Local Studies.  Albireo shall report on development activities
undertaken by it relating to any Local Study, including, without limitation, by
providing any protocol, a reasonably detailed summary of all results, data, and
material inventions, if any, obtained from such activities.  Albireo shall
report on development activities undertaken by each of its Licensees relating to
any Local Study, including, without limitation, by providing any protocol, a
reasonably detailed summary of all results, data, and, to the extent such
Licensee is a Sublicensee of Albireo pursuant to clause (ii) or (iii) of Section
2.5.2, Licensee Know-How and Licensee Patent Rights, if any, obtained from such
activities; provided, however, that Albireo’s reporting obligations with respect
to each Licensee’s activities under this Section 4.2.4 shall exist if, and only
to the extent that, Ajinomoto agrees in writing to permit Albireo to report to
such Licensee on Ajinomoto’s development activities on terms substantially
similar to this Section. Such reports shall be provided by Albireo to Ajinomoto
in the same manner as the reports and updates pursuant to Section 4.2.2. Also,
Albireo shall, upon Ajinomoto’s request and at Ajinomoto’s expense, make
appropriate scientific and regulatory personnel available to Ajinomoto, either
by telephone or in person as the Parties may mutually agree, for the purpose to
keep Ajinomoto informed of development activities and results obtained under the
Local Studies.

4.3.Regulatory Matters.

4.3.1.Responsibility For Regulatory Interactions.  Ajinomoto shall be
responsible for all regulatory matters relating to Products in the Field in the
Territory, including payment of all costs associated with obtaining Regulatory
Approvals for Products in the Field in the Territory.  Ajinomoto shall have sole
authority in the Territory with respect to (i) obtaining Regulatory Approvals
for Products in the Field and subsequently maintaining such Regulatory
Approvals; (ii) communicating with Regulatory Authorities about Products in the
Field; and (iii) preparing and submitting supplements, communications, annual
reports, adverse event reports, manufacturing changes, supplier designations and
other related regulatory filings and Regulatory Submissions.  Ajinomoto shall
keep Albireo reasonably (but at least on a [***] basis) informed regarding the
status and progress of such activity, including,

27

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

without limitation, providing Albireo with as much advance notice as possible of
all meetings scheduled with a Regulatory Authority involved in such Regulatory
Submission, providing Albireo with a copy, and English abstract of, all written
correspondence from a Regulatory Authority involved in such Regulatory
Submission, and providing Albireo with an abstract of oral correspondence from a
Regulatory Authority involved in such Regulatory Submission.  Ajinomoto shall
provide Albireo with any data Controlled by Ajinomoto necessary to comply with
requirements from Regulatory Authorities outside the Territory, with respect to
the Product in the Field, and if reasonably requested by Albireo, English
translations of all pre-clinical and clinical study reports related to such
data.  

4.3.2. Regulatory Cooperation. The Parties shall, each at their own expense,
provide the other Party with reasonable access to and copies of any documents or
other materials Controlled by such Party that are useful for regulatory filings
and correspondence and maintenance of Regulatory Approvals for Products in the
Field in such other Party’s territory and will otherwise cooperate with the
other Party’s efforts to obtain and maintain Regulatory Approvals for Products
in the applicable field and territory.  Albireo shall keep Ajinomoto reasonably
(but at least on a [***] basis) informed regarding the status and progress of
all regulatory matters relating to Products outside of the Territory by
providing Ajinomoto with a copy and English abstract of any regulatory
submission made to a Regulatory Authority and all written correspondence and
abstracts of all material oral correspondence involved in such regulatory
submission, in each case to the extent Controlled by Albireo.  Albireo shall
provide Ajinomoto with any data Controlled by Albireo necessary to comply with
requirements from Regulatory Authorities in the Territory, with respect to the
Product in the Field, such as annual reports, PSUR and CCDS required by
Regulatory Authorities.

4.3.3.Regulatory Audits.  If a Party receives a notice that a Regulatory
Authority desires to conduct an inspection or audit of its or the other Party’s
facility, or a facility under contract with it or the other Party, with regard
to the Albireo Compound and a Product, then the Party who has received such
notice shall promptly notify the other Party of such inspection or audit. The
Party who is to be inspected or audited, or is under contract with a facility to
be inspected or audited, shall permit such inspection or audit, or obtain
consent by such contracted facility on such inspection or audit, and cooperate
for such inspection and audit.  Following receipt of the inspection or audit
observations of such Regulatory Authority (a copy of which the audited Party
will immediately provide to the other Party), the Party who is in charge of the
correspondence with the Regulatory Authority shall prepare the response to any
such observations and shall provide a copy of such response to the other
Party.  

28

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

4.3.4.Adverse Events.  Within [***] after the Effective Date, the Parties will
enter into a pharmacovigilance agreement, which upon such execution will be
attached as an exhibit hereto and hereby incorporated into this Agreement by
reference (the “Pharmacovigilance Agreement”).  The Parties shall comply with
the provisions of such agreement.  Albireo shall maintain and will be the
recognized holder of a global safety database for Adverse Event reports related
to the Albireo Compound and Products received by either Party.  Ajinomoto will
respond to safety inquiries regarding Products in the Field in the Territory.  

4.4.Manufacture.  

4.4.1.Clinical Supply.  Ajinomoto may, at any time, Manufacture and/or have
Manufactured any necessary amount of the Albireo Compound and/or Products by
exercising its rights granted pursuant to Section 2.1.  Without prejudice to the
generality of the foregoing, unless and until otherwise agreed upon between the
Parties, Albireo shall be responsible for API Manufacturing and for the
Manufacture of Products for pre-clinical and clinical supply, to the extent
required for Ajinomoto or its Sublicensees to perform the Development activities
set forth in this Agreement and the Territory Development Plan (such supply of
the Albireo Compound and/or Products, the “Clinical Supply”).  The Parties shall
use good faith efforts to execute a supply agreement (the “Supply Agreement”)
and a quality agreement (the “Quality Agreement”) for the Clinical Supply within
ninety (90) days after the Effective Date, which Supply Agreement and Quality
Agreement shall be on terms consistent with those set forth in this Section
4.4.1, and shall contain terms and conditions customary to the supply of
pharmaceutical products similar to the Albireo Compound and the
Products.  Albireo shall Manufacture and deliver the Clinical Supply to
Ajinomoto (or to such Third Parties designated by Ajinomoto) sufficiently in
advance for Ajinomoto or its Sublicensees to perform the Development activities
as contemplated by the Territory Development Plan.  Albireo shall invoice
Ajinomoto upon [***] pursuant to this Section 4.4.1 and/or the Supply Agreement
for the [***], including, but not limited to, [***].  Ajinomoto shall pay all
such invoices received from Albireo within [***] of [***].  The Supply Agreement
shall contain terms and conditions of record keeping and audit, similar to
[***].  All Manufacturing activities performed pursuant to this Section 4.4.1
and/or the Supply Agreement shall be performed in accordance with Applicable Law
and in accordance with GCP, GLP and GMP.  All Albireo Compound or Product
delivered pursuant to this Section 4.4.1 and/or the Supply Agreement shall
conform to any applicable specifications mutually agreed upon by the Parties.  

4.4.2.Commercial Supply.Ajinomoto shall be responsible for API Manufacturing and
Manufacturing of Products for Ajinomoto’s commercial distribution and sale in
the Territory in accordance with this Agreement.

29

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

4.5.Commercialization in the Territory.  Ajinomoto shall use Commercially
Reasonable Efforts to Commercialize a Product/Products in the Field in the
Territory in accordance with the Commercialization Plan as follows:

4.5.1.Commercialization Plan.  The JCC shall review a strategic
commercialization plan for the Products in the Field in the Territory (the
“Commercialization Plan”) which sets forth, among other things, [***] all other
activities to be conducted by Ajinomoto in connection with the Commercialization
of Products in the Field in the Territory.  The Commercialization Plan will be
updated at least once per year.

4.5.2.Commercialization Activities.  Ajinomoto shall have sole responsibility
for all aspects of Commercialization of Products in the Field in the Territory
and shall use Commercially Reasonable Efforts to implement and conduct the
Commercialization activities set forth in the Commercialization Plan.  Ajinomoto
shall undertake the Commercialization activities set forth in the
Commercialization Plan in accordance with all Applicable Laws and applicable
industry professional standards.  

4.5.3.Reports of Commercialization Activities.  Ajinomoto shall report on its
performance of the Commercialization activities set forth in the
Commercialization Plan at each meeting of the JCC.  In addition, Ajinomoto
shall, at Albireo’s expense, make appropriate scientific and regulatory
personnel available to Albireo, either by telephone or in person as Albireo may
reasonably request, as reasonably required to keep Albireo informed of the
Commercialization activities, including Ajinomoto’s efforts to achieve the
diligence obligations set forth in Section 4.5.4.

4.5.4.Diligence Obligations.  Ajinomoto shall use Commercially Reasonable
Efforts to Commercialize a Product/Products in the Field in Japan and, after the
first patient is dosed in a Phase III trial of the Product in Japan, other
countries throughout the Territory.  Upon the grant of all Regulatory Approvals
necessary for marketing and distribution of a Product in a country, Ajinomoto
shall use Commercially Reasonable Efforts to complete a First Commercial Sale of
such Product in such country within [***] after obtaining such Regulatory
Approval, provided that Ajinomoto [***].  

4.6.Publication Strategy.  The Parties shall coordinate worldwide publication
strategy involving Products and activities involving Products related to
scientific conferences inside and outside the Territory.  Each Party shall be
afforded the opportunity to review and approve any scientific paper or
presentation with respect to any Product proposed for publication, presentation
or distribution by the other Party or its Affiliates, licensees or Sublicensees
and shall have [***] days to complete such review and approval (or such shorter
period as may reasonably be required by applicable publication deadlines
promptly communicated to such Party).  The Party proposing publication or
presentation shall (i) not unreasonably reject comments furnished by the other
Party; (ii) comply with the other Party’s

30

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

request to delete references to its Confidential Information in any such
publication or presentation; and (iii) delay publication for such reasonable
period requested by the other Party to permit the filing of patent applications
concerning any Ajinomoto Technology, Albireo Technology or Joint Technology
disclosed in material proposed for such publication or presentation.  In no
event will Confidential Information of a Party be published without the consent
of such Party.

 

5.

CONSIDERATION.  In consideration for the rights granted to Ajinomoto under this
Agreement, including, without limitation, the (i) exclusive license under
Albireo Technology; (ii) reports and data provided by Albireo; and (iii) Right
of Reference, Ajinomoto will pay to Albireo, pursuant to Section 5.1, 5.2, and
5.3 as follows:

5.1.Upfront Payments.  Ajinomoto shall pay to Albireo [***] Euros (€[***]) no
later than [***] days after the Effective Date, as an upfront, non-creditable,
non-refundable fee; provided, however, that Ajinomoto shall undertake every
possible effort, and Albireo shall cooperate with such efforts, to make such
payment as soon as possible after the Effective Date.  

5.2.Milestones.  

5.2.1.Development Milestones.  As additional consideration for the rights
granted to Ajinomoto under this Agreement, Ajinomoto will pay Albireo the
following non-creditable, non-refundable amounts within [***] days after the
first occurrence of each of the following events (each, a “Development
Milestone”):

EVENT

MILESTONE PAYMENT

[***]

[***] Euros (€[***])

[***]

[***] Euros (€[***])

[***]

[***] Euros (€[***])

[***]

[***] Euros (€[***])

[***]

[***] Euros (€[***])

 

For the avoidance of doubt, in the event Ajinomoto provides notice of
termination of this Agreement to Albireo pursuant to Section 10.2.2 prior to the
occurrence of any Development Milestone, Ajinomoto shall remain obligated to
make any such or subsequent Development Milestone payment that occurs prior to
the effectiveness of such termination.

31

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

5.2.2.Sales Milestones.  Ajinomoto will pay Albireo the following
non-creditable, non-refundable amounts within [***] days after the first
occurrence of the following events (each, a “Sales Milestone”):

EVENT

MILESTONE PAYMENT

[***]  

[***] Yen (¥[***])

[***]  

[***] Yen (¥[***])

[***]  

[***] Yen (¥[***])

 

5.2.3.Milestone Payments.  For the avoidance of doubt, each milestone payment
under Section 5.2 shall be owed only once.  Once Ajinomoto has made any
particular milestone payment, Ajinomoto will not be obligated to make any
payment with respect to the subsequent occurrence of the same or a similar
milestone event anywhere in the Territory and with respect to any Product.

5.3.Royalties.  In addition to the payments under Sections 5.1 and 5.2,
Ajinomoto shall pay to Albireo the royalty payments set forth in this Section
5.3.

5.3.1.Royalty Rates.  Subject to Section 5.3.2, Ajinomoto shall pay to Albireo,
with respect to sales of each Product sold by Ajinomoto, its Affiliates or its
Sublicensees in the Field in the Territory [***], an amount equal to:

[***] percent ([***]%) of aggregate Net Sales of all Products in a Year in the
Territory for the portion thereof below or equal to [***] Yen (¥[***]); plus

[***] percent ([***]%) of aggregate Net Sales of all Products in a Year in the
Territory for the portion thereof greater than [***] Yen (¥[***]) and less than
or equal to [***] Yen (¥15,000,000,000); plus

[***] percent ([***]%) of aggregate Net Sales of all Products in a Year in the
Territory for the portion thereof greater than [***] Yen (¥[***]) and less than
or equal to [***] Yen (¥[***]); plus

[***] percent ([***]%) of aggregate Net Sales of all Products in a Year in the
Territory for the portion thereof greater than [***] Billion Yen (¥[***]).  

32

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

For the purpose of clarification, if Ajinomoto receives ¥[***] of aggregate Net
Sales of all Products in each Calendar Quarter in a given Year, then Ajinomoto
will pay a royalty of ([***]% of ¥[***]) in each of the first two (2) Calendar
Quarters, a royalty of ([***]% of ¥[***]) plus ([***]% of ¥[***]) in the third
Calendar Quarter, and a royalty of ([***]% of ¥[***]) in the fourth Calendar
Quarter.

For the purpose of further clarification, if the Royalty Period of a Product is
expired or does not exist in a country, the sales of such Product in such
country shall not be counted as Net Sales under this Agreement and, thereby, in
no way will such sales be counted in determining whether a Sales Milestone has
been achieved under Section 5.2.2 or determining the applicable royalty tier
pursuant to this Section 5.3.  

5.3.2.Adjustments in Royalty Rates.

(a)Competing Products.  Subject to Section 5.3.2(b), on a country-by-country and
Product-by-Product basis, if one or more Competing Products is being sold in
such country and the sales of all such Competing Products during a Calendar
Quarter (based on data from a mutually agreed Third Party source) are greater
than [***] percent ([***]%) of the aggregate of all such sales combined with the
sales of the applicable Product in such country in such Calendar Quarter, then
Ajinomoto shall pay to Albireo for each such Calendar Quarter [***] applicable
to such Product, a reduced royalty rate on Net Sales of such Product in such
country equal to [***] percent ([***]%) of the royalty rate applicable under
Section 5.3.1, but only for so long as such Competing Products are being sold in
such country at such level.

(b)Competing Products and [***].  On a country-by-country and Product-by-Product
basis, if (i) a Competing Product is being sold in such country and (ii) [***],
then Ajinomoto shall [***] royalties on Net Sales of such Product in such
country during the applicable Royalty Period, but only for so long as such
Competing Product is being sold in such country.  For the sake of clarity, if
such Competing Product ceases to be sold in such country and no other Competing
Products are being sold in such country, Net Sales of such Product in such
country shall thereafter be subject to [***] applicable under Section 5.3.1,
subject to Sections 5.3.2(c) and 5.3.2(d), for the duration of the applicable
Royalty Period.  

33

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

(c)Bulk Price.  On a Product-by-Product basis, in Japan, in the event Ajinomoto,
its Affiliates, or Sublicensees purchases the Albireo Compound as the active
pharmaceutical ingredient for such Product and the Bulk Price provided by
Albireo or on Albireo’s behalf [***], the royalty rate applicable under Section
5.3.1 [***] shall be [***] by the following [***]:

 

(Bulk Price) - [***](Drug Price)

x 100 x .50

Net Price

 

By way of example, if the [***].

With respect to each of [***] other than [***] in the [***], the Parties shall
discuss in good faith whether [***] based on [***]should apply to such country.
Such discussion will be held as soon as practicable after the [***].

(d) Licenses from Third Parties.  If Ajinomoto enters into an agreement with a
Third Party to obtain a license under a Patent Right or other right in the
absence of which Ajinomoto, its Affiliates, or Sublicensees could not legally
(including, without infringing any Third Party Patent Rights) Develop,
Manufacture or Commercialize the Albireo Compound and/or a Product in the Field
in the Territory, Ajinomoto may subtract from the royalties set forth in Section
5.3 [***] percent ([***]%) of the amount that Ajinomoto paid to such Third Party
pursuant to such agreement; provided, however, that the royalties shall not be
reduced to less than [***] percent ([***]%) of the amount that would otherwise
be due under Section 5.3.1.

Notwithstanding the foregoing, under no circumstances shall the aggregate
royalty rate so calculated under Sections 5.3.2(c) and 5.3.2(d) be reduced to
[***] of the amount that would otherwise be due under Section 5.3.1.

5.3.3.Fully Paid-Up, Royalty Free License.  Following the expiration of the
Royalty Period for any Product in a given country in the Territory, no further
royalties shall be payable in respect of sales of such Product in such country
and, thereafter, the license granted to Ajinomoto under Section 2.1 with respect
to such Product in such country shall automatically become a fully paid-up,
perpetual, irrevocable, royalty-free license.  

5.4.Payment of Albireo Territory Development Costs and Expert Costs.

5.4.1.Development Cost Report.  Within [***] after the end of each Calendar
Quarter during which Albireo has performed Development activities pursuant to
the Territory Development Plan and/or provided regulatory assistance pursuant to
Section 4.3 or 4.2.2, Albireo shall deliver to Ajinomoto an invoice of
Development Costs during such Calendar Quarter, which invoice shall set forth
the [***] during such Calendar Quarter and the amount of other costs reasonably
included in such Development Costs, including costs incurred under

34

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

the Global Development Plan that are specific to or primarily related to
obtaining Regulatory Approval in the Territory, and specifically requested by
Ajinomoto, as described in Section 4.1.2.

5.4.2.Payment of Development Costs.  Ajinomoto shall pay any invoice delivered
by Albireo pursuant to Section 5.4.1 within [***] days of receipt of any such
invoice.

5.4.3.Expert Cost Report and Payment.  Within [***] after the end of each
Calendar Quarter during which either Party has made appropriate personnel
available to the other Party pursuant to Section 4.1.3, 4.2.2, or 4.2.4, such
Party shall deliver to the other Party an invoice of expenses [***].  The other
Party shall pay any invoice delivered by such Party pursuant to this Section
5.4.3 within [***] of receipt of any such invoice.  

5.5.Reports and Payments.

5.5.1.Royalty Reports.  Within [***] ([***]) days [***] after the end of each
Calendar Quarter beginning with the Calendar Quarter in which the First
Commercial Sale is made in a country following receipt of Regulatory Approval in
such country, Ajinomoto shall deliver to Albireo a report setting forth for the
previous Calendar Quarter the following information on a Product-by-Product
basis: (i) the gross sales and Net Sales of each Product in the Field in each
country of the Territory; (ii) the number of units sold by Ajinomoto, its
Affiliates or its Sublicensees; (iii) the basis for any adjustments to the
royalty payable for the sale of each Product; (iv) the royalty due hereunder for
the sales of each Product; and (v) the applicable exchange rate as determined in
accordance with this Agreement.  The total royalty due for the sale of Products
during such Calendar Quarter shall be remitted at the time such report is
made.    

5.5.2.Taxes and Withholding.  The Parties agree to cooperate with one another
and use reasonable efforts, to the extent permitted under applicable law, to
minimize obligations for any and all income or other taxes required by
applicable law to be withheld or deducted from any royalties, milestone
payments, expert cost payments, or other payments made by a Party to the other
Party under this Agreement, including by completing all procedural steps, and
taking all reasonable measures, to ensure that any withholding tax is reduced or
eliminated to the extent permitted under applicable law, including income tax
treaty provisions and related procedures for claiming treaty relief.  To the
extent that a Party is required to deduct and withhold taxes on any payment to
the other Party, the paying Party shall deduct and withhold such taxes and pay
the amounts of such taxes on behalf of the receiving Party to the proper
Government Authority in a timely manner and promptly submit to the receiving
Party an official tax certificate or other evidence of such withholding
sufficient to enable the receiving Party to claim such payment of taxes.  The
paying Party shall render the receiving Party reasonable assistance in order to
allow the

35

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

receiving Party to recover, as permitted by applicable law, withholding taxes,
value added taxes or similar obligations resulting from payments made hereunder
or to obtain the benefit of any present or future treaty against double taxation
which may apply to such payments.  Notwithstanding the foregoing, if a payment
made by a Party to the other Party hereunder is subject to a deduction of tax or
withholding tax that arises as a result of the paying Party’s failure to comply
with this Section 5.5.2 or, if the paying Party is Ajinomoto, Ajinomoto’s
failure to make such payment from Japan (other than at the request of Albireo),
then such payment shall be increased to the amount that the receiving Party
would have received if the paying Party had not failed to take such action.  In
no case will any obligation of a Party to make a payment to the other Party
under this Agreement be reduced as a result of any income or other taxes imposed
on any payments between the paying Party and other Persons (other than the
receiving  Party), including, without limitation, any withholding or other taxes
imposed on payments made by a Sublicensee pursuant to a Sublicense.

5.5.3.Currency. All amounts payable hereunder shall be in Euros.  Currency
translation into Euros shall be made by using the simple arithmetic average of
the telegraphic transfer selling (TTS) rates on the last business day of each
calendar month of the relevant Calendar Quarter quoted by Bank of
Tokyo-Mitsubishi UFJ.  If, due to restrictions or prohibitions imposed by a
national or international authority, payments cannot be made as provided in this
Section 5, the Parties shall consult with a view to finding a prompt and
acceptable solution, and the paying Party shall deal with such payments as the
other Party may lawfully direct at no additional out-of-pocket expense to the
paying Party.  

5.5.4.Method of Payment.  Except as permitted pursuant to Section 5.5.3, each
payment hereunder shall be made by wire transfer to the bank account designed by
the Party receiving payments under this Section 5 in writing to the paying Party
at least [***] before the payment is due.  

5.5.5.Record Keeping.   Ajinomoto shall keep, and shall causes its Affiliates
and Sublicensees to keep, books and accounts of record in connection with the
sale of Products, including records of gross invoiced sales, Net Sales, exchange
rates and royalty payments (collectively, the “Financial Records”), in
accordance with GAAP and in sufficient detail to permit accurate determination
of all figures necessary for verification of royalties and Sales Milestone
payments to be made by Ajinomoto under this Section 5.  Albireo shall keep, and
shall causes its Affiliates and Sublicensees to keep, books and accounts of
record in connection with the Development Costs in accordance with GAAP and in
sufficient detail to permit accurate determination of all figures necessary for
verification of Development Costs payments to be made by Ajinomoto under this
Section 5; furthermore, in the event this Agreement is [***] shall [***]. Each
Party and its Affiliates, Sublicensees, and Licensees shall keep such records
for a period of at least [***] after the end of the Calendar Quarter in which
they are generated.  

36

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

5.5.6.Audits.  Upon thirty (30) days prior written notice from the other Party
(the “Auditing Party”), the Party required to keep such books and accounts of
record as set forth in Section 5.5.5 (as applicable, the “Audited Party”) shall
permit an independent certified public accounting firm of internationally
recognized standing, selected by the Auditing Party and reasonably acceptable to
the Audited Party, to examine the relevant books and records of the Audited
Party and its Affiliates, as may be reasonably necessary to verify the royalty
reports submitted by Ajinomoto in accordance with Section 5.5.1, Development
Costs reports and/or royalty reports submitted by Albireo in accordance with
Section 5.4.1 and Section 10.3.1(d).  An examination by the Auditing Party under
this Section will occur not more than [***] and will be limited to the pertinent
books and records for any Year ending not more than [***] before the date of the
request.  The accounting firm will be provided access to such books and records
at the Audited Party’s facility or facilities where such books and records are
normally kept and such examination will be conducted during the Audited Party’s
normal business hours.  The Audited Party may require the accounting firm to
sign a standard non-disclosure agreement before providing the accounting firm
access to its facilities or records.  Upon completion of the audit, the
accounting firm will provide both the Auditing Party and the Audited Party a
written report disclosing whether the royalty reports submitted by Ajinomoto,
the Development Costs reports submitted by Albireo, or royalty reports submitted
by Albireo are correct or incorrect and the specific details concerning any
discrepancies.  No other information will be provided to the Auditing Party.  If
the reports submitted by the Audited Party resulted in an underpayment or
overpayment, the Party owing underpaid or overpaid amount will promptly pay such
amount to the other Party. If, as a result of such inaccurate reports, such
underpayment to the Auditing Party or such overpayment to the Audited Party
[***] of the total amount owed for the Year then being audited, the Audited
Party will reimburse the Auditing Party for the reasonable expense incurred by
the Auditing Party in connection with the audit.  Any information provided by
the Audited Party to the accounting firm and the written report of the
accounting firm shall be the Confidential Information of the Audited Party.

5.5.7.Interest.  Any payment of any undisputed sums properly due and payable to
the receiving Party under this Agreement that is [***] past due shall be subject
to interest at an annual percentage rate of then-current base rate of [***] if
the paying Party does not make payment within [***] of its receipt of notice
that such amount is past due.  Likewise, any overpayment for which notice is
given that is not refunded within [***] after the date upon which notice of such
overpayment was received or made shall, after such date, be subject to interest
at an annual percentage rate of then-current base rate of [***]; provided,
however, that if the overpayment is due to errors in reports provided by the
overpaid Party, such interest shall accrue from the date the overpayment was
made.   Notwithstanding the preceding, if a Party contests any amounts due

37

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

hereunder in good faith and promptly notifies the other Party of such dispute,
interest shall not accrue as to amounts being so contested until [***] days
following the presentation of such notice to the other Party. This Section shall
not be construed as prejudicing the receiving Party’s right to receive payment
within the relevant period and shall not apply to the extent and for the period
that a Force Majeure prevents payment.

6.

MUTUAL COVENANTS.  

6.1.Confidentiality.  

6.1.1.Confidential Information.  Except to the extent expressly permitted by
this Agreement and subject to the provisions of Sections 6.1.2 and 6.1.3, at all
times during the Term and for [***] following the expiration or termination
hereof, each Party (the “Receiving Party”) receiving any Confidential
Information of the other Party (the “Disclosing Party”) in connection with this
Agreement shall: (i) keep completely confidential and shall not publish or
otherwise disclose any Confidential Information furnished to it by the
Disclosing Party, except to those of the Receiving Party’s employees,
Affiliates, Sublicensees, consultants, contractors, agents, medical institutes
or personnel, or representatives who have a need to know such information
(collectively, “Recipients”) to perform such Party’s obligations or exercise its
rights hereunder, provided that each such Recipient has a written
confidentiality obligation no less strict than the confidentiality provisions
herein; and (ii) not use Confidential Information of the Disclosing Party
directly or indirectly for any purpose other than performing its obligations or
exercising its rights hereunder.  The Receiving Party shall be liable for any
breach by any of its Recipients of the restrictions set forth in this Agreement,
including, without limitation, those set forth in Section 6.1.6.

6.1.2.Exceptions to Confidentiality.  The Receiving Party’s obligations set
forth in this Agreement shall not extend to any Confidential Information of the
Disclosing Party or the Names and Terms:

(a)that is or hereafter becomes part of the public domain through no wrongful
act, fault or negligence on the part of a Receiving Party or its Recipients;

(b)that is received from a Third Party without restriction and without breach of
any agreement or fiduciary duty between such Third Party and the Disclosing
Party;

(c)that the Receiving Party can demonstrate by competent evidence was already in
its possession without any limitation or restriction on use or disclosure prior
to its receipt from the Disclosing Party;

38

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

(d)that is generally made available to Third Parties by the Disclosing Party
without any restriction imposed by the Disclosing Party on disclosure, whether
such restriction is by contract, fiduciary duty or by operation of law; or

(e)that the Receiving Party can demonstrate by competent evidence was
independently developed by the Receiving Party without any reference to
Confidential Information.

6.1.3.Authorized Disclosure.  

(a)Notwithstanding the provisions of Section 6.1.1, the Receiving Party and its
Recipients may disclose Confidential Information belonging to the Disclosing
Party, and the Names and Terms, to the extent that such disclosure is reasonably
necessary to:

(i) prosecute or defend litigation;

 

(ii) comply with applicable governmental laws and regulations (including,
without limitation, Applicable Law, rule or regulation or the requirements of a
national securities exchange or another similar regulatory body); or

 

(iii) respond to a valid order, inquiry, or request of, or make filings and
submissions to, or correspond or communicate with, any Government Authority.

In the event that the Receiving Party or its Recipients, as applicable, deem it
reasonably necessary to disclose Confidential Information belonging to the
Disclosing Party pursuant to this Section 6.1.3(a), the Receiving Party shall,
to the extent possible, provide the Disclosing Party with reasonable advance
notice of such disclosure and take reasonable measures to ensure confidential
treatment of such information.  

(b)Notwithstanding the provisions of Section 6.1.1, the Receiving Party may
disclose Confidential Information belonging to the Disclosing Party to any Third
Party who is performing diligence in connection with a transaction with the
Receiving Party (including, without limitation, potential Sublicensees and
Licensees), provided that each such Third Party has signed a written
confidentiality agreement with the Receiving Party no less strict than the terms
hereof.  

6.1.4.Notification.  The Receiving Party shall notify the Disclosing Party
immediately, and cooperate with the Disclosing Party as the Disclosing Party may
reasonably request, upon the Receiving Party’s discovery of any loss or
compromise of the Disclosing Party’s Confidential Information.

39

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

6.1.5.Destruction of Confidential Information.  Upon the expiration or earlier
termination of this Agreement, the Receiving Party shall (i) destroy all
tangible embodiments of Confidential Information of the Disclosing Party,
including, without limitation, any and all copies thereof, and those portions of
any documents, memoranda, notes, studies and analyses prepared by the Receiving
Party or its Recipients that contain or incorporate such Confidential
Information and provide written certification of such destruction to the
Disclosing Party in a form reasonably acceptable to the Disclosing Party,
provided that the legal department of the Receiving Party shall have the right
to retain one copy of any such tangible embodiments for archival purposes
(provided that such copy shall continue to be maintained on a confidential basis
subject to the terms of this Agreement); and (ii) immediately cease, and shall
cause its Recipients to cease, use of such Confidential Information as well as
any information or materials that contain or incorporate such Confidential
Information.  Notwithstanding the foregoing, the Receiving Party may keep and
use any Confidential Information of the Disclosing Party solely to the extent
necessary or useful to exercise its rights and/or perform its obligations that
survive such expiration or termination of this Agreement.

6.1.6.Use of Name and Disclosure of Terms.  Each Party shall keep the existence
of, the terms of and the transactions covered by this Agreement (collectively
the “Names and Terms”) confidential and shall not disclose such information to
any Third Party through a press release or otherwise, or mention or otherwise
use the name, insignia, symbol, trademark, trade name or logotype of the other
Party or its Affiliates in any manner without the prior written consent of the
other Party in each instance (which may be withheld at the other Party’s
discretion); provided, however, that each Party shall be permitted to disclose
the Names and Terms without the prior consent of the other Party to its
Recipients to perform such Party’s obligations or exercise its rights hereunder,
provided that each such Recipient has a written confidentiality obligations no
less strict than the confidentiality provisions in this Agreement.  The
restrictions imposed by this Section shall not prohibit either Party from making
any disclosure that is required by Applicable Law, rule or regulation or the
requirements of a national securities exchange, tax agency, or another similar
regulatory body including, without limitation, disclosing such information in
any clinical trial database maintained by or on behalf of a Party.  Further, the
restrictions imposed on each Party under this Section 6.1.6 are not intended,
and shall not be construed, to prohibit a Party from identifying the other Party
in its internal business communications, provided that any Names and Terms in
such communications remains subject to the confidentiality obligation of this
Section 6.1.6.  Notwithstanding the foregoing, the Parties acknowledge that they
each may engage in financing, licensing and merger and acquisition transactions
after the Effective Date and that in such event, the Parties may disclose the
existence of this Agreement, including its terms and subject matter, under terms
of confidentiality no less strict than those contained in this Agreement, to
parties or potential parties in such transaction.  

40

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

6.1.7.Remedies.  The Parties acknowledge and agree that the restrictions set
forth in Section 6.1 are reasonable and necessary to protect the legitimate
interests of the Parties and that neither Party would have entered into this
Agreement in the absence of such restrictions, and that any breach or threatened
breach of any provision of Section 6.1 will result in irreparable injury to the
other Party for which there will be no adequate remedy at law.  Notwithstanding
anything to the contrary in this Agreement, in the event of a breach or
threatened breach of any provision of Section 6.1 by a Party, the other Party
shall be authorized and entitled to obtain from any court of competent
jurisdiction injunctive relief, whether preliminary or permanent, specific
performance and an equitable accounting of all earnings, profits and other
benefits arising from such breach, which rights shall be cumulative and in
addition to any other rights or remedies to which such Party may be entitled in
law or equity.  The breaching Party agrees to waive any requirement that the
non-breaching Party (i) post a bond or other security as a condition for
obtaining any such relief; and (ii) show irreparable harm, balancing of harms,
consideration of the public interest or inadequacy of monetary damages as a
remedy.  Nothing in this Section 6.1.7 is intended, or shall be construed, to
limit the Parties’ rights to equitable relief or any other remedy for a breach
of any provision of this Agreement.

6.2.Compliance with Law.  Each Party hereby covenants and agrees to comply with
all Applicable Laws related to its activities connected with the Development,
Manufacture and Commercialization (as applicable) of the Albireo Compound and
Products.  Without limiting the generality of the foregoing:

6.2.1.Patient Information.  Each Party agrees to abide by all laws, rules,
regulations, and orders of all applicable supranational, national, federal,
state, provincial, and local governmental entities concerning the
confidentiality or protection of patient identifiable information and/or
patients’ protected health information in the course of their performance under
this Agreement.

6.2.2.Export Controls.  This Agreement is made subject to any restrictions
concerning the export of products or technical information from the United
States or other countries which may be imposed upon or related to Albireo or
Ajinomoto from time to time.  Each Party agrees that it shall not export,
directly or indirectly, any technical information acquired from the other Party
pursuant to this Agreement or any Products using such technical information to a
location or in a manner that at the time of export requires an export license or
other governmental approval, without first obtaining the written consent to do
so from the appropriate agency or other governmental entity.

6.2.3.Debarment.  Each Party agrees that it shall not use, in any capacity, in
connection with any of its obligations to be performed under this Agreement any
individual who has been debarred under the FD&C Act or the Generic Drug
Enforcement Act or similar Applicable Law in any jurisdiction in the Territory.

41

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

6.3.Non-Competition.

6.3.1.Non-Competition by Ajinomoto.  After First Commercial Sale of a Product
[***] in a country in the Territory [***], neither Ajinomoto nor any of its
Affiliates shall, directly or indirectly, or in collaboration with any Third
Party, license or otherwise authorize any Third Party to distribute for sale and
sell commercially in such country any pharmaceutical products for the treatment
of CIC or IBS-C (each such product, a “Restricted Product”), other than the
Albireo Compound and Products, without complying with this Section 6.3.1;
[***].  Ajinomoto shall not be deemed to be in breach of this Section 6.3.1 if
Ajinomoto or any of its Affiliates acquires a Restricted Product through an
acquisition of or a merger with the whole or substantially the whole of the
business or assets of another entity, so long as Ajinomoto (or its Affiliate)
enters into a definitive agreement with a Third Party to divest such Restricted
Product within twelve (12) months after the closing of such acquisition or
merger. For the sake of clarity, a pharmaceutical product for any of the
following indications shall not constitute a Restricted Product so long as such
product is not also indicated for the treatment of CIC or IBS-C: (i) the
prophylaxis and treatment of Opioid-Induced-Constipation; (ii) the prophylaxis
and treatment of symptoms of constipation; (iii) use in postoperative ileus
(prophylaxis and treatment); and (iv) colonoscopy cleansing procedures; neither
Ajinomoto nor any of its Affiliates shall be restricted by this Section 6.3.1
with respect to such non-Restricted Product.

6.3.2.Non-Competition by Albireo.  After First Commercial Sale of a Product
[***] in a country in the Territory until [***], neither Albireo nor any of its
Affiliates shall, directly or indirectly, or in collaboration with any Third
Party, license or otherwise authorize any Third Party to, distribute for sale
and sell commercially any Restricted Product in such country in the Field
without complying with this Section 6.3.2; provided, however, that the
prohibitions set forth in this Section 6.3.2 shall not apply to any products
that (i) are being commercialized by Albireo as of the Effective Date or (ii),
in the event Albireo or any of its Affiliates undergoes a Change of Control, are
products under development or being commercialized by the Third Party
entity(ies) involved in the Change of Control, as of the effective date of such
Change of Control or is subsequently developed or commercialized by such Third
Party or its Affiliates (other than Albireo) without use of the Albireo
Technology and/or Joint Technology.  

6.4.Non-Solicitation.  During the Term, neither Party nor any of its Affiliates
shall, directly or indirectly, anywhere in the world employ, solicit for
employment, or recommend for employment any person engaged in the development,
manufacture or commercialization of the Albireo Compound or Products employed by
the other Party or any of its Affiliates, during the period such person is so
employed or for [***] after termination of such person’s employment with the
other Party (or any of its Affiliates).

42

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

7.

REPRESENTATIONS AND WARRANTIES.  

7.1.Representations and Warranties of Each Party.  As of the Effective Date,
each of Ajinomoto and Albireo hereby represents and warrants to the other Party
hereto as follows:

(a)it is a corporation or entity duly organized and validly existing under the
laws of the state or other jurisdiction of its incorporation or formation;

(b)the execution, delivery and performance of this Agreement by such Party has
been duly authorized by all requisite corporate action and does not require any
shareholder action or approval;

(c)it has the power and authority to execute and deliver this Agreement and to
perform its obligations hereunder;

(d)the execution, delivery and performance by such Party of this Agreement and
its compliance with the terms and provisions does not and shall not conflict
with or result in a breach of any of the terms and provisions of or constitute a
default under (i) a loan agreement, guaranty, financing agreement, agreement
affecting a product or other agreement or instrument binding or affecting it or
its property; (ii) the provisions of its charter or operative documents or
bylaws; or (iii) any order, writ, injunction or decree of any court or
governmental authority entered against it or by which any of its property is
bound; and

(e)it has the full right, power and authority to grant all of the right, title
and interest in the licenses granted to the other Party under this Agreement.

7.2.Additional Representations and Warranties of Albireo.  Albireo hereby
represents and warrants to Ajinomoto that as of the Effective Date:

(a)Albireo solely owns the Albireo Patent Rights listed in Schedule 1.12
attached to this Agreement, and Albireo, together with its Affiliates, has
timely paid all maintenance fees, annuities, and the like due or payable with
respect to such Albireo Patent Rights (for the avoidance of doubt, such timely
payment includes payment of any maintenance fees for which the fee is payable,
even if the surcharge date or final deadline for payment of such fee would be in
the future);

(b)Albireo Patent Rights includes no Patent Rights that are Controlled by
Albireo pursuant to a Third Party License, and any and all Albireo Patent Rights
are listed in Schedule 1.12 attached to this Agreement;

(c)Albireo, together with its Affiliates, has the rights with respect to all
Albireo Technology that it purports to grant to Ajinomoto hereunder;

43

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

(d)No Albireo Patent Rights are subject to, or were developed pursuant to, any
funding agreement with any government or government agency;

(e)To its actual knowledge, without having made any inquiry other than
freedom-to-operate analysis with respect to the Albireo Patent Rights, the
manufacture anywhere in the world, use, sale, offer for sale and import in the
Field in the Territory of the Albireo Compound and/or a Product does not
infringe any Patent Rights of a Third Party;

(f)Albireo has not received any written or oral claim of ownership, inventorship
or patent infringement from any Third Party (including, without limitation, by
current or former officers, directors, employees, consultants, or personnel of
Albireo or any predecessor) with respect to the Albireo Technology, and Albireo
is not aware of any reasonable basis for any such claim;

(g)Albireo is not subject to any agreement with a Third Party that includes a
royalty or similar payment obligation to, or other restriction or limitation in
favor of, such Third Party (including, without limitation, current or former
officers, directors, employees, consultants or personnel of Albireo or any
predecessor) with respect to its rights to practice the Albireo Technology in
the Territory and its right and ability to perform its obligations under this
Agreement;

(h) Albireo is not in breach of any material provisions of any agreements with
Third Parties relating to the Albireo Patent Rights, if any, and the execution
of this Agreement and Albireo’s performance of its obligations hereunder and the
consummation of the transactions contemplated herein will not result in any such
breach;

(i)There are no challenges, oppositions, interferences, or other proceedings
pending or, to Albireo’s best knowledge, threatened with respect to the Albireo
Technology;

(j)Albireo has not brought any claim against any Third Party relating to the
infringement, misappropriation, or other violation of any Albireo Technology;
and

(k)To Albireo’s best knowledge all data, study results, and other information
relating to the Albireo Compound and the Product presented by Albireo to
Ajinomoto prior to the Effective Date, as of the time such data, study results,
and other information were presented to Ajinomoto, were complete in all material
respects and accurate.  

44

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

7.3.Representation by Legal Counsel. Each Party hereto represents that it has
had the opportunity to consult with legal counsel in connection with reviewing
and drafting this Agreement.  In interpreting and applying the terms and
provisions of this Agreement, the Parties agree that no presumption shall exist
or be implied against the Party which drafted such terms and provisions.

7.4.No Inconsistent Agreements.  Neither Party has in effect, and after the
Effective Date neither Party shall, enter into any oral or written agreement or
arrangement that would be inconsistent with its obligations under this Agreement
or limit the ability of either Party to grant the licenses set forth in
Section 2 of this Agreement.

7.5.Disclaimer.  THE FOREGOING WARRANTIES OF EACH PARTY ARE IN LIEU OF ANY OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF NONINFRINGEMENT, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR ANY
IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY
SPECIFICALLY EXCLUDED AND DISCLAIMED.  EACH PARTY HEREBY DISCLAIMS ANY
REPRESENTATION OR WARRANTY THAT THE DEVELOPMENT, MANUFACTURE OR
COMMERCIALIZATION OF ANY PRODUCT UNDER THIS AGREEMENT WILL BE SUCCESSFUL.  

8.

INTELLECTUAL PROPERTY.  

8.1.Disclosure.  During the Term, the Parties shall promptly disclose to one
another all Know-How (whether patentable or not) arising out of each Party’s
performance of activities under this Agreement.  

8.2.Ownership.  

8.2.1.Ownership of Technology.  As between the Parties, each Party shall own any
Patent Right or Know-How solely conceived and reduced to practice by employees
of it or its Affiliates, or Third Parties acting on behalf of it or its
Affiliates during the Term in the course of its performance under this
Agreement, and the Parties shall jointly own any Patent Right or Know-How
jointly conceived and/or reduced to practice by an employee of Albireo or its
Affiliates (or a Third Party acting on any of their behalf) and an employee of
Ajinomoto or its Affiliates (or a Third Party acting on any of their
behalf).  Notwithstanding the foregoing, all data and results generated from
studies funded at least in part by Albireo shall be excluded from such jointly
owned Patent Right or Know-How, and such excluded data and results shall be
solely and exclusively owned by Albireo.  Subject to the license grants under
Section 2 of this Agreement, as between the Parties, Albireo shall own all
Albireo Technology and Ajinomoto shall own all Ajinomoto Technology. [***].  In
the event inventorship and ownership of any Technology cannot be resolved by the
Parties with advice of their respective intellectual property counsel, such
dispute shall be resolved through arbitration pursuant to Section 12.1.4,
provided that such arbitration panel shall include at least one (1) arbitrator
who is a specialist in English patent law and in chemical and pharmaceutical
patents.  

45

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

8.2.2.Employee Assignment.  To the extent permissible under applicable laws,
each Party will cause each employee and contractor conducting work on such
Party’s behalf under this Agreement to be bound by an obligation that (i)
compels prompt disclosure to the Party of all Albireo Technology, Ajinomoto
Technology, and Joint Technology, as applicable, conceived or reduced to
practice by such employee or contractor during any performance under this
Agreement; (ii) automatically assigns to the Party all right, title and interest
in and to all such Technology and all Patent Rights disclosing or claiming such
Technology; and (iii) obligates such persons to similar obligations of
confidentiality as set forth in this Agreement.  Each Party will require each
employee and contractor conducting work on such Party’s behalf under this
Agreement to maintain records in sufficient detail and in a good scientific
manner appropriate for patent purposes to properly reflect all work done.  

8.3.Filing, Prosecution and Maintenance of Patent Rights.

8.3.1.Albireo Patent Rights and Joint Patent Rights in the Territory.  Ajinomoto
shall have the first right, at its sole discretion, to file, prosecute and
maintain the Albireo Patent Rights in the Territory in Albireo’s name and Joint
Patent Rights in the Territory in the joint names of Albireo and Ajinomoto or
its Affiliate, using patent counsel selected by Ajinomoto and reasonably
acceptable to Albireo, and shall be responsible for the payment of all such
patent prosecution and maintenance costs.  Albireo shall cooperate and render
all assistance reasonably requested by Ajinomoto in connection with such
efforts.  Ajinomoto agrees to keep Albireo fully informed of the course of
patent prosecution or other proceedings relating to any such Patent Rights,
including, without limitation, by providing Albireo with copies of office
actions and other material correspondence between Ajinomoto and the patent
offices throughout the Territory concerning such Patent Rights.  If Ajinomoto
elects not to file, prosecute or maintain any of such Albireo Patent Rights
and/or the Joint Patent Rights in the Territory, Ajinomoto shall provide Albireo
with no less than [***] written advance notice sufficient to avoid any loss or
forfeiture, and Albireo shall have the right, but not the obligation, at
Albireo’s sole expense, to file, prosecute or maintain such Albireo Patent
Rights and such Joint Patent Rights in the joint names of Albireo and Ajinomoto
or its Affiliate.  For any such Albireo Patent Rights and Joint Patent Rights
that Albireo elects to file, prosecute or maintain at its sole expense (the
“Elected Patent Rights”), Albireo agrees to keep Ajinomoto informed of material
developments in the course of patent prosecution or other proceedings relating
to any such Elected Patent Rights, including, without limitation, by providing
Ajinomoto with copies of office actions and other material correspondence
between Albireo and the patent offices throughout the Territory concerning such
Elected Patent Rights.    

46

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

8.3.2.Patent Term Extensions.  At Ajinomoto’s reasonable request, Albireo shall
supply Ajinomoto as for Albireo Patent Rights and Joint Patent Rights, with any
information in its possession or control pertaining to, or desirable for,
gaining patent term extensions in the Territory, including, without limitation,
supplementary protection certificates and any other extensions that are now or
become available in the future wherever applicable to the Albireo Patent Rights
and Joint Patent Rights that are applicable to the Products in the
Territory.  Albireo shall supply Ajinomoto in a timely manner with any
supporting affidavits or documents required in connection with any such
extensions of the Albireo Patent Rights and Joint Patent Rights.  Neither
Albireo nor its Affiliates shall take any action the consequence of which is to
preclude Ajinomoto from obtaining any extension of the term of any Albireo
Patent Rights or Joint Patent Rights.  Final decisions and elections with
respect to obtaining such extension or supplemental protection certificates
shall be made [***]. Notwithstanding the foregoing, Albireo’s obligations under
this Section 8.3.2 with respect to Albireo Patent Rights that are Controlled by
Albireo pursuant to a Third Party License shall be subject to the terms of such
Third Party License.  

8.4.Ajinomoto Patent Rights. Ajinomoto shall have the right, in its sole
discretion, to prepare, file, prosecute and maintain the Ajinomoto Patent
Rights.

8.5.Joint Patent Rights outside the Territory. The Parties will consult with
each other for the purpose of determining the jurisdictions outside the
Territory in which to file Joint Patent Rights.  Albireo will undertake filing,
prosecution and maintenance of the Joint Patent Rights in the determined
jurisdictions in the joint names of Albireo and Ajinomoto or its Affiliate,
using patent counsel selected by Albireo and reasonably acceptable to Ajinomoto.
The Parties will be equally responsible for the payment of all such patent
prosecution and maintenance costs, including reasonable attorneys’ fees. Albireo
agrees to keep Ajinomoto fully informed of the course of patent prosecution or
other proceedings relating to any such Joint Patent Rights outside the
Territory, including, without limitation, by providing Ajinomoto with copies of
office actions and other material correspondence between Albireo and the patent
offices outside the Territory concerning such Joint Patent Rights.  Albireo
shall consider Ajinomoto’s reasonable comments on the filing, prosecution or
other proceedings relating to any such Joint Patent Rights outside the
Territory.  If either Party intends to abandon all or a part of its share in the
Joint Patent Rights outside the Territory, such Party will notify the other
Party of such intention, and such other Party will have the right to acquire the
aforesaid share in such Joint Patent Rights without compensation, and the
abandoning Party shall be free from any obligations as provided in this Section
8.5 with regard to such Joint Patent Rights thereafter. Notwithstanding the
first sentence in this Section 8.5, in case either Ajinomoto or Albireo has no
intention to file Joint Patent Rights in certain country(ies) outside the
Territory, the other Party may have sole rights to file, prosecute and maintain
the Joint Patent Rights in such country(ies) at its sole cost and will have the
exclusive right therefrom.  

47

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

8.6.Trademarks.  

8.6.1.Product Trademarks.  Ajinomoto shall select, Control and, as between the
Parties, own any trademark which is identified as a trademark or brand name for
a Product in its application for Regulatory Approval for such Product in the
Territory (each such trademark, a “Trademark”). Ajinomoto shall be solely
responsible for applying for and maintaining the registrations for the
Trademarks in the Territory (including payment of all costs associated
therewith), and all goodwill associated therewith will inure to the benefit of
Ajinomoto.  Ajinomoto shall assume full responsibility, at its sole costs and
expense, for any infringement by Ajinomoto, its Affiliates or its Sublicensees
of the rights of Third Party by the use of the Trademark in connection with the
Product in the Field in the Territory and will defend and indemnify Albireo for
and against any claims of such infringement in accordance with Section 11.2.

8.6.2.Trademark License.  Ajinomoto hereby grants to Albireo, effective on the
Effective Date, an exclusive, royalty-free, irrevocable license, with the right
to freely sublicense, to use the Trademarks for the Commercialization of
Products outside of the Territory.  This provision shall not be construed as
imposing on Ajinomoto any obligation or responsibility relating to the
Trademarks outside the Territory, including, without limitation, applying for
and maintaining the registrations for the Trademark outside the Territory.
Albireo shall assume full responsibility, at its sole costs and expense, for any
infringement by Albireo or its sublicensees of the rights of Third Party by the
use of the Trademark and will defend and indemnify Ajinomoto and its Affiliates
for and against any claims of such infringement in accordance with Section 11.1.

8.6.3.Use of Trademark. The manner of use of the Trademarks outside of the
Territory will be subject to periodic review by Ajinomoto.  Neither Albireo nor
its sublicensee will use the Trademarks in a way that is inconsistent with the
usage rules reviewed by the JCC and decided on by Ajinomoto.

8.7.Enforcement of Technology Rights.  

8.7.1.Notice.  Each Party shall promptly notify the other Party when such Party
becomes aware of any actual, potential or suspected infringement or
misappropriation of the Albireo Technology, Ajinomoto Technology, or the Joint
Technology by any Third Party in the Territory (an “Infringement”), including,
without limitation, a Third Party’s application for Regulatory Approval of a
Competing Product in the Territory.

8.7.2.Enforcement.  With regard to any actual or threatened legal actions
relating to the Albireo Technology, Ajinomoto Technology, or the Joint
Technology (including, without limitation, any legal action for Infringement by
a Third Party in the Territory, or any defense of a declaratory judgment action
brought by a Third Party, or any other action or proceeding by a Third Party
that

48

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

may affect any of such Technologies, including, without limitation, any
reexamination, revocation or other similar proceeding) anywhere within the
Territory (each a “Legal Action”), Ajinomoto shall have the first right, in its
sole discretion, to initiate, enforce and/or defend any such Legal Action, with
Albireo’s option to participate, at its own expense, in such Legal Action;
provided, however, that such first right of Ajinomoto, with respect to Albireo
Technology that is Controlled by Albireo pursuant to a Third Party License,
shall be subject to any rights to initiate, enforce and/or defend Legal Actions
relating to such Albireo Technology that are reserved by the Third Party
licensor under such Third Party License, in which case Albireo shall, upon
Ajinomoto’s request, and to the extent permitted under such Third Party License,
request that such Third Party licensor exercise such reserved rights to the
extent that Ajinomoto could have exercised such rights pursuant to this Section
8.7.2 if such rights were not reserved by such Third Party licensor, provided
further, with respect to any Albireo Patent Right (other than an Albireo Patent
Right that is Controlled by Albireo or its Affiliates non-exclusively with
respect to Products), if such Albireo Patent Right is Controlled by Albireo
pursuant to a Third Party License, Albireo shall notify Ajinomoto promptly after
the execution of such Third Party License whether the Third Party licensor
reserves, under such Third Party License, any rights to initiate, enforce and/or
defend Legal Actions relating to such Albireo Patent Right.  Albireo shall
render, at Ajinomoto’s expense, all assistance reasonably requested by Ajinomoto
in connection with any such Legal Action, or in connection with any other action
to prevent Infringement.  In the event Ajinomoto elects not to initiate, enforce
and/or defend any such Legal Action, or does not initiate any legal action
within [***] days from the discovery by Ajinomoto of the facts forming the basis
for any such Legal Action, then Albireo shall have the sole right, at its
expense, to initiate, enforce and/or defend the action, subject to Ajinomoto's
prior written approval.  The Party who initiates, enforces and/or defends a
Legal Action pursuant to this Section shall be responsible for the costs of such
action (including attorneys’ fees), and the Parties hereto shall equally share
the costs if the Parties otherwise agree to initiate, enforce and/or defend such
Legal Action.  Any recoveries received in such a Legal Action shall be allocated
in the following manner.

1) Firstly, reimburse the [***] for its [***];

2) Secondly, reimburse the [***] for its [***];

3)The remaining portion shall belong to [***]; provided, however, that in case
[***] is [***], such remaining shall be considered [***] for the purposes of
[***] under this Agreement, [***] and in case [***] is [***], the amount of any
recovery remaining then shall be allocated [***].

49

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

8.8.Third Party Claims.  

8.8.1.Third Party Claims - Course of Action.  If (i) the Development,
Commercialization or Manufacture of the Albireo Compound or a Product under this
Agreement; or (ii) any development, manufacture, or commercialization of the
Albireo Compound or a Product by Albireo or Licensees is alleged by a Third
Party to infringe a Third Party’s patent right(s) or misappropriate a Third
Party’s trade secret, the Party becoming aware of such allegation shall promptly
notify the other Party thereof, in writing, reasonably detailing the claim.

8.8.2.Third Party Suit.  If a Third Party sues a Party (the “Sued Party”)
alleging that the Sued Party’s, or its Sublicensee’s Development, Manufacture,
or Commercialization of the Albireo Compound or any Product in the Field in the
Territory infringes or shall infringe said Third Party’s patent right(s) or
misappropriates said Third Party’s trade secret, Ajinomoto shall have the first
right to defend such Third Party suit on behalf of both of the Parties and any
expenses or costs incurred by Ajinomoto in connection with such suit, and [***].
Albireo shall render, at Ajinomoto’s expense, all assistance reasonably
requested by Ajinomoto in connection with any such suit.  For such suit as
Ajinomoto is unable to defend hereunder solely or jointly in its own name,
Albireo will join such suit voluntarily at the expense of Ajinomoto. Ajinomoto
shall not admit the invalidity of any patent within the Albireo Patent Rights or
the Joint Patent Rights, without written consent of Albireo, such consent not to
be unreasonably withheld.  

If Ajinomoto does not exercise its right to defend Third Party suit granted
pursuant to this Section 8.8.2 in a particular jurisdiction within [***] from
the date when the relevant suit becomes known to Ajinomoto, then Albireo shall
be entitled to defend such suit at its own cost and expense in such jurisdiction
subject to Ajinomoto’s prior written approval and any recovery in such suit
shall be retained by Albireo in full, subject to the other applicable terms of
this Agreement, if any. Albireo shall keep Ajinomoto reasonably informed on a
monthly basis, in person or by telephone, prior to and during the pendency of
any such suit.  Albireo shall not admit the invalidity of any patent within the
Ajinomoto Patent Rights or the Joint Patent Rights without written consent of
Ajinomoto, such consent not to be unreasonably withheld.  

8.9.Patent Marking.  Each Party agrees to mark and have its Affiliates, and all
Licensees and Sublicensees mark all Products (or their containers or labels) as
required by the applicable statutes or regulations, if any, in the country or
countries of sale thereof.

8.10.No Implied Licenses.  Except as expressly set forth in this Agreement, no
right or license under any Albireo Technology or Ajinomoto Technology is granted
or shall be granted by implication as a result of the respective rights of the
Parties under this Agreement.  All such rights or licenses are or shall be
granted only as expressly provided in this Agreement.

50

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

8.11.Privileged Communications.  In furtherance of this Agreement, it is
possible that Ajinomoto and Albireo should disclose to one another privileged
communications with counsel, including opinions, memoranda, letters and other
written, electronic and verbal communications.  Such disclosures will be made
with the understanding that they shall remain confidential, they will not be
deemed to waive any applicable attorney-client privilege and that they are made
in connection with the shared community of legal interests existing between
Albireo and Ajinomoto, including the community of legal interests in avoiding
infringement of any valid, enforceable patents of Third Parties and maintaining
the validity of Albireo Patent Rights, Ajinomoto Patent Rights and Joint Patent
Rights.

8.12.Recordation of License. The Parties agree and acknowledge that
notwithstanding anything in Section 6.1.6, Ajinomoto shall have the right to
record or file a summary of the terms of this Agreement disclosing such amount
of the terms as is necessary to effect such recordation or filing with any
patent office or similar authority in the Territory if Ajinomoto reasonably
determines that such recordation is beneficial or required to give effect to or
protect its rights under this Agreement.  For clarity, such recordation
includes, without limitation, registrations of patent licenses in the Japanese
patent office and any equivalents or similar registrations or filings thereto in
any other jurisdiction in the Territory and, to the extent permitted under
Section 8.3.2, filings of requests for patent term extensions in the Japanese
patent office and any equivalents or similar registrations or filings thereto in
any other jurisdiction in the Territory.  Albireo shall provide all such
cooperation and assistance, and perform all such acts and execute and deliver
all such documents, as Ajinomoto may reasonably request in connection with such
recordation or filing.  Ajinomoto shall provide Albireo with an English
translation of any such summary for prior review and comment at least [***] days
before making any recordation or filing and will not unreasonably reject
comments provided by Albireo.

9.

GOVERNMENT APPROVALS.  Ajinomoto and Albireo shall cooperate and use
respectively all reasonable efforts to make all registrations, filings and
applications, to give all notices and to obtain as soon as practicable all
governmental or other consents, transfers, approvals, orders, qualifications,
authorizations, permits and waivers, if any, and to do all other things
necessary or desirable for the consummation of the transactions as contemplated
hereby.

10.

TERM AND TERMINATION.

10.1.Term.  The term of this Agreement shall commence on the Effective Date and,
unless earlier terminated as provided in this Section 10, shall continue in full
force and effect until the expiration of the last-to-expire Royalty Period for
any Product in any country in the Territory (the “Term”).  

51

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

10.2.Rights of Termination.  

10.2.1.Termination for Material Breach.  This Agreement may be terminated
effective immediately on a country-by-country basis or in its entirety by
written notice by either Party at any time during the Term if the other Party
materially breaches this Agreement, which breach remains uncured for [***] days
measured from the date that written notice of such breach is given to the
breaching Party, which notice shall specify the nature of the breach and demand
its cure.  Notwithstanding the foregoing, if a Party is alleged to be in
material breach and disputes such termination through the dispute resolution
procedures set forth in this Agreement, then the other Party’s right to
terminate this Agreement shall be suspended for so long as such dispute
resolution procedures are being pursued by the Party in good faith and if it is
finally and conclusively determined that the Party is in material breach, then
prior to any termination becoming effective or any remedies being enforced, such
Party shall have the right to cure such material breach after such determination
within the cure period provided above in this Section 10.2.1.

10.2.2.Ajinomoto Right of Termination; Automatic Termination for Failure to
Commence Clinical Trials.  Prior to its expiration, this Agreement may be
terminated in its entirety, or country-by-country (except for Japan), at any
time by Ajinomoto effective upon at least one hundred and eighty (180) days
prior written notice to Albireo for any reason.  In addition, this Agreement
shall be terminated in its entirety to the extent provided in Section 4.1.2.

10.2.3.Bankruptcy.  This Agreement may be terminated by written notice by either
Party at any time during the Term if the other Party shall file in any court or
agency, pursuant to any statute or regulation of any state or country, a
petition in bankruptcy or insolvency, or a petition for reorganization, or a
petition for an arrangement or for the appointment of a receiver or trustee of
that Party or of its assets, or if the other Party proposes a written agreement
of composition or extension of its debts, or if the other Party shall be served
with an involuntary petition against it, filed in any insolvency proceeding, and
such petition shall not be dismissed within [***] days after the filing thereof,
or if the other Party shall propose or be a party to any dissolution or
liquidation, or if the other Party shall make an assignment for the benefit of
its creditors.  The Parties agree that, in case of bankruptcy or insolvency of
Albireo without termination of this Agreement by Ajinomoto pursuant to this
Section 10.2.3, all rights and licenses granted by Albireo under this Agreement
shall remain intact after such bankruptcy or insolvency, and Ajinomoto, as a
licensee of such rights and licenses, shall be entitled to retain and may fully
exercise all of its rights and elections to the maximum extent available to it
under the applicable laws.

52

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

10.3.Effects of Termination or Expiration.  

10.3.1.Effects of Termination by Ajinomoto without Cause or by Albireo with
Cause.  If this Agreement is terminated automatically or by Ajinomoto pursuant
to Section 10.2.2, or by Albireo pursuant to Section 10.2.1 or 10.2.3, then the
following provisions shall be effective, but only for the country or countries
for which such termination is effective (the “Relevant Countries”), upon such
termination:

(a)All licenses granted by Albireo to Ajinomoto hereunder shall automatically
terminate;

(b)All licenses granted by Ajinomoto to Albireo shall become fully paid up,
irrevocable, perpetual, royalty-free licenses;

(c)Ajinomoto shall assign to Albireo all right, title and interest in and to:
(i) all Regulatory Submissions and Regulatory Approvals Controlled by Ajinomoto
pertaining to the Albireo Compound or Products and all data generated in
clinical trials undertaken by Ajinomoto, its Affiliates or Sublicensees
hereunder, provided that Ajinomoto and its Sublicensees retain the licenses and
Right of Reference granted under Section 2 to such Regulatory Submissions,
Regulatory Approvals, and data for the countries in the Territory that are not
Relevant Countries; (ii) all of Ajinomoto’s interest in any Trademark
(including, without limitation, the goodwill symbolized by such Trademark) used
to brand the Product; and (iii) all of Ajinomoto’s interest in any copyrights of
works exclusively used for the Product to the extent necessary or useful for
Commercializing the Product;

(d)Ajinomoto shall grant, and hereby grants, to Albireo, a worldwide, exclusive
(even as to Ajinomoto), royalty-free (except as set forth in this subsection
(d)) and fully sublicensable license to practice any invention Covered by the
Ajinomoto Patent Rights or Joint Patent Rights, and to practice the Ajinomoto
Know-How and Joint Know-How, for purposes of Development and Commercialization
of any Albireo Compound or Products in the Field.  Notwithstanding the
foregoing, in the event this Agreement is terminated by Ajinomoto without cause
pursuant to Section 10.2.2, then, with respect to sales of any Royalty-Bearing
Product by Albireo or its Licensees in the Relevant Countries in the Territory
after such termination, Albireo shall deliver to Ajinomoto a report similar to
the report set forth in Section 5.5.1 and pay to Ajinomoto a royalty of [***]
percent ([***]%) of net sales (calculated by applying the definition of Net
Sales in Section 1.86 mutatis mutandis to sales of Royalty-Bearing Products by
Albireo or its Licensees) of such Royalty-Bearing Product by Albireo or its
Licensees in the Relevant Countries.  For purposes of this Section 10.3.1,
“Royalty-Bearing Product” means a Product, (i) which is Covered by or the use of
which is Covered by an Ajinomoto Patent Right or a Joint Patent Right, or which
makes use of Ajinomoto Know-How or Joint Know-

53

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

How; or (ii) for which Regulatory Approval is based substantially on data
generated in any activities undertaken by Ajinomoto, its Affiliates or
Sublicensees (“Ajinomoto Data”).  Any royalty owed pursuant to this Section
10.3.1(d) shall only be owed on a country-by-country and Royalty-Bearing
Product-by-Royalty-Bearing Product basis until the later of (A) the expiration
of the last Valid Claim of an Ajinomoto Patent Right or a Joint Patent Right
Covering such Royalty-Bearing Product (including its composition and/or
formulation) in such country or an Indication (as defined in Section 1.66) of
such Royalty-Bearing Product in such country and (B) the expiration of
Regulatory Exclusivity of the Ajinomoto Data used to obtain Regulatory Approval
of such Royalty-Bearing Product in such country;

(e)Ajinomoto shall furnish Albireo with reasonable cooperation to assure a
smooth transition of any clinical or other studies in progress related to the
Albireo Compound or Products which Albireo determines to continue in compliance
with Applicable Laws and ethical guidelines applicable to the transfer or
termination of any such studies.  In the event that Albireo informs Ajinomoto
that it does not intend to continue specific development activities then in
progress, costs incurred in closing out such activities shall be borne by
Ajinomoto.  In addition, Ajinomoto will return all Albireo Confidential
Information to Albireo; and

(f)Until termination is effective, the Parties shall continue to perform their
obligations under this Agreement, including, without limitation, the Territory
Development Plan and Commercialization Plan then in effect and pay all costs
allocated for each Party to pay in accordance with any budgets then in effect,
except with respect to activities that Albireo elects to discontinue with
respect to the Territory Development Plan and Commercialization Plan then in
effect, including all payment obligations accrued through the effective date of
termination.

Subsection (a) above will be effective upon any such termination, and
subsections (b), (c), (d), (e) and (f) above shall be effective upon
termination, or if such termination is by Ajinomoto pursuant to Section 10.2.2,
upon the earlier of such termination or Albireo’s earlier election.

Notwithstanding the foregoing, subsections (a), (c), (d) and (e) above shall not
be applicable for any Product in the Relevant Countries with respect to which
the license granted to Ajinomoto under Section 2.1 becomes a fully paid-up
license pursuant to Section 5.3.3, except in the event this Agreement is
terminated by Albireo pursuant to Section 10.2.1.

54

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

10.3.2.Effects of Termination by Ajinomoto with Cause.  If this Agreement is
terminated in its entirety by Ajinomoto pursuant to Section 10.2.1 or 10.2.3,
(i) all licenses granted by Albireo to Ajinomoto shall automatically terminate;
(ii) all licenses granted by Ajinomoto to Albireo shall automatically terminate;
and (iii) Albireo shall return all Ajinomoto Confidential Information to
Ajinomoto.  

10.3.3.Survival of Certain Obligations.  Expiration or termination of this
Agreement shall not relieve the Parties of any obligation accruing before such
expiration or termination.  The provisions of this Agreement that must, by their
nature or terms, survive expiration or termination of this Agreement to give
effect to their intention, shall so survive.  Such provisions include, without
limitation, Sections 2.4 (Joint Technology), 2.6 (Right of Reference) (for the
time period set forth therein), 5.3.3 (Fully Paid-Up, Royalty Free License), 5.4
(Payment of Albireo Territory Development Costs and Expert Costs) (to the extent
necessary to reimburse costs incurred during the Term), 5.5.1 (Royalty Reports)
(to the extent necessary to determine and remit royalty payments on Net Sales
earned during the Term), 5.5.2 (Taxes and Withholding) (with respect to payments
made after the Term), 5.5.3 (Currency) (with respect to payments made after the
Term), 5.5.4 (Method of Payment) (with respect to payments made after the Term),
5.5.5 (Record Keeping) (for the time period set forth therein), 5.5.6 (Audits)
(for the time period set forth in Section 5.5.5), 5.5.7 (Interest) (with respect
to payments that become overdue during or after the Term), 6.1 (Confidentiality)
(for the time period set forth therein), 7.3 (Representation by Legal Counsel),
7.5 (Disclaimer), 8.2 (Ownership), 8.4 (Ajinomoto Patent Rights), 8.5 (Joint
Patent Rights outside the Territory) (with respect to Joint Patent Rights filed
before the expiration or termination of this Agreement), 8.10 (No Implied
Licenses), 8.11 (Privileged Communications), 10.3 (Effects of Termination or
Expiration), 11 (Product Liability, Indemnification and Insurance), 12.1
(Governing Law, Jurisdiction; Dispute Resolution), 12.3 (Waiver and
Non-Exclusion of Remedies), 12.4 (Notices), 12.5 (Entire Agreement), 12.8 (No
Benefit to Others), 12.12 (Publicity), 12.13 (Relationship of the Parties) and
12.14 (Headings), as well as any other Sections or defined terms referred to in
such Sections or necessary to give them effect.  Furthermore, any other
provisions required to interpret the Parties’ rights and obligations under this
Agreement shall survive to the extent required.  Any expiration or early
termination of this Agreement shall be without prejudice to the rights of either
Party against the other accrued or accruing under this Agreement before
termination.

55

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

11.

PRODUCT LIABILITY, INDEMNIFICATION AND INSURANCE.  

11.1.Indemnification by Albireo.  Albireo shall indemnify, defend and hold
harmless Ajinomoto, its Affiliates and Sublicensees, and each of its and their
respective employees, officers, directors and agents (each, a “Ajinomoto
Indemnified Party”) from and against any and all losses, damages, liabilities,
settlements, penalties, fines and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) (collectively, “Liability”) that the
Ajinomoto Indemnified Party may be required to pay to one or more Third Parties
to the extent resulting from or arising out of:

(a)any Albireo representation or warranty set forth herein being untrue in any
material respect when made or any material breach by Albireo of any of its
covenants or obligations hereunder; or

(b)the gross negligence or willful misconduct by or of Albireo, its Affiliates,
Sublicensees and Licensees, and their respective employees, officers, directors,
and agents; or

(c)any claims arising from or related to Albireo’s development, manufacture or
commercialization of the Albireo Compound or Products;

except in each case, to the extent caused by the gross negligence or willful
misconduct of Ajinomoto or any Ajinomoto Indemnified Party, or by breach of this
Agreement by Ajinomoto.

11.2.Indemnification by Ajinomoto. Ajinomoto shall indemnify, defend and hold
harmless Albireo, its Affiliates and Sublicensees, and each of its and their
respective employees, officers, directors and agents (each, a “Albireo
Indemnified Party”) from and against any and all Liabilities that the Albireo
Indemnified Party may be required to pay to one or more Third Parties to the
extent resulting from or arising out of:

(a)any Ajinomoto representation or warranty set forth herein being untrue in any
material respect when made or a material breach by Ajinomoto of any of its
covenants or obligations hereunder; or

(b)the gross negligence or willful misconduct by or of Ajinomoto, its Affiliates
and Sublicensees, and their respective employees, officers, directors and
agents; or

(c)any claims arising from or related to Ajinomoto’s development, manufacture or
commercialization of the Albireo Compound or Products;

except in each case, to the extent caused by the gross negligence or willful
misconduct of Albireo or any Albireo Indemnified Party, or by breach of this
Agreement by Albireo.  

56

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

11.3.Procedure.  Each Party shall notify the other in the event it becomes aware
of a claim for which indemnification may be sought hereunder or for which
Liability is shared pursuant to this Section 11.  In case any proceeding
(including, without limitation, any governmental investigation) shall be
instituted involving any Party in respect of which indemnity may be sought
pursuant to this Section 11, such Party (the “Indemnified Party”) shall promptly
notify the other Party (the “Indemnifying Party”) in writing and the
Indemnifying Party and Indemnified Party shall meet to discuss how to respond to
any claims that are the subject matter of such proceeding.  The Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party and
shall pay the fees and expenses of such counsel related to such proceeding.  In
any such proceeding, the Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of the Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
Parties by the same counsel would be inappropriate due to actual or potential
differing interests between them.  All such fees and expenses incurred pursuant
to Section 11.1 or 11.2 shall be reimbursed as they are incurred.  The
Indemnifying Party shall not be liable for any settlement of any proceeding
unless effected with its written consent.  The Indemnifying Party shall not,
without the written consent of the Indemnified Party, effect any settlement of
any pending or threatened proceeding in respect of which the Indemnified Party
is, or arising out of the same set of facts could have been, a party and
indemnity could have been sought hereunder by the Indemnified Party, unless such
settlement includes an unconditional release of the Indemnified Party from all
liability on claims to which the indemnity relates that are the subject matter
of such proceeding.  

11.4.Insurance.  Each Party further agrees to obtain and maintain, during the
term of this Agreement, Commercial General Liability Insurance, Products
Liability Insurance and Product Recall Insurance with reputable and financially
secure insurance carriers to cover its indemnification obligations under
Sections 11.1 or 11.2, as applicable, with limits of not less than [***] U.S.
Dollars ($[***]) per occurrence and [***] U.S. Dollars ($[***]) in the
aggregate, which shall be raised to [***] U.S. Dollars ($[***]) per occurrence
and [***] U.S. Dollars ($[***]) in the aggregate from and after the First
Commercial Sale of any Product in any country in the Territory.  

11.5.Liability Limitations.  

11.5.1.No Consequential Damages.  NOTWITHSTANDING THE FOREGOING, IN NO EVENT
WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES UNDER THIS AGREEMENT, EXCEPT TO
THE EXTENT THE DAMAGES RESULT FROM A PARTY’S WILLFUL MISCONDUCT OR ARISE FROM A
PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS SECTION 11.  

57

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

11.5.2.Scope of Albireo’s Liability.  The maximum aggregate amount that Albireo
shall be required to pay for indemnification arising under Section 11.1 in
respect of all claims by all Ajinomoto Indemnified Parties shall be equal to the
total amount of payments actually received by Albireo pursuant to Section 5 of
this Agreement (the “Indemnity Cap”); provided, however, that such Indemnity Cap
shall not apply to Liabilities based on or arising out of the gross negligence
or willful misconduct of Albireo.  

12.

MISCELLANEOUS.  

12.1.Governing Law, Jurisdiction; Dispute Resolution.

12.1.1.Governing Law.  The interpretation and construction of this Agreement
shall be governed by the laws of England, excluding any conflicts or choice of
law rule or principle that might otherwise refer construction or interpretation
of this Agreement to the substantive law of another jurisdiction.  

12.1.2.Jurisdiction.  With respect to actions for equitable relief brought
pursuant to Section 6.1.7 or 12.1.4(e), each Party (i) irrevocably submits to
the exclusive jurisdiction of the courts sitting in England, with respect to
actions or proceedings arising in whole or in part out of, related to, based
upon or in connection with this Agreement or the subject matter hereof; (ii)
agrees that all claims in respect of such actions or proceedings may be heard
and determined only in any such court; and (iii) agrees not to bring any action
or proceeding arising out of or relating to this Agreement in any other court
(except to the extent required to enforce an order, judgment or ruling for
equitable relief in an action brought pursuant to Section 6.1.7 or 12.1.4(e)
issued by a court sitting in England).  Each Party waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety or other security that might be required of the other
Party with respect thereto.  

12.1.3.Dispute Resolution.  In the event of a dispute arising out of or relating
to this Agreement either Party shall provide written notice of the dispute to
the other, in which event the dispute shall be referred to the executive
officers designated below or their successors, for attempted resolution by good
faith negotiations within [***] business days after such notice is
received.  Said designated officers are, as of the Effective Date, as follows:

 

For Albireo:[***] or his designate

 

For Ajinomoto:  [***] or his designate

58

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

In the event the designated executive officers do not resolve such dispute
within the allotted [***] business days, either Party may, after the expiration
of the [***] business day period, seek to resolve the dispute through
arbitration in accordance with Section 12.1.4.  Notwithstanding the preceding,
the Parties acknowledge that the failure of the JCC or JDC to reach consensus as
to any matter, which failure does not involve a breach by a Party of its
obligations hereunder, shall not be deemed a dispute which may be referred for
resolution by arbitration hereunder.

12.1.4.Arbitration.  

(a)Claims.  Any claim, dispute, or controversy of whatever nature arising
between the Parties out of or relating to this Agreement that is not resolved
under Section 12.1.3 within the required thirty (30) business days time period,
or for which a Party is entitled to seek equitable relief under Section 6.1.7 or
12.1.4(e), including, without limitation, any action or claim based on tort,
contract, or statute, or concerning the interpretation, effect, termination,
validity, performance and/or breach of this Agreement (“Claim”), will be
resolved by final and binding arbitration before a panel of three (3) experts
with relevant industry experience (the “Arbitrators”).  One (1) Arbitrator will
be chosen by Albireo and one (1) Arbitrator will be chosen by Ajinomoto within
fifteen (15) business days from the notice of initiation of arbitration.  The
third Arbitrator will be chosen by mutual agreement of the Arbitrator chosen by
Albireo and the Arbitrator chosen by Ajinomoto within fifteen (15) business days
of the date that the last of such Arbitrators were appointed.  The Arbitrators
will be administered by the International Chamber of Commerce (the
“Administrator”) in accordance with its then existing arbitration rules or
procedures regarding commercial or business disputes.  The arbitration will be
held in [***].  The Arbitrators will be instructed by the Parties to complete
the arbitration within ninety (90) business days after selection of the final
Arbitrator.

(b)Arbitrators’ Award.  The Arbitrators will, within fifteen (15) calendar days
after the conclusion of the arbitration hearing, issue a written award and
statement of decision describing the essential findings and conclusions on which
the award is based, including, without limitation, the calculation of any
damages awarded. The decision or award rendered by the Arbitrators will be final
and non-appealable, and judgment may be entered upon it in accordance with
applicable law in England or any other court of competent jurisdiction. The
Arbitrators will be authorized to award compensatory damages, but will NOT be
authorized (i) to award non-economic damages, such as for emotional distress,
pain and suffering or loss of consortium; (ii) to award punitive damages; or
(iii) to reform, modify or materially change this Agreement or any other
agreements contemplated hereunder; provided, however, that the damage
limitations described in parts (i) and (ii) of this sentence will not apply if
such damages are statutorily imposed.

59

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

(c)Costs.  Each Party will bear [***], and [***] arising out of the arbitration
and the costs of the [***], and will pay [***] of the fees and costs of [***];
provided, however, that the Arbitrators will be authorized to determine whether
a Party is the prevailing Party, and if so, to award to the prevailing Party
reimbursement for its reasonable attorneys’ fees, costs and disbursements
(including, for example, expert witness fees and expenses, photocopy charges,
travel expenses, etc.), and/or the fees and costs of the Administrator and the
Arbitrators.

(d)Compliance with this Agreement.  Unless the Parties otherwise agree in
writing, during the period of time that any arbitration proceeding is pending
under this Agreement, the Parties will continue to comply with all those terms
and provisions of this Agreement that are not the subject of the pending
arbitration proceeding.

(e)Injunctive or Other Equity Relief.  Nothing contained in this Agreement will
deny any Party the right to seek injunctive or other equitable relief from a
court of competent jurisdiction in the context of a bona fide emergency or
prospective irreparable harm, and such an action may be filed and maintained
notwithstanding any ongoing arbitration proceeding.

12.2.Force Majeure.  No liability shall result from, and no right to terminate
shall arise, in whole or in part, based upon any delay in performance or
non-performance, in whole or in part, by either of the Parties to this Agreement
to the extent that such delay or non-performance is caused by an event of Force
Majeure.  “Force Majeure” means an event that is beyond a non-performing Party’s
reasonable control, including, without limitation, an act of God, act of the
other Party, strike, lock-out or other industrial/labor dispute, power failure,
war, riot, civil commotion, terrorist act, malicious damage, epidemic,
quarantine, fire, flood, storm, natural disaster or compliance with any law or
governmental order, rule, regulation or direction, whether or not it is later
held to be invalid or inapplicable.  The Force Majeure Party shall within ten
(10) days of the occurrence of the Force Majeure event, give written notice to
the other Party stating the nature of the Force Majeure event, its anticipated
duration and any action being taken to avoid or minimize its effect.  Any
suspension of performance shall be of no greater scope and of no longer duration
than is reasonably required and the Force Majeure Party shall use reasonable
efforts to remedy its inability to perform; provided, however, if the suspension
of performance continues or is anticipated to continue for thirty (30) days
after the date of the occurrence, the unaffected Party shall have the right but
not the obligation to perform on behalf of the Force Majeure Party for the
duration of such Force Majeure and such additional period as may be reasonably
required to assure a smooth and uninterrupted transition of such activities.  If
such failure to perform would constitute a material breach of this Agreement in
the absence of such event of Force Majeure, and continues for one (1) year from
the date of the occurrence and the Parties are not able to agree on appropriate
amendments within such period, such other Party shall have the right,
notwithstanding the first sentence of this Section 12.2, to terminate this
Agreement immediately by written notice to the Force Majeure Party, in which
case neither Party shall have any liability to the other except for those rights
and liabilities that

60

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

accrued prior to the date of termination and the consequences of termination
pursuant to Sections 10.3.1 or 10.3.2, as applicable, as if such termination was
a termination as to which such consequences applied.

12.3.Waiver and Non-Exclusion of Remedies.  A Party’s failure to enforce, at any
time or for any period of time, any provision of this Agreement, or to exercise
any right or remedy shall not constitute a waiver of that provision, right or
remedy or prevent such Party from enforcing any or all provisions of this
Agreement and exercising any rights or remedies.  To be effective any waiver
must be in writing.  The rights and remedies provided herein are cumulative and
do not exclude any other right or remedy provided by law or otherwise available
except as expressly set forth herein.

12.4.Notices.

12.4.1.Notice Requirements.  Any notice, request, demand, waiver, consent,
approval or other communication permitted or required under this Agreement shall
be in writing, shall refer specifically to this Agreement and shall be deemed
given only if delivered by hand or sent by facsimile transmission (with
transmission confirmed) or by internationally recognized courier service that
maintains records of delivery, addressed to the Parties at their respective
addresses specified in Section 12.4.2 or to such other address as the Party to
whom notice is to be given may have provided to the other Party in accordance
with this Section 12.4.1.  Such Notice shall be deemed to have been given as of
the date delivered by hand or transmitted by facsimile (with transmission
confirmed) or on the second business day (at the place of delivery) after
deposit with an internationally recognized courier service.  This Section is not
intended to govern the day-to-day business communications necessary between the
Parties in performing their obligations under the terms of this Agreement.

12.4.2.Address for Notice.

Albireo:

 

Albireo AB

Arvid Wallgrens Backe 20

413 46 Gothenburg

Sweden

Fax number:+46-31-7411480

Tel number:+46-31-820223

 

Attention:  Jan P. Mattsson, PhD, Chief Operating Officer

 

61

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

With a copy of any notices pursuant to Sections 2.5.4, 6.1.3(a), 6.1.4, 8.7.1,
8.8.1, 10.2, 11.3, 12.1.3, 12.1.4(a), 12.2, 12.3 and/or 12.7:

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199-3600

U.S.A.

Fax number: +1-(617) 235-0706

Tel number: +1-(617) 951-7826

 

Attention:  Marc A. Rubenstein

 

 

Ajinomoto:

 

 

[***]

 

 

Attention: [***]

 

With a copy of any notices pursuant to Sections 2.5.4, 6.1.3(a), 6.1.4, 8.7.1,
8.8.1, 10.2, 11.3, 12.1.3, 12.1.4(a), 12.2, 12.3 and/or 12.7:

Ajinomoto Co., Inc.

15-1, Kyobashi 1-chome, Chuo-ku

Tokyo, 104-8315 Japan

Fax number: +81-(0)3-5250-8347

Tel number: +81-(0)3-5250-8178

 

Attention:  Intellectual Property Dept.

 

 

 

12.5.Entire Agreement.  This Agreement constitutes the entire agreement between
the Parties with respect to the subject matter of this Agreement.  This
Agreement supersedes all prior agreements, whether written or oral, with respect
to the subject matter hereof.  Each Party confirms that it is not relying on any
representations, warranties or covenants of the other Party except as
specifically set out in this Agreement.  Nothing in this Agreement is intended
to limit or exclude any liability for fraud.  All Schedules or Exhibits referred
to in this Agreement are intended to be and are hereby specifically incorporated
into and made a part of this Agreement.  In the event of any inconsistency
between any such Schedules or Exhibits and this Agreement, the terms of this
Agreement shall govern.

12.6.Amendment.  Any amendment or modification of this Agreement must be in
writing and signed by authorized representatives of both Parties.

62

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

12.7.Assignment.  Neither Party may assign its rights or delegate its
obligations under this Agreement, in whole or in part without the prior written
consent of the other Party, except that each Party shall always have the right,
without such consent, (i) to perform any or all of its obligations and exercise
any or all of its rights under this Agreement through any of its Affiliates; and
(ii) on written notice to the other Party, assign any or all of its rights and
delegate or subcontract any or all of its obligations hereunder to (A) any of
its Affiliates or (B) a successor of all or substantially all of the business of
such Party or of the portion of such business to which this Agreement relates,
whether by way of merger, sale of stock, sale of assets or other transaction (or
series of transactions).  Notwithstanding the foregoing, each Party shall remain
responsible for any failure to perform on the part of any such Affiliates.  Any
attempted assignment or delegation in violation of this Section shall be void.  

12.8.No Benefit to Others.  The provisions of this Agreement are for the sole
benefit of the Parties and their successors and permitted assigns, and they
shall not be construed as conferring any rights in any other persons except as
otherwise expressly provided in this Agreement.

12.9.Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall be deemed to constitute one and the same instrument.  An executed
signature page of this Agreement delivered by facsimile transmission shall be as
effective as an original executed signature page.

12.10.Severability.  To the fullest extent permitted by applicable law, the
Parties waive any provision of law that would render any provision in this
Agreement invalid, illegal or unenforceable in any respect.  If any provision of
this Agreement is held to be invalid, illegal or unenforceable, in any respect,
then such provision will be given no effect by the Parties and shall not form
part of this Agreement.  To the fullest extent permitted by applicable law and
if the rights or obligations of any Party will not be materially and adversely
affected, all other provisions of this Agreement shall remain in full force and
effect and the Parties will use their best efforts to negotiate a provision in
replacement of the provision held invalid, illegal or unenforceable that is
consistent with applicable law and achieves, as nearly as possible, the original
intention of the Parties.

12.11.Further Assurance. Each Party shall perform all further acts and things
and execute and deliver such further documents as may be necessary or as the
other Party may reasonably require to implement or give effect to this
Agreement.

12.12.Publicity.  Notwithstanding Section 6.1.6, it is understood that the
Parties will issue a press release announcing the execution of this Agreement in
such form as the Parties shall mutually agree.  The Parties agree to consult
with each other reasonably and in good faith with respect to the text and timing
of any subsequent press releases relating to this Agreement or the activity
hereunder prior to the issuance thereof, provided that a Party may not
unreasonably withhold consent to such releases, and that either Party may issue
such press releases as it determines, based on advice of counsel, are reasonably
necessary to comply with laws or regulations or for appropriate market
disclosure or as are consistent with information disclosed in prior releases
properly made hereunder following prior notice to the other Party as much in
advance as possible.  

63

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

12.13.Relationship of the Parties.  The status of a Party under this Agreement
shall be that of an independent contractor. Nothing contained in this Agreement
shall be construed as creating a partnership, joint venture, or agency
relationship between the Parties or, except as otherwise expressly provided in
this Agreement, as granting either Party the authority to bind or contract any
obligation in the name of or on the account of the other Party or to make any
statements, representations, warranties, or commitments on behalf of the other
Party.  All Persons employed by a Party or any of its Affiliates shall be
employees of such Party or its Affiliates and not of the other Party or such
other Party’s Affiliates and all costs and obligations incurred by reason of any
such employment shall be for the account and expense of such Party or its
Affiliates, as applicable.

12.14.Headings.  The titles, and section and subsection headings, herein are for
convenience of reference only and shall not affect the construction of this
Agreement.

 

64

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

IN WITNESS WHEREOF, duly authorized representatives of the Parties have duly
executed this Agreement to be effective as of the Effective Date.

 

AJINOMOTO PHARMACEUTICALS CO., LTD.

ALBIREO AB

 

 

 

 

By

/s/ T. Toyoda

By

/s/ Jan Mattsson

 

 

 

 

Name:

Tomoyasu Toyoda

Name:

Jan Mattsson

Title:

President & CEO

Title:

COO

 

 

 

 

 

 

By

/s/ D. J. Chiswell

 

 

Name:

D. J. Chiswell

 

 

Title:

Chairman

 

 

 

[Signature Page to License Agreement]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

Schedule 1.9

Albireo Compound

 

Albireo name: A3309 (previously known as AZD7806)

International Non-proprietary Name (INN): Elobixibat.

Systematic name :
N-{(2R)-2-[({[3,3-dibutyl-7-(methylthio)-1,1-dioxido-5-phenyl-2,3,4,5‑tetrahydro-1,5-benzothiazepin-8-yl]oxy}acetyl)amino]-2-phenylethanoyl}glycine

Structural formula:

 

[g2017032719542642055903.jpg]

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL

 

Schedule 1.12

Albireo Patent Rights

 

The headings are: Reference; Country Name (using standard WIPO two-letter
codes); Status (I = inactive; F = filed/pending; G = granted); Application
Number; Registration No. = Patent No.

 

Case No: [***]

Reference

Country

Status

Application No.

Registration No.

[***]

[***]

[***]

[***]

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

 

Case No: [***]

Reference

Country

Status

Application No.

Registration No.

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

Schedule 1.23

Chronic Idiopathic Constipation

 

I. Definition of Chronic Idiopathic Constipation

A diagnosis of Chronic Idiopathic Constipation (“CIC”) (synonymous with
functional constipation and chronic constipation) can be based on clinical
symptoms, a physician’s opinion, the Rome I, II or III diagnostic criteria
(1-3), WGO (4) or ACG (5) guidelines. It is characterized by unsatisfactory
defecation that results from infrequent stools, difficult stool passage, or
both. The pathophysiology is multi-factorial and may include dysfunction of
intestinal motility, visceral sensitivity, ano-rectal musculature and the
enteric nervous system. The term chronic implies that the symptom duration is
more than three (3) months.

II. References

 

1.

Whitehead WE, Chaussade S, Corazziari E, et al. Report of an international
workshop on management of constipation. Gastroenterol Int 1991;4:99-113

 

2.

Thompson WG, Longstreth GF, Drossman DA, et al. Functional bowel disorders and
functional abdominal pain. Gut 1999;45 (Suppl II):1143-7

 

3.

Longstreth GF, Thompson WG, Chey WD, et al. Functional bowel disorders.
Gastroenterology 2006;130:1480-91

 

4.

Lindberg, Greger; Hamid, Saeed S. ,  Malfertheiner, Peter et al. WGO Guideline.
World Gastroenterology Organisation Global Guideline: Constipation—A Global
Perspective. J Clin Gastroenterol 2011; 45: 483–487

 

5.

American College of Gastroenterology Chronic Constipation Task Force.  An
Evidence-Based Approach to the Management of Chronic Constipation in North
America. Am J Gastroenterol 2005; 100: S1-S4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

EXHIBIT 1.54

Rome III Diagnostic Criteria for Functional Gastrointestinal Disorders

 

 

[See attached.]

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

EXHIBIT 1.115

Territory Development Plan

          [***]

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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

CONFIDENTIAL

 

EXHIBIT 4.2.1

Global Development Plan

 

 

[See attached.]

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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CONFIDENTIAL

 

EXHIBIT 6.3.1

[***]

 

[***]

[***]

[g2017032719542681355904.jpg]

 

[g2017032719542681455905.jpg]

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.