exv10w2






Exhibit 10.2




Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.




Amended and Restated




Strategic License Agreement



by and between



Avila Therapeutics, Inc.



and



Clovis Oncology, Inc.



June 16, 2011














 





Amended and Restated Strategic License Agreement



Table of Contents




	 	 	 	 	 	 
	 	 	 	 	 	Page
	1.
	 	Definitions	 	 	1
	 
	 	 	 	 	 
	2.
	 	Collaboration Program	 	 	8
	 
	 	 	 	 	 
	3.
	 	Governance	 	 	9
	 
	 	 	 	 	 
	4.
	 	Development and Commercialization	 	 	11
	 
	 	 	 	 	 
	5.
	 	License Grants	 	 	12
	 
	 	 	 	 	 
	6.
	 	Payments and Royalties	 	 	14
	 
	 	 	 	 	 
	7.
	 	Ownership of Collaboration Program Know-How	 	 	21
	 
	 	 	 	 	 
	8.
	 	Patent Prosecution and Maintenance	 	 	22
	 
	 	 	 	 	 
	9.
	 	Patent Enforcement and Defense	 	 	24
	 
	 	 	 	 	 
	10.
	 	Confidentiality	 	 	26
	 
	 	 	 	 	 
	11.
	 	Warranties; Limitations of Liability; Indemnification	 	 	28
	 
	 	 	 	 	 
	12.
	 	Term and Termination	 	 	31
	 
	 	 	 	 	 
	13.
	 	General Provisions	 	 	34





















 






Amended and Restated Strategic License Agreement




List of Exhibits and Schedules




	 	 	 

	 
	Exhibit 1.7
	 	Avila Patents as of the Effective Date
	 
	Exhibit 1.53
	 	Targets
	 
	Exhibit 2.1(b)
	 	Collaboration Plan
	 
	Exhibit 2.1(c)
	 	Initial Agreed Compound Profile
	 
	Exhibit 8.1(a)
	 	Proposed Prosecution and Maintenance Activities for Subject Patents
	 
	Exhibit 10.3(c)
	 	Joint Press Release





















 







Amended and Restated Strategic License Agreement




Amended and Restated Strategic License Agreement




          This Amended and Restated Strategic License Agreement (this “Agreement”), dated as of June 16,
2011 (the “A&R Date”), is made by and between Avila Therapeutics, Inc., a Delaware corporation
(“Avila”), and Clovis Oncology, Inc, a Delaware corporation (“Clovis”). Each of Avila and Clovis
may be referred to herein as a “Party” or together as the “Parties.”



          WHEREAS, Avila has developed and owns or has rights to certain patents and technology relating
to the discovery and development of covalent-based drugs using its AvilomicsTM platform;



          WHEREAS, Avila has previously conducted research and development to identify potential
covalent inhibitors of the Targets (as defined below);



          WHEREAS, Clovis is a biopharmaceutical company focused on acquiring, developing and
commercializing innovative anti-cancer agents;



          WHEREAS, the Parties are interested in collaborating together to discover and develop
preclinically covalent inhibitors of the Targets and then having Clovis develop clinically and
commercialize the lead inhibitor candidate as a drug product, all in accordance with the terms and
conditions set forth below; and



          WHEREAS, the Parties entered into that certain Strategic License Agreement (the “Original
Agreement”) as of May 24, 2010 (the “Effective Date”), and the Parties now desire to amend and
restate the Original Agreement on the terms and conditions set forth below.



          NOW, THEREFORE, the Parties hereby agree as follows:


1.          Definitions.



The following terms and their correlatives will have the following meanings:




      1.1       “Affiliate” of a person or entity will mean any other entity which (directly or
indirectly) is controlled by, controls or is under common control with such person or entity. For
the purposes of this definition, the term “control” (including, with correlative meanings, the
terms “controlled by” and “under common control with”) as used with respect to an entity will mean
(i) in the case of a corporate entity, direct or indirect ownership of voting securities entitled
to cast more than fifty percent (50%) of the votes in the election of directors or (ii) in the case
of a non-corporate entity, direct or indirect ownership of more than fifty percent (50%) of the
equity interests with the power to direct the management and policies of such entity.



      1.2       “Asia” will mean the People’s Republic of China (including Hong Kong), Japan, Republic of
Korea, and Taiwan.



      1.3       “Asia Partnership” will mean an agreement between Clovis and a Sublicensee whereby Clovis
grants to such Sublicensee at least Commercialization rights for Japan (and optionally other
countries within Asia) with respect to any Lead Candidate or Licensed Products. The grant by
Clovis of an option to such Commercialization rights may be treated by Avila at its election as an
Asia Partnership for purposes of this Agreement.



      1.4       “Avila Core Technology” will mean all Patents, Materials and Know-How owned (in whole or
in part), in-licensed or otherwise controlled by Avila or any of its Affiliates comprising the
technology currently branded by Avila under the trademark AvilomicsTM and improvements thereto or
any research tools used by Avila in the research, discovery or development of covalent inhibitors.



      1.5       “Avila Owned IP” will mean any Collaboration Program Know-How, and Patents arising
therefrom, that constitute one or more of the following: (i) improvements, modifications to any
Avila Core Technology; and (ii) Research Candidates and methods of making and using the same.



1









 





Amended and Restated Strategic License Agreement




      1.6       “Avila Know-How” will mean all Know-How and Materials Controlled by Avila or any of its
Affiliates, used by Avila in the Collaboration Program, and necessary or useful to discover and
Develop preclinically Research Candidates or to Develop and Commercialize the Lead Candidate and
Licensed Products. For clarity, Avila Know-How will include, if applicable, Collaboration Program
Know-How owned in whole or in part by Avila (including Avila Owned IP).



      1.7       “Avila Patents” will mean all Patents Controlled by Avila or any of its Affiliates,
containing a Valid Claim Covering any Research Candidates or Licensed Products, and necessary or
useful to discover and Develop preclinically Research Candidates or to Develop and Commercialize
the Lead Candidate, Licensed Products and Companion Diagnostics. For clarity, Avila Patents will
include (i) Patents for occupancy probes for the Targets and (ii) if applicable, Avila’s interest
in Patents within its Sole Collaboration Program IP and within the Joint Collaboration Program IP,
including Patents constituting Avila Owned IP. The Avila Patents in existence as of the Effective
Date are set forth on Exhibit 1.7.



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



      1.9       “Clovis Development & Commercialization Program” will mean a Development and
Commercialization program for the Lead Candidate and Licensed Products and Companion Diagnostics in
the Field worldwide.



      1.10      “Clovis Technology” will mean Know-How, Materials and Patents Controlled by Clovis or any
of its Affiliates necessary or useful for Avila to discover and Develop Research Candidates as part
of the Collaboration Program. For clarity, Clovis Technology will include, if applicable, (i)
Clovis’s interest in Patents within its Sole Collaboration Program IP and the Joint Collaboration
Program IP, and (ii) Collaboration Program Know-How owned in whole or in part by Clovis.



      1.11      “Collaboration Program” will mean the program of research and preclinical Development
that the Parties engage in under this Agreement.



      1.12      “Collaboration Program Know-How” will mean all Know-How and Materials created, conceived
or reduced to practice in connection with activities performed pursuant to the Collaboration
Program (whether solely by one Party or jointly by the Parties, in each case optionally with their
Affiliates and subcontractors or any employees, consultants or agents of any of the foregoing).



      1.13      “Commercialization” will mean any and all activities directed to the manufacturing,
marketing, detailing, promotion and securing of reimbursement of Licensed Products after Regulatory
Approval has been obtained (including making, having made, using, importing, selling and offering
for sale Licensed Products), and will include post-approval clinical studies, post-launch
marketing, promoting, detailing, marketing research, distributing, customer service, and
commercially selling Licensed Products, importing, exporting or transporting Licensed Products for
commercial sale, and all regulatory compliance with respect to the foregoing.



      1.14      “Commercially Reasonable Efforts” will mean, with respect to the Development or
Commercialization of the Lead Candidate and Licensed Products, that level of efforts and resources
commonly dedicated in the research-based pharmaceutical industry by a company to the development or
commercialization, as the case may be, of a product of similar commercial potential at a similar
stage in its lifecycle, in each case taking into account issues of safety and efficacy, product
profile, the proprietary position, the then current competitive environment for such product and
the likely timing of such product’s entry into the market, the regulatory environment and status of
such product, and other relevant scientific, technical and commercial factors.



      1.15      “Companion Diagnostics” will mean a diagnostic product or service to the extent sold or
used to determine whether to prescribe the Licensed Product to treat a human patient. For clarity,
no covalent



2









 





Amended and Restated Strategic License Agreement



inhibitor (including the Lead Candidate or any Licensed Product) or occupancy probe against
any of the Targets will be included within this definition.




      1.16      The terms “compound” and “covalent inhibitor” when used herein will include the chemical
structure in question, its optical isomers, plus all solvates, salt forms and polymorphs of the
foregoing.



      1.17      “Control” or “Controlled” will mean, with respect to any Know-How, Material, Patent, or
other intellectual property right, the possession (whether by ownership or license, other than by a
license granted pursuant to this Agreement) by a Party or its Affiliates of the ability to grant to
the other Party a license or access as provided herein to such Know-How, Material or Patent,
without violating the terms of any agreement or other arrangement with any Third Party, or being
obligated to pay any royalties or other consideration therefor, in existence as of the time such
Party or its Affiliates would first be required hereunder to grant the other Party such license or
access.



      1.18      “Covers”, with reference to a Patent, will mean that the making, using, selling, offering
for sale or importing of a composition of matter or practice of a method would infringe a Valid
Claim of such Patent in the country in which such activity occurs.



      1.19      “Development” will mean, with respect to a compound, preclinical and clinical drug
development activities, including: test method development and stability testing, toxicology,
formulation, process development, qualification and validation, manufacture scale-up,
development-stage manufacturing, quality assurance/quality control, clinical studies, statistical
analysis and report writing, the preparation and submission of NDAs and MAAs, regulatory affairs
with respect to the foregoing and all other activities necessary or useful or otherwise requested
or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a
Regulatory Approval, plus pre-launch marketing, promoting, detailing, marketing research,
distributing, and commercial sales.



      1.20      “Distributors” will mean a Third Party, other than a Sublicensee of Clovis, that (i)
purchases any Licensed Products in finished form from or at the direction of Clovis or any of its
Affiliates or Sublicensees, and (ii) has the right to Commercialize such Licensed Products in one
or more regions, or has an option to do the foregoing.



      1.21      “EMA” will mean the European Medicines Agency and any successor agency thereto.



      1.22      “EU” will mean the organization of member states of the European Union as it may be
constituted from time to time.



      1.23      “FDA” will mean the United States Food and Drug Administration and any successor agency
thereto.



      1.24      “Field” will mean all indications for human use, including all therapeutic and diagnostic
uses.



      1.25      “Financial Consideration” will mean license fees, signing fees, option fees, milestone
payments and any other consideration (including non-monetary consideration) paid to, or otherwise
received by, Clovis or any of its Affiliates in consideration for the establishment of a
Sublicensee or Distributor relationship (and without reduction for any additional Patents or
Know-How or other intellectual property rights granted or commitments made in connection
therewith), but does not include (i) revenues from sales of Licensed Products by Clovis to
Sublicensees or Distributors; (ii) royalties metered on sales of Licensed Products by Selling
Parties, (iii) payments contractually committed to reimburse the Fully Allocated Costs of future
Development of the Lead Candidate and Licensed Products, provided that any amounts received in
excess of such costs (such as, for example, a profit share) will be treated as “Financial
Consideration” hereunder, and (iv) payments received to purchase securities of Clovis at fair
market value, provided that any premium paid over fair market value will be treated as “Financial
Consideration” hereunder with. For purposes of this definition, “fair market value” will be
determined on a per share basis and will mean the average closing price of Clovis common stock for
the ten (10) trading days immediately preceding the date such Sublicensee or Distributor agreement
is



3









 





Amended and Restated Strategic License Agreement



executed, or, if there is no trading market for the security issued, the good faith
determination of the board of directors of Clovis as to its fair market value (taking into account,
inter alia, the pricing of other recent security issuances by Clovis).




      1.26      “First Commercial Sale” will mean the first sale for use or consumption of any Licensed
Product in a country after all required Regulatory Approvals for commercial sale of such Licensed
Product have been obtained in such country.



      1.27      “First Line Therapy” will mean an initial treatment or primary or induction therapy for
the treatment of patients having any of lung, breast, colon or prostate cancer.



      1.28      “FTE” will mean a full-time person, or more than one person working the equivalent of a
full-time person, where “full-time” is determined by the standard practices in the
biopharmaceutical industry in the geographic area in which such personnel are working and includes
R&D activities and scientific management oversight.



      1.29      “FTE Rate” will equal *** for twelve (12) continuous months of one (1) FTE. The FTE Rate
is the fully burdened rate for each such FTE and, for clarity, will include all standard laboratory
supplies and reagents to be used by such FTE in conducting the Collaboration Program.



      1.30      “Fully Allocated Costs” will mean the costs of labor (including allocable employee
benefits and employment taxes), material, energy, utilities or other costs directly incurred and
normal overhead (including, without limitation, administrative labor costs, maintenance, relevant
insurance, depreciation of the equipment and depreciation of the facility) all determined in
accordance with GAAP applied on a consistent basis.



      1.31      “GAAP” will mean U.S. generally accepted accounting principles, consistently applied.



      1.32      “IND” will mean an investigational new drug application filed with the FDA for
authorization to commence clinical studies, and its equivalent in a foreign country.



      1.33      “Know-How” will mean all commercial, technical, scientific and other know-how and
information, trade secrets, knowledge, technology, methods, processes, practices, formulae,
instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs,
drawings, assembly procedures, computer programs, specifications, data and results (including
biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical,
preclinical, clinical, safety, manufacturing and quality control data and know-how, including study
designs and protocols), in all cases, whether or not confidential, proprietary, patented or
patentable, in written, electronic or any other form now known or hereafter developed.



      1.34      “Knowledge” will mean the actual knowledge or good faith understanding of the vice
presidents, senior vice presidents, president or chief executive officer of a Party of the facts
and information then in their possession without any duty to conduct any investigation with respect
to such facts and information.



      1.35      “Lead Candidate” will mean the Research Candidate that the Parties mutually agree
exhibits the Agreed Compound Profile, and that Clovis will Develop pursuant to this Agreement, all
as described in Section 2.1(c).



      1.36      “Licensed Products” will mean the Lead Candidate and any pharmaceutical products
containing the Lead Candidate in any formulation.



      1.37      “MAA” will mean a Marketing Authorization Application filed with the EMA under the
centralized European procedure (including amendments and supplements thereto).



      1.38      “Materials” will mean any tangible chemical or biological material, including any
compounds, DNA, RNA, clones, cells, and any expression product, progeny, derivative or other



4









 





Amended and Restated Strategic License Agreement



improvement thereto, along with any tangible chemical or biological material embodying any
Know-How.




      1.39      “NDA” will mean a New Drug Application or Supplemental New Drug Application filed with
the FDA (including amendments and supplements thereto).



      1.40      “Net Sales” will mean the gross amount invoiced in arms-length transactions by the
Selling Party(ies) from or on account of the sale or distribution of Licensed Products to
non-Selling Parties, less:



            (a)        reasonable credits or allowances, if any, on account of price adjustments, recalls,
rejection or return of items previously sold;




            (b)        import taxes, export taxes, excises, sales taxes, value added taxes, consumption taxes,
duties or other taxes imposed upon and paid with respect to such sales (excluding income or
franchise taxes of any kind);




            (c)        separately itemized insurance and transportation costs incurred in shipping Licensed
Products to such non-Selling Parties;




            (d)        trade, quantity and cash discounts actually allowed; and




            (e)        governmental or commercial rebates, wholesaler fees, administrative fees to managed care,
group purchasing and other similar institutions, chargebacks and retroactive price adjustments and
any other similar allowances which effectively reduce the selling price,



all as determined from the books and records of the Selling Party, maintained in accordance with
GAAP.




           Nothing herein will prevent a Selling Party from selling, distributing or invoicing Licensed
Products at a discounted price for shipments to Third Parties in connection with clinical studies,
compassionate sales, or an indigent program or similar bona fide arrangements in which the Selling
Party agrees to forego a normal profit margin for good faith business reasons. Except for such
discounting, no deduction will be made for any item of cost incurred in Developing or
Commercializing Licensed Products except as permitted pursuant to clauses (a) to (e) of the
foregoing sentence.



           Licensed Products will be considered “sold” when a sale by a Selling Party is recognized in
accordance with revenue recognition policies mandated by GAAP. Sale or transfer of Licensed
Products between any of the Selling Parties will not result in any Net Sales, and Net Sales instead
will be based on subsequent sales or distribution to a non-Selling Party, unless such Licensed
Products is consumed by a Selling Party. To the extent that any Selling Party receives
consideration other than or in addition to cash upon the sale or distribution of Licensed Products,
Net Sales will include the fair market value of such additional consideration.



      1.41      “Patent” will mean a patent or a patent application, including any additions, divisions,
continuations, continuations-in-part, invention certificates, substitutions, reissues,
reexaminations, extensions, registrations, supplementary protection certificates and renewals, but
not including any rights that give rise to Regulatory Exclusivity Periods (other than supplementary
protection certificates, which will be treated as “Patents” hereunder).



      1.42      “Patent Costs” will mean the out-of-pocket costs and expenses paid to outside legal
counsel and other Third Parties, and filing and maintenance expenses, incurred in Prosecuting and
Maintaining Patents and enforcing and defending them.



      1.43      “Phase 2 Study” will mean a clinical trial of a product, the principal purpose of which
is a determination of safety and efficacy in the target patient population, as described in 21
C.F.R. 312.21(b) (as amended or any replacement thereof), or a similar clinical study prescribed by
the Regulatory Authorities in a foreign country. For purposes of this Agreement, “start of Phase 2
Study” for a product will mean the first dosing of such product in a human patient in a Phase 2
Study.



5









 





Amended and Restated Strategic License Agreement




      1.44      “Phase 3 Study” will mean a clinical trial of a product on a sufficient number of
subjects that is designed to establish that a pharmaceutical product is safe and efficacious for
its intended use, and to determine warnings, precautions, and adverse reactions that are associated
with such pharmaceutical product in the dosage range to be prescribed, which trial is intended to
support Regulatory Approval of such product, as described in 21 C.F.R. 312.21(c) (as amended or any
replacement thereof), or a similar clinical study prescribed by the Regulatory Authorities in a
foreign country. For purposes of this Agreement, “start of Phase 3 Study” for a product will mean
the first dosing of such product in a human patient in a Phase 3 Study.



      1.45      “Prosecution and Maintenance,” with regard to a particular Patent, will mean the
preparation, filing, prosecution and maintenance of such Patent, as well as re-examinations,
reissues and the like with respect to that Patent, together with the conduct of interferences, the
defense of oppositions and other similar proceedings with respect to that Patent.



      1.46      “Regulatory Approval” will mean, with respect to a country or extra-national territory,
any and all approvals (including NDAs and MAAs), licenses, registrations or authorizations of any
Regulatory Authority necessary in order to commercially distribute, sell or market a product in
such country or some or all of such extra-national territory, but not including any pricing or
reimbursement approvals.



      1.47      “Regulatory Authority” will mean any national (e.g., the FDA), supra-national (e.g. the
EMA), regional, state or local regulatory agency, department, bureau, commission, council or other
governmental entity, in any jurisdiction in the world, involved in the granting of Regulatory
Approval.



      1.48      “Regulatory Exclusivity Period” will mean any period of data, market or other regulatory
exclusivity (other than supplementary protection certificates, which will be treated as Patents
hereunder), including any such periods under national implementations in the EU of Section
10.1(a)(iii) of Directive 2001/EC/83 and all international equivalents.



      1.49      “Research Candidates” will mean any covalent inhibitors that are designed, discovered or
tested as part of the Collaboration Program in an effort to discover and Develop a covalent
inhibitor to specifically inhibit the Targets with the properties specified in the Agreed Compound
Profile. For clarity, the Lead Candidate will be a “Research Candidate” hereunder.



      1.50      “Second Indication” will mean a disease condition for which a particular Licensed Product
may be prescribed, after such Licensed Product has already been approved by such Regulatory
Authority for the treatment of a first disease condition.



      1.51      “Selling Party” will mean Clovis and its Affiliates and Sublicensees, plus with respect
to sales or distribution of Licensed Products in or for the United States, Asia, Canada, the EU,
Norway and Switzerland, Distributors as well.



      1.52      “Sublicensee” will mean any person or entity (including Affiliates of Clovis) that is
granted a sublicense as permitted by Section 5.3(c) (or an option take such a sublicense), either
directly by Clovis or indirectly by any other Sublicensee hereunder.



      1.53      “Targets” will mean the mutant forms of the epidermal growth factor receptor specified on
Exhibit 1.53.



      1.54      “Third Party” will mean any person or entity other than Avila, Clovis and their
respective Affiliates.



      1.55      “United States” or “U.S.” will mean the United States of America, including its
territories and possessions, the District of Columbia and Puerto Rico.



      1.56      “Valid Claim” will mean, with respect to a particular country, (i) any claim of an issued
and unexpired Patent in such country that (a) has not been held permanently revoked, unenforceable
or invalid



6









 





Amended and Restated Strategic License Agreement


by a decision of a court or governmental agency of competent jurisdiction, which decision is
unappealable or unappealed within the time allowed for appeal and (b) has not been abandoned,
disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or
otherwise in such country, or (ii) a claim of a pending Patent application, which claim is being
diligently prosecuted and has not been abandoned or finally disallowed without the possibility of
appeal or re-filing of the application.



Definitions for each of the following terms are found in the body of this Agreement as indicated
below:




	 	 	 	 	 	 

	 	Defined Term
	 	 	Location	 
	 	Additional Reporting Period
	 	 	Section 4.5	 
	 	Agreed Compound Profile
	 	 	Section 2.1(c)	 
	 	Agreement
	 	 	Preamble	 
	 	A&R Date
	 	 	Preamble	 
	 	Avila
	 	 	Preamble	 
	 	Avila Indemnitees
	 	 	Section 11.6(a)	 
	 	Avila Program Director
	 	 	Section 3.1	 
	 	Clovis
	 	 	Preamble	 
	 	Clovis Indemnitees
	 	 	Section 11.6(b)	 
	 	Clovis Program Director
	 	 	Section 3.1	 
	 	Collaboration Plan
	 	 	Section 2.1(b)	 
	 	Collaboration Program Term
	 	 	Section 2.1(c)	 
	 	Competitive Infringement
	 	 	Section 9.1	 
	 	Confidentiality Agreement
	 	 	Section 10.4	 
	 	Confidential Information
	 	 	Section 10.1(a)	 
	 	Cost Estimate
	 	 	Section 6.4(e)(i)	 
	 	Disclosing Party
	 	 	Section 10.1(a)	 
	 	Drug Company
	 	 	Section 13.3	 
	 	Effective Date
	 	 	Preamble	 
	 	Expert
	 	 	Section 13.1(d)(i)	 
	 	First Line Notice
	 	 	Section 6.4(e)(i)	 
	 	Hatch-Waxman Time Period
	 	 	Section 9.2(a)(iii)	 
	 	Indemnification Claim Notice
	 	 	Section 11.6(c)	 
	 	Indemnified Party
	 	 	Section 11.6(c)	 
	 	Industry Transaction
	 	 	Section 13.3	 
	 	Issuing Party
	 	 	Section 10.3(b)	 
	 	JAMS
	 	 	Section 13.1(c)	 
	 	Joint Collaboration Program IP
	 	 	Section 7.2(b)	 
	 	JSC
	 	 	Section 3.2(a)	 
	 	Losses
	 	 	Section 11.6(a)	 
	 	Milestone Event
	 	 	Section 6.3(a)	 
	 	Milestone Payment
	 	 	Section 6.3(a)	 
	 	Other Product
	 	 	Section 5.6	 
	 	Option Exercise Notice
	 	 	Section 6.4(e)(i)	 
	 	Original Agreement
	 	 	Preamble	 
	 	Other Patents
	 	 	Section 8.1	 
	 	Party and Parties
	 	 	Preamble	 
	 	Program Directors
	 	 	Section 3.1	 
	 	Receiving Party
	 	 	Section 10.1(a)	 
	 	Release
	 	 	Section 10.3(b)	 
	 	Reviewing Party
	 	 	Section 10.3(b)	 
	 





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Amended and Restated Strategic License Agreement




	 	 	 	 	 	 

	 	Defined Term
	 	 	Location	 
	 	Sole Collaboration Program IP
	 	 	Section 7.2(b)	 
	 	Specific Patent
	 	 	Section 8.1(b)	 
	 	Subject Patent
	 	 	Section 8.1	 
	 	Term
	 	 	Section 12.1	 
	 	Third Party Claims
	 	 	Section 11.6(a)	 
	 





2.          Collaboration Program.




      2.1       Collaboration Program Generally.



            (a)        Goals.   The objective of the Collaboration Program will be to discover and Develop
preclinically the Lead Candidate up to and through acceptance of an IND for the Lead Candidate, all
as directed by the JSC as provided herein.




            (b)        Collaboration Plan.   The research and preclinical Development activities of the Parties
with respect to the Collaboration Program will be described in a “Collaboration Plan,” an initial
version of which is attached hereto as Exhibit 2.1(b). The Collaboration Plan will include a
budget for the remaining portion of the Calendar Year in which this Agreement is executed and the
next succeeding Calendar Year, and a projected budget for the next Calendar Year thereafter or
until the end of the Collaboration Program Term if shorter. The Collaboration Plan will be
reviewed as necessary at each meeting of the JSC, and at any other time upon the request of either
Party, and will be modified as appropriate at the direction of the JSC to reflect material
scientific, commercial and other developments. In all events, the Collaboration Plan will be
consistent and not conflict with the terms of this Agreement.




            (c)        Designation of the Agreed Compound Profile and the Lead Candidate.   Attached hereto as
Exhibit 2.1(c) is the initial covalent inhibitor profile for the Targets, which will be used to
guide the discovery and Development of Research Candidates (the “Agreed Compound Profile”).
Pursuant to the Collaboration Plan, Avila will work to discover and Develop Research Candidates in
an effort to identify the Lead Candidate. The JSC will designate a Lead Candidate satisfying the
Agreed Compound Profile from among the Research Candidates, with reference to such other factors as
the JSC may deem relevant, including for example assessment of the complexity of chemical synthesis
of the Lead Candidate, expected amenability for manufacture of the Lead Candidate at scale,
physical forms of the Lead Candidate, physical stability of the Lead Candidate and the extent to
which strong patent Coverage could be obtained for such compound. If the JSC does not so designate
a Lead Candidate and an IND is not accepted for the Lead Candidate by July 1, 2012, then the
Parties will promptly meet and discuss the extent to which Clovis is willing to continue to fund
the Collaboration Program, and absent a commitment by Clovis to fund the Collaboration Program for
an additional period of time the Collaboration Program will terminate on October 1, 2012. The
Collaboration Program will be in effect for a period from the Effective Date until an IND is
accepted for the Lead Candidate unless ending earlier pursuant to the terms hereof (the
“Collaboration Program Term”).




            (d)        Obligations Under the Collaboration Plan.    Each Party will use reasonable efforts to
perform (itself or through its Affiliates or by permitted subcontracting) its respective
obligations under the Collaboration Plan, and will cooperate with and provide reasonable support to
the other Party in such other Party’s performance of its responsibilities under the Collaboration
Plan. The Parties acknowledge and agree, however, that no outcome or success is or can be assured
and that failure to achieve desired results will not in and of itself constitute a breach or
default of any obligation in this Agreement.




            (e)        Cell Lines.   Promptly following the execution of this Agreement and during the course of
the Collaboration Program Term, and subject to Section 2.2(c), Avila will share with Clovis cell
lines in its Control relevant to the Agreed Compound Profile as well as other relevant cell lines
developed as part of the Collaboration Program (e.g. Target transfectants/lines) and Controlled by
Avila to aid in






8









 





Amended and Restated Strategic License Agreement





translational biology efforts for Research Candidates or the Lead Candidate or diagnostic
development efforts for Companion Diagnostics as part of the Clovis Development & Commercialization
Program.




            (f)        Pre-IND Regulatory Interactions.    Clovis will lead all efforts with Regulatory Authorities
regarding preclinical development of the Lead Candidate, including taking full responsibility for
preparing and filing the IND for the Lead Candidate and interactions with the FDA or other
Regulatory Authority regarding such IND or its equivalent.




      2.2        Collaboration Program Records, Reports and Materials.



            (a)        Records.    Each Party will maintain, or cause to be maintained, records of its activities
under the Collaboration Program in sufficient detail and in good scientific manner appropriate for
scientific, Patent and regulatory purposes, which will properly reflect all work included in the
Collaboration Program, Program for a period of at least ten (10) years after the creation of such
records. Each Party will have the right to request a copy of any such records, except to the
extent that the other Party reasonably determines that such records contain Confidential
Information that is not licensed to such Party hereunder, or to which such Party does not otherwise
have a right hereunder.




            (b)        Collaboration Program Reports.   During the Collaboration Program Term and for the next
calendar quarter thereafter, each Party will furnish to the JSC, a summary written report within
thirty (30) days after the end of each calendar quarter, describing its progress under the
Collaboration Plan as part of the Collaboration Program.




            (c)        Materials.




                   (i)        Each Party will, during the Collaboration Program Term, as a matter of course as described
in the Collaboration Plan or upon the other Party’s reasonable written request, furnish to each
other samples of Materials which constitute Avila Know-How or Clovis Technology in such Party’s
Control and are necessary for the other Party to carry out its responsibilities under the
Collaboration Plan.



                   (ii)       Each Party will use such Materials only in accordance with the Collaboration Plan and
otherwise in accordance with the terms and conditions of this Agreement. Except with the prior
written consent of the supplying Party, the Party receiving any Materials will not distribute or
otherwise allow the release of Materials to any Affiliate or Third Party, except for subcontracting
or to Sublicensees in each case as permitted hereunder. All Materials delivered to the receiving
Party will remain the sole property of the supplying Party and will be used in compliance with all
applicable law. The Materials supplied under this Agreement will be used with prudence and
appropriate caution in any experimental work because not all of their characteristics may be known.



      2.3        Permitted Subcontracting.    Each Party may subcontract any of its activities to be
performed under the Collaboration Plan to an Affiliate or Third Party, provided that any such
Affiliate or Third Party will have entered into a written agreement with such Party that includes
terms and conditions protecting and limiting use and disclosure of Confidential Information and
Materials and Know-How at least to the same extent as under this Agreement, and requiring such
Affiliate or Third Party and its personnel to assign to such Party all right, title and interest in
and to any Patents and Know-How and Materials created, conceived or reduced to practice in
connection with the performance of subcontracted activities. Any such subcontracting activities
will be described in the reports for the Collaboration Program required by Section 2.2(b).



3.        Governance.




     3.1      Management.     Management of the Collaboration Program activities will be under the
responsibility of one person to be designated by Clovis (the “Clovis Program Director”) and one
person to be designated by Avila (the “Avila Program Director,” and together with the Clovis
Program Director, the “Program Directors”).



9









 




 Amended and Restated Strategic License Agreement




     3.2         Joint Steering Committee.



           (a)        Steering Committee.     As soon as practicable, the Parties will establish a Joint Steering
Committee, comprised of two (2) representatives of Avila and two (2) representatives of Clovis (the
“JSC”). Each Party may replace its representatives on the JSC or its Program Director at any time
upon written notice to the other Party. With the consent of the other Party (which will not be
unreasonably withheld or delayed), each Party may invite non-voting employees and consultants to
attend meetings of the JSC, subject to their agreement to be bound to the same extent as a
permitted subcontractor under Section 2.3.




           (b)        Meetings.     While in existence, the JSC will meet each calendar quarter and, at a minimum,
two of such meetings each Calendar Year will be in person (which in-person meeting will be held on
an alternating basis in Waltham, MA, on the one hand, and in either Boulder, CO or San Francisco,
CA, on the other). Meetings of the JSC will be effective only if at least one (1) representative
of each Party is present or participating. Each Party will be responsible for all of its own
expenses of participating in the committee meetings. The Parties will endeavor to schedule
meetings of the JSC at least six (6) months in advance. The Parties will alternate in preparing
the meeting agenda, and the Party that was responsible for preparing the meeting agenda will
prepare and circulate for review and approval by the other Party written minutes of such meeting
within fifteen (15) days after such meeting. The Parties will agree on the minutes of each meeting
promptly, but in no event later than the next meeting of the JSC.




           (c)        Responsibilities.    The JSC will oversee and supervise the overall performance of the
Collaboration Plan and within such scope will:




                 (i)        review the efforts of the Parties and allocate those resources for the Collaboration Plan
committed by the Parties hereunder;



                 (ii)        revise and approve any revised Collaboration Plan and its related budget regularly and in
any event at least thirty (30) days before the start of each Calendar Year during the Collaboration
Program Term;



                 (iii)       update the Agreed Compound Profile if and when appropriate during the Collaboration
Program Term;



                 (iv)        select Research Candidates for additional work as part of the Collaboration Program;



                 (v)        select the Lead Candidate as set forth in Section 2.1(c);



                 (vi)        form such other committees as the JSC may deem appropriate, provided that such committees
may make recommendations to the JSC but may not be delegated JSC decision-making authority;



                 (vii)      address such other matters relating to the activities of the Parties under this
Agreement as either Party may bring before the JSC, including any matters that are expressly for
the JSC to decide as provided in this Agreement; and



                 (viii)      attempt to resolve any disputes on an informal basis.



           (d)        Decision-making.    The two (2) JSC representatives of each Party will collectively have one
(1) vote, and the JSC will make decisions only by unanimous consent. In the event of a dispute
between the Parties with respect to the Collaboration Program or otherwise within the scope of the
JSC, the matter will be first considered by the JSC for resolution, and if not resolved, then
referred to the dispute resolution process set forth in Section 13.1(b); provided that instead of
escalation to such dispute resolution process, (i) Avila will have the tie-breaking vote for
matters involving the design, discovery and synthesis of Research Candidates and other research
chemistry aspects of the Collaboration Program, and (ii) Clovis will have the tie-breaking vote for
the selection of the Research Candidate meeting the






10









 





Amended and Restated Strategic License Agreement





Agreed Compound Profile that becomes the Lead Candidate hereunder and for matters involving
regulatory aspects of the IND for the Lead Candidate.




           (e)      Limits on JSC Authority.   Each Party will retain the rights, powers and discretion granted
to it under this Agreement and no such rights, powers, or discretion will be delegated to or vested
in the JSC unless such delegation or vesting of rights is expressly provided for in this Agreement
or the Parties expressly so agree in writing. The JSC will not have the power to amend, modify or
waive compliance with this Agreement (other than as expressly permitted hereunder).
Notwithstanding anything herein to the contrary, neither Party will require the other Party to
perform any activities that are materially different or greater in scope or more costly than those
provided for in the Collaboration Plan then in effect.




           (f)
     Term.    The JSC will cease to exist three (3) months after the end of the Collaboration
Program Term.




4.        Clinical Development and Commercialization.




      4.1      Clinical Development.  Upon the end of the Collaboration Program Term, Clovis will
assume sole responsibility for Developing the Lead Candidate and Licensed Products in the Field
worldwide, and will establish a Clovis Development & Commercialization Program for that purpose.
Clovis will have sole responsibility for all costs and expenses arising from the Development and
Commercialization of the Lead Candidate and Licensed Products in the Field worldwide.



      4.2      Regulatory.  Clovis will lead all efforts with Regulatory Authorities regarding
the Development and Commercialization of the Lead Candidate and Licensed Products in the Field
worldwide, including taking full responsibility for preparing and filing the relevant applications
for Regulatory Approval.



      4.3      Manufacturing.  Clovis will be solely responsible for, and will bear all the costs
and expenses of manufacturing and supplying all Licensed Products for Development and
Commercialization in the Field worldwide. Avila will provide at Clovis’ expense (including on an
FTE-basis) background research information and technical assistance as reasonably requested by
Clovis, to support development of the active drug substance for Licensed Products in the Field
worldwide.







      4.4      Clovis Diligence.  Clovis, directly or through one or more of its Affiliates,
Sublicensees or Distributors, will use Commercially Reasonable Efforts: (i) to Develop Licensed
Products in the Field and to obtain Regulatory Approvals therefor; and (ii) to Commercialize
Licensed Products in the Field after obtaining such Regulatory Approval, in the U.S., Canada, the
EU, Norway and Switzerland and in Asia, and in each other country worldwide where Commercializing
the Licensed Products would be Commercially Reasonable. Without limiting the generality of the
foregoing, Clovis will endeavor to complete an Asia Partnership within *** years after first human dosing
of any Licensed Product in a clinical trial, provided, that a failure to achieve such an Asia
Partnership within such time frame will have no contractual consequence other than the imposition
of the Japan-specific development Milestones Events specified in Section 6.3(d).







      4.5      Bi-Annual Update Meetings.  During each six (6)-month period from the end of the
Collaboration Program Term until the earlier of first approval of an NDA for any Licensed Product
by the FDA or first approval of an MAA for any Licensed Product by the EMA, within thirty (30) days
of Avila’s written request, the Parties will meet in person at a U.S. site of Clovis for Clovis to
provide Avila with an update on the Development of the Licensed Products by Clovis and its
Affiliates and Sublicensees. During such meeting, Clovis will disclose to Avila all material
information regarding such Development and will further provide such data and information in
writing with respect thereto as Avila may reasonably request. Each Party will bear its own costs
and expenses regarding such meetings. Further, in the event that Avila exercises its option under
Section 6.4(e) regarding cost sharing of certain clinical trial expenses, at Avila’s request such
meetings will occur, not only during the time period and at



11









 




Amended and Restated Strategic License Agreement



the frequency prescribed above, but also from Avila’s option exercise until twelve (12) months
after the completion of the additional clinical trial referred to in such Section 6.4(e) (the
“Additional Reporting Period”), and during the Additional Reporting Period such meetings will occur
each calendar quarter instead of once every six (6) months.




     4.6      Reports by Clovis.    Clovis will prepare and maintain, and will cause its
Affiliates, Sublicensees and Distributors to prepare and maintain, reasonably complete and accurate
records regarding the Development of Licensed Products, and Commercialization of Licensed Products
worldwide after Regulatory Approval therefor. Clovis will provide to Avila a reasonably detailed
report regarding such efforts at least once every two (2) calendar quarters. Such report will
contain sufficient detail to enable Avila to assess Clovis’s compliance with its Development and
Commercialization obligations in Section 4.4, including information with respect to the following:
(i) the design, status and results of any animal studies and clinical trials for the Lead Candidate
and Licensed Products; (ii) any regulatory milestones, and any Regulatory Approvals achieved, for
the Lead Candidate and Licensed Products; and (ii) activities with respect to selling, promoting,
supporting, detailing and marketing of Licensed Products. In addition to the foregoing, (a) Clovis
will provide Avila with such additional information regarding any such activities as Avila may
reasonably request from time to time, and (b) Clovis will disclose to Avila as soon as practicable
any information regarding any clinical trials for any Licensed Products that Clovis intends to
disclose publicly (after complying with the terms of this Agreement with respect thereto).
Further, in the event that Avila exercises its option under Section 6.4(e) regarding cost sharing
of certain clinical trial expenses, at Avila’s request such reports will be made by Clovis during
the Additional Reporting Period each calendar quarter instead of once every two (2) calendar
quarters.



5.      License Grants.




      5.1      Licenses by Avila



           (a)      For the Collaboration Program.   Subject to the terms and conditions of this Agreement,
Avila hereby grants to Clovis a worldwide, non-exclusive license, with the right to sublicense only
as permitted by Section 5.3, during the Collaboration Program Term, to use Avila Know-How and Avila
Patents, as needed to enable Clovis to perform its portion of the Collaboration Program.




           (b)      For Development and Commercialization.  Subject to the terms and conditions of this
Agreement, Avila hereby grants to Clovis a worldwide, exclusive (even as to Avila) license in the
Field, with the right to sublicense only as permitted by Section 5.3, under Avila Know-How and
Avila Patents, to Develop the Lead Candidate, Licensed Products and Companion Diagnostics and to
Commercialize Licensed Products and Companion Diagnostics, as part of a Clovis Development &
Commercialization Program, provided that until the first Regulatory Approval of a Licensed Product,
the foregoing license to Companion Diagnostics may only be used for the Development of Licensed
Products. For clarity, the license to Commercialize granted in this Section 5.1(b) will cover only
the sale and offer for sale of Licensed Products in finished form and Companion Diagnostics, and
not the sale or offer for sale of the Lead Candidate, API for Licensed Products, or any other
product or service other than Licensed Products in finished form and Companion Diagnostics.




      5.2      Licenses by Clovis.



           (a)      For the Collaboration Program.   Subject to the terms and conditions of this Agreement,
Clovis hereby grants to Avila a worldwide, non-exclusive license, with the right to sublicense only
as permitted by Section 5.3, during the Collaboration Program Term, to use Clovis Technology, as
needed to enable Avila to perform its portion of the Collaboration Program.




           (b)
     Grant-Back License.   Subject to the terms and conditions of this Agreement, Clovis hereby
grants to Avila a worldwide, fully paid-up, non-exclusive license, with the right to sublicense
through multiple tiers, to practice in full all Patents Controlled by Clovis or any of its
Affiliates and






12









 




Amended and Restated Strategic License Agreement






Sublicensees claiming any invention conceived or reduced to practice as part of the
Collaboration Program or the Clovis Development & Commercialization Program (including all Patents
arising from any Collaboration Program Know-How) for manufacturing purposes only, except to the
extent and for such time that the claim scope of any such Patents Covers the Lead Candidate or
Licensed Products exclusively licensed by Avila to Clovis under Section 5.1(b). For clarity, the
license granted in this Section 5.2(b) will apply to Patents only, not Know-How.




      5.3         Sublicensing Rights.



            (a)        The licenses granted in this Section 5 are transferable only upon a permitted assignment
of this Agreement in accordance with Section 13.12.




            (b)        The licenses granted in Sections 5.1 and 5.2 may be sublicensed, in full or in part, by a
written agreement as may be necessary for permitted subcontracting hereunder as provided in Section
2.3.




            (c)        The license granted in Section 5.1(b) may be sublicensed, in full or in part, by Clovis by
a written agreement to its Affiliates and Third Parties (with the right to sublicense through
multiple tiers), provided, that as a condition precedent to and requirement of any such sublicense:




                 (i)        Clovis will consult with Avila when negotiating any sublicense for all or part of Asia,
including providing Avila with drafts of any proposed term sheets or agreements in sufficient time
for Avila to review and provide comments thereon, such comments to be taken into good faith
consideration by Clovis;



                 (ii)      Clovis will provide Avila with a copy of any sublicense agreement with a non-Affiliated
Sublicensee within thirty (30) days of execution thereof;



                 (iii)      Clovis will be responsible for any and all obligations of such Sublicensee as if such
Sublicensee were “Clovis” hereunder;



                 (iv)      Any such Sublicensee will agree in writing to be bound by similar obligations as “Clovis”
hereunder with respect to the activities of such Sublicensee hereunder (and not with respect to the
activities of any other); and




                 (v)      Avila will be made an express third-party beneficiary of any such Sublicensee’s
obligations under such sublicense agreement that relate to compliance with the terms and conditions
of this Agreement.



      5.4        Distributors. Subject to the terms and conditions of this Agreement, Clovis will
have the right to appoint by a written agreement Distributors to re-sell Licensed Products in
finished form purchased from or at the direction of Clovis, its Affiliates or Sublicensees. Clovis
will provide Avila with a copy of any agreement with any Distributor within thirty (30) days of
execution thereof. Clovis will be responsible for any and all obligations of any Distributor as if
such Distributor were “Clovis” hereunder. Further, any Distributor will agree in writing to be
bound by similar obligations as “Clovis” hereunder with respect to activities of such Distributor
in its jurisdiction under (i) Sections 4.4, 9.1, 10 and 11.6 and (ii) in addition, only for those
Distributors that are Selling Parties, Sections 4.6, 6.7(b) and 6.7(c).



      5.5        Contract Manufacturers. Subject to the terms and conditions of this Agreement,
Clovis will have the right to appoint by a written agreement “contract manufacturers”, meaning any
Third Party or Affiliate of Clovis that manufactures Licensed Products (or API therefor) for
re-sale, but who itself is not a “Sublicensee” hereunder and thereby exercises “have made” rights
granted by Avila under Section 5.1(b). Clovis will be responsible for any such contract
manufacturer hereunder, and further will require any such contract manufacturer to agree in writing
to comply with Sections 2.2(c), 5.7, and 10.



13









 




 Amended and Restated Strategic License Agreement




       5.6        Exclusivity. During the Term (on a country-by-country basis), neither Avila nor
Clovis nor any of their Affiliates will intentionally Develop or commercialize ***, except as
contemplated under this Agreement; provided, however, that:



            (a)      with respect to a Party, the foregoing prohibition will not apply to such Party or any of
its Affiliates after the closing of an Industry Transaction of such Party, provided that ***;




            (b)      The Parties understand and agree that ***; and




            (c)      Notwithstanding anything herein to the contrary, Avila will retain the right to use alone
or with others the Lead Candidate and Licensed Products for cross-screening and analysis of
molecules against any targets to enable compliance with this Section 5.6.




       5.7        No Other Licenses or Rights.   No license or other right is or will be created or
granted hereunder by implication, estoppel or otherwise. All such licenses and rights are or will
be granted only as expressly provided in this Agreement.



6.        Payments and Royalties.




       6.1        Up-Front Payment.   Clovis will pay to Avila on the Effective Date a one-time
payment of Two Million Dollars (U.S.$2,000,000), which will be non-refundable and non-creditable
and not subject to set-off.



       6.2        Collaboration Program FTE Support and Expense Payments.



            (a)        Collaboration Program FTE Support.




                  (i)        During the Collaboration Program Term, as support for work performed by or on behalf of
Avila under the Collaboration Plan, Clovis will pay Avila for FTEs at the proportionate share of
the FTE Rate for each FTE related to the time devoted by such FTE to the Collaboration Program.
Avila will establish a time tracking system for its FTEs involved in the Collaboration Program,
under which each person for whom Avila will seek reimbursement from Clovis will specify on an
every-other-week basis what percentage of his or her working time is spent on the Collaboration
Program. Avila will use reasonable efforts to manage and monitor the time of its FTEs involved in
the Collaboration Program in relation to the budget for the then Calendar Year under the
Collaboration Plan as established under Section 2.1(b) and will promptly communicate through the
JSC if any adjustment is needed to such budget during the applicable Calendar Year.



                  (ii)        Promptly following the end of each calendar quarter during the Collaboration Program
Term, Avila will invoice Clovis for the FTEs time at the FTE Rate devoted during such quarter to
the Collaboration Program, and will provide with each such invoice a reasonably detailed
description of the proportionate share of his or her time devoted by each FTE. Clovis will pay
Avila within thirty (30) days of receiving such invoice any undisputed FTE charges. Section 6.7(c)
will apply to Avila and the FTE charges will be subject to audit by Clovis under the terms of that
Section 6.7(c).



            (b)        Payment for External Expenses.   Promptly following the end of each calendar quarter during
the Collaboration Program Term, Avila will invoice Clovis for external expenses incurred by Avila
in support of the Collaboration Program and in accordance with the budget under the Collaboration
Plan and Avila will provide with each such invoice a reasonably detailed description of such
expenditures, and thereafter Avila will provide Clovis with any materials supporting such
expenditures as Clovis may reasonably request. Clovis will pay Avila within thirty (30) days of
receiving such invoice any undisputed amounts of such external expenses. In addition to the
foregoing, if any such external expense is expected to exceed One Hundred Thousand Dollars
(U.S.$100,000) from any single vendor, Avila may request that Clovis pay such expense directly or
reimburse Avila in advance of Avila incurring such expense, and in connection therewith Avila will
promptly provide Clovis with any materials describing such expense as Clovis may reasonably
request. Section 6.7(c) will apply to Avila and such external expenses will be subject to audit by
Clovis under the terms of that Section 6.7(c).







14









 




Amended and Restated Strategic License Agreement







       6.3        Milestone Payments.



          (a)        Generally.     Clovis will make milestone payments (each, a “Milestone Payment”) to Avila
upon the occurrence of each of the milestones events (each, a “Milestone Event”) as set forth below
in this Section 6.3. Each of the Milestone Payments will be payable to Avila by Clovis within ten
(10) days of the achievement of the specified Milestone Event, and such payments when owed or paid
will be non-refundable and non-creditable (except as specified in Section 6.3(b) for Milestone
Payments W and X, and in Section 6.3(d) for Milestone Payments A, B and C), and not subject to
set-off. Each of the Milestone Payments are payable only once.




          (b)        Development Milestones.



	 	 	 	 	 	 

	 	Milestone Event
	 	 	Milestone Payment	 
	 	
Upon the effectiveness of the first IND filing for Licensed Product
	 	 	Four Million Dollars (U.S.$4,000,000)	 
	 	
Upon start of the first Phase 2 Study for Licensed Product
	 	 	***	 
	 	

Upon acceptance of the filing of the first NDA in the United States or MAA in the EU for Licensed Product




a) First of the United States or EU 


b) Second of the United States or EU

 
	 	 	


***

***	 
	 	Upon the first approval of an NDA for Licensed
Product by the FDA
	 	 	
***	 
	 	Upon the first approval of an MAA for Licensed
Product by the EMA
	 	 	
***	 
	 	W. Upon start of the first Phase 3 Study (or, if
earlier, as such times as the first Phase 2 Study
is determined to be the pivotal study) for
Licensed Product in a Second Indication*
	 	 	
***	 
	 	X. Upon acceptance of the filing of an NDA in the
United States or MAA in the EU for Licensed
Product in a Second Indication*
	 	 	
***	 
	 	Upon the approval of an NDA for Licensed Product
by the FDA in a Second Indication
	 	 	
***	 
	 	Upon the approval of an MAA for Licensed Product
by the EMA in a Second Indication
	 	 	
***	 
	 






*If Avila elects to opt-in to pay certain Development costs and increase royalties payable
hereunder pursuant to Section 6.4(e), then Milestone Payment W is not thereafter payable
and Milestone Payment X is thereafter payable only at fifty percent (50%) of the amount
specified above (i.e., ***), or, if and to the extent either or both of Milestone Payments
W and X have been previously paid, may be credited by Clovis in the full amount of
Milestone Payment W and fifty percent (50%) of the amount specified above for Milestone
Payment X (i.e., ***) against the payment of future royalties or other Milestone Payments
hereunder.




If Milestone Event W or X concerning a Second Indication occurs before the Regulatory
Approval of Licensed Product for a first disease condition, then the payment of the
corresponding Milestone Payment will be due ten (10) days after Regulatory Approval of a
first disease condition for Licensed Product. For purposes of Milestones Payments, the
treatment of an approved indication as either “first” or “second” will ultimately be
determined by the actual



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Amended and Restated Strategic License Agreement






timing of the Regulatory Approval of the indication, even if such timing is the reverse of
that contemplated by the original designation of such indications by the Parties.



(c)      Sales Milestones.



	 	 	 	 	 	 

	 	Milestone Event	 	 	Milestone Payment	 
	 	Upon Net Sales in any Calendar Year arising from the
worldwide sale or distribution of all Licensed Products
exceeding *** for the first time
	 	 	***	 
	 	Upon Net Sales in any Calendar Year arising from the
worldwide sale or distribution of all Licensed Products
exceeding *** for the first time
	 	 	***	 
	 	Upon Net Sales in any Calendar Year arising from the
worldwide sale or distribution of all Licensed Products
exceeding *** for the first time
	 	 	***	 
	 









        (d)      Asia Milestones.    If Clovis does not enter into an exclusive Asia Partnership within ***
years after the first human dosing of a Licensed Product in a clinical trial, the following additional
Milestone Payments will be payable to Avila:








	 	 	 	 	 	 

	 	Milestone Event	 	 	Milestone Payment	 
	 	Start of a registration study for Japan for Licensed
Product (as such study is agreed with Japanese health
authorities)
	 	 	***	 
	 	Upon the filing of the first regulatory application for
Regulatory Approval in Japan of Licensed Product
	 	 	***	 
	 	Upon the first Regulatory Approval in Japan of Licensed
Product
	 	 	***	 
	 






If Clovis enters into such an Asia Partnership after any of the foregoing Milestone
Payments A, B or C are paid to Avila, any such Milestone Payments so paid to Avila will be
creditable against amounts owed Avila pursuant to Sections 6.4(a)(ii)(A) and 6.4(d) and
pursuant to Section 6.5 for such Asia Partnership, to reflect the equal sharing of
Financial Consideration contemplated by Section 6.5.




By way of example, (i) if Milestone Payment A has already been paid by Clovis to Avila, and
Clovis thereafter enters into such an Asia Partnership with a license fee of ***, then
fifty percent (50%) of such license fee, or ***, would have been owed Avila, and since
Clovis has already paid Avila *** as Milestone Payment A, then Clovis has a *** credit as
provided above, or (ii) if Milestone Payment A has already been paid by Clovis to Avila,
and Clovis thereafter enters into such an Asia Partnership with a license fee of ***, then
fifty percent (50%) of such license fee, or ***, would have been owed Avila, and since
Clovis has already paid Avila *** as Milestone Payment A, then Clovis owes Avila ***
payable in accordance with Section 6.7(a).



     6.4      Royalties.



         (a)      Royalties and Rates.




                (i)      Subject to the remainder of this Section 6.4, Clovis will pay to Avila running royalties
based on the total aggregate annual Net Sales worldwide by Selling Parties of all Licensed Products
in a given Calendar Year at the following royalty rates:



16









 




Amended and Restated Strategic License Agreement




	 	 	 	 	 	 	 	 
	 
	 	Annual Worldwide Net Sales	 	 	Royalty Rate	 	 
	 	of all Licensed Products	 	 	 	 	 	 
	 	Up to ***
	 	 	 	***	 
	 	From *** up to ***
	 	 	 	***	 
	 	From *** up to ***
	 	 	 	***	 
	 	Over ***
	 	 	 	***	 
	 




By way of example, in a given Calendar Year, if the aggregate annual worldwide Net Sales for all
Licensed Products is ***.




               (ii)      Notwithstanding Section 6.4(a)(i), for all Net Sales invoiced after the date that Clovis
first enters into an Asia Partnership, this Section 6.4(a)(ii) will apply instead of Section
6.4(a)(i) for those later-invoiced Net Sales:




                    (A)      Asia Net Sales. Subject to the remainder of this Section 6.4, Clovis will pay to Avila
running royalties based on the total aggregate annual Net Sales for Asia by Selling Parties of all
Licensed Products in a given Calendar Year at the following royalty rates:




	 	 	 	 	 	 	 	 
	 
	 	Annual Net Sales for Asia	 	 	Royalty Rate	 	 
	 	of all Licensed Products	 	 	 	 	 	 
	 	Up to ***
	 	 	 	***	 
	 	From *** up to ***
	 	 	 	***	 
	 	From *** up to ***
	 	 	 	***	 
	 	Over ***
	 	 	 	***	 
	 




By way of example, in a given Calendar Year, if the aggregate annual Net Sales for Asia for all
Licensed Products is ***.




                    (B)      Non-Asia Net Sales. Subject to the remainder of this Section 6.4, Clovis will pay to
Avila running royalties based on the total aggregate annual Net Sales worldwide other than for Asia
by Selling Parties of all Licensed Products in a given Calendar Year at the following royalty
rates:




	 	 	 	 	 	 	 	 
	 
	 	Annual Net Sales Worldwide Other than for Asia	 	 	Royalty Rate	 	 
	 	of all Licensed Products	 	 	 	 	 	 
	 	Up to ***
	 	 	 	***	 
	 	From *** up to ***
	 	 	 	***	 
	 	From *** up to ***
	 	 	 	***	 
	 	Over ***
	 	 	 	***	 
	 




By way of example, in a given Calendar Year, if the aggregate annual worldwide Net Sales (other
than for Asia) for all Licensed Products is ***.




               (iii)      For clarity, and as applied to both Sections 6.4(a)(i) and 6.4(a)(ii), with respect to
sales or distribution of Licensed Products in or for the United States, Asia, Canada, the EU,
Norway and Switzerland by one or more Distributors (as opposed to Clovis or any of its Sublicensees
or Affiliates), royalties payable under this Section 6.4(a) will be based on Net Sales of such
Distributors (and not on sales of Licensed Products to such Distributor by or at the direction of
Clovis or any of its Affiliates or Sublicensees).




          (b)      Royalty Term. Royalties under Section 6.4(a) will be payable on the Net Sales of any
Licensed Product if at least one of the following three (3) conditions apply:



               (i)      if one or more Valid Claims within any of the Avila Patents Covers such Licensed Product;







17









 




Amended and Restated Strategic License Agreement







                          (ii)        if one or more Regulatory Exclusivity Periods apply to the manufacture, use, sale, offer
for sale or importation of such Licensed Product; or








                         (iii)        on a country-by-country and Licensed Product-by-Licensed Product basis, for *** years from the
First Commercial Sale of such Licensed Product in such country.








                 (c)        Royalty Reduction for the United States. If a Licensed Product sold or distributed for
the United States is royalty-bearing only on account of Section 6.4(b)(iii), but not Section
6.4(b)(i) or 6.4(b)(ii), then the royalty rates set forth in Sections 6.4(a)(i) and 6.4(a)(ii)(B)
with respect to Net Sales attributable to such sales for the United States will be reduced by ***.
There will not be any other royalty deductions.



                 (d)        Royalty Adjustment for Asia. Upon Clovis first entering into an Asia Partnership, then
with respect to Net Sales invoiced thereafter from the sale or distribution of Licensed Products
for Asia attributable to any Sublicensee(s), royalties payable to Avila on such Net Sales will be
the greater of (i) *** or (ii) *** For each calendar quarter during which an Asia Partnership is
in effect, Clovis will determine the amounts payable to Avila under both of clause (i) and (ii)
based on the aggregate Net Sales from January 1 of the applicable Calendar Year until the end of
calendar quarter in question, and will pay to Avila the greater of those two amounts in accordance
with Section 6.7(b). Within ninety (90) days after the end of each Calendar Year during which an
Asia Partnership is in effect, Clovis will perform a “true-up” based on clauses (i) and (ii) above,
and will thereby pay Avila by the end of such 90-day period in accordance with Section 6.7(b) an
amount equal to (x) the greater of clause (i) or (ii) based on the full Calendar Year minus (y) the
sum of what Clovis had paid to Avila under either or both of clause (i) or (ii) for the first three
(3) calendar quarters of such Calendar Year. For clarity, if Clovis or any of its Affiliates or
Distributors (but not Sublicensees) sells or distributes Licensed Product for Asia after any such
Asia Partnership goes into effect, then Net Sales for Asia attributable to Clovis, its Affiliates
and Distributors will be included in Section 6.4(a)(ii)(A) for the royalties payable to Avila
hereunder, but will not be included in the “true-up” calculation required by this Section 6.4(d).



                 (e)        Royalty Buy-In Option.



                          (i)        At such time, if any, as Clovis decides to pursue the Regulatory Approval in either the
U.S. or EU for the use of a Licensed Product as a First Line Therapy, it will notify Avila of such
decision and provide Avila with a reasonable summary of the clinical Development plan which Clovis
is contemplating to achieve such Regulatory Approval and, ultimately, its counterpart Regulatory
Approval in the other major region (i.e., either the U.S. or EU), together with the cost estimates
(the “Cost Estimate”) for such a clinical Development program (the “First Line Notice”). Within
*** months following the delivery of the First Line Notice, Avila may exercise an option, by
delivery of notice to Clovis (the “Option Exercise Notice”) to pay *** of all costs incurred by
Clovis or any its Affiliates or Sublicensees in the Development effort required to achieve
Regulatory Approvals for such a First Line Therapy in the U.S. and EU, including both direct out of
pocket costs and the time of Clovis personnel devoted to the First Line Therapy Development effort,
charged on an FTE Rate basis in a manner comparable to that described in Section 6.2(a). The
Parties understand that the Development pathway for such Regulatory Approvals may be subject to
changes to meet demands of Regulatory Authorities or as a result of the need to modify clinical
trial design to conform to best medical practices or ethical considerations, or to add additional
clinical trials, and, accordingly, that the Cost Estimate provided by Clovis may well be exceeded.
If Avila exercises this option, then from and after the date of the first of such Regulatory
Approvals for a First Line Therapy, Clovis will pay Avila an additional royalty of *** on combined
annual Net Sales of Licensed Products for the U.S. and EU in excess of *** in a given Calendar
Year. This payment will be in addition to the royalties due Avila as set forth in Section 6.4(a),
and will be subject to all of the provisions of this Agreement relating to royalties (including the
remainder of this Section 6.4).



18









 




 Amended and Restated Strategic License Agreement




                          (ii)        Clovis will invoice Avila each calendar quarter monthly for Avila’s share of the costs of
such First Line Therapy Development effort, with the first such invoice to be for the calendar
quarter in which the Option Exercise Notice is delivered by Avila, and Clovis will provide with
each such invoice a reasonably detailed description of those costs and thereafter Clovis will
provide Avila with any materials supporting those such costs as Avila may reasonably request.
Avila will pay Clovis within thirty (30) days of receiving such invoice Avila’s shares of any
undisputed costs. Section 6.7(c) will apply to Clovis and those costs for which Clovis asks Avila
to share, and those costs will be subject to audit by Avila under the terms of that Section 6.7(c).



                          (iii)        If the aggregate costs of such First Line Therapy Development effort ultimately exceed
the Cost Estimate by more than ***, then upon ninety (90) days advance written notice to Clovis
given at any time after such threshold has been exceeded, Avila may elect to no longer pay a ***
share of such costs (beginning with any such costs first accrued after such ninetieth
(90th) day). Upon such election by Avila, the *** additional royalty specified in
Section 6.4(e)(i) will be reduced on a pro rata basis to reflect Avila’s reduced share of such
costs, as follows: the *** in Section 6.4(e)(i) will be replaced with *** multiplied by the
fraction of (x) the amount actually paid by Avila for such Development costs, divided by (y) *** of
the aggregate of all such Development costs.



                 (f)          Additional Royalty Provisions. The royalties payable under Section 6.4(a) will be subject
to the following:



                          (i)        only one royalty will be payable hereunder with respect to each Licensed Product;



                         (ii)        royalties when owed or paid hereunder will, except as provided in Section 6.3(b), 6.3(d)
or 6.7(c), be non-refundable and non-creditable and not subject to set-off; and



                        (iii)        if a particular Licensed Product is sold or distributed in one country with the
intention of the Selling Party for use in one or more other countries, those other countries of
intended use as well as such country of sale will be treated as the countries of sale for purposes
of this Section 6.4. The Parties agree that the good faith estimate of such intended use by the
selling entity will be binding for such purposes.



       6.5      Other Sublicensee Consideration for Asia.     Clovis will pay to Avila fifty percent (50%) of all
Financial Consideration Clovis or any of its Affiliates receives in connection with any sublicense
agreement for all or part of Asia with any non-Affiliated Sublicensees concerning the Lead
Candidate or any Licensed Products, subject to any permitted credits taken pursuant to Section
6.3(d). Any such payments to Avila will be due within ten (10) days following receipt of any such
Financial Consideration.



       6.6      Other Distributor Consideration.     Clovis will pay to Avila fifty percent (50%) of all Financial
Consideration Clovis or any of its Affiliates receives in connection with any distributor agreement
with any Distributors concerning any Licensed Products. Any such payments to Avila will be due
within ten (10) days following receipt of any such Financial Consideration.



       6.7        Payment Terms.



                 (a)        Manner of Payment. All payments to be made by Clovis hereunder will be made in U.S.
dollars by wire transfer to such bank account as Avila may designate.



                 (b)      Reports and Royalty Payments.     For as long as royalties or other payments are due under
this Section 6, Clovis will furnish to Avila a written report, after the end of each calendar
quarter, showing the amount of Net Sales and royalty due, Financial Consideration and corresponding
sublicensing payments owed under Section 6.5, and any other payments accrued during such calendar
quarter, which report will be furnished within sixty (60) days of the end of the quarter for Net
Sales generated by Clovis and its Affiliates, and within ninety (90) days of the end of the quarter
for Net Sales generated by Sublicensees and Distributors. Royalty and other payments for each
calendar quarter will be due at the same time as such written reports for the calendar quarter.
The reports will include, at a



19









 




Amended and Restated Strategic License Agreement



minimum, the following information for the applicable calendar quarter, each listed on a
Licensed Product-by-Licensed Product basis, and by country of sale or intended use: (i) the gross
amount received for such sales by the Selling Parties; (ii) deductions taken from Net Sales as
specified in the definition thereof, itemized by type and amount; (iii) Net Sales; (iv) royalties
owed Avila hereunder, payments under Section 6.5, Milestone Payments, any credits under Section
6.3(d), and other payments owed to Avila or already paid during such calendar quarter, listed by
category; (vi) any royalty adjustments under Sections 6.4(c), 6.4(d), or 6.4(f)(iii); (vii) any
amounts paid to Clovis by Sublicensees under clause (ii) of Section 6.4(d) and any true-up required
by Section 6.4(d); and (viii) the computations for any applicable currency conversions pursuant to
Section 6.7(c).




           (c)      Records and Audits.   Clovis will keep, and will cause each of the other Selling Parties,
as applicable, to keep, and Avila will keep, adequate books and records of accounting for the
purpose of calculating all royalties and other amounts payable by either Party to the other Party
hereunder and ensuring each Party’s compliance hereunder. For the three (3) years following the
end of the Calendar Year to which each will pertain, such books and records of accounting
(including those of the other Selling Parties, as applicable) will be kept at each of their
principal place of business. At the request of either Party, the other Party will, and, with
respect to Clovis, Clovis will cause each of the other Selling Parties to, permit the requesting
Party and its representatives (including an independent auditor), at reasonable times and upon
reasonable notice, to examine the books and records maintained pursuant to Section 6.2, 6.4(e) or
6.7(b). Such examinations may not (i) be conducted for any Calendar Year more than three (3) years
after the end of such year, (ii) be conducted more than once in any twelve (12) month period or
(iii) be repeated for any Calendar Year. Except as provided below, the cost of this examination
will be borne by the Party that requested the examination, unless the audit reveals a variance of
more than five percent (5%) from the reported amounts, in which case the audited Party will bear
the cost of the audit. Unless disputed as described below, if such audit concludes that additional
payments were owed or that excess payments were made during such period, the paying Party will pay
the additional royalties or amounts or the receiving Party will reimburse such excess payments,
with interest from the date originally due as provided in Section 6.7(g), within sixty (60) days
after the date on which a written report of such audit is delivered to the Parties. In the event
of a dispute regarding such books and records, including the amount of royalties owed to Avila
under this Section 6.7(c) or the calculation costs, expenses or FTE charges, Avila and Clovis will
work in good faith to resolve the disagreement. If the Parties are unable to reach a mutually
acceptable resolution of any such dispute within thirty (30) days, such dispute will be resolved in
accordance with Section 13.1(d). The receiving Party will treat all information subject to review
under this Section 6.7(c) in accordance with the confidentiality provisions of Section 10 and the
Parties will cause any auditor or arbitrator to enter into a reasonably acceptable confidentiality
agreement with the audited Party obligating such firm to retain all such financial information in
confidence pursuant to such confidentiality agreement.



           (d)      Currency Exchange.   With respect to Net Sales invoiced in U.S. dollars, the Net Sales and
the amounts due to Avila hereunder will be expressed in U.S. dollars. With respect to Net Sales
invoiced in a currency other than U.S. dollars, payments will be calculated based on currency
exchange rates for the calendar quarter for which remittance is made for royalties. For each month
and each currency, such exchange rate will equal the arithmetic average of the daily exchange rates
(obtained as described below) during such calendar quarter; each daily exchange rate will be
obtained from www.OANDA.com or, if not so available, as otherwise agreed by the Parties. For
purposes of calculating the Net Sales thresholds set forth in Sections 6.3(c) and 6.4(a), the
aggregate Net Sales with respect to each calendar quarter within a Calendar Year will be calculated
based on the currency exchange rates for the calendar quarter in which such Net Sales occurred, in
a manner consistent with the exchange rate procedures set forth in the immediately preceding
sentence.



           (e)      Taxes.   Clovis may withhold from payments due to Avila amounts for payment of any
withholding tax that is required by law to be paid to any taxing authority with respect to such
payments.



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Amended and Restated Strategic License Agreement



Clovis will provide Avila all relevant documents and correspondence, and will also provide to
Avila any other cooperation or assistance on a reasonable basis as may be necessary to enable Avila
to claim exemption from such withholding taxes and to receive a refund of such withholding tax or
claim a foreign tax credit. Clovis will give proper evidence from time to time as to the payment
of any such tax. The Parties will cooperate with each other in seeking deductions under any double
taxation or other similar treaty or agreement from time to time in force. Such cooperation may
include Clovis making payments from a single source in the U.S., where possible. Apart from any
such permitted withholding and those deductions expressly included in the definition of Net Sales,
the amounts payable Clovis to Avila hereunder will not be reduced on account of any taxes, charges,
duties or other levies.




           (f)        Blocked Payments.   In the event that, by reason of applicable law in any country, it
becomes impossible or illegal for Clovis (or any other Selling Party) to transfer, or have
transferred on its behalf, payments owed Avila hereunder, Clovis will promptly notify Avila of the
conditions preventing such transfer and such payments will be deposited in local currency in the
relevant country to the credit of Avila in a recognized banking institution designated by Avila or,
if none is designated by Avila within a period of thirty (30) days, in a recognized banking
institution selected by Clovis or another Selling Party, as the case may be, and identified in a
written notice given to Avila.



           (g)        Interest Due.   If any payment due to either Party under this Agreement is overdue (and is
not subject to a good faith dispute), then such paying Party will pay interest thereon (before and
after any judgment) at an annual rate (but with interest accruing on a daily basis) of the lesser
of two percent (2%) above the prime rate as reported in The Wall Street Journal, Eastern Edition,
and the maximum rate permitted by applicable law, such interest to run from the date upon which
payment of such sum became due until payment thereof in full together with such interest.



     6.8        Mutual Convenience of the Parties.    The royalty and other payment obligations set
forth hereunder have been agreed to by the Parties for the purpose of reflecting and advancing
their mutual convenience, including the ease of calculating and paying royalties and other amounts
to Avila. Clovis hereby stipulates to the fairness and reasonableness of such royalty and other
payments obligations and covenants not to allege or assert, nor to allow any of its Sublicensees,
Affiliates or Distributors to allege or assert, nor further to cause or support any other Third
Parties to allege or assert, that any such royalty or other payments obligations are unenforceable
or illegal in any way.


7.        Ownership of Collaboration Program Know-How.




     7.1      Disclosure of Collaboration Program Know-How. Each Party will promptly (and at
least on a calendar quarterly basis) disclose to the other Party any Collaboration Program Know-How
created, conceived or reduced to practice by or on behalf of such Party, and will provide such
documentation regarding same as such other Party may reasonably request.



     7.2      Ownership and Inventorship.



           (a)        Avila Owned IP. As between the Parties, Avila will solely own all right, title and
interest in and to the Avila Owned IP, and all right, title and interest in and to all Avila Owned
IP will automatically vest solely in Avila. Clovis, for itself and on behalf of its Affiliates and
subcontractors, and employees, subcontractors, consultants and agents of any of the foregoing,
hereby assigns (and to the extent such assignment can only be made in the future hereby agrees to
assign), to Avila all right, title and interest in and to Avila Owned IP (unless already owned by
Avila). Clovis will cooperate, and will cause the foregoing persons and entities to cooperate,
with Avila to effectuate and perfect the foregoing ownership, including by promptly executing and
recording assignments and other documents consistent with such ownership.



21









 




Amended and Restated Strategic License Agreement




           (b)      Sole and Joint Collaboration Program Know-How.



                (i)      Except for any Avila Owned IP, ownership of any Collaboration Program Know-How, and
Patents arising therefrom, created, conceived or reduced to practice solely by or on behalf of a
Party will be solely owned by such Party (referred to herein along with all Patents arising
therefrom, as “Sole Collaboration Program IP” for each Party), and if created, conceived or reduced
to practice jointly by or on behalf of the Parties will be jointly owned by the Parties (referred
to herein along with all Patents arising therefrom, as “Joint Collaboration Program IP”).



                (ii)      Each Party will have an undivided one-half interest in and to Joint Collaboration Program
IP. Each Party will exercise its ownership rights in and to such Joint Collaboration Program IP,
including the right to license and sublicense or otherwise to exploit, transfer or encumber its
ownership interest, without an accounting or obligation to, or consent required from, the other
Party, but subject to the licenses hereunder and the other terms and conditions of this Agreement.
At the reasonable written request of a Party, the other Party will in writing grant such consents
and confirm that no such accounting is required to effect the foregoing regarding Joint
Collaboration Program IP. Each Party, for itself and on behalf of its Affiliates, licensees and
sublicenses, and employees, subcontractors, consultants and agents of any of the foregoing, hereby
assigns (and to the extent such assignment can only be made in the future hereby agrees to assign),
to the other Party a joint and undivided interest in and to all Joint Collaboration Program IP.



                (iii)      Subject to the licenses hereunder and the other terms and conditions of this Agreement
(including Section 8 and 9):



                     (A)      Each Party will be solely responsible for the Prosecution and Maintenance, and the
enforcement and defense, of any Patents within its Sole Collaboration Program IP, and the other
Party will have no rights with respect thereto; and



                     (B)      The Prosecution and Maintenance, and the enforcement and defense, of any Patents within
Joint Collaboration Program IP will be jointly managed by the Parties on mutually agreeable terms
to be entered into by the Parties at the time any such Patents are first filed, and all recoveries
and out-of-pocket costs and expenses arising from those activities, absent further agreement, will
be shared equally by the Parties (provided that sufficient advance written notice of any such costs
or expenses is given to the Party not incurring same), provided that if either Party elects not to
pay any such costs or expenses for any such Patent, the Parties will meet and agree upon an
equitable way to treat such Patent.



           (c)      Inventorship.   Inventorship determination for all Patents worldwide arising from any
Collaboration Program Know-How and thus the ownership thereof will be made in accordance with
applicable United States patent laws.


8.        Patent Prosecution and Maintenance.




     8.1      Subject Patents.   The following provisions of this Section 8.1 will apply to Avila
Patents when subject to the exclusive licenses in Section 5.1(b), and then only with respect to the
scope of such exclusive license (each such Avila Patent, only when so subject, a “Subject Patent”).
Other than for Subject Patents hereunder, all Avila Patents will be referred to herein as “Other
Patents”.



           (a)      Prosecution and Maintenance.    Avila will have the sole right to Prosecute and Maintain
throughout the world the Subject Patents, and will retain final decision making authority with
respect thereto, except as set out in the remainder of this Section 8. Avila will regularly
provide Clovis with copies of all Subject Patent applications, and all other material submissions
and correspondence with any patent authorities regarding Subject Patents, in sufficient time to
allow for review and comment by Clovis, and Avila will consider in good faith all such comments
timely made. More specifically, as of the A&R Date the Parties have agreed to pursue the
Prosecution and Maintenance activities set forth on



22









 




Amended and Restated Strategic License Agreement



Exhibit 8.1(a). Except as set forth in Section 8.1(b) for Specific Patents or Section 8.1(c)
or Exhibit 8.1(a), Avila will be responsible for all Patent Costs incurred by Avila for Subject
Patents.




           (b)        Specific Patents.   For any Subject Patent having a specification that could reasonably
support and enable a composition-of-matter claim or a method-of-use claim in each case Covering
only the Lead Candidate or a particular Licensed Product, the following will apply: to the extent
practicable, upon Clovis’s reasonable written request and provided that Avila reasonably agrees
with Clovis that the following Prosecution and Maintenance activities would not materially harm any
other Avila Patents or other Patents owned by Avila or any of its Affiliates, the Parties will file
a U.S. continuation, continuation-in-part or divisional of such Subject Patent application seeking
issuance of such composition-of-matter or method-of-use claim scope (and no other claim scope)
(each such Subject Patent, a “Specific Patent”). Each such Specific Patent will remain a “Subject
Patent” hereunder, so that this Agreement will continue to apply thereto, provided that the Parties
will jointly control the Prosecution and Maintenance thereof using patent counsel selected by
Avila, and Clovis will be solely responsible for the payment of all related Patent Costs. Neither
Party may take any action with respect to the Prosecution or Maintenance of any Specific Patent
without the consent of the other Party, such consent not to be unreasonably withheld or delayed.
If and at such time as Clovis no longer has an exclusive license to all of the claim scope of any
such Specific Patent, then any such Specific Patent will no longer be treated as such hereunder
(although it may remain a Subject Patent). Clovis acknowledges and agrees that Avila may grant
substantially similar rights to other exclusive Third Party licensees under any Subject Patents.



           (c)        Election Not to Prosecute or Maintain or Pay Patent Costs.   If Avila elects not (i) to
Prosecute or Maintain any Subject Patent in any particular country before the applicable filing
deadline or continue such activities once filed in a particular country, or (ii) to pay the Patent
Costs associated with Prosecution or Maintenance of any Subject Patent, then in each such case
Avila will so notify Clovis, promptly in writing and in good time to enable Avila to meet any
deadlines by which an action must be taken to preserve such Subject Patent in such country, if
Clovis so requests. Upon receipt of each such notice by Avila, Clovis will have the right, but not
the obligation, to notify Avila in writing on a timely basis that Avila should continue the
Prosecution or Maintenance of such Subject Patent on the terms set forth above, and Clovis will
reimburse Avila for all Patent Costs thereafter incurred by Avila with respect thereto within
thirty (30) days of receiving an invoice therefor. If after making such election, Clovis elects
not to pay the Patent Costs associated with Prosecution or Maintenance of any Subject Patent, then
in each such case Clovis will so notify Avila and on the ninetieth (90th) day after
Avila’s receipt of such notice such Subject Patent will no longer be licensed to Clovis hereunder
and will not longer be treated as a “Subject Patent” hereunder. Clovis will be required to
reimburse Avila for Patent Costs for such Subject Patent incurred by Avila through such ninetieth
(90th) day, but not thereafter.



           (d)        Patent Term Extensions and Filings for Regulatory Exclusivity Periods.



                  
(i)     Avila will consult with Clovis when considering any patent term restoration or
supplemental protection certificates or their equivalent for the Subject Patents. In the event
that any election with respect to patent term restoration or supplemental protection certificates
or their equivalent for any Subject Patent is available, Avila will decide on whether or not to
make any such election, provided that Clovis will have the right to decide whether or not to make
any such election with respect to any Specific Patents.



                   (ii)      With respect to any Patent listings required for any Regulatory Exclusivity Periods for
Licensed Products, the Parties will mutually agree on which Avila Patents to list.



     8.2        Other Licensed Patents.     Avila will have the sole right, and sole responsibility
for all Patent Costs incurred by Avila, to Prosecute and Maintain all Other Patents, and Clovis
will have no rights with respect thereto. Clovis will have the sole right, and sole responsibility
for all Patent Costs incurred by



23









 




Amended and Restated Strategic License Agreement



Clovis, to Prosecute and Maintain all Patents within Clovis Technology, and Avila will have no
rights with respect thereto.




     8.3      Cooperation.    Each Party will reasonably cooperate with the other Party in the
Prosecution and Maintenance of the Subject Patents and any other Patents within each Party’s Sole
Collaboration Program IP and within Joint Collaboration Program IP. Such cooperation includes
promptly executing all documents, or requiring inventors, subcontractors, employees and consultants
and agents of Clovis and its Affiliates, Sublicensees and Distributors to execute all documents, as
reasonable and appropriate so as to enable the Prosecution and Maintenance of any such Patents in
any country.



     8.4      Patent Marking.    Clovis will mark, and will cause all other Selling Parties to
mark, Licensed Products with all Avila Patents in accordance with applicable law, which marking
obligation will continue for as long as (and only for as long as) required under applicable law.


9.        Patent Enforcement and Defense.




     9.1      Notice.   Each Party will promptly notify, in writing, the other Party upon
learning of any actual or suspected Competitive Infringement of any Subject Patents by a Third
Party, or of any claim of invalidity, unenforceability, or non-infringement of any Subject Patents,
and will, along with such notice, supply the other Party with any evidence in its possession
pertaining thereto. For purposes of this Agreement, “Competitive Infringement” will mean any
allegedly infringing activity with respect to a Subject Patent, which activity (i) falls within the
scope then in effect of the licenses granted by Avila to Clovis as set forth in Sections 5.1(b),
and (ii) is reasonably expected to reduce the Net Sales of any Licensed Products.



     9.2  Enforcement and Defense.



          (a)      Subject Patents and Competitive Infringement.



                 (i)      As between the Parties, and subject to Section 9.2(a)(ii), Clovis will have the first
right, but not the obligation, to seek to abate any Competitive Infringement of the Subject Patents
by a Third Party, or to file suit against any such Third Party for such Competitive Infringement.
If Clovis does not take steps to abate such Competitive Infringement, or file suit to enforce the
Subject Patents against such Third Party with respect to such Competitive Infringement, within a
commercially reasonably time (and in all events within the applicable Hatch-Waxman Time Period, as
defined below), then subject to Section 9.2(a)(ii), Avila will have the right (but not the
obligation) to take action to enforce the Subject Patents against such Third Party for such
Competitive Infringement. The controlling Party will pay all its Patent Costs incurred for such
enforcement.



                 (ii)      Neither Party will exercise any of its enforcement rights under this Section 9.2(a)
without first consulting with the other Party, provided that this consultation requirement will not
limit either Party’s rights under this Section 9.2(a), and further provided that notwithstanding
anything herein to the contrary, Clovis will have no right to enforce (including seeking to abate
any Competitive Infringement) or defend any Subject Patent (other than, for clarity, any Specific
Patents) that Covers any compound that is in Development or has been commercialized by Avila, its
Affiliates, or any licensees or sublicensees of Avila and its Affiliates.



                (iii)      For purposes of this Agreement, “Hatch-Waxman Time Period” will mean the applicable
period of time during which a patent holder or licensee has the right to file an infringement suit
to maintain certain rights and privileges upon receipt of Paragraph IV Patent Certification by a
Third Party filing an Abbreviated New Drug Application or an application under §505(b)(2) of the
United States Food, Drug, and Cosmetic Act, as amended or any replacement thereof or any other
similar Patent certification by a Third Party, or any foreign equivalent thereof.



          (b)      Defense.   As between the Parties, Avila will have the first right, but not the obligation,
to defend against a declaratory judgment action or other action challenging any Subject Patents,
other than



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Amended and Restated Strategic License Agreement



with respect to (i) any interferences, oppositions, reissues or reexaminations, which are
included in the definition of Prosecution and Maintenance and addressed in Section 8, (ii) any
counter-claims in any enforcement action brought by Clovis pursuant to Section 9.2(a), or (iii) any
action by a Third Party in response to an enforcement action brought by Clovis alleging
infringement of any Subject Patents, which defense for the foregoing clause (ii) and this clause
(iii) will be controlled by the Party controlling such enforcement action (unless the last proviso
of Section 9.2(a)(ii) applies, in which case in all events Avila will control). If Avila does not
take steps to defend within a commercially reasonably time, or elects not to continue any such
defense, then ), then subject to Section 9.2(a)(ii), Clovis will have the right (but not the
obligation) to defend any such Subject Patent.




           (c)      Withdrawal, Cooperation and Participation. With respect to any infringement or defensive
action identified above in this Section 9.2:



                (i)    If the controlling Party ceases to pursue or withdraws from such action, it will notify
the other Party and then, subject to Section 9.2(a)(ii), such other Party may substitute itself for
the withdrawing Party and proceed under the terms and conditions of this Section 9.2.



                (ii)   The non-controlling Party will cooperate with the Party controlling any such action (as
may be reasonably requested by the controlling Party), including (i) providing access to relevant
documents and other evidence, (ii) making its and its Affiliates and licensees and sublicensees and
all of their respective employees, subcontractors, consultants and agents available at reasonable
business hours and for reasonable periods of time, but only to the extent relevant to such action,
and (iii) if necessary, by being joined as a party, subject for this clause (iii) to the
controlling Party agreeing to indemnify such non-controlling Party for its involvement as a named
party in such action and paying those Patent Costs incurred by such Party in connection with such
joinder. The Party controlling any such action will keep the other Party updated with respect to
any such action, including providing copies of all documents received or filed in connection with
any such action.



                (iii) Each Party will have the right to participate or otherwise be involved in any such
action controlled by the other Party, in each case at the participating Party’s sole cost and
expense. If a Party elects to so participate or be involved, the controlling Party will provide
the participating Party and its counsel with an opportunity to consult with the controlling Party
and its counsel regarding the prosecution of such action (including reviewing the contents of any
correspondence, legal papers or other documents related thereto), and the controlling Party will
take into account reasonable requests of the participating Party regarding such enforcement or
defense.



           (d)     Settlement.     Clovis may not settle or consent to an adverse judgment in any action
described in this Section 9.2 and controlled by Clovis, including any judgment which affects the
scope, validity or enforcement of any Subject Patents involved therewith, without the prior written
consent of Avila (such consent not to be unreasonably withheld or delayed).



          
(e)     Damages.     Unless otherwise agreed by the Parties, all monies recovered upon the final
judgment or settlement of any action described in Section 9.2(a), or any action described in
Section 9.2(b), will be used first to reimburse each of the Parties, and any other Third Party
licensees of Avila, on a pro rata basis for each of their out-of-pocket costs and expenses relating
to the action, with the balance of any such recovery to be divided as follows:



                (i)      To the extent the recovery reflects lost profits damages, if Clovis was the controlling
Party, Clovis will retain such lost profits recovery, less the amount of royalties payable to Avila
by treating such lost profits recovery as “Net Sales” hereunder, and if Avila was the controlling
Party, *** to Avila and *** to Clovis;



                (ii)      To the extent the recovery reflects reasonable royalty damages, if Clovis was the
controlling Party, *** to Clovis and *** to Avila, and if Avila was the initiating party, ***to
Avila and *** to Clovis; and



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 Amended and Restated Strategic License Agreement




          (iii)      For the remainder of any such recovery, *** to Clovis and *** to Avila.



     9.3      Other Patents.    Avila will have the sole right, and sole responsibility for all
Patent Costs incurred by Avila, to enforce and defend all Other Patents, and Clovis will have no
rights with respect thereto. Clovis will have the sole right, and sole responsibility for all
Patent Costs incurred by Clovis, to enforce and defend all Patents within Clovis Technology, and
Avila will have no rights with respect thereto.


10.      Confidentiality.




     10.1      Confidential Information.



           (a)      Confidential Information.    Each Party (“Disclosing Party”) may disclose to the other Party
(“Receiving Party”), and Receiving Party may acquire during the course and conduct of activities
under this Agreement, certain proprietary or confidential information of Disclosing Party in
connection with this Agreement. The term “Confidential Information” will mean (i) all Materials
and (ii) all ideas and information of any kind, whether in written, oral, graphical,
machine-readable or other form, whether or not marked as confidential or proprietary, which are
transferred, disclosed or made available by Disclosing Party or at the request of Receiving Party,
including any of the foregoing of Third Parties. Without limiting the foregoing, Avila Core
Technology and Avila Know-How will be considered Confidential Information of Avila, and Clovis
Technology will be considered Confidential Information of Clovis.



          (b)      Restrictions.    During the Term and for ten (10) years thereafter, Receiving Party will
keep all Disclosing Party’s Confidential Information in confidence with the same degree of care
with which Receiving Party holds its own confidential information. Receiving Party will not use
Disclosing Party’s Confidential Information except for in connection with the performance of its
obligations and exercise of its rights under this Agreement. Receiving Party has the right to
disclose Disclosing Party’s Confidential Information without Disclosing Party’s prior written
consent, to the extent and only to the extent reasonably necessary, to Receiving Party’s Affiliates
and their employees, subcontractors, consultants or agents who have a need to know such
Confidential Information in order to perform its obligations and exercise its rights under this
Agreement and who are required to comply with the restrictions on use and disclosure in this
Section 10.1(b). Receiving Party will use diligent efforts to cause those entities and persons to
comply with the restrictions on use and disclosure in this Section 10.1(b). Receiving Party
assumes responsibility for those entities and persons maintaining Disclosing Party’s Confidential
Information in confidence and using same only for the purposes described herein.



           (c)      Exceptions.    Receiving Party’s obligation of nondisclosure and the limitations upon the
right to use the Disclosing Party’s Confidential Information will not apply to the extent that
Receiving Party can demonstrate that the Disclosing Party’s Confidential Information: (i) was
known to Receiving Party or any of its Affiliates prior to the time of disclosure; (ii) is or
becomes public knowledge through no fault or omission of Receiving Party or any of its Affiliates;
(iii) is obtained by Receiving Party or any of its Affiliates from a Third Party under no
obligation of confidentiality to Disclosing Party; or (iv) has been independently developed by
employees, subcontractors, consultants or agents of Receiving Party or any of its Affiliates
without the aid, application or use of Disclosing Party’s Confidential Information, as evidenced by
contemporaneous written records.



           (d)      Permitted Disclosures.    Receiving Party may disclose Disclosing Party’s Confidential
Information to the extent (and only to the extent) such disclosure is reasonably necessary in the
following instances:



                (i)      in order to comply with applicable law (including any securities law or regulation or the
rules of a securities exchange) or with a legal or administrative proceeding;



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Amended and Restated Strategic License Agreement




                (ii)      in connection with prosecuting or defending litigation, Regulatory Approvals and other
regulatory filings and communications, and filing, prosecuting and enforcing Patents in connection
with Receiving Party’s rights and obligations pursuant to this Agreement; and



                (iii)      in connection with exercising its rights hereunder, to its Affiliates; potential and
future collaborators (including Sublicensees and Distributors where Clovis is the Receiving Party);
permitted acquirers or assignees; and investment bankers, investors and lender;


provided that (1) with respect to Sections 10.1(d)(i) or 10.1(d)(ii), where reasonably possible,
Receiving Party will notify Disclosing Party of Receiving Party’s intent to make any disclosure
pursuant thereto sufficiently prior to making such disclosure so as to allow Disclosing Party
adequate time to take whatever action it may deem appropriate to protect the confidentiality of the
information to be disclosed, and (2) with respect to Section 10.1(d)(iii), each of those named
people and entities are required to comply with the restrictions on use and disclosure in Section
10.1(b) (other than investment bankers, investors and lenders, which must be bound prior to
disclosure by commercially reasonable obligations of confidentiality).




     10.2      Publications.   The Parties intend to publish in scientific journals and present
at scientific conferences the results of the Collaboration Program, subject to the following
process. Notwithstanding anything to the contrary herein, either Party may propose publication of
the results of the Collaboration Program following scientific review by the JSC (if in force) and
subsequent written approval by Avila’s and Clovis’s management, which approval will not be
unreasonably withheld. After receipt of the proposed publication by both Clovis’s and Avila’s
management’s, such written approval or disapproval will be provided within thirty (30) days. Both
Parties understand that a reasonable commercial strategy may require delay of publication of
information or filing of patent applications, therefore the Parties agree to review and consider
delay of publication and filing of patent applications under certain circumstances for a reasonably
limited period of time. Once publications have been reviewed by each Party and have been approved
for publication, the same publications do not have to be provided again to the other Party for
review for a later submission for publication. Expedited reviews for abstracts or poster
presentations may be arranged if mutually agreeable to the Parties. Each Party will acknowledge
the other Party’s contributions in any such publication.



     10.3      Terms of this Agreement; Publicity.



           (a)      Restrictions.   The Parties agree that the terms of this Agreement will be treated as
Confidential Information of both Parties, and thus may be disclosed only as permitted by Section
10.1(d). Except as require by law, each Party agrees not to issue any press release or public
statement disclosing information relating to this Agreement or the transactions contemplated hereby
or the terms hereof without the prior written consent of the other Party not to be unreasonably
withheld (or as such consent may be obtained in accordance with Section 10.3(b)), or as permitted
by Section 10.3(c). Notwithstanding the foregoing, and in addition to those disclosures permitted
by Section 10.1(d), Avila will have the right to disclose publicly the following facts: (i) payment
of Milestone Payments to Avila by Clovis but not the amounts; and (ii) the successful progression
of the Lead Candidate and Licensed Products to the next stage of clinical development or regulatory
approval.



           (b)      Review.  In the event either Party (the “Issuing Party”) desires to issue a press release
or other public statement disclosing information relating to this Agreement or the transactions
contemplated hereby or the terms hereof, the Issuing Party will provide the other Party (the
“Reviewing Party”) with a copy of the proposed press release or public statement (the “Release”).
The Issuing Party will specify with each such Release, taking into account the urgency of the
matter being disclosed, a reasonable period of time within which the Receiving Party may provide
any comments on such Release and if the Receiving Party fails to provide any comments during the
response period called for by the Issuing Party, the Reviewing Party will be deemed to have
consented to the issuance of such Release; provided, however, that as it relates to the disclosure
of the results of any clinical trial conducted by Clovis or any



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Amended and Restated Strategic License Agreement



health or safety matter related to a Licensed Product, Avila acknowledges that announcements
may need to be made on extremely short notice, and although Clovis will endeavor to provide Avila
adequate time for such a review, Clovis will be free to make necessary public disclosures as
promptly as it deems necessary and appropriate. If the Receiving Party provides any comments, the
Parties will consult on such Release and work in good faith to prepare a mutually acceptable
Release. Either Party may subsequently publicly disclose any information previously contained in
any Release so consented to.




           (c)      Joint Press Release.   The Parties agree to issue the joint press release on Exhibit
10.3(c) promptly following the Effective Date.



     10.4      Relationship to the Confidentiality Agreement.  This Agreement supersedes that
certain “Mutual Confidentiality Agreement” between the Parties dated July 8, 2009 (the
“Confidentiality Agreement”); provided that all “Confidential Information” disclosed or received by
the Parties thereunder will be deemed “Confidential Information” hereunder and will be subject to
the terms and conditions of this Agreement.


11.      Warranties; Limitations of Liability; Indemnification.




     11.1      Representations and Warranties.   Each Party represents and warrants to the other
as of the Effective Date that it has the legal right and power to enter into this Agreement, to
extend the rights and licenses granted or to be granted to the other in this Agreement, and to
fully perform its obligations hereunder.



     11.2      Additional Representations and Warranties of Avila. Avila represents and
warrants to Clovis that, as of the Effective Date:



           (a)      Avila Controls the Patents listed on Exhibit 1.7 and the Avila Know-How, and is entitled
to grant the licenses specified herein. Avila has not caused any Patent included on such Exhibit
to be subject to any liens or encumbrances and Avila has not granted to any Third Party any rights
or licenses under such Patents or Avila Know-How that would conflict with the licenses granted to
Clovis hereunder. No Patents listed on Exhibit 1.7 are in-licensed by Avila.



           (b)      To Avila’s Knowledge, the Patents listed on Exhibit 1.7 have been procured or are being
procured from the respective patent offices in accordance with applicable law.



           (c)      Avila has no Knowledge of any claim or litigation that has been brought or threatened in
writing by any Third Party alleging that the Patents listed on Exhibit 1.7 are invalid or
unenforceable.



     11.3      Disclaimers.  Without limiting the respective rights and obligations of the
Parties expressly set forth herein, each Party specifically disclaims any guarantee that the
Collaboration Program or any Licensed Products or Companion Diagnostics will be successful, in
whole or in part. The failure of the Parties to successfully identify a Lead Candidate will not,
of itself, constitute a breach of any representation or warranty under this Agreement. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY AVILA PATENTS, AVILA KNOW-HOW,
CLOVIS TECHNOLOGY, RESEARCH CANDIDATES, MATERIALS, THE LEAD CANDIDATE, LICENSED PRODUCTS, COMPANION
DIAGNOSTICS, OR RESEARCH PROGRAM KNOW-HOW, INCLUDING WARRANTIES OF VALIDITY OR ENFORCEABILITY OF
ANY PATENT RIGHTS, TITLE, QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE,
PERFORMANCE, AND NONINFRINGEMENT OF ANY THIRD PARTY PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS.



     11.4      No Consequential Damages.   NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR
OTHERWISE, NEITHER PARTY WILL BE LIABLE TO THE OTHER OR ANY THIRD PARTY WITH RESPECT TO ANY SUBJECT
MATTER OF THIS AGREEMENT FOR ANY INDIRECT,



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Amended and Restated Strategic License Agreement



PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF SUCH PARTY HAS BEEN INFORMED OR SHOULD
HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED THAT THIS SECTION 11.4 WILL NOT APPLY TO
THE PARTIES’ INDEMNIFICATION RIGHTS AND OBLIGATIONS UNDER SECTION 11.6.




     11.5      Performance by Others.   The Parties recognize that each Party may perform some or
all of its obligations under this Agreement through Affiliates and permitted subcontractors
provided, however, that each Party will remain responsible and liable for the performance by its
Affiliates and permitted subcontractors and will cause its Affiliates and permitted subcontractors
to comply with the provisions of this Agreement in connection therewith.



     11.6      Indemnification.



           (a)      Indemnification by Clovis. Clovis will indemnify Avila, its Affiliates and their
respective directors, officers, employees, Third Party licensors and agents, and their respective
successors, heirs and assigns (collectively, “Avila Indemnitees”), and defend and save each of them
harmless, from and against any and all losses, damages, liabilities, costs and expenses (including
reasonable attorneys’ fees and expenses) (collectively, “Losses”) in connection with any and all
suits, investigations, claims or demands of Third Parties (collectively, “Third Party Claims”)
arising from or occurring as a result of: (i) the material breach by Clovis of any term of this
Agreement; (ii) any gross negligence or willful misconduct on the part of Clovis in performing its
obligations under this Agreement; (iii) any such Third Party Claims relating to any alleged
infringement or misappropriation of Patents or other intellectual property rights by Avila as part
of the Collaboration Program based on use of Clovis Technology or with respect to the Targets; or
(iv) the Development or Commercialization by Clovis or any of its Affiliates, Sublicensees or
Distributors of the Lead Candidate or Licensed Products or Companion Diagnostics, including any
such Third Party Claims relating to any alleged infringement or misappropriation of Patents or
other intellectual property rights, except in each case for those Losses as to which Avila has an
obligation to indemnify Clovis pursuant to Section 11.6(b), as to which Losses each Party will
indemnify the other to the extent of their respective liability; provided, however, that Clovis
will not be obligated to indemnify Avila Indemnitees for any Losses to the extent that such Losses
arise as a result of gross negligence or willful misconduct on the part of an Avila Indemnitee.



           (b)      Indemnification of Clovis. Avila will indemnify Clovis, its Affiliates and their
respective directors, officers, employees and agents, and their respective successors, heirs and
assigns (collectively, “Clovis Indemnitees”), and defend and save each of them harmless, from and
against any and all Losses in connection with any and all Third Party Claims arising from or
occurring as a result of: (i) the material breach by Avila of any term of this Agreement; or (ii)
any gross negligence or willful misconduct on the part of Avila in performing its obligations under
this Agreement, except in each case for those Losses for which Clovis has an obligation to
indemnify Avila pursuant to Section 11.6(a), as to which Losses each Party will indemnify the other
to the extent of their respective liability for the Losses; provided, however, that Avila will not
be obligated to indemnify Clovis Indemnitees for any Losses to the extent that such Losses arise as
a result of gross negligence or willful misconduct on the part of a Clovis Indemnitee.



          (c)      Notice of Claim. All indemnification claims provided for in Section 11.6(a) and 11.6(b)
will be made solely by such Party to this Agreement (the “Indemnified Party”). The Indemnified
Party will promptly notify the indemnifying Party (an “Indemnification Claim Notice”) of any Losses
or the discovery of any fact upon which the Indemnified Party intends to base a request for
indemnification under Section 11.6(a) or 11.6(b), but in no event will the indemnifying Party be
liable for any Losses that result from any delay in providing such notice. Each Indemnification
Claim Notice must contain a description of the claim and the nature and estimated amount of such
Loss (to the extent that the nature and amount of such Loss is known at such time). The
Indemnified Party will furnish promptly to the indemnifying Party copies of all papers and official
documents received in respect of any Losses and Third Party Claims.



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 Amended and Restated Strategic License Agreement




           (d)      Defense, Settlement, Cooperation and Expenses.



                (i)      Control of Defense. At its option, the indemnifying Party may assume the defense of any
Third Party Claim by giving written notice to the Indemnified Party within thirty (30) days after
the indemnifying Party’s receipt of an Indemnification Claim Notice. The assumption of the defense
of a Third Party Claim by the indemnifying Party will not be construed as an acknowledgment that
the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party
Claim, nor will it constitute a waiver by the indemnifying Party of any defenses it may assert
against the Indemnified Party’s claim for indemnification. Upon assuming the defense of a Third
Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party
Claim any legal counsel selected by the indemnifying Party (the indemnifying Party will consult
with the Indemnified Party with respect to a possible conflict of interest of such counsel retained
by the indemnifying Party). In the event the indemnifying Party assumes the defense of a Third
Party Claim, the Indemnified Party will immediately deliver to the indemnifying Party all original
notices and documents (including court papers) received by the Indemnified Party in connection with
the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim,
except as provided in Section 11.6(d)(ii), the indemnifying Party will not be liable to the
Indemnified Party for any legal costs or expenses subsequently incurred by such Indemnified Party
in connection with the analysis, defense or settlement of the Third Party Claim. In the event that
it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or
hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party
will reimburse the indemnifying Party for any and all costs and expenses (including attorneys’ fees
and costs of suit) and any Third Party Claims incurred by the indemnifying Party in its defense of
the Third Party Claim.



                (ii)      Right to Participate in Defense. Without limiting Section 11.6(d)(i), any Indemnified
Party will be entitled to participate in, but not control, the defense of such Third Party Claim
and to employ counsel of its choice for such purpose; provided, however, that such employment will
be at the Indemnified Party’s own cost and expense unless (i) the employment thereof has been
specifically authorized by the indemnifying Party in writing, (ii) the indemnifying Party has
failed to assume the defense and employ counsel in accordance with Section 11.6(d)(i) (in which
case the Indemnified Party will control the defense) or (iii) the interests of the Indemnified
Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to
prohibit the representation by the same counsel of both Parties under applicable law, ethical rules
or equitable principles in which case the indemnifying Party will assume one hundred percent (100%)
of any such costs and expenses of counsel for the Indemnified Party.



                (iii)      Settlement. With respect to any Third Party Claims that relate solely to the payment of
money damages in connection with a Third Party Claim and that will not result in the Indemnified
Party’s becoming subject to injunctive or other relief or otherwise adversely affecting the
business of the Indemnified Party in any manner, and as to which the indemnifying Party will have
acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the
indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole
discretion, will deem appropriate. With respect to all other Losses in connection with Third Party
Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance
with Section 11.6(d)(i), the indemnifying Party will have authority to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior
written consent of the Indemnified Party (which consent will not be unreasonably withheld). The
indemnifying Party will not be liable for any settlement or other disposition of a Loss by an
Indemnified Party that is reached without the written consent of the indemnifying Party.
Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim,
no



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Amended and Restated Strategic License Agreement



Indemnified Party will admit any liability with respect to or settle, compromise or discharge,
any Third Party Claim without the prior written consent of the indemnifying Party, such consent not to
be unreasonably withheld.




                (iv)      Cooperation.     Regardless of whether the indemnifying Party chooses to defend or prosecute
any Third Party Claim, the Indemnified Party will, and will cause each other Indemnified Party to,
cooperate in the defense or prosecution thereof and will furnish such records, information and
testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested in connection therewith. Such cooperation will
include access during normal business hours afforded to indemnifying Party to, and reasonable
retention by the Indemnified Party of, records and information that are reasonably relevant to such
Third Party Claim, and making Indemnified Parties and other employees and agents available on a
mutually convenient basis to provide additional information and explanation of any material
provided hereunder, and the indemnifying Party will reimburse the Indemnified Party for all its
reasonable out-of-pocket costs and expenses in connection therewith.



                (v)      Costs and Expenses.    Except as provided above in this Section 11.6(d), the costs and
expenses, including attorneys’ fees and expenses, incurred by the Indemnified Party in connection
with any claim will be reimbursed on a calendar quarter basis by the indemnifying Party, without
prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to
indemnification and subject to refund in the event the indemnifying Party is ultimately held not to
be obligated to indemnify the Indemnified Party.



     11.7      Insurance.    Each Party will maintain at its sole cost and expense, an adequate
liability insurance or self-insurance program (including product liability insurance) to protect
against potential liabilities and risk arising out of activities to be performed under this
Agreement and any agreement related hereto and upon such terms (including coverages, deductible
limits and self-insured retentions) as are customary in the U.S. pharmaceutical industry for the
activities to be conducted by such Party under this Agreement. Subject to the preceding sentence,
such liability insurance or self-insurance program will insure against all types of liability,
including personal injury, physical injury or property damage arising out of the manufacture, sale,
use, distribution or marketing of Licensed Products or Companion Diagnostics. The coverage limits
set forth herein will not create any limitation on a Party’s liability to the other under this
Agreement.


12.      Term and Termination.




     12.1      Term.     This Agreement will commence as of the Effective Date and, unless sooner
terminated in accordance with the terms hereof or by mutual written consent, will continue on an
Licensed Product-by-Licensed Product and country-by-country basis, until there are no more payments
owed Avila on such Licensed Products in such country (the longest such period of time for any
Licensed Products hereunder, the “Term”). Upon there being no more such payments hereunder for any
such Licensed Product in such country, the licenses contained in Section 5.1(b) for Avila Know-How,
as applicable, will become fully paid up and non-exclusive with respect to such Licensed Product in
such country.



     12.2      Termination by Avila.



           (a)      Breach.    Avila will have the right to terminate this Agreement in full upon delivery of
written notice to Clovis in the event of any material breach by Clovis of any terms and conditions
of this Agreement, provided that such termination will not be effective if such breach has been
cured within ninety (90) days after written notice thereof is given by Avila to Clovis specifying
the nature of the alleged breach (or, if such default cannot be cured within such ninety (90) day
period, within one hundred and eighty (180) days after such notice if Clovis commences actions to
cure such default within such 90-day period and thereafter diligently continues such actions, but
fails to cure the default by the end of such 180-days); provided, however, that to the extent such
material breach involves the failure to make a



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Amended and Restated Strategic License Agreement



payment when due, such breach must be cured within thirty (30) days after written notice
thereof is given by Avila to Clovis.




           (b)      Termination for IP Challenge.     Avila will have the right to terminate this Agreement in
full upon written notice to Clovis in the event that Clovis or any of its Affiliates, Sublicensees
or Distributors directly or indirectly challenges in a legal or administrative proceeding the
patentability, enforceability or validity of any Avila Patents; provided that Avila will not have
the right to terminate this Agreement under this Section 12.2(b) for any such challenge by any
Sublicensee or Distributor if such challenge is dismissed within thirty (30) days of Avila’s notice
to Clovis under this Section 12.2(b) and not thereafter continued.



     12.3      Termination by Clovis.



          (a)      Breach.    Clovis will have the right to terminate this Agreement in full upon delivery of
written notice to Avila in the event of any material breach by Avila of any terms and conditions of
this Agreement, provided that such termination will not be effective if such breach has been cured
within ninety (90) days after written notice thereof is given by Clovis to Avila specifying the
nature of the alleged breach (or, if such default cannot be cured within such ninety (90) day
period, within one hundred and eighty (180) days after such notice if Avila commences actions to
cure such default within such 90-day period and thereafter diligently continues such actions, but
fails to cure the default by the end of such 180-days).







          (b)      Discretionary Termination.    Beginning with the *** month anniversary of the Effective Date,
Clovis will have the right to terminate this Agreement in full ninety (90) days after delivery of
written notice to Avila if the Board of Directors of Clovis concludes due to scientific, technical,
regulatory or commercial reasons, including (i) safety or efficacy concerns, including adverse
events of the Licensed Product, (ii) concerns relating to the present or future marketability or
profitability of the Licensed Product, (iii) reasons related to Patent coverage or (iv) existing
and anticipated competition, renders the Development of the Lead Candidate or the Commercialization
of the Licensed Product no longer commercially practicable for Clovis.







     12.4      Termination Upon Bankruptcy.



           (a)      Termination Right.     Either Party may terminate this Agreement if, at any time, the other
Party will file in any court or agency pursuant to any statute or regulation of any state, country
or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or 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
will be served with an involuntary petition against it, filed in any insolvency proceeding, and
such petition will not be dismissed within sixty (60) days after the filing thereof, or if the
other Party will propose or be a Party to any dissolution or liquidation, or if the other Party
will make an assignment for the benefit of its creditors.



           (b)      Consequences of Bankruptcy.    All rights and licenses granted under or pursuant to this
Agreement by Clovis or Avila or their Affiliates are, and will otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual
property” as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that the
Parties and their respective Affiliates, Sublicensees and Third Party sublicensees, as licensees of
such rights under this Agreement, will retain and may fully exercise all of their rights and
elections under the U.S. Bankruptcy Code and any foreign counterparts thereto.



     12.5      Effects of Termination.     Upon termination by either Party under Sections 12.2,
12.3 or 12.4:



           (a)      Clovis will responsibly wind-down, in accordance with accepted pharmaceutical industry
norms and ethical practices, any on-going clinical studies for which it has responsibility
hereunder in which patient dosing has commenced or, if reasonably practicable and requested by
Avila, allow Clovis,



32









 




Amended and Restated Strategic License Agreement



its Affiliates or its Sublicensees to complete such trials. Clovis will be responsible for
any costs associated with such wind-down. Avila will pay all costs incurred by either Party to
complete such studies should Avila request that such studies be completed.




           (b)      A termination of this Agreement, will not automatically terminate any sublicense granted
by Clovis pursuant to Section 5.3 with respect to a non-Affiliated Sublicensee, provided that (i)
such Sublicensee is not then in breach of any provision of this Agreement or the applicable
sublicense agreement, (ii) Avila will have the right to step into the role of Clovis as
sublicensor, with all the rights that Clovis had under such sublicense prior to termination of this
Agreement (including the right to receive any payments to Clovis by such Sublicensee that accrue
from and after the date of the termination of this Agreement) and (iii) Avila will only have those
obligations to such Sublicensee as Avila had to Clovis hereunder and that Avila is able to satisfy
with respect to such Sublicensee based on the provisions of Sections 12.5(d) through 12.5(f) (and
no other obligations). Clovis will include in any sublicense agreement a provision in which said
Sublicensee acknowledges its obligations to Avila hereunder and the rights of Avila to terminate
this Agreement with respect to any Sublicensee for material breaches of this Agreement by such
Sublicensee that are within the scope of Section 12.2. The failure of Clovis to include in a
sublicense agreement the provision referenced in the immediately preceding sentence will render the
affected sublicense void ab initio.



           (c)      Except as otherwise expressly provided in Section 12.5(b), all rights and licenses granted
by Avila to Clovis in Section 5 will terminate, and Clovis and its Affiliates, Sublicensees and
Distributors will cease all use of Avila Know-How and Avila Patents and all Development and
Commercialization of any Licensed Products or Companion Diagnostics.



           (d)      All Regulatory Approvals and other regulatory filings and communications owned (in whole
or in part) or otherwise controlled by Clovis and its Affiliates, Sublicensees and Distributors,
and all other documents relating to or necessary to further Develop and Commercialize the Lead
Candidate and Licensed Products and Companion Diagnostics, as such items exist as of the effective
date of such termination (including all related completed and ongoing clinical studies) will be
assigned to Avila, and Clovis will provide to Avila one (1) copy of the foregoing and all documents
contained in or referenced in any such items, together with the raw and summarized data for any
clinical studies (and where reasonably available, electronic copies thereof). In the event of
failure to obtain assignment, Clovis hereby consents and grants to Avila the right to access and
reference (without any further action required on the part of Clovis, whose authorization to file
this consent with any Regulatory Authority is hereby granted) any such item.



           (e)      Clovis hereby grants to Avila and its Affiliates, and Avila and its Affiliates will
automatically have, a worldwide, perpetual and irrevocable, royalty-free and fully paid-up,
nontransferable (except in connection with a permitted assignment of this Agreement in accordance
with Section 13.12), exclusive license, with the right to grant sublicenses through multiple tiers,
under Know-How and Patents that both (i) arise from the Collaboration Program or the Clovis
Development & Commercialization Program (including Collaboration Program Know-How and all Patents
arising therefrom) and (ii) are Controlled by Clovis or any of its Affiliates and Sublicensees
(other than those non-Affiliated Sublicensees that continue with a direct license from Avila
pursuant to Section 12.5(b)), such license effective only as of and after the effective date of
such termination, for discovering, Developing and Commercializing covalent inhibitors of the
Targets, including the Lead Candidate and Licensed Products and Companion Diagnostics. The Patents
so licensed will be subject to the Prosecution and Maintenance and enforcement and defense rights
and obligations set forth in Sections 8 and 9 as “Subject Patents” thereunder, with the roles of
Avila and Clovis reversed (and such other changes as are appropriate from the context).



           (f)      Clovis will assign (or, if applicable, will cause its Affiliates or Sublicensees to
assign) to Avila all of Clovis’s (and such Affiliates’ and Sublicensees’) right, title and interest
in and to any



33









 




Amended and Restated Strategic License Agreement



registered or unregistered trademarks or internet domain names that are specific to the Lead
Candidate and Licensed Products worldwide (it being understood that the foregoing will not include
any trademarks or internet domain names that contain the corporate or business name(s) of Clovis).




     12.6      Survival.    In addition to the termination consequences set forth in Section 12.5,
the following provisions will survive termination or expiration of this Agreement, as well as any
other provision which by its terms or by the context thereof, is intended to survive such
termination: Section 1, 2.2(a), 2.2(c)(ii), 5.2(b), 5.7, 6.7, 6.8, 7, 9.2 (for any infringement
occurring prior to termination or expiration of this Agreement), 10, 11.3, 11.4, 11.5, 11.6, 12 and
13. Termination or expiration of this Agreement will not relieve the Parties of any liability or
obligation which accrued hereunder prior to the effective date of such termination or expiration
nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or
in equity with respect to any breach of this Agreement nor prejudice either Party’s right to
obtain performance of any obligation. All other rights and obligations will terminate upon
expiration of this Agreement.


13.      General Provisions.




     13.1      Dispute Resolution.



           (a)      Disputes.     Disputes arising under or in connection with this Agreement will be resolved
pursuant to this Section 13.1; provided, however, that in the event a dispute cannot be resolved
without an adjudication of the rights or obligations of a Third Party (other than any Avila
Indemnitees or Clovis Indemnitees identified in Section 11.6), the dispute procedures set forth
Sections 13.1(c) and 13.1(d) will be inapplicable as to such dispute.



           (b)      Dispute Escalation.    In the event of a dispute between the Parties, the Parties will first
attempt in good faith to resolve such dispute by negotiation and consultation between themselves or
the Program Directors. In the event that such dispute is not resolved on an informal basis within
twenty (20) days, any Party may, by written notice to the other, have such dispute referred to the
Avila CEO and the Clovis CEO or in either case his or her designee (who will be a senior
executive), who will attempt in good faith to resolve such dispute by negotiation and consultation
for a thirty (30) day period following receipt of such written notice.



           (c)      Full Arbitration.     Unless Section 13.1(d) is applicable, in the event the Parties are not
able to resolve such dispute through mediation, either Party may at any time after such 20-day
period submit such dispute to be finally settled by arbitration administered in accordance with the
rules of Judicial Administration and Arbitration Services (“JAMS”) in effect at the time of
submission, as modified by this Section 13.1. The arbitration will be heard and determined by
three (3) arbitrators who are retired judges or attorneys with at least ten (10) years of
experience in the pharmaceutical and biotechnology industry, each of whom will be a neutral. Each
Party will appoint one arbitrator and the third arbitrator will be selected by the two
Party-appointed arbitrators, or, failing agreement within thirty (30) days following the date of
receipt by the respondent of the claim, by JAMS. Such arbitration will take place in New York, NY.
The arbitration award so given will be a final and binding determination of the dispute, will be
fully enforceable in any court of competent jurisdiction, and will not include any damages
expressly prohibited by Section 11.4. Fees, costs and expenses of arbitration are to be divided by
the Parties in the following manner: Clovis will pay for the arbitrator it chooses, Avila will pay
for the arbitrator it chooses, and the Parties will share payment for the third arbitrator. Except
in a proceeding to enforce the results of the arbitration or as otherwise required by law, neither
Party nor any arbitrator may disclose the existence, content or results of any arbitration
hereunder without the prior written agreement of both Parties.



34









 




Amended and Restated Strategic License Agreement




           (d)      Accelerated Arbitration.     To the extent the arbitration matter involves a dispute that is
submitted to arbitration by a Party under either Sections 6.2, 6.4(e), or 6.7(c), or any dispute
regarding the proper characterization of a dispute subject to resolution under this Section 13.1(d)
as opposed to Section 13.1(c), the following procedures will also apply:




               (i)      For purposes of arbitration under this Section 13.1(d), the arbitrator will be
appointed pursuant to Section 13.1(c), but will be a single independent, conflict-free
arbitrator with the requisite licensing and pharmaceutical industry experience (such
arbitrator, the “Expert”). The Parties may select a different Expert for each dispute
depending on the nature of the issues presented and desired expertise.




               (ii)      Each Party will prepare and submit a written summary of such Party’s position and
any relevant evidence in support thereof to the Expert within thirty (30) days of the
selection of the Expert. Upon receipt of such summaries from both Parties, the Expert will
provide copies of the same to the other Party. The Expert will be authorized to solicit
briefing or other submissions on particular questions. Within fifteen (15) days of the
delivery of such summaries by the Expert, each Party will submit a written rebuttal of the
other Party’s summary and may also amend and re-submit its original summary. Oral
presentations will not be permitted unless otherwise requested by the Expert. The Expert
will make a final decision with respect to the arbitration matter within thirty (30) days
following receipt of the last of such rebuttal statements submitted by the Parties and will
make a determination by selecting the resolution proposed by one of the Parties that as a
whole is the most fair and reasonable to the Parties in light of the totality of the
circumstances and will provide the Parties with a written statement setting forth the basis
of the determination in connection therewith. For purposes of clarity, the Expert will only
have the right to select a resolution proposed by one of the Parties in its entirety and
without modification.




               (iii)      The Parties further agree that the decision of the Expert will be the sole,
exclusive and binding remedy between them regarding determination of the arbitration matter
so presented. Confirmation of, or judgment upon any award rendered pursuant to this Section
13.1(d) may be entered by any court of competent jurisdiction. The Expert will have no
authority to award any type of damages excluded under Section 11.4.



            (e)      Injunctive Relief.    Notwithstanding the dispute resolution procedures set forth in this
Section 13.1, in the event of an actual or threatened breach hereunder, the aggrieved Party may
seek equitable relief (including restraining orders, specific performance or other injunctive
relief) in any court or other forum, without first submitting to any dispute resolution procedures
hereunder.



           
(f)      Tolling.     The Parties agree that all applicable statutes of limitation and time-based
defenses (such as estoppel and laches) will be tolled while the dispute resolution procedures set
forth in this Section 13.1 are pending, and the Parties will cooperate in taking all actions
reasonably necessary to achieve such a result. In addition, during the pendency of any arbitration
under this Agreement initiated before the end of any applicable cure period under Section 12.2 or
12.3, (i) this Agreement will remain in full force and effect, (ii) the provisions of this
Agreement relating to termination for material breach will not be effective, (iii) the time periods
for cure under Section 12 as to any termination notice given prior to the initiation of arbitration
will be tolled, and (iv) neither Party will issue a notice of termination pursuant to such
sections, until the arbitral tribunal has confirmed the existence of the facts claimed by a Party
to be the basis for the asserted material breach.



     13.2      Cumulative Remedies and Irreparable Harm. All rights and remedies of the Parties
hereunder will be cumulative and in addition to all other rights and remedies provided hereunder or
available by agreement, at law or otherwise. Each Party acknowledges and agrees that breach of any
of the terms or conditions of this Agreement would cause irreparable harm and damage to the other
and that such damage may not be ascertainable in money damages and that as a result thereof the non
breaching Party would be



35









 




Amended and Restated Strategic License Agreement



entitled to seek from a court equitable or injunctive relief restraining any breach or future
violation of the terms contained herein by the breaching Party without the necessity of proving
actual damages or posting bond. Such right to equitable relief is in addition to whatever remedies
either Party may be entitled to as a matter of law or equity, including money damages.




     13.3      Industry Transaction.     Notwithstanding anything to the contrary herein, no
Know-How, Materials (including covalent inhibitors), Patents or other intellectual property rights
not Controlled by Avila or any of its Affiliates prior to an Industry Transaction for Avila will be
Controlled for purposes of this Agreement after such Industry Transaction, other than (i)
Collaboration Program Know-How no matter when Controlled, and (ii) any Patent that claims priority,
directly or indirectly, to any other Patent first Controlled before the Industry Transaction will
be Controlled thereafter no matter when such Patent is filed or issued. For the purposes of this
Agreement, (a) “Industry Transaction” for a Party will mean that (x) such Party will have become an
Affiliate of an entity that is a Drug Company (as defined below), or (y) any sale, license or other
transfer (in one transaction or a series of related transactions, and by any means, including by
merger or consolidation) of all or substantially all of such Party’s assets or that portion of its
business pertaining to the subject matter of this Agreement will have occurred to a Drug Company,
and (b) “Drug Company” will mean any entity that conducts R&D in the biotechnology or
pharmaceutical industry or develops or commercializes therapeutics or diagnostics.



     13.4      Relationship of Parties.     Nothing in this Agreement is intended or will be deemed
to constitute a partnership, agency, employer-employee or joint venture relationship between the
Parties. No Party will incur any debts or make any commitments for the other, except to the
extent, if at all, specifically provided therein. There are no express or implied third party
beneficiaries hereunder (except for Avila Indemnitees and Clovis Indemnitees for purposes of
Section 11.6).



     13.5      Compliance with Law.     Each Party will perform or cause to be performed any and
all of its obligations or the exercise of any and all of its rights hereunder in good scientific
manner and in compliance with all applicable law.



     13.6      Governing Law.     This Agreement will be governed by and construed in accordance
with the laws of the State of New York, without respect to its conflict of laws rules, provided
that any dispute relating to the scope, validity, enforceability or infringement of any Patents or
Know-How will be governed by, and construed and enforced in accordance with, the substantive laws
of the jurisdiction in which such Patents or Know-How apply.



     13.7      Counterparts; Facsimiles.     This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, and all of which together will be deemed to
be one and the same instrument. Facsimile or PDF execution and delivery of this Agreement by
either Party will constitute a legal, valid and binding execution and delivery of this Agreement by
such Party



     13.8      Headings.     All headings in this Agreement are for convenience only and will not
affect the meaning of any provision hereof.



     13.9      Waiver of Rule of Construction.     Each Party has had the opportunity to consult
with counsel in connection with the review, drafting and negotiation of this Agreement.
Accordingly, the rule of construction that any ambiguity in this Agreement will be construed
against the drafting party will not apply.



     13.10      Interpretation.    Whenever any provision of this Agreement uses the term
“including” (or “includes”), such term will be deemed to mean “including without limitation” (or
“includes without limitations”). “Herein,” “hereby,” “hereunder,” “hereof” and other equivalent
words refer to this Agreement as an entirety and not solely to the particular portion of this
Agreement in which any such word is used. All definitions set forth herein will be deemed
applicable whether the words defined are used herein in the singular or the plural. Unless
otherwise provided, all references to Sections and Exhibits in this Agreement are to Sections and
Exhibits of this Agreement. References to any Sections



36









 




Amended and Restated Strategic License Agreement



include Sections and subsections that are part of the related Section (e.g., a section
numbered “Section 2.1” would be part of “Section 2”, and references to “Section 2.1” would also
refer to material contained in the subsection described as “Section 2.1(a)”).




     13.11      Binding Effect.   This Agreement will inure to the benefit of and be binding upon
the Parties, their Affiliates, and their respective lawful successors and assigns.



     13.12      Assignment.   This Agreement may not be assigned by either Party, nor may either
Party delegate its obligations or otherwise transfer licenses or other rights created by this
Agreement, except as expressly permitted hereunder or otherwise without the prior written consent
of the other Party, which consent will not be unreasonably withheld; provided that (i) Clovis may
assign this Agreement to an Affiliate or to its successor in connection with the merger,
consolidation, or sale of all or substantially all of its assets, and (ii) Avila may assign this
Agreement to an Affiliate or to its successor in connection with the merger, consolidation, or sale
of all or substantially all of its assets or that portion of its business pertaining to the subject
matter of this Agreement.



     13.13      Notices.   All notices, requests, demands and other communications required or
permitted to be given pursuant to this Agreement will be in writing and will be deemed to have been
duly given upon the date of receipt if delivered by hand, recognized international overnight
courier, confirmed facsimile transmission, or registered or certified mail, return receipt
requested, postage prepaid to the following addresses or facsimile numbers:



	 	 	 

	If to Avila:

	 	Avila Therapeutics, Inc.
	 

	 	100 Beaver Street
	 

	 	Waltham, MA 02453
	 

	 	Attention: Chief Executive Officer
	 

	 	Facsimile: 781-891-0069
	 
	 	 
	With a copy to:

	 	Goodwin | Procter LLP
	 

	 	53 State Street
	 

	 	Boston, MA 02109
	 

	 	Attention: Kingsley L. Taft, Esq.
	 

	 	Facsimile: 617-523-1231
	 
	 	 
	If to Clovis:

	 	Clovis Oncology, Inc.
	 

	 	2525 28th Street
	 

	 	Boulder, CO 80301
	 

	 	Attention: Chief Executive Officer
	 

	 	Facsimile: 303-245-0361
	 
	 	 
	With a copy to:

	 	Willkie Farr & Gallagher LLP
	 

	 	787 Seventh Avenue
	 

	 	New York, NY 10019
	 

	 	Attention: Peter H. Jakes
	 

	 	Facsimile: (212) 728-8111





Either Party may change its designated address and facsimile number by notice to the other Party in
the manner provided in this Section 13.13.




     13.14      Amendment and Waiver.   This Agreement may be amended, supplemented, or otherwise
modified only by means of a written instrument signed by both Parties; provided that any unilateral
undertaking or waiver made by one Party in favor of the other will be enforceable if undertaken in
a writing signed by the Party to be charged with the undertaking or waiver. Any waiver of any
rights or failure to act in a specific instance will relate only to such instance and will not be
construed as an agreement to waive any rights or fail to act in any other instance, whether or not
similar.



37









 




 Amended and Restated Strategic License Agreement




     13.15      Severability.    In the event that any provision of this Agreement will, for any
reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability
will not affect any other provision hereof, and the Parties will negotiate in good faith to modify
this Agreement to preserve (to the extent possible) their original intent.



     13.16      Entire Agreement.     This Agreement is the sole agreement with respect to the
subject matter and supersedes all other agreements and understandings between the Parties with
respect to same (including the Original Agreement and the Confidentiality Agreement).



     13.17      Force Majeure.    Neither Clovis nor Avila will be liable for failure of or delay
in performing obligations set forth in this Agreement (other than any obligation to pay monies when
due), and neither will be deemed in breach of such obligations, if such failure or delay is due to
natural disasters or any causes reasonably beyond the control of Clovis or Avila; provided that the
Party affected will promptly notify the other of the force majeure condition and will exert
reasonable efforts to eliminate, cure or overcome any such causes and to resume performance of its
obligations as soon as possible.



[Remainder of this Page Intentionally Left Blank]








38









 




Amended and Restated Strategic License Agreement







        IN WITNESS WHEREOF, the Parties have caused this Strategic License Agreement to be executed by
their respective duly authorized officers as of the A&R Date.


Avila Therapeutics, Inc.




	 	 	 	 	 

	By:

	 	/s/ KATRINE BOSLEY
	 	 
	 

	 	(Signature)	 	 
	 
	 	 	 	 
	Name:  

	 	Katrine Bosley	 	 
	 
	 	 	 	 
	Title:

	 	President and CEO	 	 
	 
	 	 	 	 
	Date:

	 	June 16, 2011	 	 
	 
	 	 	 	 
	Clovis Oncology, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ PATRICK J. MAHAFFY	 	 
	 

	 	(Signature)	 	 
	 
	 	 	 	 
	Name:

	 	Patrick J. Mahaffy	 	 
	 
	 	 	 	 
	Title:

	 	President and CEO	 	 
	 
	 	 	 	 
	Date:

	 	June 16, 2011	 	 



















 





Amended and Restated Strategic License Agreement




Exhibit 1.7

Avila Patents as of the Effective Date



 


	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
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	 	Title	 	 	Appln	 	 	Country	 	 	Inventors	 	 	Status as of the	 
	 	 	 	 	Type	 	 	 	 	 	 	 	 	 	 	 	Effective Date	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
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a









 






Amended and Restated Strategic License Agreement



 


	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	***	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Title	 	 	Appln	 	 	Country	 	 	Inventors	 	 	Status as of the	 
	 	 	 	 	Type	 	 	 	 	 	 	 	 	 	 	 	Effective Date	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	***
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	 	 	***	 	 	***	 	 	 	 	 	***	 	 	***	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	***	 	 	 	 	 	***	 	 	***	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	***	 	 	***	 	 	 	 	 	***	 	 	***	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	***	 	 	***	 	 	 	 	 	***	 	 	***	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





b









 






Amended and Restated Strategic License Agreement




Exhibit 1.53

Targets




“Targets” comprise, collectively, ***




“Reference Sequence” is ***.




a









 





     



Amended and Restated Strategic License Agreement




Exhibit 2.1(b)

Collaboration Plan




***




a









 








     



Amended and Restated Strategic License Agreement




 




	 	 	 	 	 	 	 	 	 
	Collaboration Plan Budget (000’s)	 
	 
	 	 	 	 	 	 	 	 
	 	 	    2010	 	 	    2011	 
	 
	 	 	 	 	 	 	 	 
	Reimbursement for Avila FTEs
	 	$	*	**	 	$	*	**
	 
	 	 	 	 	 	 	 	 
	Clovis Internal Expenses
	 	 	*	**	 	 	*	**
	 
	 	 	 	 	 	 	 	 
	External Costs
	 	 	 	 	 	 	 	 
	Discovery
	 	 	*	**	 	 	*	**
	Non-clinical
	 	 	*	**	 	 	*	**
	CMC
	 	 	*	**	 	 	*	**
	Diagnostics
	 	 	*	**	 	 	*	**
	Clinical, Regulatory and Other
	 	 	*	**	 	 	*	**
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	*	**	 	 	*	**







b










 





Amended and Restated Strategic License Agreement




Exhibit 2.1(c)

Initial Agreed Compound Profile










	 	 	 
	Attribute	Criteria (method)	Desired Limit









***



a









 





Amended and Restated Strategic License Agreement




Exhibit 8.1(a)

Proposed Prosecution and Maintenance Activities for Subject Patents




***



a









 




 
Amended and Restated Strategic License Agreement




Exhibit 10.3(c)

Joint Press Release





Clovis Oncology and Avila Therapeutics Sign $209 Million Partnership for the Worldwide
Development and Commercialization of EGFR Mutant-Selective Inhibitor





	 	•	 	Avila’s oral, small molecule program targets cancer-causing mutant forms of the EGF
receptor (EGFR)

	 
	 	•	 	Innovative treatment approach for non-small cell lung cancer (NSCLC) patients with
disease resistant to current therapy

	 
	 	•	 	Potency against key disease mutation, T790M, while minimizing activity against the
wild-type (normal) EGFR to increase therapeutic index and avoid side effects of current
standard of care

	 
	 	•	 	Clovis to lead accelerated clinical development plan including companion diagnostic to
prospectively identify T790M-positive NSCLC patients






Boulder, CO, and Waltham, MA, USA. May 25, 2010.



Clovis Oncology, Inc., a biopharmaceutical company focused on acquiring, developing and
commercializing innovative anti-cancer agents, and Avila Therapeutics, Inc., a biotechnology
company designing targeted covalent drugs, announced today an agreement for the development and
commercialization of Avila’s epidermal growth factor receptor (EGFR) mutant-selective inhibitor
(EMSI) program, currently in pre-clinical development for the treatment of non-small cell lung
cancer (NSCLC). The EMSI program targets the T790M mutant form of the EGFR associated with
clinical resistance to Tarceva® (erlotinib) and Iressa® (gefitinib)1, as well as
targeting the initial activating EGFR mutations, including L858R and exon 19 deletions. It does
so while also sparing the wild-type (normal) EGFR and may thus treat refractory NSCLC while
minimizing dose-limiting side effects. Because the program targets both the sensitive activating
mutations as well as the primary resistance mechanism, T790M, it has the potential to treat both
first- and second-line NSCLC patients with EGFR mutations, for whom there is great unmet medical
need.



“The T790M mutation seems to be the predominant mechanism underlying the development of resistance
of EGFR-mutant lung cancers to specific EGFR kinase inhibitors, and it may well explain why the
dramatic responses seen in these cases are of relatively short duration. The development of a drug
that is both mutant-specific and capable of irreversibly binding the enzyme is one of the most
exciting new developments in this field,” said Dr. Daniel Haber, director of the Massachusetts
General Hospital Cancer Center, who led a team that initially discovered EGFR mutations in lung
cancer. “Such an inhibitor could overcome this resistance mutation at dosage levels that would
spare the wild type EGFR in normal tissues. This could prove to be of major clinical significance,”
he added.



Under the terms of the agreement, Avila and Clovis Oncology will collaborate on the pre-clinical
development of the EMSI product candidate. Clovis Oncology will be fully responsible for all
aspects of development and commercialization, including development of companion diagnostics to
prospectively identify patients with clinically-arising resistance mutations of the EGFR. In
addition to research support, Avila will receive an upfront fee and be eligible to receive development, regulatory and
sales-





 




	 	 	 
	1	Tarceva and Iressa are registered trademarks
of F. Hoffman-La Roche and AstraZeneca, respectively.





a









 









Amended and Restated Strategic License Agreement





based milestone payments, with a total potential value of $209 million. Avila will also
receive tiered royalties on product sales and will share in selected sublicense income.




“Avila’s EMSI program has demonstrated very encouraging data against both the T790M resistance
mutation and the initiating activating mutations and we are very pleased to initiate this
partnership with them,” said Patrick J. Mahaffy, President and CEO of Clovis Oncology. “We plan to
file an IND as rapidly as possible and initiate an accelerated clinical development program,
including the use of a companion diagnostic to identify patients with NSCLC who possess the T790M
mutation. We believe that this program has the potential to meaningfully improve outcomes in
patients with EGFR-mediated non-small cell lung cancer.”




“Clovis Oncology is an ideal partner with whom to advance this exciting program given their deep
experience developing oncology drugs and their commitment to develop a companion diagnostic to
identify the right patients for the drug,” said Katrine Bosley, President and CEO of Avila
Therapeutics. “Resistance mutations in cancer-causing proteins are uniquely amenable to the
targeted covalent inhibition enabled by Avila’s platform and working together with Clovis will
accelerate advancement of this program.”




About Lung Cancer




Lung cancer is the most common cancer worldwide with 1.35 million new cases annually, and NSCLC
accounting for almost 85 percent of all lung cancers. NSCLC progresses rapidly with a five year
survival rate in advanced NSCLC patients of less than 5%. Activating EGFR mutations are key
drivers of NSCLC malignancy in 10-15% of patients of European descent and approximately 30% of
patients of East Asian descent.




Currently, agents for the treatment of NSCLC patients include Tarceva® and Iressa®, both
non-selective EGFR inhibitors. Both agents have significant skin-rash and diarrhea as side effects
related to inhibition of the wild-type (normal) EGFR in skin and intestine respectively. Acquired
resistance to Tarceva and Iressa occurs after a median of 12 months, driven in approximately 50% of
cases by a “gatekeeper mutation” called T790M. Patients with tumors containing this secondary
resistance EGFR mutation are clinically resistant to both first generation EGFR inhibitors (Tarceva
and Iressa) as well as second generation pan-ErbB inhibitors currently in clinical development.
By inhibiting both T790M and the initial activating mutations, the EMSI program offers the prospect
of effective drug treatment for first and second-line NSCLC patients with activating EGFR
mutations. With sparing of the wild-type EGFR, the EMSI program could also offer a much improved
therapeutic window compared to current therapies in a first-line setting.




About Clovis Oncology, Inc.




Clovis Oncology, Inc. is a biopharmaceutical company focused on acquiring, developing and
commercializing innovative anti-cancer agents in the U.S., Europe and additional international
markets. Clovis intends to target development programs at specific subsets of cancer populations,
and will simultaneously develop diagnostic tools that direct a compound in development to the
population that is most likely to benefit from its use. The Company is currently developing CO-101
which is in Phase 2 development for the treatment of pancreatic cancer. The Company is
collaborating with Ventana Medical Systems to develop a companion diagnostic to identify patients
with low tumor expression of hENT1 and therefore likely to benefit from CO-101. The Company is
headquartered in Boulder, Colorado, and has additional offices in San Francisco and Cambridge,
England. For more information about Clovis Oncology, please visit the Company’s website at
www.clovisoncology.com.




About Avila Therapeutics




b









 







Amended and Restated Strategic License Agreement





Avila focuses on design and development of targeted covalent drugs to achieve best-in-class
outcomes that cannot be achieved through traditional chemistries. This approach is called “protein
silencing”. The company’s product pipeline has been built using its proprietary AvilomicsTM platform
and is currently focused on viral infection, cancer, and autoimmune disease. Avila is funded by
leading venture capital firms: Abingworth, Advent Venture Partners, Atlas Venture, Novartis Option
Fund, and Polaris Venture Partners. For additional information, please visit
http://www.avilatx.com.




For Further Information Contact:




For Clovis Oncology:




Scout Investor Relations




Breanna Burkart / Anna Sussman




303.907.5162 / 303.907.5358




Breanna@scoutir.com / anna@scoutir.com




For Avila Therapeutics:




Kathryn Morris




The Yates Network




845-635-9828




kathryn@theyatesnetwork.com





c