Exhibit 10.1


 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


EXECUTION COPY


 


LICENSE AGREEMENT


 


This
LICENSE AGREEMENT (the “Agreement”) is entered into on June 11,
2010 (the “Effective Date”)
between TRANZYME, INC., a Delaware
corporation, with its principal place of business at 4819 Emperor Blvd, Suite
400, Durham, NC 27703 (“Tranzyme”),
and NORGINE B.V., a limited
liability company under the laws of the Netherlands, with its principal offices
at Hogehilweg 7, 1101 CA Amsterdam ZO, The Netherlands (“Norgine”). 
Tranzyme and Norgine are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”


 


RECITALS


 


WHEREAS, Tranzyme is a clinical-stage
biopharmaceutical company developing novel small molecule drugs for both acute
(hospital-based) and chronic disorders with high unmet medical needs;


 


WHEREAS, Norgine and its Affiliates together possess
expertise in the development, marketing, and commercialization of
pharmaceutical products;


 


WHEREAS, Tranzyme and its Affiliates together
control certain intellectual property covering TZP-101 (as defined below), a
ghrelin agonist, and is engaged in the development of TZP-101 for the treatment
of gastrointestinal motility disorders including postoperative ileus,
gastroparesis and impaired gastric emptying; and


 


WHEREAS, Norgine desires to obtain exclusive rights
to develop, manufacture and commercialize TZP-101 for the Licensed Territory
(as defined below), and Tranzyme desires to grant Norgine such rights, all as
set forth below.


 


NOW THEREFORE, in consideration of the
foregoing premises and the mutual promises, covenants and conditions contained
in this Agreement, the Parties agree as follows:


 


ARTICLE 1


 


DEFINITIONS


 


As
used in this Agreement, the following initially capitalized terms, whether used
in the singular or plural form, shall have the meanings set forth in this
Article 1.


 


1.1                               “Acquisition” has the meaning set forth in Section 15.5(a).


 


1.2                               “Affiliate” means, with respect to a particular Party, a
corporation, partnership or other business entity that controls, is controlled
by or is under common control with such Party. 
For the purposes of this definition, the word “control” (including, with
correlative meaning, the terms “controlled by” or “under the common control
with”) means the actual power, either directly or indirectly through one or
more intermediaries, to direct or cause the direction of the


 


1

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


management
and policies of such entity, whether by the ownership of fifty percent (50%) or
more of the voting stock of such entity, or by contract or otherwise.


 


1.3                               “Clinical Manufacturing Costs” means the out-of-pocket costs
incurred by a Party or by the Parties jointly to one or more Third Parties in
connection with the manufacture, supply, testing, shipment, release and other
activities relating to the procurement of the Product(s), placebos and
comparator drugs used in the Development of the Products.  Clinical Manufacturing Costs excludes
internal costs; this means that if a Party procures or has procured the Product
from a Third Party manufacturer, the Clinical Manufacturing Costs shall mean
the costs incurred by such Party in connection with the procurement, testing,
storage, shipping and releasing such Product but shall exclude the internal
costs incurred by such Party in connection with the management of the
contractual relationship with such Third Party manufacturer.


 


1.4                               “Clinical Supply” has the meaning set forth in Section
7.3(b).


 


1.5                               “Commercialization”, with a correlative meaning for “Commercialize”,
“Commercialized” and “Commercializing”, means all non-Development activities
undertaken before and after obtaining Regulatory Approvals relating
specifically to the pre-launch, launch, promotion, detailing, medical education
and medical liaison activities, marketing, pricing, reimbursement, sale, and
distribution of a Product, including: (a) strategic marketing, sales force
detailing, advertising, medical education and liaison, national account
managers, and market and product support; (b) any commercialization studies for
use in generating data to be submitted to Regulatory Authorities (and all
associated reporting requirements) for marketing, label expansion and other
commercial purposes once Regulatory Approval for Product for the first
Indication has been obtained and which is not required by the Regulatory
Authority as a condition of Regulatory Approval, and (c) all customer support,
Product distribution, invoicing and sales activities.


 


1.6                               “Combination
Product” has the meaning given to it in Section 1.57.


 


1.7                               “Commercialization Plan” has the meaning set forth in Section
6.2(b).


 


1.8                               “Commercially Reasonable Efforts” means, (a) with respect to
Norgine, those efforts consistent with the exercise of prudent scientific and
business judgment, in an active and ongoing program as would be applied
customarily by Norgine to a product at a similar stage of development and with
similar market potential, and (b) with respect to Tranzyme, those efforts
consistent with the exercise of prudent scientific and business judgment, in an
active and ongoing program as would be applied customarily by Tranzyme to a
product at a similar stage of development and with similar market
potential.  Commercially Reasonable
Efforts requires that a Party, at a minimum, assign responsibility for such
obligations to qualified employees, set annual goals and objectives for
carrying out such obligations, and allocate resources designed to meet such
goals and objectives.


 


1.9                               “Competing Product” has the meaning set forth in Section
2.6(b).


 


1.10                        “Confidential Information” means that, unless otherwise
expressly specified in this Agreement, with respect to a Party, all reports and
other Information of such Party that is disclosed to the other Party under this
Agreement, whether in oral, written, graphic, or electronic


 


2

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


form.  All Information disclosed by either Party
pursuant to the Confidential Disclosure Agreement between the Parties dated
June 3, 2009 shall be deemed to be such Party’s Confidential Information
disclosed hereunder.  For clarity the
existence of this Agreement and the terms of this Agreement shall be the
Confidential Information of both Parties.


 


1.11                        “Control” means, with respect to any material, Information,
or Patents, that a Party (a) owns or (b) has a license to such material,
Information, or Patents and, in each case, has the ability to grant to the
other Party access, a license, or a sublicense (as applicable) to the foregoing
on the terms and conditions set forth in this Agreement without violating the
terms of any then-existing agreement or other arrangement with any Third Party,
and the terms “Controlled” and “Controlling” shall be construed accordingly.


 


1.12                        “Core Studies” has the meaning set forth in Section 4.1.


 


1.13                        “Core Studies Development Plan” has the meaning set forth in
Section 4.2(a).


 


1.14                        “Cumulative Mean Unit Price” has the meaning set forth in
Section 8.2(b)(i).


 


1.15                        “Defending Party” has the meaning set forth in Section 9.5.


 


1.16                        “Develop” or “Development”
means all pre-Regulatory Approval development and regulatory activities
regarding TZP-101 and/or a Product in a country of the Territory conducted with
the aim of obtaining such Regulatory Approval (excluding activities conducted
solely for the purpose of obtaining pricing or reimbursement approval),
including activities relating to preparing and conducting preclinical testing,
toxicology testing, human clinical studies, and regulatory activities (e.g., regulatory applications) with
respect to TZP-101 and/or such Product for the purpose of conducting the
foregoing activities.


 


1.17                        “Development Plan” shall mean, collectively, the Core Studies
Development Plan, the Norgine Independent Studies Development Plan and the
Tranzyme Independent Studies Development Plan.


 


1.18                        “Dollar” means a U.S. dollar, and “$” shall be interpreted
accordingly.


 


1.19                        “EMEA” means the European Medicines Agency or its successors.


 


1.20                        “Equity Documents” shall mean the stock purchase agreement
and other related agreements to be executed by the Parties in the form attached
hereto as Exhibit D.


 


1.21                        “Euro” means the official currency of the Netherlands, and “€”
shall be interpreted accordingly.


 


1.22                        “Europe” means the countries that are members of the European
Union (as its membership may be altered from time to time) or any successor
organization thereto (the member countries of the European Union as of the Effective
Date are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia,
Finland, France (including Monaco), Germany, Greece, Hungary, Ireland, Italy
(including San Marino and Vatican City), Latvia, Lithuania, Luxembourg, Malta,
The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia,


 


3

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


Spain,
Sweden, and the United Kingdom) and Albania, Andorra, Armenia, Azerbaijan,
Belarus, Bosnia and Herzegovina, Croatia, Georgia, Iceland, Kazakhstan, Kosovo,
Kyrgyzstan, Liechtenstein, Macedonia, Moldova, Norway, Russia, Serbia,
Switzerland, Tajikistan, Turkmenistan, Turkey, Ukraine, and Uzbekistan.


 


1.23                        “Existing Inventory” has the meaning set forth in Section
7.3(a).


 


1.24                        “FD&C Act” means the U.S. Federal Food, Drug and Cosmetic
Act, as amended.


 


1.25                        “FDA” means the U.S. Food and Drug Administration or its
successor.


 


1.26                        “Field” means the prevention, treatment or palliation of any
and all human diseases and conditions.


 


1.27                        “First Commercial Sale” means the first sale to a Third Party
of a Product in a given regulatory jurisdiction.


 


1.28                        “First Launch Milestone” has the meaning set forth in Section
8.2(a).


 


1.29                        “Generic Competing Product” means, with respect to a given
Product in a given jurisdiction in the Licensed Territory, any pharmaceutical
product that:  (a) is marketed for sale
in such jurisdiction by a Third Party (not otherwise licensed or authorized by
Norgine); (b) contains TZP-101 as an active pharmaceutical ingredient in an
equivalent formulation and mode of administration; and (c) such product, as and
to the extent required, is approved through an abbreviated process (including,
with respect to the European Union approvals issued pursuant to Article 10(1)
of Directive 2001/83/EC where the Third Party has provided EMEA with scientific
data to substantiate a claim of biosimilarity to the Product in question, or,
outside the European Union, any counterparts thereof).


 


1.30                        “Good Clinical Practices” or “GCP”
means a set of ethical and scientific quality requirements which must be
observed for designing, conducting, recording and reporting clinical trials in
a given country or group of countries that involve the participation of human
subjects including:  (a) in relation to
clinical trials in the European Union, Directive 2001/20/EC, Directive
2001/83/EC and Directive 2005/28/EC as well as ICH-GCP and any other guidelines
for good clinical practice for trials on medicinal products in Europe as
amended and applicable from time to time; (b) in relation to clinical trials in
the U.S., 21 C.F.R. Parts 50 (Protection of Human Subjects), 56 (Institutional
Review Boards) and 312 (Investigational New Drug Application), as may be
amended from time to time; and any other guidelines for good clinical practice
for trials on medicinal products in the U.S. as amended and applicable from
time to time; and (c) in relation to clinical trials in any other country, the
equivalent Laws in that country as amended and applicable from time to
time.  For clarity, Development
activities conducted with the aim of supporting Regulatory Approval in more
than one (1) jurisdiction shall meet the requirement of GCP for each of such
jurisdictions.


 


1.31                        “Good Laboratory Practices” or “GLP”
means the quality system concerned with the organizational process and the
conditions under which laboratory studies are planned, performed, monitored,
recorded and reported, in a given country or group of countries including:  (a) in relation to such studies in the
European Union, Directive 2004/10/EC as may be amended


 


4

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


or
replaced from time to time as well as any “Rules Governing Medicinal Products
in the European Community” Vol III, ISBN 92.825 9619-2 (ex OECD principles of
GLP) as amended and applicable from time to time; (b) in relation to the U.S.,
21 C.F.R. Part 58 (Good Laboratory Practice for Nonclinical Laboratory Studies)
as amended and applicable from time to time; and (c) in relation to any other
country, the equivalent Laws in that country as amended and applicable from
time to time.  For clarity, Development
activities conducted with the aim of supporting Regulatory Approval in more
than one (1) jurisdiction shall meet the requirement of GLP for each of such
jurisdictions.


 


1.32                        “Good Manufacturing Practices,” “cGMP” or “GMP” means all applicable standards relating to
manufacturing practices for fine chemicals, active pharmaceutical ingredients,
intermediates, bulk products or finished pharmaceutical products, for supply in
a given country or group of countries including:  (a) in the case of the European
Union, (i) Directive 2003/94/EC or any other applicable European Community
legislation or regulation from time to time, and (ii) the Rules Governing Medicinal Products in the European
Community, Volume IV Good Manufacturing Practice for Medicinal Products,  each as may be applicable and as amended from time to
time; (b) in the case of the U.S., the principles detailed in the U.S. Current Good Manufacturing
Practices, 21 C.F.R. Parts 210, 211, 601 and 610, each as may be applicable and
as amended from time to time; (c) in relation to any other
country, the equivalent Laws in that country as amended and applicable from
time to time; and (d) the principles detailed in the ICH Q7A guidelines.


 


1.33                        “Governmental Authority” means any multi-national, federal,
state, local, municipal, provincial or other government authority of any nature
(including any governmental division, prefecture, subdivision, department,
agency, bureau, branch, office, commission, council, court or other tribunal).


 


1.34                        “ICC” has the meaning set forth in Section 14.3.


 


1.35                        “ICH-GCP” — the ICH Harmonised Tripartite Guideline for Good
Clinical Practice (CPMP/ICH/135/95).


 


1.36                        “IND” means (a) an Investigational New Drug Application as
defined in the FD&C Act and applicable regulations promulgated hereunder by
the FDA, or (b) the equivalent application to the equivalent agency in any
other regulatory jurisdiction outside the U.S., the filing of
which is necessary to commence or conduct clinical testing of a pharmaceutical
product in humans in such jurisdiction.


 


1.37                        “Independent Studies” has the meaning set forth in Section
4.1(a).


 


1.38                        “Independent Studies Development Plan” has the meaning set
forth in Section 4.2(d).


 


1.39                        “Indication” means any human disease or condition which can
be treated, prevented, palliated or cured or the progression of which can be
delayed and for which a Product is specifically developed in order to obtain
Regulatory Approval for use of such Product pursuant to an approved label
claim.  For clarity (and without
exclusion of other Indications), [***] shall each be deemed a separate
Indication for the purpose of this Agreement.


 


5

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


1.40                        “Information” means any data, results, technology, business information, technical information and other information
of any type whatsoever, in any tangible or intangible form, including, without
limitation, know-how, practices, techniques, methods, processes, inventions,
developments, specifications, formulations, formulae, materials or compositions
of matter of any type or kind (patentable or otherwise), software, algorithms,
marketing reports, expertise, technology, test data (including pharmacological,
biological, chemical, biochemical, toxicological, preclinical and clinical test
data), analytical and quality control data, stability data, other study data
and procedures, case report forms, data analyses, and information contained in
submissions to and information from ethical committees and Regulatory
Authorities.  Information includes any
rights including trade secrets, copyright, database rights or design rights
protecting such Information.


 


1.41                        “Initial Development Plan” has the meaning set forth in
Section 4.2(a).


 


1.42                        “Initial Unit Price” has the meaning set forth in Section
8.2(a).


 


1.43                        “Joint Development Committee” or “JDC”
has the meaning set forth in Section 3.4(a).


 


1.44                        “Joint Inventions” has the meaning set forth in Section 9.1.z


 


1.45                        “Joint Patent” has the meaning set forth in Section 9.1.


 


1.46                        “Joint Steering Committee” or “JSC”
means the committee formed by the Parties as described in Section 3.1.


 


1.47                        “Launch Milestone” has the meaning set forth in Section 8.2.


 


1.48                        “Launch Milestone Adjustment” has the meaning set forth in
Section 8.2(b)(ii).


 


1.49                        “Laws” means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of any federal,
national, multinational, state, provincial, county, city or other political
subdivision, domestic or foreign.


 


1.50                        “Licensed Territory” means Europe, Oceania, South Africa, the
Middle East and North Africa.


 


1.51                        “Licensed Territory Development Plan” has the meaning set
forth in Section 4.2(a).


 


1.52                        “Losses” has the meaning set forth in Section 11.1.


 


1.53                        “MAA” or “Marketing Authorization
Application” means any filing, application or submission filed with
EMEA (or, if the decentralized procedure is followed, the national Regulatory
Authority for a particular country in the European Union, such as MHRA in the
United Kingdom or BfArM in Germany) to obtain permission to market and sell a
pharmaceutical product in the European Union (or, if the decentralized
procedure is followed, a particular country in the European Union) (but
excluding always any form of pricing or


 


6

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


reimbursement
approval) or any comparable application filed with the Regulatory Authority in
or for a country or group of countries outside the European Union to obtain
permission to market and sell a pharmaceutical product in that country or
within that group of countries.


 


1.54                        “Major Market” shall mean any of [***].


 


1.55                        “Manufacturing Costs” means the cost incurred in the
manufacture of Product for registration batch, validation batch, or for other
Commercialization purposes, including, but not limited to (a) direct labor; (b)
product quality assurance/control costs; (c) facility and equipment
depreciation costs; (d) facility and equipment validation and control costs;
(e) shipping costs; and (f) applicable overhead reasonably allocable to Product
(excluding general and administrative expenses).  Manufacturing Costs shall expressly exclude
Clinical Manufacturing Costs.


 


1.56                        “Middle East” means Bahrain, Iran, Iraq, Israel, Jordan,
Kuwait, Lebanon, Oman, Palestinian territories, Qatar, Saudi Arabia, Syria, the
United Arab Emirates and Yemen, as their boundaries are defined as of the
Effective Date and including any successors of the foregoing countries to the
extent within the boundaries of the countries set forth above as of the
Effective Date.


 


1.57                        “Net
Sales” means, with respect to a particular time period, the total amounts
invoiced by Norgine, its Affiliates and their respective sublicensees for sales
of Products made during such time period to unaffiliated Third Parties, less
the following deductions to the extent actually allowed or incurred with
respect to such sales:


 


(a)                                  normal and
customary discounts, including trade, cash and quantity discounts, administrative fees incurred directly in such discounting, and rebates
actually granted to customers and distributors;


 


(b)                                  credits, reasonable
price adjustments or allowances actually granted for damaged, outdated,
spoiled, returned or rejected Products, including, without limitation, in
connection with recalls; and


 


(c)                                  chargeback
payments and rebates (or the equivalent thereof) for the Products granted to
group purchasing organizations, managed health care organizations or to
federal, state/provincial, local and other governments, including their
agencies, or to trade customers;


 


(d)                                  reasonable and
customary freight, shipping insurance and other transportation expenses
directly related to the sale of the Products;


 


(e)                                  Taxes in the Licensed Territory, as adjusted by any refunds; and


 


In addition, Norgine may deduct from invoiced sales in
a particular quarter any amounts due and payable for Product which are
recognized by Norgine as being actual, uncollectable amounts in that quarter,
where collectability is determined in accordance with IFRS consistently applied
to all Norgine products.


 


7

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


Notwithstanding
the foregoing, amounts billed by Norgine, its Affiliates, or their respective
sublicensees for the sale of Products among Norgine, its Affiliates or their
respective sublicensees for resale shall not be included in the computation of
Net Sales hereunder.  For purposes of determining
Net Sales, the Products shall be deemed to be sold when invoiced and a “sale”
shall not include reasonable transfers or dispositions, at no cost, as samples
or for charitable purposes, or transfers or dispositions at no cost for
preclinical, clinical or regulatory purposes.


 


Such
amounts shall be determined from the books and records of Norgine maintained in
accordance with IFRS, consistently applied.


 


If
one or more Products is sold as part of a Combination Product (as defined
below), the Net Sales from the Combination Product shall be determined by
multiplying the Net Sales (as determined above) of the Combination Product,
during the applicable royalty reporting period, by the fraction, A/(A+B), where
A is the gross selling price of the Product(s) when sold separately in finished
form and B is the gross selling price of the Combination Product when sold
separately in finished form, in each case in the applicable country during the
applicable royalty reporting period or, if sales of both the Product(s) and the
other components did not occur in such country in such period, then in the most
recent royalty reporting period in which sales of both occurred.  If such average sale price cannot be
determined for both the Product(s) and all other components included in such
Combination Product, Net Sales for the purposes of determining royalty payments
shall be determined by the Parties in good faith.  For purposes of this Section 1.57 the term “Combination Product” means any therapeutic medical product
that includes both (i) one or more Product(s) and (ii) one or more other active
ingredient(s).


 


1.58                        “Non-breaching Party” has the meaning set forth in Section
13.2(a).


 


1.59                        “North Africa” means Egypt, Libya, Tunisia, Algeria, and
Morocco.


 


1.60                        “Norgine Abandoned Patents” has the meaning set forth in
Section 9.3(b)(i)(2).


 


1.61                        “Norgine Competing Product” has the meaning set forth in
Section 2.6(a).


 


1.62                        “Norgine Development Activities” has the meaning set forth in
Section 4.4(a).


 


1.63                        “Norgine Indemnitees” has the meaning set forth in Section
11.1.


 


1.64                        “Norgine Independent Studies” has the meaning set forth in
Section 4.1(a).


 


1.65                        “Norgine Independent Studies Development Plan” has the
meaning set forth in Section 4.2(a).


 


1.66                        “Norgine Know-How” means all Information that is Controlled
by Norgine or its Affiliates as of the Effective
Date or during the Term and is necessary for the Development, manufacture
and/or Commercialization of TZP-101 and/or the Product in the Field in
accordance with the terms of this Agreement. 
For clarity, Norgine Know-How excludes Information contained within the
Norgine Patents.


 


8

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


1.67                        “Norgine Patent” means any Patent that is (a) Controlled by
Norgine or its Affiliates as of the Effective
Date or at any time during the Term (including Norgine Sole Patents but
excluding Norgine’s interest in any Joint Patents), and (b) necessary for the
Development, manufacture and/or Commercialization of TZP-101 and/or Products in
the Field.


 


1.68                        “Norgine Prosecuted Patents” has the meaning set forth in
Section 9.3(b)(i)(1).


 


1.69                        “Norgine
Sole Inventions” has the meaning given to it in Section 9.1.


 


1.70                        “Norgine Sole Patents” has
the meaning given to it in Section 9.1.


 


1.71                        “Norgine
Technology” means the Norgine Patents and Norgine Know-How.


 


1.72                        “Norgine Withholding Tax Action” has the meaning set forth in
Section 8.11(c).


 


1.73                        “Notified Party” has the meaning set forth in Section
13.2(a).


 


1.74                        “Oceania” means Australia and New Zealand.


 


1.75                        “Patent List” has the meaning set forth in Section 10.2(b).


 


1.76                        “Patent Term Extension” has the meaning set forth in Section
9.3(e).


 


1.77                        “Patents” means (a) all
national, regional and international patent applications, including provisional
patent applications, (b) all patent applications filed either from the patent
applications the subject of (a) or from an application claiming priority from
any of these, including divisionals, continuations, continuations-in-part,
provisionals, converted provisionals, and continued prosecution applications,
(c) any and all patents that have issued or in the future issue from the
foregoing patent applications in (a) and (b), including author certificates,
inventor certificates, utility models, petty patents and design patents and
certificates of invention, (d) any and all extensions or restorations by
existing or future extension or restoration mechanisms, including
revalidations, reissues, re-examinations and extensions (including any
supplementary protection certificates and the like) of the foregoing patents or
patent applications in (a), (b) and (c), and (e) any similar rights, including
so-called pipeline protection, or any importation, revalidation, confirmation
or introduction patent or registration patent or patent of additions to any such
foregoing patent applications and patents.


 


1.78                        “Pharmacovigilance Agreement” has the meaning set forth in
Section 5.3.


 


1.79                        “Phase 3 Clinical Trial” means a clinical trial on sufficient
numbers of patients, which trial(s) are designed to (a) establish that a drug
is safe and efficacious for its intended use; (b) define warnings, precautions
and adverse reactions that are associated with the drug in the dosage range to
be prescribed; and (c) support approval of an application to a Regulatory
Authority for the commercial marketing of such drug.


 


1.80                        “Product” means any pharmaceutical product comprising TZP-101
as an active ingredient irrespective of its formulation.


 


9






 










 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


1.81                        “Product Infringement” has the meaning set forth in Section 9.4(a).


 


1.82                        “Product Trademark” has the meaning set forth in Section 6.6.


 


1.83                        “Region” means each of the following: (a) Europe; (b) Oceania;
(c) South Africa; (d) the Middle East; and (e) North Africa.


 


1.84                        “Regulatory Approval” means, with
respect to a Product in any country or jurisdiction, all approvals (including
pricing and reimbursement approvals), registrations, licenses or authorizations
from the relevant Regulatory Authority in a country or jurisdiction that is
specific to Product and necessary to market and sell such Product in such
country or jurisdiction.


 


1.85                        “Regulatory Authority” means, in a particular country or
regulatory jurisdiction, any applicable Governmental Authority involved in
granting Regulatory Approval and/or, to the extent required in such country or
regulatory jurisdiction, pricing or reimbursement approval of a Product in such
country or regulatory jurisdiction, including (a) the FDA, and (b) the
EMEA, and in each case, including any successor thereto.


 


1.86                        “Regulatory Filings” means, with respect to
the Products, any submission to a Regulatory Authority of any appropriate
regulatory application specific to TZP-101 or a Product, and shall include,
without limitation, any submission to a regulatory advisory board and any
supplement or amendment thereto.  For the
avoidance of doubt, Regulatory Filings shall include any IND, MAA or the
corresponding application in any other country or group of countries.


 


1.87                        “Retained Territory” means  all
countries and territories outside the Licensed Territory.


 


1.88                        “Revised Launch Milestone” has the meaning set forth in Section 8.2(b)(i).


 


1.89                        “Royalty Term” has the meaning set forth in Section 8.4.


 


1.90                        “SEC” has the meaning set forth in Section 12.4(a).


 


1.91                        “Sole Inventions” has the meaning set forth in Section 9.1.


 


1.92                        “Sublicense Agreement” has the meaning set forth in Section 2.1(c).


 


1.93                        “Taxes” means taxes (other than income taxes), duties,
tariffs or other governmental charges levied on the sale of Products,
including, without limitation, consumption
taxes.


 


1.94                        “Term” means the term of this Agreement, as determined in
accordance with Article 13.


 


1.95                        “Territory” means the Licensed Territory or the Retained
Territory, as applicable.


 


10

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


1.96                        “Third Party” means any person or entity other than Tranzyme
or Norgine or an Affiliate of either of them.


 


1.97                        “Third Party Claim” has the meaning set forth in Section 11.1.


 


1.98                        “Third Party  Development Costs”
means the out-of-pocket amounts paid to Third Parties (excluding consultants
engaged by a Party on an on-going basis) incurred as an expense in accordance
with generally accepted accounting principles and in accordance with the
Development Plan (including the budget contained therein) on behalf of a Party,
its Affiliates, licensees or sublicensees in carrying out preclinical testing,
toxicology testing, human clinical trials, and post-approval marketing studies,
but excluding Clinical Manufacturing Costs, Manufacturing Costs and costs
associated with seeking, obtaining or maintaining Regulatory Approval in a
particular country within the Territory.


 


1.99                        “Tranzyme Competing Product” has the meaning set forth in Section 2.6(b).


 


1.100                 “Tranzyme Development Activities” has the meaning set forth
in Section 4.3(a).


 


1.101                 “Tranzyme Know-How” means all Information that is Controlled
by Tranzyme or its Affiliates as
of the Effective Date or during the Term and is necessary for the
Development, manufacture and/or Commercialization of TZP-101 and/or the
Products in the Field in accordance with the terms of this Agreement.  For clarity, Tranzyme Know-How excludes
Information contained within the Tranzyme Patents.


 


1.102                 “Tranzyme Indemnitees” has the meaning set forth in Section 11.2.


 


1.103                 “Tranzyme Independent Studies” has the meaning set forth in Section 4.1.


 


1.104                 “Tranzyme Independent Studies Development Plan” has the
meaning set forth in Section 4.2(d).


 


1.105                 “Tranzyme Other-Product Patent” means (a) the Patents
set forth on Part A of Exhibit A
and (b) any other Patent that becomes Controlled by Tranzyme or its
Affiliates after the Effective Date (including Tranzyme Sole Patents but
excluding Tranzyme’s interest in any Joint Patents) that: (i) is necessary
for Norgine and/or its Affiliates to have rights under in order to Develop,
manufacture, use and/or Commercialize TZP-101 and/or Products in the Field; and
(ii) covers any of Tranzyme’s proprietary technology: (A) that is
generally applicable or can be applied to Tranzyme’s discovery or development
program in addition to the development program relating to TZP-101 and Product,
or (B) that is applicable or can be applied to one or more compounds or
products in addition to TZP-101 or Product, or (C) that covers the
composition of matter of, or the method of discovering, making or using, any
compounds or products (or any design, component, formulation or part thereof)
in addition to TZP-101 or Product.


 


1.106                 “Tranzyme
Patent” means the Tranzyme Product- Specific
Patents and Tranzyme Other-Product Patents.  The Tranzyme
Patents existing as of the Effective Date are set forth on Exhibit A
attached hereto.


 


11

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


1.107                 “Tranzyme Product-Specific Patent” means (a) the Patents
set forth on Part B of Exhibit A
and (b) any other Patent that becomes Controlled by Tranzyme or its
Affiliates at any time after the Effective Date (including Tranzyme Sole
Patents but excluding Tranzyme’s interest in any Joint Patents) that: (i) is
necessary for Norgine and/or its Affiliates to have rights under in order to
Develop, manufacture, use and/or Commercialize TZP-101 and/or Products in the
Field; and (ii) is not a Tranzyme Other-Product Patent.


 


1.108                 “Tranzyme Prosecuted Patents” has the meaning given to it in Section 9.3(a)(i).


 


1.109                 “Tranzyme
Sole Invention” has the meaning given to it in Section 9.1.


 


1.110                 “Tranzyme
Sole Patent” has the meaning given to it in Section 9.1.


 


1.111                 “Tranzyme Technology” means the Tranzyme Patents and Tranzyme
Know-How.


 


1.112                 “TZP-101” means Tranzyme’s proprietary ghrelin agonist known
as TZP-101 (ulimorelin), having
the chemical structure set forth on Exhibit B,
including any salt, ester, solvate, polymorphic form, stereoisomer, metabolite,
and pro-drug thereof.


 


1.113                 “TZP-101 Divisionals” has the meaning set forth in Section 9.3(a)(i).


 


1.114                 “TZP-101 Specific Claims” has the meaning set forth in Section 9.3(a)(i).


 


1.115                 “Unit” has the meaning set forth in Section 8.2(c).


 


1.116                 “U.S.” means the United States of America and its territories
and possessions.


 


1.117                 “Valid Claim”  means, with
respect to any country: (a) a claim of an issued and unexpired patent (as
may be extended through supplementary protection certificate or patent term
extension or the like) included within Patents to the extent such claim has not
been revoked, held invalid or unenforceable by a patent office, court or other
governmental agency of competent jurisdiction in a final and non-appealable
judgment (or judgment from which no appeal was taken within the allowable time
period) and which claim has not been disclaimed, denied or admitted to be
invalid or unenforceable through reissue, re-examination or disclaimer or
otherwise; and (b) a claim of a pending patent application included within
Patents which claim was filed and is being prosecuted in good faith and has not
been abandoned or finally disallowed without the possibility of appeal or
refiling of the application, provided that no more than eight (8) years
have passed since the earliest priority date for such application.


 


ARTICLE 2


 


LICENSES AND EXCLUSIVITY


 


2.1                               License
to Norgine under Tranzyme Technology.


 


(a)                                  License.  Subject to the terms of this Agreement,
Tranzyme and its Affiliates hereby grant Norgine (i) an exclusive (even as to Tranzyme and its Affiliates except as provided in Section 2.1(b) below),
royalty-bearing license (with the right to grant sublicenses at


 


12

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


one
or more tier(s) subject to Section 2.1(c) below) under the
Tranzyme Technology, (a) to research, have researched, Develop, have
Developed, use and have used TZP-101 and Product in the Field in the Licensed
Territory and (b) to sell, offer for sale, have sold, import and otherwise
Commercialize or have Commercialized Product in the Field in the Licensed
Territory; (ii) a nonexclusive, worldwide, royalty-free license (with the
right to grant sublicenses at one or more tier(s) subject to Section 2.1(c) below),
under the Tranzyme Technology, to manufacture and have manufactured TZP-101 and
Product worldwide solely for research, Development, use or Commercialization of
such Products in the Field in the Licensed Territory under the license granted
to Norgine under Section 2.1(a)(i); (iii) an exclusive (even as to
Tranzyme and its Affiliates except as provided in Section 2.1(b) below),
royalty free license (with the right to grant sub-licenses at one or more tier(s) subject
to Section 2.1(c) below) under Tranzyme’s interest in the Joint
Inventions to (a) research, have researched, Develop, have Developed and
use and have used TZP-101 and Product in the Field in the Licensed Territory
and (b) sell, offer for sale, have sold, import and otherwise
Commercialize or have Commercialized the Products in the Field in the Licensed
Territory; and (iv) a nonexclusive, worldwide, royalty-free license (with
the right to grant sublicenses at one or more tier(s) subject to Section 2.1(c) below),
under the Joint Inventions, to manufacture and have manufactured TZP-101 and
Product worldwide solely for Development, use or Commercialization of such
Product in the Field in the Licensed Territory under the license granted to
Norgine under Section 2.1(a)(i). Norgine shall not have the right to
conduct or have conducted research and/or Development activities in the
Retained Territory for the generation of data in support of Regulatory Filings
to the Regulatory Authorities in the Licensed Territory except as expressly
permitted under this Agreement or with the prior written consent of
Tranzyme.  For clarity, the licenses
granted to Norgine by Tranzyme and its Affiliates under this Section 2.1(a) shall
not include any rights for Norgine to research, Develop, make, have made, use,
sell, offer for sale, distribute, import, export and otherwise commercialize
any other proprietary compound of Tranzyme (including any proprietary compound
which Tranzyme licenses to a Third Party) that is not TZP-101.


 


(b)                          Tranzyme
Retained Rights.  Tranzyme
shall retain all rights under the Tranzyme Technology that are not subject to a
license grant to Norgine in Section 2.1(a) above subject to Section 2.3
of this Agreement.  In addition and
notwithstanding the rights granted to Norgine in Section 2.1(a), Tranzyme
retains the right, directly or through any Third Party, to: (i) conduct
the activities assigned to it under the Development Plan (including without limitation
the conduct of Development activities in the Licensed Territory in accordance
with the Development Plan); (ii) with the prior written consent of
Norgine, to conduct or have conducted research, Development activities in the
Licensed Territory for the generation of data in support of regulatory
submissions to the Regulatory Authorities in the Retained Territory in addition
to those activities set forth in Section 2.1(b)(i); and (iii) formulate,
process, manufacture and have manufactured TZP-101 and/or Product worldwide for
use in connection with the research and Development and/or Commercialization of
the Product in the Retained Territory.


 


(c)                                  Sublicenses. 
Norgine may grant sublicenses to Affiliates and Third Parties under its
rights under Section 2.1(a) without the prior written consent of Tranzyme but, in the case of
sublicenses to Third Parties, with prior written notification to Tranzyme.  Norgine shall ensure that each
agreement under which it grants a sublicense under the license set forth in Section 2.1(a) (each,
a “Sublicense Agreement”), is entered
into on terms which are consistent with the terms of this Agreement and Norgine
shall remain responsible for all of its obligations


 


13

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


hereunder
and if the acts or omissions of any such sub-license cause Norgine to be in
breach of this Agreement Norgine shall be responsible therefor (with all the
express consequences provided for under this Agreement) regardless of any
remedy which Norgine may have against the sub-licensee for breach of the
Sublicense Agreement.


 


2.2                               License
to Tranzyme under Norgine Technology.  Norgine hereby
grants Tranzyme (a) [***] license under the Norgine Technology and Norgine’s
interest in the Joint Inventions to perform Tranzyme’s obligations under this Agreement
anywhere in the world; (b) [***], under Norgine Sole Inventions and
Norgine’s interest in the Joint Inventions to research, have researched,
Develop, have Developed, use, have used, sell, offer for sale, have sold and
import any Product in the Retained Territory; (c) [***], under Norgine
Sole Inventions and Norgine’s interest in the Joint Inventions, to manufacture
and have manufactured Product worldwide solely for research, Development, use
or Commercialization of such Product in the Field in the Retained
Territory.  Except as expressly set forth
above Tranzyme shall not acquire any license or other right to use the Norgine
Technology or Norgine’s interest in the Joint Inventions hereunder.  Should Tranzyme wish to acquire either (i) rights
to use the Norgine Technology or (ii) rights under Norgine’s interest in
the Joint Inventions or Joint Patents, in each case other than in relation to
Product in the Retained Territory, such rights under the Norgine Technology or
Norgine’s interest in the Joint Inventions or Joint Patents shall be the
subject of a separate agreement to be negotiated and executed by the Parties at
some time in the future.  The Parties
shall negotiate in good faith to agree on the terms for the use of such rights,
and if the Parties cannot agree on such terms, such rights shall be granted on
terms to be determined in accordance with the dispute resolution mechanism set
forth in Article 14.


 


2.3                               Limitations
to Injectable TZP-101.  Norgine  covenants that, notwithstanding the scope of the licenses
granted to Norgine under (i) Tranzyme Technology and (ii) Tranzyme’s
interest in the Joint Patent pursuant to Section 2.1(a) above to all
Products in the Field, during the Term it will not, and shall ensure that none
of its Affiliates will, either by itself or through collaborating with or
granting rights to a Third Party, use, research, Develop, manufacture, import,
export, sell or otherwise Commercialize in the Licensed Territory Product that
is not formulated for intravenous, subcutaneous and/or intramuscular
administration.  For clarity, Norgine may
use, research, Develop, manufacture, import or export Product that is not
formulated for intravenous, subcutaneous and/or intramuscular administration so
long as the purpose of such activity is to Develop, manufacture or
Commercialize Product formulated for intravenous, subcutaneous or intramuscular
administration, such as to generate pre-clinical or non-clinical data relating
to TZP-101 for use in an MAA for  Product
formulated for intravenous, subcutaneous or intramuscular administration.


 


2.4                               No
Implied Licenses; Rights Limited to Licenses Granted.  Except as set forth herein,
neither Party acquires any license or other intellectual property interest, by
implication or otherwise, under any trademarks, Information or Patents
owned or Controlled by the other Party. 
Norgine covenants that it will not, and will ensure that its Affiliates
and sublicensees will not, use or practice any Tranzyme Technology outside the
scope of the license granted to it under Section 2.1 above.  Tranzyme covenants that it will not, and it
will not permit any of its Affiliates and sublicensees to, use or practice any
Norgine Technology outside the scope of the license granted to it under Section 2.2.


 


14

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


2.5                               Cross-Territorial Restrictions.  Norgine hereby
covenants and agrees that it shall not, and will ensure that its Affiliates and
sublicensees will not, either directly or indirectly, actively promote, market,
distribute, import, sell or have sold Product into countries in the Retained
Territory. As to such countries in the Retained Territory: (a) Norgine
shall refrain, and will ensure that its Affiliates and sublicensees shall
refrain, from establishing or maintaining any branch, warehouse or distribution
facility for Product in such countries other than is necessary to allow for the
exportation of Product manufactured in the Retained Territory into the Licensed
Territory; (b) Norgine shall not, and will ensure that its Affiliates and
sublicensees will not, engage in any advertising or promotional activities
relating to Product directed primarily to customers or other buyers or users of
the Product located in such countries; and (c) Norgine shall not, and will
ensure that its Affiliates and sublicensees will not, solicit orders from any
prospective purchaser located in such countries.  If Norgine receives any order from a
prospective purchaser located in a country in the Retained Territory, Norgine
shall immediately refer that order to Tranzyme. 
Norgine shall not accept any such orders.  Norgine may not deliver or tender (or cause
to be delivered or tendered) any Product outside of the Licensed
Territory.  Norgine shall not, and will
ensure that its Affiliates and sublicensees will not, restrict or impede in any
manner Tranzyme’s exercise of its retained rights in the Retained
Territory.  Tranzyme hereby covenants and
agrees that it shall not, and will ensure that its Affiliates or its
sublicensees will not, either directly or indirectly, promote, market, distribute,
sell or have sold Product in the Licensed Territory.  As to such countries in the Licensed
Territory, (a) Tranzyme shall refrain, and will ensure that its Affiliates
and sublicensees shall refrain, from establishing or maintaining any branch,
warehouse or distribution facility for the Product in such countries other than
is necessary to allow for the Development and/or exportation of Product
manufactured in the Licensed Territory into the Retained Territory; (b) Tranzyme
shall not, and will ensure that its Affiliates and sublicensees will not,
engage in any advertising or promotional activities relating to the Product
directed primarily to customers or other buyers or users of the Product located
in such countries; and (c) Tranzyme shall not, and will ensure that its
Affiliates and sublicensees will not, solicit orders from any prospective
purchaser located in such countries.  If
Tranzyme receives any order from a prospective purchaser located in a country
in the Licensed Territory, Tranzyme shall immediately refer that order to
Norgine.  Tranzyme shall not accept any
such orders.  Tranzyme may not deliver or
tender (or cause to be delivered or tendered) any Product outside of the
Retained Territory.  Tranzyme shall not,
and will ensure that its Affiliates and sublicensees will not, restrict or
impede in any manner Norgine’s exercise of its rights in the Licensed
Territory.


 


2.6                               Exclusivity


 


(a)                                  Norgine.  On a Region-by-Region basis, prior to the end
of the Royalty Term in an applicable Region within the Licensed Territory,
Norgine shall not, and shall ensure that none of its Affiliates will, either by
itself or through collaborating with or granting rights to a Third Party,
[***].


 


(b)                                  Tranzyme.  On a Region-by-Region basis, prior to the end
of the Royalty Term in an applicable Region within the Licensed Territory,
Tranzyme shall not, and shall ensure that none of its Affiliates will, either
by itself or through collaborating with or granting rights to a Third Party,
commercialize in such Region in the Field in the Licensed Territory [***] (such
product, a “Tranzyme Competing Product”, and
together with Norgine Competing


 


15

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Product,
“Competing Product”); provided that
Tranzyme’s exclusivity obligation under this Section 2.6(b) in the
Licensed Territory shall expire completely on the date when Product is no
longer sold in the Licensed Territory by Norgine, its Affiliates or any of its
sublicensees (should this occur prior to expiry of the Royalty Terms in the
Licensed Territory).


 


(c)                                  Acquisition
by a Third Party.[***]


 


ARTICLE 3


 


OVERVIEW; MANAGEMENT


 


3.1                               Joint
Steering Committee.


 


(a)                                  Formation
and Role.  The Parties
agree to establish a Joint Steering Committee (or “JSC”) for the overall coordination and oversight of
the Parties’ activities under this Agreement, promptly after the Effective
Date.  The role of the Joint Steering
Committee shall be:


 


(i)                                    to (A) review,
coordinate, discuss and approve the overall strategy for conducting Development
of and seeking Regulatory Approval for Products in the Licensed Territory and
Retained Territory in the Field and (B) review and discuss Commercializing
Products in the Licensed Territory in the Field;


 


(ii)                                to review,
discuss and approve the Development Plan and/or associated budget, any proposed
amendments or revisions to the Development Plan and any corresponding change to
the associated budget;


 


(iii)                            to facilitate
the exchange of information between the Parties under this Agreement regarding
the strategy for implementing the joint Development activities and to discuss
those activities that a Party may conduct independently for its Territory;


 


(iv)                               to oversee the
activities performed by the JDC;


 


(v)                                   to review,
discuss and approve the Commercialization Plan, and any proposed amendments or
revisions to such plan;


 


(vi)                               to seek to
resolve any issues arising under this Agreement;


 


(vii)                           to establish
such additional joint subcommittees as it deems necessary to achieve the
objectives and intent of this Agreement;


 


(viii)                       to review,
discuss and approve publications pursuant to this Agreement;  and


 


(ix)                              to perform such
other functions as appropriate to further the purposes of this Agreement, as
determined by the Parties in writing.


 


(b)                                  JSC
Membership.  Tranzyme
and Norgine shall each designate an equal


 


16

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


number
of representatives (each of whom shall be a senior executive of the applicable
Party) to serve on the Joint Steering Committee by written notices to the other
Party.  Initially, each Party shall
designate three (3) such representatives. 
The Joint Steering Committee may elect to vary the number of
representatives from time to time during the Term.  Either Party may designate substitutes for
its representatives if one (1) or more of such Party’s designated
representatives is unable to be present at a meeting.  From time to time each Party may replace its
representatives by written notice to the other Party specifying the prior
representative(s) and their replacement(s).  The Chairperson of the JSC shall be appointed
each twelve (12) months, with Tranzyme appointing the initial Chairperson.  The Chairperson
shall be responsible for (a) calling meetings, (b) preparing and
issuing minutes of each such meeting within thirty (30) days thereafter, and (c) preparing
and circulating an agenda for the upcoming meeting, but shall have no special
authority over the other members of the Joint Steering Committee, and shall
have no additional voting rights or powers beyond those held by the other JSC
members.


 


3.2                               JSC
Decisions and Actions.


 


(a)                                  Decision
Making.  The JSC shall act by
consensus. Each Party will have, collectively, one (1) vote on behalf of
that Party. If the JSC cannot reach consensus within twenty (20) days with
respect to any matter that comes before it, then it shall refer the matter to
one senior executive of each Party (i.e., the Chief Executive Officer (or
equivalent position) of such Party or an executive of such Party who reports
directly to the Chief Executive Officer (or equivalent position)) for
resolution.  If such senior executives
cannot agree on the matter within thirty (30) days after such matter has been
referred to them, then, except as provided in Section 3.2(b), either Party
may submit such matter for dispute resolution pursuant to Section 14.3.


 


(b)                                  Final
Decision Making Authority.


 


(i)                                    The following
matters shall require the unanimous consent of the JSC: (A) changes to the
Core Studies Development Plan, and (B) material changes to the budget for
the Core Studies Development (where material, for the purposes of this provision
means increase or decrease to the budget set forth in the Core Studies
Development Plan at the Effective Date by more than ten per cent (10%)).


 


(ii)                                Matters
pertaining to Regulatory Filings, Regulatory Approval, launch and
Commercialization for Product in a Party’s territory or Independent Studies
conducted by a Party, as well as matters pertaining to the activities in
connection therewith, shall be determined by such Party at its sole discretion,
subject to the terms and conditions of this Agreement, provided that neither
Party may make such determination in a manner that would adversely affect the
other Party’s rights to, or activities relating to, Product in Licensed
Territory, insofar as Norgine is concerned, and Retained Territory, insofar as Tranzyme
is concerned.  The JSC shall be a forum
for the Parties to exchange information relating to such matters and shall not
serve as a decision making body for such matters.


 


3.3                               Meetings.  The JSC shall meet at least quarterly during
the Term unless the Parties mutually agree in writing to a different frequency
for such meetings.  No later than ten (10) business
days prior to any regularly scheduled meeting of the JSC, the chairperson of
the JSC shall prepare and circulate an agenda for such meeting and, as soon as
practicable, materials for


 


17

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


the
meeting; provided, however, that either Party may propose additional topics to
be included on such agenda, either prior to or in the course of such
meeting.  The JSC may meet in person, by
videoconference or by teleconference. 
Each Party will bear the expense of its respective JSC members’
participation in JSC meetings.  Meetings
of the JSC shall be effective only if at least one (1) representative of
each Party is present or participating in such meeting.  The chairperson of the JSC will be
responsible for preparing reasonably detailed written minutes of all JSC
meetings that reflect, without limitation, material decisions made at such
meetings.  The JSC chairperson shall send
draft meeting minutes to each member of the JSC for review and approval within
ten (10) business days after each JSC meeting.  The JSC shall formally approve the minutes of
each meeting at the immediately subsequent meeting, and the minutes for the
last JSC meeting will be deemed approved unless one or more members of the JSC
objects to the accuracy of such minutes within ten (10) business days of
receipt.


 


3.4                               Joint
Development Committee


 


(a)                                  The Parties
will also establish a Joint Development Committee (“JDC”),
composed of three representatives of each Party selected by the Parties that
have knowledge and expertise in the development of products similar to Product
to oversee the Development of the Product hereunder and to coordinate the
global development of Product.  The
initial JDC chairperson shall be appointed by Norgine and shall serve in such
capacity for one (1) year. 
Thereafter, the member of the JDC who shall serve as the JDC chairperson
shall be designated alternately by each Party, with each chairperson serving
for a period of one (1) year.  Each
Party may replace its JDC representatives by written notice to the other
Party.  The role of the JDC shall be:


 


(i)                                    to facilitate
the exchange of Information between the Parties under this Agreement with
respect to their Product-related activities (including activities conducted in
the Licensed Territory and the Retained Territory), including as and to the
extent necessary for each Party to perform its obligations under this
Agreement;


 


(ii)                                to develop,
review and comment on the Development Plan (and associated budget) and all
amendments and updates thereto, and to submit such plan (and associated budget)
to the JSC for approval (it being understood that the JDC shall submit such
plan (and associated budget) with sufficient time for the JSC to review and
approve such plan); and


 


(iii)                            to establish
such working teams or subcommittees and to perform such other functions as
appropriate to further the purposes of this Agreement, as determined by the
Parties in writing.


 


(b)                                  The JDC shall
meet at least once per quarter, unless otherwise specified by the JSC, at times
mutually agreed upon by the Parties.  At
least two (2) such meetings per calendar year must be held in person, and
all other such meetings may be held by teleconference or videoconference.  The location of the JDC meetings shall
alternate between sites designated by each Party, with the first such meeting
of the JDC to be held in person to be at Tranzyme’s offices.  A unanimous vote of all the members of the
JDC is required to make decisions.  In
the event of a disagreement among members of the JDC, the committee members
shall use good


 


18

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


faith
efforts to discuss and resolve expeditiously such disagreement.  If a disagreement among members of the JDC
remains unresolved for more than thirty (30) days after the committee first
addresses such matter (or such longer period as the Parties may mutually agree
upon), such disagreement shall be submitted to the JSC for resolution under Section 3.2.  The JDC shall have no power to amend or waive
compliance with this Agreement.


 


3.5                               Costs
of Governance.  The Parties
agree that the costs incurred by each Party in connection with its
participation at any meetings under this Article 3 shall be borne solely
by such Party.


 


3.6                               Discontinuation
of Participation in the Committee.  The JSC and/or
the JDC shall continue to exist until Tranzyme provides written notice to
Norgine of its intention to disband and no longer participate in such
committee, upon which notice such committee shall have no further obligations
under this Agreement.  Tranzyme shall not
give such a notice to Norgine prior to completion of the Core Studies
Development Plan except for a reasonable and material reason.


 


ARTICLE 4


 


PRODUCT DEVELOPMENT


 


4.1                               Overview of Product Development.    The Parties desire and intend to
collaborate with respect to the Development of Product in the Field, under the
direction of the JDC and JSC, as and to the extent set forth in this Agreement.  In general, the Parties shall jointly manage
and conduct a series of core studies that are required to obtain Regulatory
Approval for Product by both the FDA and the EMEA for a first Indication (the “Core Studies”). 
Norgine, its Affiliates and sublicensees shall be responsible for other
Development activities required for the Regulatory Approval of Product in the
Licensed Territory (including by the EMEA to the extent such activities are not
covered by the Core Studies) (the “Norgine Independent
Studies”), and Tranzyme, its Affiliates and licensees shall be
responsible for Development activities required for the Regulatory Approval of
Product in the Retained Territory (including by the FDA to the extent such
activities are not covered by the Core Studies) (the “Tranzyme
Independent Studies”, and together with Norgine Independent Studies,
the “Independent Studies”).  For clarity, the Parties agree to take into
consideration the need for Norgine to obtain pricing and reimbursement approval
in the Licensed Territory in designing the Core Studies and to use Commercially
Reasonable Efforts to design the Core Studies in a manner that Norgine may use
the data and results generated therefrom to satisfy the requirements of the
Major Markets in Europe for such pricing and reimbursement approvals.  In the event any clinical trial(s) is
required for Norgine to obtain any pricing and reimbursement approvals in
addition to the Core Studies, then such additional clinical trial(s) shall
be deemed Norgine Independent Studies.


 


4.2                               Development Plan.


 


(a)                                  Licensed Territory Development Plan. 
As of the Effective Date, the Parties have agreed upon a summary
development plan setting forth the Development activities anticipated by the
Parties to be conducted in order to obtain Regulatory Approval of Product in
the Licensed Territory for a first Indication, including an estimated budget
relating thereto (the


 


19






 










 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


“Initial
Development Plan”), attached to this Agreement as Exhibit C. 
Within sixty (60) days after the Effective Date, the Parties shall
discuss and agree upon a detailed development plan consistent with the
principles set forth in the Initial Development Plan and detailing those Development
activities reasonably necessary to obtain Regulatory Approval of Product in the
Licensed Territory for a first Indication, including a detailed budget relating
thereto (the “Licensed Territory Development Plan”),
provided that such detailed budget shall not be greater than the estimated
budget set forth in the Initial Development Plan without the Parties mutual
agreement.  The Licensed Territory
Development Plan will consist of two parts: (i) a plan allocating between
the Parties the Development activities to be conducted by each Party pertaining
to the Core Studies, and setting forth the estimated timeline and a detailed
budget for such activities pertaining to the Core Studies (the “Core Studies Development Plan”); and (ii) a plan
setting forth the activities to be conducted by Norgine under the Norgine
Independent Studies for Regulatory Approval of Product in the Licensed
Territory for a first Indication, and an estimated timeline and budget for such
activities (the “Norgine Independent Studies Development Plan”).


 


(b)           Updates to
Core Studies Development Plan.  From time to time during the Term, the JDC
shall update and amend, as appropriate the then-current Core Studies
Development Plan as well as the associated detailed budget, by submitting all
such updates and amendments to the JSC for review and approval in accordance
with Section 3.2.  Once approved by
the JSC, each updated or amended Core Studies Development Plan and each updated
and amended budget shall become effective and supersede the previous Core
Studies Development Plan (and the previous budget) as of the date of such
approval.


 


(c)           Updates to Norgine Independent
Studies Development Plan.  From time to
time during the Term, Norgine shall have the right to propose amendments to the
then-current Norgine Independent Studies Development Plan to the JDC for its
review.  Norgine shall consider in good
faith any and all comments from the JDC with respect to such amendments.


 


(d)           Tranzyme Independent Studies
Development Plan.  Within
ninety (90) days after the Effective Date, Tranzyme shall prepare a plan
setting forth the activities to be conducted by Tranzyme under the Tranzyme
Independent Studies, and an estimated timeline and budget relating to such
activities (the “Tranzyme Independent Studies Development Plan”,
and together with the Norgine Independent Studies Development Plan, the “Independent Studies Development Plan”).  From time to time during the Term, Tranzyme
shall have the right to amend the then-current Tranzyme Independent Studies Development
Plan.  Tranzyme will provide any proposed
amendments to the JDC for its review, and will consider in good faith any and
all comments from the JDC with respect to such amendments, subject to any of
Tranzyme’s obligations to any Third Party (including confidentiality
obligations) in the event Tranzyme enters into a collaboration with a Third
Party for the Development and/or Commercialization of the Product in the
Retained Territory.  Tranzyme shall use
reasonable efforts in its negotiations with Third Parties to obtain from such
Third Parties the right to share with Norgine any updates to the Tranzyme
Independent Studies Development Plan, the details of any of Tranzyme’s
Development activities relating thereto and any Information arising therefrom.
If Tranzyme is unable to obtain from a Third Party the right to share such
updates, details and Information with Norgine, Tranzyme shall not share any
updates to the Norgine


 


20

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Independent Studies
Development Plan, the details of any of Norgine’s Development activities
relating thereto and any Information arising therefrom with that Third Party.


 


4.3          Tranzyme
Development Activities


 


(a)           Tranzyme shall timely and
diligently conduct the Development activities assigned to it in the Core Studies
Development Plan (the “Tranzyme Development
Activities”).  Tranzyme shall
conduct all Tranzyme Development Activities in accordance with the Development
Plan and under the direction of the JSC.


 


(b)           For as long as Tranzyme is
conducting Tranzyme Development Activities, the status, progress and results of
Tranzyme Development activities shall be discussed in reasonable detail at
meetings of the JDC, and Tranzyme shall provide the JDC with a written report
on the status and progress of such Tranzyme Development Activities on a
quarterly basis.  In addition, Tranzyme
shall make available to Norgine such information about Tranzyme Development
Activities as may be reasonably requested by Norgine from time to time.


 


(c)           Tranzyme shall have the sole
discretion to conduct the Tranzyme Independent Studies under the Tranzyme
Independent Studies Development Plan.


 


4.4          Norgine
Development Activities


 


(a)           Norgine shall
timely and diligently conduct all Development activities assigned to Norgine
under the Licensed Territory Development Plan (the “Norgine Development Activities”), in accordance with the
then-current Licensed Territory Development Plan and the direction of the
JDC.  Without limiting the generality of
the foregoing, Norgine shall use Commercially Reasonable Efforts to Develop the
Product in the Licensed Territory.


 


(b)           The status, progress and
results of Norgine’s Development Activities shall be discussed in reasonable
detail at meetings of the JDC, and Norgine shall provide the JDC with a written
report on the status and progress of such Norgine Development Activities on a
quarterly basis.  In addition, Norgine
shall make available to Tranzyme such information about Norgine Development
Activities as may be reasonably requested by Tranzyme from time to time.


 


(c)           Each Party shall keep the
other informed of any plans to use or incorporate any technology, material,
process or other intellectual property of a Third Party in connection with the
Development of Product in its Territory (being the Licensed Territory with
respect to Norgine and the Retained Territory with respect to Tranzyme).  The Parties shall discuss in good faith to,
when permitted under such Third Party arrangements, enable each Party to use or
incorporate such Third Party technology, material, process or intellectual
property in connection with each Party’s exercise of its rights in its
Territory (being the Licensed Territory with respect to Norgine and the
Retained Territory with respect to Tranzyme).


 


4.5          Compliance.


 


(a)           Each Party agrees that in
performing its obligations under this Agreement: (a) it shall comply with
all applicable Laws; and (b) it will not employ or engage any person who


 


21

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


has been debarred by any
Regulatory Authority, or, to such Party’s knowledge, is the subject of
debarment proceedings by a Regulatory Authority.  Each Party shall have the right to engage
subcontractor(s) for the performance of its obligations under the
Development Plan.  Each Party shall cause
the subcontractor(s) engaged by it to be bound by written obligations of
confidentiality and invention assignment consistent with those contained
herein, and such Party remains primarily responsible for the performance of
such subcontractor(s).


 


(b)           Each Party shall maintain
complete, current and accurate records of all work conducted by it under the
Development Plan, and all data and other Information resulting from such
work.  Such records shall fully and
properly reflect all work done and results achieved in the performance of the
Development activities in good scientific manner appropriate for regulatory
purposes.  Each Party shall document all
preclinical studies and clinical trials in formal written study reports
according to applicable national and international (e.g., ICH, GCP, GLP,
and GMP) guidelines.  Each Party shall
have the right to review such records maintained by the other Party at
reasonable times, upon written request at the reviewing Party’s costs, which
shall not exceed once a year.


 


4.6          Development
Cost Allocation.


 


(a)           Third Party
Development Costs for Core Studies.


 


(i)            The Third Party
Development Costs for the Core Studies that are incurred by or on behalf of a
Party or its Affiliates after the Effective Date in connection with conducting
the activities set forth in the then-current Core Studies Development Plan
shall be allocated between the Parties [***].


 


(ii)           [***]


 


(iii)         Failure for
Tranzyme to pay its share of the Third Party Development Costs for the first
Phase 3 Clinical Trial for the first Product for the first Indication under the
Core Studies Development Plan shall not be deemed a material breach of this
Agreement by Tranzyme and shall not give rise to Norgine’s right to terminate
this Agreement under Section 13.2, but instead, the sole remedy available
to Norgine for such failure to pay by Tranzyme shall be: [***].  Such remedy shall only be available to
Norgine after Norgine provides Tranzyme with written notification of such
underpayment, giving ninety (90) days to cure such underpayment and only if
Tranzyme fails to cure such underpayment within such ninety (90)-day notice
period.


 


(iv)          Failure for
Tranzyme to pay its share of the Third Party Development Costs under Section 4.6(a)(i) for
any Core Study under the Core Studies Development Plan for the first Product
for the first Indication, other than the first Phase 3 Clinical Trial for the
first Product for the first Indication, shall not be deemed a material breach
of this Agreement by Tranzyme and shall not give rise to Norgine’s right to
terminate this Agreement under Section 13.2, but instead, the sole remedy
available to Norgine for such failure to pay by Tranzyme shall be: [***].  Such remedy shall only be available to
Norgine after Norgine provides Tranzyme with written notification of such
underpayment, giving ninety (90) days to cure such underpayment and only if
Tranzyme fails to cure such underpayment within


 


22

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


such
ninety (90)-day notice period.


 


(v)            [***]


 


(b)           Third Party
Development Costs for a Party’s Independent Studies.    Each  Party shall bear all Third Party
Development Costs  that are
incurred by or on behalf of such Party or its Affiliates after the Effective
Date in connection with the activities in support of such Party’s Independent
Studies, subject to Section 5.5(b).


 


(c)           Internal Costs.  For clarity, as part of the sharing of
development costs under this Section 4.6, neither Party shall be required
to bear any of the internal costs incurred after the Effective Date by the
other Party, its Affiliates, licensees and/or sublicensees in connection with
conducting the activities set forth in the then-current Core Studies
Development Plan and/or activities pertaining to its Independent Studies, with
such internal costs to include the FTE costs incurred for employees and
consultants engaged on an ongoing basis, as well as facilities, utilities and
other overhead costs incurred by such Party at such Party’s facility.


 


ARTICLE 5


 


REGULATORY MATTERS


 


5.1          Data Sharing.  Within thirty (30) days after the Effective
Date, Tranzyme will provide Norgine with copies of all material Regulatory
Filings pertaining to the Development of the Product submitted to Regulatory
Authorities in the U.S. or the Licensed Territory prior to the Effective Date.


 


5.2          Regulatory
Responsibilities.


 


(a)           The Parties
shall collaborate through the JDC and JSC with respect to the regulatory
strategy and approach for the Core Studies in order to support the Regulatory
Approval for the Product in both the U.S. and the EU.  Otherwise, each Party shall be primarily
responsible for the regulatory strategy and approach for seeking and obtaining
Regulatory Approval for the Product in such Party’s territory.


 


(b)           Norgine shall
consult with Tranzyme regarding its proposed regulatory strategy in the
Licensed Territory and consider in good faith Tranzyme’s comments and
suggestions as the Parties recognize that the Development of the Product shall
be conducted in a manner consistent with Tranzyme’s global strategy for the
Product.


 


(c)           Norgine shall
be responsible for preparing any and all Regulatory Filings for the Products to be used for filing with the Regulatory Authority and
seeking and maintaining Regulatory Approvals in the Licensed Territory.  Norgine shall solely bear all costs and
expenses incurred in connection with such activities.  As Norgine may reasonably request, Tranzyme
shall use Commercially Reasonable Efforts to assist Norgine in connection with
the preparation and filing of such Regulatory Filings for the Licensed
Territory.  Norgine will reimburse
Tranzyme any out-of-pocket costs incurred by Tranzyme to Third Parties in
providing such assistance


 


23

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


(including
any filing fees associated therewith). 
Norgine shall hold in its name all Regulatory Filings and Regulatory
Approvals filed with Regulatory Authorities for the Product in the Licensed
Territory.


 


(d)           Tranzyme
acknowledges that Norgine will prepare MAAs for the Products in the Licensed
Territory on a rolling basis, with the draft MAAs being continually updated as
the relevant data and information required for submission becomes
available.  Norgine shall keep Tranzyme
reasonably informed of material regulatory activities and events that occur for
a Product in the Licensed Territory and shall, at Tranzyme’s reasonable
request, provide Tranzyme with copies of all material Regulatory Filings
submitted to Regulatory Authorities in the Licensed Territory at no cost to
Norgine, and any Information provided by Norgine to Tranzyme under this Section 5.2(d) shall
be deemed Norgine’s Confidential Information.


 


(e)           Subject to
Tranzyme’s cooperation with Norgine with respect to the Core Studies as set
forth in Section 5.2(a), Tranzyme shall have the sole responsibility, at
its sole discretion, to submit and maintain Regulatory Filings with Regulatory
Authorities for the Products in the Retained Territory.  Subject to Section 4.2(d), Tranzyme
shall keep Norgine reasonably informed of material regulatory activities and
events that occur for a Product in the Retained Territory and shall, at Norgine’s
reasonable request, provide Norgine with copies of all material Regulatory
Filings submitted to Regulatory Authorities in the U.S. and such other
jurisdictions in the Retained Territory as the Parties may agree from time to
time at no cost to Norgine, and any Information provided by Tranzyme to Norgine
under this Section 5.2(e) shall be deemed Tranzyme’s Confidential
Information.


 


5.3              Adverse Event
Reporting and Safety Data Exchange.  The Parties
agree that Tranzyme will be primarily responsible for the monitoring of all
adverse events and maintaining the global safety database.  Norgine will be responsible for the filing of
all required reports in the Licensed Territory throughout the Development and
Commercialization of Products.  The
Parties shall cooperate to develop methods and/or procedures for sharing
information relating to such clinical experiences in accordance with safety
reporting requirements of the respective Regulatory Authorities and as
necessary for a Party to comply with applicable law.  Promptly following the  Effective
Date but in any case prior to the commencement of the first Phase 3 Clinical
Trial using a Product, the Parties shall enter into a pharmacovigilance and
adverse event reporting agreement setting forth the worldwide pharmacovigilance
procedures for the Parties with respect to the Products, such as safety data
sharing, adverse events reporting and prescription events monitoring (the “Pharmacovigilance Agreement”).


 


5.4              Cross Territory
Actions.  If either Party believes that the
other Party, as the case may be, is taking or intends to
take any action with respect to a Product that could reasonably be expected to
have a material adverse impact upon the regulatory status of a Product in the Retained Territory, or the Licensed Territory, as the case may be,
such Party shall have the right to bring the matter to the attention of the
JSC.  Without limiting the
foregoing:  (a) neither Party shall
communicate with any Regulatory Authority having jurisdiction in the Territory of the other Party regarding any Product (meaning
Norgine shall not communicate with a Regulatory Authority in the Retained
Territory regarding Product and Tranzyme shall not communicate with a
Regulatory Authority in the Licensed Territory regarding Product) unless
explicitly requested or permitted in writing to do so by the other Party, or
unless so ordered by such Regulatory


 


24

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Authority,
in which case the Party obliged to make such communication shall provide
immediately to the other Party notice of such order, and (b) neither Party
shall submit any Regulatory Filings or seek Regulatory Approvals for the
Product in the Territory of the other Party.


 


5.5          Data Sharing.


 


(a)           Data Generated under
Core Studies.  Each Party
shall promptly provide the other Party with copies of final reports and of all
Information (including preclinical and clinical data) generated in conducting
the Core Studies.  A Party shall provide
such Information to the other as soon as reasonably practical and through
information sharing procedures to be established by the JSC.  Each Party and its Affiliates, sublicensees
and licensees may use any such Information for (i) the performance of the
activities under this Agreement, and (ii) the research, Development,
manufacture and Commercialization of Product for its Territory (being the
Licensed Territory for Norgine and the Retained Territory for Tranzyme); in
each case including the regulatory activities relating thereto.  Each Party hereby grants to the other Party a
fully-paid up right of reference (transferrable by such other Party to its
Affiliates, sublicensees and licensees) to all Regulatory Filings made by the
first Party (or its Affiliates or (sub)licensees) solely for such other Party
to conduct the activities set forth in subsections (i) and (ii) above.


 


(b)           Data Generated under
Independent Studies.  Each Party
shall have the right to conduct Independent Studies in its territory, or in the
other Party’s territory with the prior written consent of the other Party.  Each Party shall conduct any such Independent
Study in accordance with the applicable Independent Studies Development
Plan.  Such Independent Studies
Development Plan shall be subject to the review and comment (but not approval)
by the JDC.  As soon as practicable after
the completion of each clinical trial within the Independent Studies, the Party
conducting such trial shall provide the other Party with the full data set and
all results and reports generated in such trial and Controlled by such Party,
as well as a statement of the total Third Party Development Costs incurred by
such Party in connection with the conduct of such trial.  [***] 
The Party conducting its Independent Studies shall maintain its discretion
over such Independent Studies, regardless of whether the other Party reimburses
such Party for its share of the Third Party Development Costs for such
Independent Studies as set forth above. 
For clarity, each Party shall keep the other Party reasonably informed
of the progress of each such trial, as well as the results generated therefrom,
regardless of whether such other Party co-funds such trial, provided that, such
other Party shall not have the right to use such data or results in its own
Regulatory Filings, cross-reference Regulatory Approvals applied for or
obtained using the data sets and results generated in such an Independent
Study, unless such other Party reimburses the first Party for the Third Party
Development Costs as set forth above. 
The foregoing does not prevent a Party from using data generated from an
Independent Study by the other Party in periodic safety update reports,
expedited or urgent safety matters to maintain regulatory compliance, or like
Regulatory Filings.


 


25

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


ARTICLE 6


 


COMMERCIALIZATION


 


6.1          Overview of
Commercialization in the Licensed Territory.  Subject to the terms and conditions of this Article 6,
as between the Parties, Norgine will be solely responsible for all aspects of
the Commercialization of Products in the Field in the Licensed Territory, in
compliance with all applicable Laws and in accordance with the
Commercialization Plan (as defined in Section 6.2(b)).


 


6.2          Norgine Performance


 


(a)           Commercial
Diligence.  Norgine shall
devote Commercially Reasonable Efforts to Commercialize Product in the Licensed
Territory following Regulatory Approval of Product in the Licensed Territory in
accordance with this Agreement.  
Specifically and without limiting the foregoing, Norgine shall: (i) actively
pursue Regulatory Approval for Product for at least one (1) Indication in
each of the Major Market Countries if it is commercially reasonable to do so; (ii) commence
First Commercial Sale of a Product in any country in the Licensed Territory in
which it obtains a Regulatory Approval and in which it is commercially
reasonable to Commercialize Product [***] following receipt of all necessary
Regulatory Approvals and all necessary or commercially desirable pricing and
reimbursement approvals in such country; and (iii) use Commercially
Reasonable Efforts in conducting its post-launch Commercialization activities,
including without limitation in the allocation of sales force and the
performance of detailing and promotion activities.


 


(b)           Commercialization Plan.  When available to Norgine, but in any case at
least [***] to the anticipated filing of the Regulatory Filing seeking
Regulatory Approval for a Product in the Licensed Territory, Norgine will
provide the JSC with a summary of the commercialization plan derived from the
annual commercialization plan used by Norgine for its internal purposes,
including a summary of Norgine’s proposed Commercialization strategy for
Product in the Licensed Territory, as well as a summary of the anticipated
level of sales efforts to be dedicated to the promotion of Product (each a “Commercialization Plan”). 
During the Royalty Term, Norgine shall update such summary of the
commercialization plan from time to time by written notice, [***].


 


(c)           Diligence Failures.  If
Tranzyme believes in good faith that Norgine has failed to utilize Commercially
Reasonable Efforts with respect to Commercialization of Products, then Tranzyme
shall first raise such issue through the JSC, setting forth specific detailed
reasons underlying such allegation. 
Within [***] following Norgine’s receipt of any such notice from
Tranzyme, Norgine shall provide Tranzyme with a written response specifying, in
reasonable detail, how it is using or has begun to use such Commercially
Reasonable Efforts.  In the event of a
dispute between the Parties with respect to whether Norgine has failed to utilize
Commercially Reasonable Efforts with respect to Commercialization of Products,
such dispute shall be resolved in accordance with Article 14.


 


6.3          Reports.  Norgine shall informally
update the JSC periodically regarding Norgine’s Commercialization activities
with respect to Product in the Licensed Territory.  In addition, 


 


26

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


Norgine
shall present written reports to the JSC annually, summarizing its significant
Commercialization activities with respect to Products in the Licensed Territory
pursuant to this Agreement.  Such reports
submitted by Norgine shall cover subject matter at a level of detail reasonably
sufficient to enable Tranzyme to determine Norgine’s compliance with its
diligence obligations pursuant to Section 6.2.


 


6.4          Additional Marketing
Activities.  The Parties
shall meet and discuss additional marketing (as distinct from detailing or
promotional) support for the Products in the Licensed Territory, including
establishing medical science liaisons for the Products, maintaining existing
relationships with key opinion leaders and developing additional contacts, and
sponsoring or participating in medical education activities, including
conferences, exhibit booths and the like. 
All such activities will be consistent with messaging and strategy
coordinated by the JSC.


 


6.5          Product Recalls.  In
the event that any Regulatory Authority issues or requests a recall or takes
similar action in connection with a Product, or in the event a Party reasonably
believes that an event, incident or circumstance has occurred that may result
in the need for a recall, market withdrawal or other corrective action
regarding a Product, such Party shall promptly advise the other Party by
telephone or facsimile.  Norgine shall
decide and have control of whether to conduct a recall or market withdrawal in
the Licensed Territory (except in the event of a recall or market withdrawal
mandated by a Regulatory Authority, in which case it shall be required) or to
take other corrective action in any country in the Licensed Territory and the
manner in which any such recall, market withdrawal or corrective action shall
be conducted; provided that the Norgine shall keep Tranzyme regularly informed
regarding any such recall, market withdrawal or corrective action, and Norgine
shall bear the costs incurred by the Parties in connection with such recall.


 


6.6          Trademarks.  The Parties shall, through the JSC, discuss
the most appropriate trademark strategy for Product with the aim of having a
coordinated global trademark for Product.  Norgine shall have the right to
select the trademark to be used in connection with the Commercialization of the
Products in the Licensed Territory (the “Product Trademark”),
and shall have all rights in and to such Product Trademark in the Licensed
Territory.  Norgine will notify Tranzyme
of all Product Trademarks and Norgine will be responsible for the filing,
prosecution, maintenance and defense of all registrations of the Product
Trademark, and will be responsible for the payment of any costs relating to
filing, prosecution, maintenance and defense of all Product Trademarks in the
Licensed Territory.  Norgine shall not
select as a Product Trademark a trademark which contains or is confusingly
similar to the name and trademark “Tranzyme”, the Tranzyme group corporate logo
or any name or trademark including or comprising the letters “Tranz”.  Norgine shall not file or otherwise seek to
establish rights in the Product Trademark in the Retained Territory.  Norgine shall notify Tranzyme if Norgine decides
to change, alter, modify or replace the Product Trademark initially selected by
it for the Products.


 


ARTICLE 7


 


MANUFACTURING


 


7.1          Clinical
Manufacturing for Core Studies.  The Parties are
jointly responsible for the manufacturing of the Product for use in the Core
Studies.  The Parties currently
contemplate 


 


27

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


for
Tranzyme to procure supply of the Product for use in the Core Studies from the
Third Party supplier engaged by Tranzyme as of the Effective Date, and the
Parties will share the Clinical Manufacturing Costs for such supply equally in
accordance with Section 7.3.


 


7.2          Clinical
Manufacturing for Independent Studies.  The Parties may agree for Tranzyme to procure
supply of Product for use in certain Norgine Independent Studies from the Third
Party supplier engaged by Tranzyme as of the Effective Date.  In such event, Norgine will reimburse
Tranzyme for the Clinical Manufacturing Costs of procuring such supply in
accordance with Section 7.3. 
Otherwise, each Party shall be solely responsible for the procurement of
clinical supply for Product for its Independent Studies.  Such Party shall be solely responsible for
the Clinical Manufacturing Costs for such Independent Studies, [***].


 


7.3          Cost Sharing.


 


(a)           Inventory As of the
Effective Date.  The Parties
acknowledge that, as of the Effective Date, Tranzyme is in possession of
certain inventory of Product (in bulk and/or finished form) (the “Existing Inventory”). 
Tranzyme has incurred costs in connection with the procurement of such
Existing Inventory prior to the Effective Date, and will continue to incur
costs after the Effective Date in connection with the fill and finish of the
portion of such Existing Inventory that exists in bulk form as of the Effective
Date.  Tranzyme shall invoice Norgine for
fifty percent (50%) of the Clinical Manufacturing Costs incurred by Tranzyme in
connection with the fill and finish of such portion of the Existing Inventory,
on an ongoing basis as such costs are incurred by Tranzyme.  Concurrent with the issuance of each such
invoice for a particular lot of finished Product, Tranzyme shall also invoice
Norgine for fifty percent (50%) of the Clinical Manufacturing Costs incurred by
Tranzyme prior to the Effective Date in connection with the procurement of the
Existing Inventory incorporated into such lot of finished Product.  Norgine shall pay each such invoice within
thirty (30) days after receiving such invoice.


 


(b)           Procurement of
Supply after the Effective Date.  The Parties wish for Tranzyme to
procure certain quantity of Product from the Third Party supplier after the
Effective Date for use in Core Studies and Independent Studies (the “New Supply” and together with the Existing Inventory, the “Clinical Supply”). [***]


 


(c)           Use of Clinical
Supply for Independent Studies.  In the event a Party uses any Clinical Supply
in its Independent Studies and the Clinical Manufacturing Costs for such
Clinical Supply have been paid by each Party equally, such Party using such
Clinical Supply for its Independent Studies shall pay to the other Party fifty
percent (50%) of the Clinical Manufacturing Costs of the portion of the
Clinical Supply so used by such Party for such Independent Studies.  [***]


 


7.4          Validation and
Registration Batches; Commercial Supply. 
Each Party shall be solely responsible for procuring the validation and
registration batches of Product, as well as the commercial supply of Product,
for its territory, at its own costs and expense.


 


7.5          Manufacturing
Transfer.  At Norgine’s
request, Tranzyme shall make its qualified personnel available to Norgine to
provide reasonable assistance in transferring manufacturing Information to
Norgine on reasonable notice.  If
requested by Norgine, Tranzyme 


 


28

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


shall
support the establishment of a separate supply arrangement between any of its
existing Third Party manufacturers and use Commercially Reasonable Efforts to
assist Norgine in negotiating supply agreements with such contract
manufacturers with respect to purchase of the Products.  In the event Norgine decides to engage a
Third Party supplier which, at the time of such engagement by Norgine, is
engaged by Tranzyme for the supply of the Products for use or sale in the
Retained Territory, Norgine shall ensure that any agreement with such Third
Party supplier does not oblige the Third Party supplier to supply Norgine with
Product for use or sale in the Licensed Territory in preference to or in
priority to Tranzyme in the event the Third Party supplier is unable to meet
both Parties’ Product needs.


 


ARTICLE 8


 


FINANCIAL PROVISIONS


 


8.1          Initial Payments.


 


(a)           Upfront Fee.  Within ten (10) days
after the Effective Date, Norgine shall pay to Tranzyme a one-time,
non-refundable and non-creditable upfront fee of Eight Million Dollars
($8,000,000).


 


(b)           Equity Investment.  Norgine shall purchase certain
equity in Tranzyme in an amount equal to Two Million Dollars
($2,000,000) in accordance with this Section 8.1(b).  As of the
Effective Date, Norgine and Tranzyme have agreed to certain Equity Documents, attached
in the form hereto as Exhibit D.  In addition, as of the Effective Date, each
Party has obtained the approval of its board of directors to enter into such
Equity Documents in the form as attached hereto.  Promptly after the Effective Date, Tranzyme
will endeavor to procure all necessary consent and approval from its
stockholders in order for Tranzyme to enter into such Equity Documents, and the
Parties will execute such Equity Documents in the forms attached within five (5) days
after Tranzyme notifies Norgine in writing of its receipt of such stockholder
consent and approval.


 


8.2          Milestone Payments.  Norgine shall report the achievement of each
milestone event for Product as set forth in this Section 8.2 by or on
behalf of Norgine, its Affiliates or sublicensees to Tranzyme within [***] of
its achievement and shall make the following non-refundable and non-creditable
milestone payments to Tranzyme within [***] days after receipt of an invoice
therefor from Tranzyme.  Each milestone
payment by Norgine to Tranzyme hereunder shall be payable only once, regardless
of the number of times achieved by the Products, provided that, if more than
one sales milestones that have not been previously paid are triggered at the
end of any particular calendar year, then each and every of such sales
milestones shall be deemed to have been achieved upon the end of such calendar
year and the corresponding milestone payments triggered by each and every of
such sales milestones shall become due at the end of such calendar year.


 


29

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


	
  Milestone Event

  	
   

  	
  Milestone Payment

  
	
   

  	
   

  	
   

  
	
  Regulatory Milestones

  
	
   

  	
   

  	
   

  
	
  On successful completion of first Phase 3 Clinical
  Trial (where successful completion means that the Phase 3 Clinical Trial has
  met its primary endpoints and the data generated in such clinical trial, in
  Norgine’s opinion (acting reasonably), can be used as part of the submission
  for an MAA.

  	
   

  	
  [***]
  in cash and $1,000,000 in exchange for Tranzyme equity as provided in the
  Equity Documents

  
	
   

  	
   

  	
   

  
	
  On
  first filing of an MAA for a Product in a Major Market in the Licensed
  Territory.

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  
	
  On
  First Commercial Sale of the first Product in a Major Market in the Licensed
  Territory (the “Launch Milestone”).

  	
   

  	
  [***],
  subject to adjustment pursuant to Section 8.2(a) and (b)*

  
	
   

  	
   

  	
   

  
	
  On
  Regulatory Approval for a second Indication in a Major Market in the Licensed
  Territory 

  	
   

  	
  [***]

  



 






*              The
amount for the Launch Milestone shall be subject to the following adjustments:


 


(a) At the time of First Commercial Sale of
Product in the first Major Market, a portion of the Launch Milestone shall be
due upon such First Commercial Sale being made (“First Launch
Milestone”) which shall be determined as follows: if the Product is
sold at a price per Unit in such Major Market (which shall be determined at the
time of launch and shall be no less than the pricing approved in the Regulatory
Approval for the applicable Major Market) (the “Initial
Unit Price”) (i) is equal to, or
is greater than, [***] Euros (€[***]), then the First Launch Milestone shall be
$[***]; (b) is equal to, or is greater than, [***] Euros (€[***]), but is
less than [***] Euros (€[***]), then the First Launch Milestone shall equal:
$[***] x (Unit Price - €[***])/€[***]; and (c) is less than [***] Euros
(€[***]), then the First Launch Milestone shall be zero.


 


(b) Upon the First Commercial Sale of a Product
in each further Major Market, made within [***]:


(i)             The mean Unit price of the Product in all Major Markets in which the
Product is being sold (the selling price in each such Major Market shall be
determined at the time of launch in such Major Market and shall be no less than
the pricing approved in the Regulatory Approval for such Major Market) will be
calculated (“Cumulative Mean Unit Price”) and a
revised Launch Milestone (“Revised Launch Milestone”)
will be [***].


(ii)          [***]


(iii)       [***]


(iv)      [***]


 


30






 










 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


(c) For the purposes of this Section a “Unit” means the daily human adult dose of Product for
intravenous, subcutaneous or intramuscular administration, whichever
formulation is first Commercialized by Norgine, its Affiliates or sublicensees
following Regulatory Approval.


 


Sales Milestones


 


	
  The
  aggregate Net Sales of all Products in the Licensed Territory during any
  calendar year equal to or exceed €[***]

  	
   

  	
  $

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  aggregate Net Sales of all Products in the Licensed Territory during any
  calendar year equal to or exceed €[***]

  	
   

  	
  $

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  aggregate Net Sales of all Products in the Licensed Territory during any
  calendar year equal to or exceed €[***]

  	
   

  	
  $

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  aggregate Net Sales of all Products in the Licensed Territory during any
  calendar year equal to or exceed €[***]

  	
   

  	
  €

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  aggregate Net Sales of all Products in the Licensed Territory during any
  calendar year equal to or exceed €[***]

  	
   

  	
  €

  	
  [***

  	
  ]

  



 


For
the aggregation of Net Sales for the purpose of determining whether a
commercial milestone trigger has been met under this Section 8.2 or the
applicable royalty rate under Section 8.3, all Combination Products and
single agent Products shall be considered the same Product, regardless of the
formulation, dosage strength, route of administration, packaging or indicated
use thereof or any other active ingredient(s) contained therein, or
whether such Product is sold by or on behalf of Norgine, its Affiliates or
sublicensees.


 


8.3          Royalties.


 


(a)           Royalty Rates. Subject to Section 8.4,
Norgine shall pay to Tranzyme a running royalty at the following royalty rates,
on Net Sales of the Products in all countries of the Licensed Territory:


 


31

















 


PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


	
  Aggregate Annual Net Sales of the Products in the

  Licensed Territory for a Particular Calendar Year

  	
   

  	
  Royalty Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  For
  that portion of aggregate annual Net Sales less than or equal to €[***]

  	
   

  	
  [***

  	
  ]%

  
	
   

  	
   

  	
   

  	
   

  
	
  For
  that portion of aggregate annual Net Sales greater than €[***] but less than
  or equal to €[***]

  	
   

  	
  [***

  	
  ]%

  
	
   

  	
   

  	
   

  	
   

  
	
  For
  that portion of aggregate annual Net Sales greater than €[***]but less than
  or equal to €[***]

  	
   

  	
  [***

  	
  ]%

  
	
   

  	
   

  	
   

  	
   

  
	
  For
  that portion of aggregate annual Net Sales Greater than €[***]

  	
   

  	
  [***

  	
  ]%

  



 


8.4          Royalty Term.  The royalty payment obligation under Section 8.3
above shall apply, on a country-by-country and Product-by-Product basis, during
the period of time beginning upon the First Commercial Sale of such Product in
such country, and ending upon the later of (i) the expiration of the
last-to-expire Valid Claim of a Tranzyme Patent or other exclusivity conferred
by a relevant Regulatory Authority covering such Product in such country; and (ii) the
[***] anniversary of the First Commercial Sale of such Product in such country
(the “Royalty Term”).  For the avoidance of doubt and notwithstanding
anything to the contrary herein, the First Commercial Sale of a Product
formulated for a different route of administration (e.g., for intramuscular
administration, subcutaneous administration and intravenous administration)
shall be construed as a new Product under this Section 8.4 and the Royalty
Term for such new Product shall start upon the First Commercial Sale of such
new Product.


 


8.5          Third Party Royalties.  If the Parties mutually agree that it is
necessary for Norgine to obtain a license to any Third Party’s Patents issued
before or after the Effective Date in order for Norgine, its Affiliates, or any
sublicensee to Develop, manufacture or Commercialize a Product in a particular
country in the Licensed Territory, then Norgine shall have the right to credit
[***] of any royalties actually paid by Norgine to such Third Party for such
license with respect to such Product in such country, against the royalty
payment due from Norgine to Tranzyme under Section 8.3 for such Product in
such country; provided that the royalties payable to Tranzyme for any
particular calendar quarter for such Product in such country shall not be
reduced by more than [***] by reason of this Section 8.5.


 


8.6          Royalty Reduction.  During the Royalty Term, for a particular
Product and in a particular country, if a Generic Competing Product for such
Product is launched and Norgine’s Net Sales in two (2) consecutive
calendar quarters following such launch are decreased by at least [***] as
compared to the quarterly average amount of Net Sales booked by Norgine for
that Product in that country during the two (2) calendar quarters
immediately preceding the launch of such Generic Competing Product, the
royalties due to Tranzyme shall be reduced by [***] from what would otherwise
have been due under Section 8.3, provided that this Section 8.6 shall
no longer apply in the event: (a) such Generic Competing Product is no
longer sold in such country; or (b) the Net Sales for the applicable
Product in the applicable country returns to at least the same level as the
quarterly average amount of Net Sales booked by Norgine for that Product in
that country during the two (2) calendar quarters immediately preceding
the launch of such Generic Competing Product.


 


32

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


8.7          Royalty Payments and
Reports.  Within sixty (60) days after
the end of each calendar quarter, Norgine shall deliver to Tranzyme a report
containing the following information for the prior calendar quarter:


 


(a)           the number of
units of Products sold by Norgine, its Affiliates and sublicensees;


 


(b)           the gross sales
associated with each Product sold by Norgine, its Affiliates and sublicensees;


 


(c)           a calculation
of Net Sales of each Products that are sold by Norgine, its Affiliates and (if
applicable) sublicensees; and


 


(d)           details of any
corrections or true-ups from previously reported Net Sales amounts; and


 


(e)           a calculation
of payments due to Tranzyme with respect to the foregoing.


 


Concurrent
with these reports, Norgine shall remit to Tranzyme any payment due for the
applicable calendar quarter.  If no
royalties are due to Tranzyme for such reporting period, the report shall so
state.


 


8.8          Foreign Exchange.  All payments required under this Agreement
shall be paid in U.S. Dollars.  The rate
of exchange to be used in computing the amount of currency equivalent in
Dollars of Net Sales invoiced in other currencies shall be made at the average
of the daily closing exchange rates reported in The Wall
Street Journal (U.S., Western Edition) over the applicable reporting
period for the payment due.


 


8.9          Payment Method; Late
Payments.  All
payments due to Tranzyme hereunder shall be made by wire transfer of
immediately available funds into an account designated by Tranzyme.  If Tranzyme does not receive payment of any
sum due to it on or before the due date, simple interest shall thereafter
accrue on the sum due to Tranzyme until the date of payment at the per annum
rate of two percent (2%) over the then-current prime rate quoted by Citibank in
New York City or the maximum rate allowable by applicable Law, whichever is
lower.


 


8.10        Records; Audits.  Norgine will maintain complete and accurate
records in sufficient detail to permit Tranzyme to confirm the accuracy of the
calculation of royalty payments under this Agreement.  Upon reasonable prior notice, such records
shall be available during regular business hours for a period of three (3) years
from the end of the calendar year to which they pertain for examination at the
expense of Tranzyme, and not more often than once each calendar year, by an
independent certified public accountant selected by Tranzyme and associated
with an independent accounting firm reasonably acceptable to Norgine, for the
sole purpose of verifying the accuracy of the financial reports furnished by Norgine pursuant to this Agreement.  The
accounting firm shall enter into appropriate obligations with Norgine to treat
all information it receives during its examination in confidence.  The accounting firm shall disclose to
Tranzyme only whether Norgine’s calculations of royalty payments under this
Agreement are correct and details concerning any discrepancies, but no other
information shall be disclosed to Tranzyme. 
Any amounts shown to be owed but unpaid shall be paid within thirty (30)
days from


 


33

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


the
accountant’s report, plus interest (as set forth in Section 8.9) from the original due date. 
Any amounts shown to have been overpaid shall be, at Tranzyme’s
election, refunded as soon as practicable after the accountant’s report or
credited towards future payments owed by Norgine to Tranzyme over time.  Tranzyme shall bear the full cost of such
audit unless such audit discloses an underpayment by Norgine of more than five
percent (5%) of the amount due, in
which case Norgine shall bear the full cost of such audit.


 


8.11        Taxes.


 


(a)           Taxes on Income.  Each Party shall be solely responsible for
the payment of all taxes imposed on its share of income arising directly or
indirectly from the collaborative efforts of the Parties under this Agreement.


 


(b)           Tax Cooperation.  The Parties agree to
cooperate with one another and use reasonable efforts to avoid or reduce tax
withholding or similar obligations in respect of royalties, milestone payments,
and other payments made by Norgine to Tranzyme under this Agreement. To the
extent Norgine is required to deduct and withhold taxes on any payment to
Tranzyme, Norgine shall pay the amounts of such taxes to the proper
Governmental Authority in a timely manner and promptly transmit to Tranzyme an
official tax certificate or other evidence of such withholding sufficient to
enable Tranzyme to claim such payment of taxes. 
Tranzyme shall provide Norgine any tax forms that may be reasonably
necessary in order for Norgine to not withhold tax or to withhold tax at a
reduced rate under an applicable bilateral income tax treaty.  Tranzyme shall use reasonable efforts to
provide any such tax forms to Norgine at least thirty (30) days prior to the
due date for any payment for which Tranzyme desires that Norgine apply a
reduced withholding rate.  Each Party
shall provide the other with reasonable assistance to enable the recovery, as
permitted by applicable law, of withholding taxes, value added taxes, or
similar obligations resulting from payments made under this Agreement, such recovery
to be for the benefit of the Party bearing such withholding tax or value added
tax.


 


(c)           Taxes Resulting From
Norgine Action.  If Norgine is
required to make a payment to Tranzyme subject to a deduction of tax or
withholding tax, then (i) if such withholding or deduction obligation
arises as a result of any action by Norgine, including any assignment or
sublicense, or any failure on the part of Norgine to comply with applicable
Laws or filing or record retention requirements, that has the effect of modifying
the tax treatment of the Parties hereto (an “Norgine
Withholding Tax Action”), then the sum payable by Norgine (in
respect of which such deduction or withholding is required to be made) shall be
increased to the extent necessary to ensure that Tranzyme receives a sum equal
to the sum which it would have received had no such Norgine Withholding Tax
Action occurred, and (ii) otherwise, the sum payable by Norgine (in
respect of which such deduction or withholding is required to be made) shall be
made to Tranzyme after deduction of the amount required to be so deducted or
withheld, which deducted or withheld amount shall be remitted in accordance
with applicable Law.


 


8.12            Cost Reimbursement.  For each calendar quarter during which the
Parties are sharing: (a) Third Party Development Costs for the Core
Studies; (b) Third Party Development Costs for any trial under the
Independent Studies in the event a [***]; and/or (c) any other costs
subject to reimbursement under this Agreement (other than the Clinical
Manufacturing Costs


 


34

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


which
shall be reimbursed pursuant to Section 7.3), within thirty (30) days
after the end of such calendar quarter, each Party shall provide the JDC with a
report itemizing the costs and expenses incurred by or on account of such Party
during such calendar quarter, together with the calculation of reimbursement
sought by such Party from the other Party for each item of such costs and
expenses.  Within fifteen (15) days after
receiving such reports, the JDC shall issue to both Parties a reconciliation
report setting forth the calculation of net reimbursement due from the Party
owing a reconciliation payment to the other Party, and the Party owing such
reconciliation payment shall make such payment within fifteen (15) days after
receiving such reconciliation report.


 


ARTICLE 9


 


INTELLECTUAL PROPERTY


 


9.1          Ownership of
Inventions.  As between
the Parties, each Party shall own any inventions conceived (or conceived and
reduced to practice) solely by its own employees, agents, or independent
contractors in the course of conducting its activities under this Agreement,
together with all intellectual property rights therein (“Sole
Inventions”).  Sole Inventions
conceived (or conceived and reduced to practice) solely by Norgine’s own
employees, agents or independent contractors in the course of conducting its
activities under the Agreement shall be “Norgine Sole Inventions”.  Sole Inventions conceived (or conceived and
reduced to practice) solely by Tranzyme’s own employees, agents or independent
contractors in the course of conducting its activities under this Agreement
shall be “Tranzyme Sole Inventions”.  The Parties (or their relevant Affiliates)
shall jointly own any inventions that are conceived (or conceived and reduced
to practice) jointly by employees, agents, or independent contractors of each
Party in the course of performing activities under this Agreement, together
with all intellectual property rights therein (“Joint
Inventions”).  Inventorship
shall be determined in accordance with applicable patent laws.  All Patents claiming patentable Norgine Sole
Inventions shall be referred to herein as “Norgine Sole Patents”.  All Patents claiming patentable Tranzyme Sole
Inventions shall be referred to herein as “Tranzyme Sole Patents”.  All Patents claiming patentable Joint
Inventions shall be referred to herein as “Joint Patents.”  As between the Parties, each Party retains an
undivided one-half interest in and to Joint Inventions and Joint Patents.  Subject to the rights and licenses granted by
one Party to the other under this Agreement and the Parties’ respective
exclusivity obligations under Section 2.6, each Party shall have the right
to exploit and exercise its ownership rights in and to its half interest in
Joint Inventions and/or Joint Patents for any field, including the right to
license and sub-license (which license and sub-license shall be non-exclusive
by reason of the half interest of the other Party), in each case without the
consent of or the duty of accounting to the other Party.  Any Party granting such license under the
Joint Inventions and/or Joint Patents shall inform the other Party of such
grant of rights promptly after such grant.


 


9.2          Disclosure of
Inventions.  Each Party
shall promptly disclose to the other any invention disclosures, or other
similar documents, submitted to it by its employees, agents or independent
contractors describing inventions that are either Sole
Inventions or Joint Inventions,


 


35

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


and all Information relating to such
inventions to the extent necessary for the preparation, filing and maintenance
of any Patent with respect to such invention.


 


9.3          Prosecution of
Patents.


 


(a)           Tranzyme Prosecuted Patents.


 


(i)            Subject to Section 9.3(a)(ii) below,
Tranzyme shall have the sole right to prepare, file, prosecute and maintain: (A) Tranzyme
Other-Product Patents in the Retained Territory and the Licensed Territory; and
(B) Tranzyme Product-Specific Patents in the Retained Territory (the “Tranzyme Prosecuted Patents”).  In particular, as soon as practicable after
the Effective Date, for certain patent families included in Tranzyme
Other-Product Patents where it would be practicable and beneficial to seek
TZP-101 specific claims, Tranzyme and Norgine shall use commercially reasonable
efforts to cooperate with each other to create divisional applications
containing only claims specific to TZP-101 (the “TZP-101
Divisionals”).  If such
TZP-101 Divisionals are created after the Effective Date, then such TZP-101
Divisionals shall be deemed Tranzyme Product-Specific Patents.  In the event, despite the Parties’ reasonable
efforts, such TZP-101 Divisionals cannot be created after the Effective Date,
then Tranzyme shall use commercially reasonable efforts to create TZP-101
specific claims within each such patent family (such claims, the “TZP-101 Specific Claims”). 
Tranzyme shall provide Norgine reasonable opportunity to review and
comment on the prosecution efforts regarding the Tranzyme Prosecuted Patents in
the Licensed Territory.  Tranzyme shall
provide Norgine with a copy of material communications from any patent
authority regarding such Tranzyme Prosecuted Patents in the Licensed Territory,
and shall provide drafts of any material filings or responses to be made to
such patent authorities a reasonable amount of time in advance of submitting
such filings or responses for Norgine’s review and comment.  Tranzyme shall, in good faith, consider the
advice and comments of Norgine for TZP-101 Specific Claims in the Licensed
Territory, but the final decision on such matters shall be Tranzyme’s (which
will be exercised in good faith). 
Tranzyme shall bear all costs incurred by Tranzyme in connection with
the filing, prosecution and maintenance of Tranzyme Prosecuted Patents.


 


(ii)           If Tranzyme
decides to cease the prosecution or maintenance of any Tranzyme Prosecuted
Patent described in subsection (i) above in the Licensed Territory, it
shall notify Norgine in writing sufficiently in advance so that Norgine may, at
its discretion, assume the responsibility for the prosecution or maintenance of
such Tranzyme Prosecuted Patents, at Norgine’s sole expense. If Norgine elects
to assume the responsibility for the prosecution or maintenance of such
Tranzyme Prosecuted Patents it shall give written notice to Tranzyme.  Tranzyme shall upon receipt of any such
notice from Norgine transfer to Norgine copies of all its files relating to the
relevant Tranzyme Prosecuted Patents and at Norgine’s reasonable cost and
expense execute any documents to otherwise transfer control of such filing,
prosecution and maintenance to Norgine and thereafter Norgine shall be
responsible for the cost and expense of prosecuting and maintaining such
Tranzyme Prosecuted Patents as set out in Section 9.3(b)(ii) and
thereafter such Tranzyme Prosecuted Patents shall no longer be regarded as part
of Tranzyme Patents for the sole purpose of Section 8.4.


 


(iii)         For clarity,
Tranzyme may discharge any of its obligations under Sections 9.3(a) and
9.3(c) through any of its Affiliates. 
However, in the event Tranzyme enters


 


36

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


into
a license agreement with a Third Party under which Tranzyme grants such Third
Party the right to develop and/or commercialize a Tranzyme proprietary product
under any Tranzyme Other-Product Patent, Tranzyme shall not agree to give such
Third Party higher level of control over the prosecution of such Tranzyme
Other-Product Patent with respect to such other Tranzyme proprietary Tranzyme
product, than the level of control Tranzyme has given to Norgine hereunder over
the prosecution of such Tranzyme Other-Product Patent with respect to TZP-101
in the Licensed Territory.


 


(b)           Norgine Prosecuted
Patents.


 


(i)            Tranzyme
Product-Specific Patents.


 


(1)           Upon the
Effective Date, Norgine shall have the sole responsibility for preparation,
filing, prosecution, and maintenance of: (A) any and all Tranzyme
Product-Specific Patents in the Licensed Territory (including patent
applications and any Third Party proceedings related thereto); and (B) all
Tranzyme Other-Product Patents for which the responsibility for prosecution and
maintenance has transferred to Norgine pursuant to Section 9.3(a)(ii) above,
in each case at Norgine’s sole costs and expense (collectively, the “Norgine Prosecuted Patents”).  Norgine shall provide Tranzyme reasonable
opportunity to review and comment on such prosecution efforts regarding the
Norgine Prosecuted Patents in the Licensed Territory, but the final decision on
such matters shall be Norgine’s (which will be exercised in good faith).  Norgine shall provide Tranzyme with a copy of
material communications from any patent authority regarding such Norgine
Prosecuted Patents, and shall provide drafts of any material filings or
responses to be made to such patent authorities a reasonable amount of time in
advance of submitting such filings or responses for Tranzyme’s review and
comment.  Norgine shall reasonably
consider such comments by Tranzyme in connection with the prosecution of
Norgine Prosecuted Patents, and shall implement such comments by Tranzyme with
respect to Norgine Prosecuted Patents as Norgine deems appropriate, but the
final decision on such matters shall be Norgine’s.  Norgine shall use reasonable efforts to
prosecute patent applications forming part of Tranzyme Prosecuted Patents to
grant with Valid Claims in the Licensed Territory, with the goal of achieving
broad coverage for the composition of matter of, and method of making and
using, TZP-101 and Product.


 


(2)           If Norgine
decides to cease the prosecution or maintenance of any Norgine Prosecuted
Patents, it shall notify Tranzyme in writing sufficiently in advance so that
Tranzyme may, at its discretion, assume the responsibility for the prosecution
or maintenance of such Norgine Prosecuted Patents, at Tranzyme’s sole expense
(such Patent, a “Norgine Abandoned Patent”).  Each Norgine Abandoned Patent (including any
Patent for which the responsibility for prosecution and maintenance has
transferred to Norgine pursuant to Section 9.3(a)(ii) and such
responsibility has been transferred back to Tranzyme pursuant to this Section 9.3(b)(i)(2))
shall continue to be deemed a Tranzyme Patent so long as the making, using,
importing, and/or the Commercialization of the Product, but for the license
granted herein, would infringe such Norgine Abandoned Patent (or, in the case
of a claim in a patent application, would infringe such Norgine Abandoned
Patent should such claim issue).


 


(3)           Norgine shall
have the right to delegate its responsibilities in Section 9.3(b)(i) above
to its Affiliates but shall not have the right to delegate such


 


37

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


responsibilities
to any of its sublicensees or to any other Third Party.


 


(ii)           Norgine Sole
Patents.  Norgine shall be solely
responsible for, at its sole expense, filing, prosecuting and maintaining all
Norgine Sole Patents.  Norgine shall
provide Tranzyme reasonable opportunity to review and comment on such
prosecution efforts regarding Norgine Sole Patents which cover or relate to
Product.  Norgine shall provide Tranzyme
with a copy of material communications from any patent authority regarding such
Norgine Sole Patents which cover or relate to Product, and shall provide drafts
of any material filings or responses to be made to such patent authorities a
reasonable amount of time in advance of submitting such filings or responses
for Tranzyme’s review and comment. 
Norgine shall consider such comments by Tranzyme in connection with the
prosecution of Norgine Sole Patents which cover or relate to Product, but the
final decision on such matters shall be Norgine’s.


 


(c)           Joint Patents.  For each family of Joint
Patents, the JSC shall determine which Party shall be primarily responsible for
the preparation, filing and maintenance of such Joint Patents (or, if both
Parties are responsible, the respective territory for which each Party is
responsible), taking into consideration the nature of the Joint Invention
claimed by such Joint Patents and the territory in which such Joint Patents are
filed and prosecuted, and the Party responsible for such preparation, filing
and maintenance of such Joint Patents shall also be responsible for all
out-of-pocket expenses in connection therewith. 
Each Party shall provide the other reasonable opportunity to review and
comment on its prosecution efforts regarding Joint Patents.  Each Party shall provide the other with a
copy of material communications from any patent authority regarding a Joint
Patent, and shall provide drafts of any material filings or responses to be
made to such patent authorities a reasonable amount of time in advance of
submitting such filings or responses for the other Party’s review and
comment.  Each Party shall consider the
others comments in connection with the prosecution of Joint Patents, but the
final decision on such matters shall be that of the Party with responsibility
for filing and prosecuting such Joint Patent in the jurisdiction in
question.  If a Party decides to cease
the prosecution or maintenance of any Joint Patents for which it has
responsibility, it shall notify the other Party in writing sufficiently in
advance so that the other Party may, at its discretion, assume the
responsibility for the prosecution or maintenance of such Joint Patent, at its
sole expense.


 


(d)           Cooperation in
Prosecution.  Each Party
shall provide the other Party all reasonable assistance and cooperation in the
Patent prosecution efforts provided above in this Section 9.3, including
providing any necessary powers of attorney and executing any other required
documents or instruments for such prosecution. 
The Parties acknowledge that, during the course of prosecution, certain
Patents that are included in a particular group of Patents under this Agreement
(and thus subject to certain rules of allocation of prosecution rights and
responsibilities between the Parties) may become included in a different group
of Patents (and subject to different rules). 
In such event, the Parties shall cooperate in good faith to transfer
such responsibilities accordingly.


 


(e)           Patent Term
Extensions.  The Parties
shall cooperate with each other in obtaining patent term extension or
restoration or supplemental protection certificates or their equivalents in any
country or region in the Licensed Territory (“Patent Term
Extensions”).  In particular
but without limiting the foregoing, each Party shall provide reasonable
assistance to


 


38

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


the
other by executing (and procuring its Affiliates execute) any required
documents and providing any relevant information required by the other Party in
connection with obtaining such Patent Term Extensions.  This means that, by way of example only,
where the Patent in question is a Tranzyme Patent granted in a country in the
European Union, Tranzyme will execute (or procure its Affiliates execute) any required
documents to apply for such Patent Term Extension and Norgine (as the Party
responsible for MAAs and Regulatory Approvals in the Licensed Territory) shall
provide (or procure its Affiliates and sublicensees provide) any required
documents relating to such MAAs and Regulatory Approvals as are required to
apply for Patent Term Extensions in the European Union.


 


9.4          Infringement of
Patents by Third Parties.


 


(a)           Notification.  (i) Each Party shall promptly notify the
other Party in writing of (A) any existing or threatened infringement of
the Tranzyme Patents or Joint Patents through the Development or
Commercialization of a Product in the Field in the Licensed Territory by a
Third Party of which such Party becomes aware, and (B) any declaratory
judgment, opposition, or similar action alleging the invalidity,
unenforceability or non-infringement of any of the Tranzyme Patents or Joint
Patents ((A) and (B) collectively a “Product
Infringement”), and (ii) each Party shall promptly notify the
other Party in writing of any existing or threatened infringement of the
Tranzyme Patents or Joint Patents either (A) in the Licensed Territory by
a Third Party which is not covered by (i) above, and (B) in the
Retained Territory of which such Party becomes aware, and any declaratory
judgment, opposition, or similar action alleging the invalidity,
unenforceability or non-infringement of any of the Tranzyme Patents or Joint
Patents.


 


(b)           Product Infringement.


 


For
any Product Infringement, each Party shall share with the other Party all
information available to it regarding such alleged infringement.  Norgine shall have the first right, but not
the obligation, to bring an appropriate suit or other action against any person
or entity engaged in such Product Infringement in the Licensed Territory,
including the right to defend any related, counterclaim or parallel claim
alleging the invalidity, unenforceability or non-infringement of any of the
Tranzyme Patents or Joint Patents, subject always to Sections 9.4(b)(i) through
9.4(b)(iii), below, provided that Norgine shall obtain Tranzyme’s prior written
approval before asserting any claim in the Tranzyme Other-Product Patents
(other than any TZP-101 Specific Claims) in such action.  If Norgine fails to institute and prosecute
an action or proceeding to address the Product Infringement within a period of
ninety (90) days after the first notice under Section 9.4(a) (or if
Norgine as exclusive licensee is unable to institute and prosecute such an
action in a particular jurisdiction of the Licensed Territory as a matter of
Law in the jurisdiction in question), then Tranzyme shall have the right to
commence a suit or take action to enforce the applicable Patent against such
Third Party in the Licensed Territory.
Where Norgine wishes to institute and prosecute such an action but is prevented
from doing so as a matter of Law in the jurisdiction in question, Tranzyme
shall exercise the foregoing right as Norgine reasonably requests and at
Norgine’s cost (in which case Norgine shall remain the Enforcing Party for the
purpose of Section 9.4(b)(ii) and Section 9.4(d)); where Norgine
may institute and prosecute such an action but chooses not to, Tranzyme shall
have the right to but is under no obligation to do so.  Norgine shall take appropriate actions in order to enable Tranzyme to commence a suit or


 


39

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


take the actions set forth in the preceding
sentence.  The Party that either (A) has
the right to institute and prosecute and elects to institute and prosecute an
action under this Section 9.4(b) or, (B) is required to
institute and prosecute an action under this Section 9.4(b), being the “Enforcing Party”.


 


(i)            Each Party
shall provide to the Enforcing Party reasonable assistance in such proceedings,
at such Enforcing Party’s request and expense, including joining such action as
a party plaintiff if required by applicable Law to pursue such action.  The Enforcing Party shall keep the other
Party regularly informed of the status and progress of such enforcement
efforts, shall reasonably consider the other Party’s comments on any such
efforts, and shall seek consent of the other Party in any important aspects of such
enforcement including, without limitation, determination of litigation
strategy, filing of important papers to the competent court, which shall not be
unreasonably withheld or delayed.


 


(ii)           Each Party
shall bear all of its own internal costs incurred in connection with its
activities under this Section 9.4(b). 
Subject to Section 9.4(b)(iii), the Enforcing Party shall bear all
external costs and expenses for such action.


 


(iii)         The Party not
bringing an action with respect to Product Infringement under this
Section 9.4(b) shall be entitled to separate representation in such
matter by counsel of its own choice and at its own expense, but such Party
shall at all times cooperate fully with the Party bringing such action.


 


(c)           Infringement Other
Than a Product Infringement.  For any and all infringements of any of the
Tranzyme Patents other than a Product Infringement (or any, counterclaim or
parallel claim alleging the invalidity, unenforceability or non-infringement of
any of the Tranzyme Patents or Joint Patents relating to the conduct of a
Product Infringement action), as between the Parties Tranzyme alone shall have
the right to bring an appropriate suit or other action against any person or
entity engaged in such other infringement, in its sole discretion, and as
between the Parties shall bear all related expenses and retain all related
recoveries.  Tranzyme shall keep Norgine
reasonably informed of the progress of such actions and of any material events
or disclosure arising therefrom, such as previously undisclosed or unidentified
prior art, and the judgment or findings of any court in relation to such
actions.


 


(d)           Allocation of
Proceeds.  If either
Party recovers monetary damages from any Third Party in a suit or action
brought for a Product Infringement, such recovery shall be allocated first to
the reimbursement of any expenses incurred by the Parties in such litigation
(including, for this purpose, a reasonable allocation of expenses of internal
counsel).  Any remaining amount shall be
retained by the Enforcing Party, provided that: [***].


 


9.5          Infringement of Third
Party Rights in the Licensed Territory.  If any Product used or sold by either Party,
its Affiliates, licensees or sublicensees becomes the subject of a Third Party’s
claim or assertion of infringement of a Patent granted by a jurisdiction within
the Licensed Territory, the Party first
having notice of the claim or assertion shall promptly notify the other Party,
the Parties shall agree on and enter into an “common interest agreement”
wherein such Parties agree to their shared, mutual interest in the outcome of
such potential dispute, and thereafter, the Parties shall promptly meet to
consider the claim or assertion and the


 


40






 










 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


appropriate course of action.  Notwithstanding the foregoing, unless the
Parties otherwise agree in writing, each Party shall have the right to defend
itself against a suit that names it as a defendant (the “Defending
Party”) at its own cost and expense. 
Neither Party shall enter into any settlement of any claim described in
this Section 9.5 that adversely affects the other Party’s rights or
interests without such other Party’s written consent, which consent shall not
be unreasonably conditioned, withheld or delayed.  In any event, the other Party shall
reasonably assist the Defending Party and cooperate in any such litigation at
the Defending Party’s request and expense.


 


9.6      Settlements.  In no case may Norgine enter into any
settlement or consent judgment or other voluntary final disposition of any
suit, claim or action brought under Section 9.4(b) or Section 9.5
that: (a) extends, or purports to exercise, Norgine’s rights under the
Tranzyme Technology beyond the rights expressly granted pursuant to this
Agreement, (b) makes any admission regarding wrongdoing by Tranzyme, or
the invalidity, unenforceability or absence of infringement of any Tranzyme
Patents; (c) subjects Tranzyme or its Affiliates to an injunction or other
equitable relief; (d) obligates Tranzyme or its Affiliates, to make a
monetary payment; or (e) limits Tranzyme’s rights under the Norgine
Technology or under this Agreement, in each case without Tranzyme’s prior
written consent, unless Norgine is required to enter into any such settlement,
consent judgment or other final disposition which contains terms with (a) to
(e) above as a matter of applicable Law. 
Similarly, in no case may Tranzyme enter into any settlement or consent
judgment or other voluntary final disposition of any suit, claim or action
brought under Section 9.4(b) or Section 9.5 that: (i) limits
Norgine’s rights under the Tranzyme Technology or under this Agreement; (ii) makes
any admission regarding wrongdoing on the part of Norgine or its Affiliate, or
the invalidity, unenforceability or absence of infringement of any Norgine
Technology; (iii) subjects Norgine to an injunction or other equitable
relief; (iv) obligates Norgine to make a monetary payment; or (v) extends,
or purports to exercise, Tranzyme’s rights under the Norgine Technology beyond
the rights expressly granted pursuant to this Agreement; in each case without
the prior written consent of Norgine, unless Tranzyme is required to enter into
any such settlement, consent judgment or other final disposition which contains
terms with (i) to (v) above as a matter of applicable Law.


 


ARTICLE 10


 


REPRESENTATIONS AND
WARRANTIES


 


10.1    Mutual Representations and
Warranties.  Each Party
hereby represents, warrants, and covenants (as applicable) to the other Party
as follows:


 


(a)           Corporate
Existence and Power.  It is a
company or corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction in which it is incorporated, and has full
corporate power and authority and the legal right to own and operate its
property and assets and to carry on its business as it is now being conducted
and as contemplated in this Agreement, including, without limitation, the right
to grant the licenses granted by it hereunder.


 


(b)           Authority
and Binding Agreement.  As
of the Effective Date, except as set forth in Section 8.1(b): (i) it
has the corporate power and authority and the legal right to enter 


 


41

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


into this Agreement and to perform its obligations
hereunder (for Tranzyme, other than the requisite approval needed to issue the
stocks to Norgine under Section 8.2); (ii) it has taken all necessary
corporate action on its part required to authorize the execution and delivery
of the Agreement and the performance of its obligations hereunder (for
Tranzyme, other than the requisite approval needed to issue the stocks to
Norgine under Section 8.2); and (iii) the Agreement has been duly
executed and delivered on behalf of such Party, and constitutes a legal, valid,
and binding obligation of such Party that is enforceable against it in
accordance with its terms.


 


(c)           No
Conflict; Covenant.  It is not a
party to any agreement that would materially prevent it from granting the
rights granted to the other Party under this Agreement or performing its
obligations under the Agreement.


 


(d)           No
Debarment.  In the
course of the development of Products, each Party shall not use, during the Term, any employee or consultant who has been debarred by any Regulatory
Authority, or, to the best of such Party’s knowledge, is the subject of
debarment proceedings by a Regulatory Authority.


 


10.2    Additional Representations and
Warranties of Tranzyme. 
Tranzyme represents and warrants to Norgine that, as of the Effective
Date:


 


(a)           Tranzyme or a Tranzyme
Affiliate is the sole owner of the entire right, title and interest in the
Tranzyme Patents existing at the Effective Date and licensed to Norgine
hereunder.  Tranzyme has the right under
the Tranzyme Technology to grant the licenses to Norgine as purported to be granted
pursuant to this Agreement.  Neither
Tranzyme nor a Tranzyme Affiliate has previously entered into any agreement,
whether written or oral, with respect to, or otherwise assigned, licensed,
transferred, conveyed or otherwise encumbered its right, title or interest in
or to, Tranzyme Technology in connection with seeking Regulatory Approval for,
and/or Commercialization of TZP-101 and/or Product in the Licensed Territory to
a Third Party.  Neither Tranzyme nor a
Tranzyme Affiliate has granted any lien or other security interest under the
Tranzyme Patents to a Third Party;


 


(b)           The Tranzyme Patents listed
in Exhibit A (“Patent List”)
represent all Patents within Tranzyme’s Control at the Effective Date relating
to the subject matter of this Agreement which as of the Effective Date are
necessary for Norgine to manufacture, use, Develop, seek Regulatory Approval
for, and/or Commercialize TZP-101 and/or the Product as contemplated by the
Parties as of the Effective Date.  To
Tranzyme’s knowledge, there is no Information relating to and there are no
Patents in the Licensed Territory which claim or cover, the Product which, in
either case, Tranzyme has rights to but which rights Tranzyme cannot license to
Norgine;


 


(c)           To Tranzyme’s knowledge
there is no material reason why any of the Tranzyme Patents on the Patent List
are invalid;


 


(d)           The Tranzyme Patents on the
Patent List that are applications at the Effective Date are being diligently
procured from the respective patent offices and the Patent Rights on the Patent
List that are granted have been maintained properly and correctly and all 


 


42

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


applicable fees due on or before the Effective Date
have been paid on or before the due date for payment;


 


(e)           neither Tranzyme nor any of
its Affiliates has received any written notice from any Third Party asserting
or alleging that any research, Development or manufacture of TZP-101 or any
Product by Tranzyme prior to the Effective Date infringes or has
misappropriated the intellectual property rights of such Third Party and to
Tranzyme’s and its Affiliates’ knowledge there are no issued Patents of a Third
Party which will likely be infringed by the Development, manufacture, use or
Commercialization of Product in the Licensed Territory as contemplated by the
Parties as of the Effective Date;  and


 


(f)            there
are no actual, pending, alleged or threatened adverse actions, suits, claims,
interferences or formal governmental investigations involving TZP-101, the
Product and/or the Tranzyme Technology relating to TZP-101 or the Product by or
against Tranzyme or any of its Affiliates in or before any court, governmental
or regulatory authority.


 


10.3    Disclaimer.  Norgine understands that the Products are the
subject of ongoing clinical research and development and that Tranzyme cannot
assure the safety or usefulness of Products. 
In addition, Tranzyme makes no warranties except as set forth in this
Article 10 concerning the Tranzyme Technology.


 


10.4    No Other Representations or
Warranties.  EXCEPT AS
EXPRESSLY STATED IN THIS ARTICLE 10, NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS, IS MADE OR GIVEN BY OR ON BEHALF OF A PARTY.  ALL REPRESENTATIONS AND WARRANTIES, WHETHER
ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.


 


43

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


ARTICLE 11


 


INDEMNIFICATION


 


11.1    Indemnification by Tranzyme.  Tranzyme hereby agrees to defend, hold
harmless and indemnify Norgine and its Affiliates, agents, directors, officers
and employees (the “Norgine Indemnitees”)
from and against any and all liabilities, expenses and/or losses, including
without limitation reasonable legal expenses and attorneys’ fees (collectively “Losses”) in each case resulting from Third Party suits,
claims, actions and demands (each, a “Third Party Claim”)
arising directly or indirectly out of (a) the death or personal injury of
a person as a result of the research, Development or Commercialization of
Products by Tranzyme or its Affiliates, or sublicensees in exercising its
retained rights to the Product under Section 2.1(b); or (b) the
negligence or willful misconduct of any Tranzyme Indemnitee.  Tranzyme’s obligation to Indemnify the
Norgine Indemnitees pursuant to this Section 11.1 shall not apply to the
extent that any such Losses arise from: (A) the negligence or willful
misconduct of any Norgine Indemnitee; (B) the research, Development or
Commercialization of Products by Norgine or its Affiliates, or sublicensees; or
(C) Norgine’s material breach of this Agreement.


 


11.2    Indemnification
by Norgine.  Norgine
hereby agrees to Indemnify Tranzyme and its Affiliates, agents, directors,
officers and employees (the “Tranzyme Indemnitees”)
from and against any and all Losses resulting from Third Party Claims arising
directly or indirectly out of (a) the death or personal injury of a person
as a result of the research, Development or Commercialization of Products by Norgine
or its Affiliates, or sublicensees; or (b) the negligence or willful
misconduct of Norgine Indemnitees. 
Norgine’s obligation to Indemnify the Tranzyme Indemnitees pursuant to
the foregoing sentence shall not apply to the extent that any such Losses arise
from: (A) the negligence or willful misconduct of any Tranzyme Indemnitee;
(B) the research, Development or Commercialization of Products by Tranzyme
or its Affiliates, or sublicensees in exercising its retained rights to the
Product under Section 2.1(b); or (C) Tranzyme’s material breach of
this Agreement.


 


11.3    Procedure.  The indemnified Party shall provide the
indemnifying Party with prompt notice of the claim giving rise to the
indemnification obligation pursuant to this Article 11 and the exclusive
ability to defend (with the reasonable cooperation of the indemnified Party) or
settle any such claim; provided, however,
that the indemnifying Party shall not enter into any settlement for damages
other than monetary damages without the indemnified Party’s written consent,
such consent not to be unreasonably withheld. The indemnified Party shall have
the right to participate, at its own expense and with counsel of its choice, in
the defense of any claim or suit that has been assumed by the indemnifying
Party. If the Parties cannot agree as to the application of Sections 11.1 and
11.2 to any particular Third Party Claim, the Parties may conduct separate
defenses of such Third Party Claim.  Each
Party reserves the right to claim indemnity from the other in accordance with
Sections 11.1 and 11.2 above upon resolution of the underlying claim,
notwithstanding the provisions of this Section 11.3 requiring the
indemnified Party to tender to the indemnifying Party the exclusive ability to
defend such claim or suit.


 


11.4    Limitation of Liability.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES OR LOSS OF
PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF
ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. 
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.4 IS
INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR
OBLIGATIONS OF ANY PARTY UNDER SECTION 11.1 OR 11.2, OR DAMAGES AVAILABLE
FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 12.


 


44

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


11.5    Insurance. Each Party
shall procure and maintain insurance, including product liability insurance,
adequate to cover its obligations hereunder and which are consistent with
normal business practices of prudent companies in the pharmaceutical industry
similarly situated at all times during which any Product is being clinically
tested in human subjects or commercially distributed or sold by such Party.  It is
understood that such insurance shall not be construed to create a limit of
either Party’s liability with respect to its indemnification obligations under
this Article 11.  Each Party shall
provide the other Party with written
evidence of such insurance upon request after the Effective Date.  Following the Effective Date, each Party
shall provide the other Party with written evidence that the other Party had
been listed as an additional insured under the policies described herein.  Each Party shall provide the other Party with written notice at least thirty (30) days prior to the
cancellation, non-renewal or material change in such insurance or
self-insurance which materially adversely affects the rights of the other Party
hereunder.


 


ARTICLE 12


 


CONFIDENTIALITY


 


12.1    Confidentiality.  Except to the extent expressly authorized by
this Agreement or otherwise agreed in writing by the Parties, each Party agrees that, for the Term and for a period of five (5) years
thereafter, it shall keep confidential and shall not publish or otherwise
disclose and shall not use for any purpose other than as provided for in this
Agreement (which includes the exercise of any rights or the performance of any
obligations hereunder) any Confidential Information furnished to it by the
other Party pursuant to this Agreement except for that portion of such
information or materials that the receiving Party can demonstrate by competent
written proof:


 


(a)           was already known to the
receiving Party or its Affiliate, other than under an obligation of
confidentiality, at the time of disclosure by the other Party;


 


(b)           was generally available to
the public or otherwise part of the public domain at the time of its disclosure
to the receiving Party;


 


(c)           became generally available
to the public or otherwise part of the public domain after its disclosure and
other than through any act or omission of the receiving Party in breach of this
Agreement;


 


(d)           is subsequently disclosed to
the receiving Party or its Affiliate by a Third Party who has a legal right to make such disclosure; or


 


45

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


(e)           is subsequently
independently discovered or developed by the receiving Party or its Affiliate
without the aid, application, or use of the
disclosing Party’s Confidential Information, as evidenced by a
contemporaneous writing.


 


12.2    Authorized Disclosure.  Notwithstanding the obligations set forth in Section 12.1,
a Party may disclose the other Party’s Confidential Information including the
terms of this Agreement to the extent:


 


(a)           such disclosure: (i) is
reasonably necessary for the filing or prosecuting patent rights as
contemplated by this Agreement; or (ii) is reasonably necessary for the
prosecuting or defending litigation as contemplated by this Agreement; or


 


(b)           such disclosure is
reasonably necessary: (i) to such Party’s directors, attorneys,
independent accountants or financial advisors for the sole purpose of enabling
such directors, attorneys, independent accountants or financial advisors to
provide advice to the receiving Party, provided that in each such case on the
condition that such directors, attorneys, independent accountants and financial
advisors are bound by confidentiality and non-use obligations consistent with
those contained in this Agreement; or (ii) to actual or potential
investors and/or acquirers solely for the purpose of evaluating an actual or
potential investment or acquisition; provided that in each such case on the
condition that such actual or potential investors and/or acquirers are bound by
confidentiality and non-use obligations consistent with those contained in the
Agreement; or


 


(c)           such disclosure is required
by judicial or administrative process, provided that in such event such Party
shall promptly inform the other Party of such required disclosure and provide
the other Party an opportunity to challenge or limit the disclosure
obligations.  Confidential Information
that is disclosed by judicial or administrative process shall remain otherwise
subject to the confidentiality and non-use provisions of this Article 12,
and the Party disclosing Confidential Information pursuant to law or court
order shall take all steps reasonably necessary, including seeking of
confidential treatment or a protective order to ensure the continued
confidential treatment of such Confidential Information.


 


12.3    Publication.
 Where one Party carries out any
clinical trial under this Agreement it shall prepare a final report of the
results from such clinical trial and from all sites and shall present the same
to the other Party at the same time supplying a written copy.  The first Party may thereafter release such
results or submit them for use at conferences and for publication in scientific
journals in accordance with this Section 12.3.  The Parties acknowledge that scientific
publications must be strictly monitored to prevent any adverse effect from
premature publications of results of the research and Development activities
hereunder.  Accordingly, the Parties
shall not publish, present or otherwise disclose any material related to a Product
without the prior written consent of the JSC, such consent not to be
unreasonably withheld or delayed.  In
rendering or withholding its consent, the JSC shall take into consideration
Tranzyme’s and Norgine’s interest in publishing the results of its research in
order to obtain recognition within the scientific community and to advance the
state of scientific knowledge, the need to protect Confidential Information and
the Parties’ mutual interest in obtaining valid patent protection, protecting
reasonable business interests and trade secret information and, having an
integrated approach to Developing one or more Products for one or more
Indications in the Licensed 


 


46

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Territory and Retained Territory.  The JSC shall have the right to require
modifications of the publication or presentation: (a) to protect the
Parties’ Confidential Information; (b) for trade secret reasons or
business reasons; and/or (c) to delay such submission for an additional
ninety (90) days as may be reasonably necessary to seek patent protection for
the information disclosed in such proposed submission.  Each Party’s contribution to such material
results shall be duly recognized in such publications.  Notwithstanding the foregoing, nothing in
this Agreement shall prevent either Party from posting the results of any
clinical trial conducted hereunder on a government website, such as
www.clinicaltrials.gov, or otherwise making the results of a clinical trial
conducted hereunder available in accordance with the Laws and industry codes of
practice of any country in which such clinical trial is conducted or in
accordance with good industry practice.


 


12.4    Publicity;
Use of Names.  Subject to
the rest of this Section 12.4 and the authorized disclosures permitted
under Section 12.2, no disclosure of the existence, or the terms, of this
Agreement may be made by either Party or its Affiliates, and no Party shall use
the name, trademark, trade name or logo of the other Party, its Affiliates or
their respective employee(s) in any publicity, promotion, news release or disclosure
relating to this Agreement or its subject matter, without the prior express
written permission of the other Party, except as may be required be law.


 


(a)           A Party may disclose this
Agreement and its terms, and material developments or material information
generated under this Agreement, in securities filings with the Securities
Exchange Commission (“SEC”) (or
equivalent foreign agency) to the extent required by law after complying with
the procedure set forth in this Section 12.4(a).  In such event, the Party seeking such
disclosure will prepare a draft confidential treatment request and proposed
redacted version of this Agreement to request confidential treatment for this
Agreement, and the other Party agrees to promptly (and in any event, no less
than seven (7) days after receipt of such confidential treatment request
and proposed redactions) give its input in a reasonable manner in order to
allow the Party seeking disclosure to file its request within the time lines
proscribed by applicable SEC regulations. 
The Party seeking such disclosure shall exercise Commercially Reasonable
Efforts to obtain confidential treatment of the Agreement from the SEC or other
agency as represented by the redacted version reviewed by the other Party.


 


(b)           Further, each Party
acknowledges that the other Party may be legally required or required by
prevailing industry codes of practice to make public disclosures (including in
filings with the SEC or other agency) of certain material developments or
material information generated under this Agreement and agrees that each Party
may make such disclosures as required by Laws, provided
that the Party seeking such disclosure first provides the other Party a copy of
the proposed disclosure, and provided further that (except to the extent that
the Party seeking disclosure is required to disclose such information to comply
with applicable laws or regulations) if the other Party demonstrates to the
reasonable satisfaction of the Party seeking disclosure, within ten (10) days
of such Party’s providing the copy, that the public disclosure of previously
undisclosed information will materially adversely affect the Development and/or
Commercialization of a Product being Developed and/or Commercialized, the Party
seeking disclosure will remove from the disclosure such specific previously
undisclosed information as the other Party shall reasonably request to be
removed.


 


47

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


(c)           Notwithstanding the
foregoing, Tranzyme and Norgine have agreed on language of a press release announcing
the collaboration, attached hereto as Exhibit E
to be issued promptly after the execution of the Agreement by both Parties.


 


(d)           Thereafter, if either Party
desires to issue a press release or make a public announcement concerning the
material terms of this Agreement or the Development or Commercialization of the
Product in the Licensed Territory under this Agreement, such as announcing the
achievement of any milestone that triggers a milestone payment under Section 8.2,
the commencement of any clinical trial for the Product, the filing of
Regulatory Filings for the Product and the achievement of Regulatory Approvals
of the Product, the disclosing Party shall provide the other Party with the
proposed text of such announcement for prior review and approval, such approval
not to be unreasonably withheld or delayed.


 


(e)           The Parties agree that after
a disclosure pursuant to Section 12.4(b) or a press release pursuant
to Section 12.4(c) or (d) hereof has been reviewed and approved
by a Party, either Party may make subsequent public disclosures or issue a
press release disclosing the same content without having to obtain the other
Party’s prior consent and approval.


 


ARTICLE 13


 


TERM AND TERMINATION


 


13.1    Term.  This Agreement shall become effective on the
Effective Date and, unless earlier terminated pursuant to this Article 13,
shall remain in effect, on a Product-by-Product basis and on a country-by-country basis, [***].


 


13.2    Termination for Breach.


 


(a)           Notice.  If either Party believes that
the other is in material breach of this Agreement, then the Party holding such
belief (the “Non-breaching Party”) may deliver
notice of such breach to the other Party (the “Notified
Party”).  The Notified Party
shall have [***] to cure such breach to the extent involving non-payment of
amounts due hereunder, and [***] to either cure such breach for all other
material breaches, or, if cure of such breach other than non-payment cannot
reasonably be effected within such [***], to deliver to the Non-breaching Party
a plan reasonably calculated to cure such breach within a timeframe that is
reasonably prompt in light of the circumstances then prevailing but in no event
in excess of an [***].  Following
delivery of such a plan, the Notified Party shall diligently carry out the plan
and cure the breach and the cure period shall be extended by the time period
provided in such plan but in no event to exceed one hundred and eighty (180)
days from the date of any initial breach notice delivered under this Section 13.2.


 


(b)           Failure
to Cure.  If the
Notified Party fails to cure a material breach of this Agreement as provided
for in Section 13.2(a), then the Non-Breaching Party may terminate this
Agreement upon written notice to the Notified Party.


 


(c)           Disputes.  If the Notified Party in good
faith disputes the alleged material breach or disputes the failure to cure or
remedy such material breach and provides written notice of that dispute to the
Non-breaching Party within the relevant time period to cure under Section 


 


48

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


13.2(a) or (b), then the matter will be
resolved in accordance with Article 14, and the Non-breaching Party may
not terminate this Agreement until it has been determined under Article 14
that the Notified Party is in material breach of this Agreement, and such Party
further fails to cure such breach within the relevant time period under Section 13.2(a) or
(b) for the type of breach in question after the matter has been resolved
in accordance with Article 14.


 


13.3    Termination Without Cause.  Norgine may terminate this Agreement in its
entirety at any time and for any reason during the Term as follows:


 


(a)           Prior to the First
Commercial Sale of any Product in the Licensed Territory, Norgine may terminate
this Agreement under this Section 13.3 upon providing Tranzyme with not
less than three (3) months prior written notice referencing this Section 13.3
and specifying termination of the Agreement. 
Thereafter the Parties shall (i) continue to be liable to share
Third Party Development Costs in relation to Core Studies which Third Party
Development Costs were committed to (meaning that a contract with the relevant
Third Party had been executed and the Development activity in question had been
initiated on or before the date of Norgine’s notice of termination, unless
performance of such Development activity can be cancelled or terminated without
any material impact to the Development of the Product and without any
cancellation costs) by either or both Parties in accordance with the Core
Studies Development Program and associated budget prior to the date of Norgine’s
notice of termination pursuant to this Section 13.3, which costs shall be
shared in accordance with Section 4.6(a)(i) but Norgine shall have no
liability for any Third Party Development Costs committed to by Tranzyme
following delivery of Norgine’s notice of termination, even if such costs are
committed to during the three (3) months termination period.


 


(b)           After the First Commercial
Sale of the Product, Norgine shall have the right to terminate this Agreement
under this Section 13.3 upon six (6)-month written notice to Tranzyme,
provided that, in the event Tranzyme is able to transfer the Commercialization
activities for the Product to a Third Party for any particular country prior to
the end of such six (6)-month notice period, then this Agreement shall
terminate with respect to such country at the time Tranzyme consummates such
transfer.


 


(c)           After Tranzyme receives
Norgine’s notice of termination under this Section 13.3, Norgine and its
Affiliates shall do all such things as are necessary to prepare for and execute
the transition back to Tranzyme of the Product. 
Norgine shall be and remain liable for any Third Party Development Costs
Norgine has committed to with respect to any Norgine Independent Studies.


 


13.4    Consequence of Termination.


 


(a)           Termination
by Tranzyme under Section 13.2; Termination by Norgine under Section 13.3.  Upon the early termination
of this Agreement by Tranzyme
pursuant to Sections 13.2 or by Norgine pursuant to Section 13.3, the
following shall apply (in addition to any other rights and obligations
otherwise under this Agreement with respect to such termination):


 


(i)            Termination
of licenses. The licenses granted to Norgine under 


 


49

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Section 2.1(a) shall terminate, with the
effect that all sublicenses granted by Norgine shall also terminate.


 


(ii)           Regulatory
Filings; Data; Trademarks.  To
the extent permitted by applicable Laws, Norgine shall, and shall cause its
Affiliates and sublicensees to, transfer and assign to Tranzyme all Regulatory
Filings, Regulatory Approvals, and related preclinical, analytical, and
clinical data and other results for the Products throughout the Licensed
Territory and grant Tranzyme a right of reference to Regulatory Approvals that
are owned by Norgine for the Products throughout the Licensed Territory as and
to the extent owned or Controlled by Norgine, and shall assign to Tranzyme all
of its right, title and interest in the Product Trademarks. 
Norgine shall provide such assistance, at no cost to Tranzyme, as may be
reasonably necessary to transfer and/or transition to Tranzyme all such
Regulatory Filings, Regulatory Approvals, data, and Product Trademarks for
Tranzyme to commence or continue Developing, manufacturing or Commercializing
Products.


 


(iii)         Norgine
License.  Subject to the pre-existing
rights of Norgine’s existing licensees under Norgine Technology in the Licensed
Territory, Norgine hereby grants to Tranzyme, effective only in the event of
such termination, an exclusive  license, with
the right to grant multiple tiers of sublicenses, under Norgine Technology and
Norgine’s interest in Joint Patents to Develop, make, have made, use, sell,
offer for sale, have sold, import and otherwise Commercialize the Products in
the Licensed Territory, which license shall be effective as of the date of such
termination.  In its
Sublicense Agreements, Norgine shall obtain the right from its sublicensees
under the Information and Patents generated by such sublicensees in connection
with the making, using, Developing, seeking Regulatory Approval for and/or
Commercializing the Products in order to pass such rights to Tranzyme under
this Section 13.4(a)(iii) in the event of such termination.  This license shall be fully paid up if the
Agreement is terminated by Norgine pursuant to Section 13.3.  If the Agreement is terminated by Tranzyme
pursuant to Section 13.2 the license set out above shall be on reasonable
financial terms to be agreed in good faith between the Parties taking into
account the following factors:


 


(1)           industry benchmarks for financial terms paid to companies in Norgine’s
position for a license of similar intellectual property at the then stage of
research, Development and/or Commercialization of the Products in such circumstances
of termination and taking into account the circumstances of termination; and


 


(2)           the relative value represented by Tranzyme Technology and other
contributions made by Tranzyme with respect to the Product, compared to the
value represented by Norgine Technology and other contributions made by Norgine
with respect to the Product; and


 


(3)           the value of lost Tranzyme Patent life represented by the delay in the
research, Development and or Commercialization of Products caused by the
termination.


 


(iv)          Transition Assistance.  Norgine shall provide such assistance, at no
cost to Tranzyme, as may be reasonably necessary or useful for Tranzyme to
commence or continue Developing, manufacturing or Commercializing Products in the Licensed Territory, to


 


50














 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


the extent Norgine is then performing or having
performed such activities, including without limitation transferring or amending as appropriate, upon request of Tranzyme,
any agreements or arrangements with Third Party vendors to sell or manufacture
Products in the Licensed Territory.  To the extent that any such
contract between Norgine and a Third Party is not assignable to Tranzyme, then
Norgine shall reasonably cooperate with Tranzyme to arrange to continue to and
provide such services from such entity.


 


(b)           Termination
by Norgine under Section 13.2.  Upon the early
termination of this Agreement by
Norgine pursuant to Section 13.2, the license granted to Norgine under Section 2.1(a) shall
survive, provided that Norgine fulfills its payment obligations to Tranzyme
under Article 8.  Section 2.6
shall survive such termination on its own terms.


 


13.5    Bankruptcy.  Should Tranzyme be and/or should Tranzyme
seek to be or is involuntarily placed under the protection of the “Bankruptcy
Code” (i.e., Title 11, U.S. Code), then Norgine hereby requests, under Section 365(n)(4) of
the Bankruptcy Code, that, unless and until the trustee in bankruptcy, or
Tranzyme as a debtor in possession, rejects the Agreement, Tranzyme and/or the
trustee in bankruptcy shall perform Tranzyme’s obligations under the Agreement.  As of the commencement of a bankruptcy
proceeding by or against Tranzyme under the Bankruptcy Code, Norgine is
entitled to a complete duplicate of all embodiments of intellectual property
licensed to it hereunder.  To the extent
such embodiments are not already in Norgine’s possession as of the commencement
of a bankruptcy, upon a rejection of this Agreement by or on behalf of Tranzyme
or if Tranzyme elects not to continue to perform all of its obligations under
this Agreement Tranzyme (or the trustee in bankruptcy) shall deliver such
embodiments to Norgine.  All licenses
granted under this Agreement are deemed to be, for purposes of Section 365(n) of
the Bankruptcy Code, licenses of “intellectual property” as defined in Section 101
of such Code.


 


13.6    General Effects of Expiration or
Termination.


 


(a)           Accrued
Obligations.  Expiration
or termination of this Agreement for any reason shall not release either Party
from any obligation or liability which, at the time of such expiration or
termination, has already accrued to the other Party or which is attributable to
a period prior to such expiration or termination.


 


(b)           Non-Exclusive
Remedy.  Notwithstanding anything herein
to the contrary, termination of this Agreement by a Party shall be without
prejudice to other remedies such Party may have at law or equity.


 


(c)           Termination
Press Releases.  In the event
of any termination of this Agreement (whether in its entirety or as to a
particular country) for any reason, the Parties shall cooperate in good faith
to coordinate public disclosure, if any, of such termination and the reasons
therefor, and shall not, except to the extent required by applicable Laws or
the rules of a recognized stock exchange, disclose such information
without the prior approval of the other Party, such approval not to be
unreasonably withheld, conditioned or delayed.


 


(d)           Survival.  The following provisions shall survive any
termination of this Agreement or expiry of the Term for the period of time
specified: Articles 1, 8 (solely with 


 


51

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


respect to payments that are payable as of the
effective date of such expiration or termination, or that become payable in
connection with such expiration or termination), 11, 12, 14, and 15, and
Sections 2.1(b), 2.2, 8.8, 8.9, 8.10, 9.1, 10.3, 10.4, 13.3, 13.4 and 13.6.


 


ARTICLE 14


 


DISPUTE RESOLUTION


 


14.1    Disputes.  The Parties recognize that disputes as to
certain matters may from time to time arise during the Term which relate to
either Party’s rights and/or obligations hereunder.  It is the objective of the Parties to
establish procedures to facilitate the resolution of disputes arising under
this Agreement in an expedient manner by mutual cooperation and without resort
to litigation.  To accomplish this
objective, the Parties agree to follow the procedures set forth in this Article 14
to resolve any controversy or claim arising out of, relating to or in
connection with any provision of this Agreement, if and when a dispute arises
under this Agreement.


 


14.2    Internal Resolution.  With respect to all disputes
arising between the Parties under this Agreement, including, without
limitation, any alleged breach under this Agreement or any issue relating to
the interpretation or application of this Agreement, if the Parties are unable
to resolve such dispute within thirty (30) days after such dispute is first
identified by either Party in writing to the other, the Parties shall refer
such dispute to the Chief Executive Officers of the Parties for attempted
resolution by good faith negotiations within thirty (30) days after such notice
is received.


 


14.3    Binding Arbitration.  If the Chief Executive
Officers of the Parties are not able to resolve such disputed matter within
thirty (30) days of such matter being referred to them pursuant to Section 14.2
and either Party wishes to pursue the matter, except as set forth in Section 3.2(b),
each such dispute, controversy or claim that is not an Excluded Claim (defined
in Section 14.4 below) shall be finally resolved by binding arbitration
administered by the International Chamber of Commerce (the “ICC”) in accordance with its then existing Rules of
Conciliation and Arbitration, and judgment on the arbitration award may be
entered in any court having jurisdiction thereof.  The Parties agree that:


 


(a)           The arbitration shall be
conducted by a panel of three persons experienced in the pharmaceutical
business: within thirty (30) days after initiation of arbitration, each Party
shall select one person to act as arbitrator and the two Party-selected arbitrators
shall select a third arbitrator within thirty (30) days of their
appointment.  If the arbitrators selected
by the Parties are unable or fail to agree upon the third arbitrator, the third
arbitrator shall be appointed by ICC. 
The place of arbitration shall be New York, New York, and all
proceedings and communications shall be in English.


 


(b)           Either Party may apply to
the arbitrators for interim injunctive relief until the arbitration award is
rendered or the controversy is otherwise resolved.  Either Party also may, without waiving any
remedy under this Agreement, seek from any court having jurisdiction any
injunctive or provisional relief necessary to protect the rights or property of
that Party pending the arbitration award. 
The arbitrators shall have no authority to award punitive or any other
type of damages not measured by a Party’s compensatory damage.  Each Party shall bear its own 


 


52

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


costs and expenses and attorneys’ fees and an equal
share of the arbitrators’ fees and any administrative fees of arbitration.


 


(c)           Except to the extent
necessary to confirm an award or as may be required by law, neither a Party nor
an arbitrator may disclose the existence, content, or results of an arbitration
without the prior written consent of both Parties.  In no event shall an arbitration be initiated
after the date when commencement of a legal or equitable proceeding based on
the dispute, controversy or claim would be barred by the applicable New York
statute of limitations.


 


14.4    Excluded Claim. As used in this
Article 14, the term “Excluded Claim”
shall mean a dispute, controversy or claim that concerns (a) the scope,
validity, enforceability, inventorship or infringement of a patent, patent
application, trademark or copyright; or (b) any antitrust, anti-monopoly
or competition law or regulation, whether or not statutory.


 


ARTICLE 15


 


MISCELLANEOUS


 


15.1    Entire Agreement; Amendment.  This Agreement, including the Exhibits
hereto, sets forth the complete, final and exclusive agreement and all the
covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto with respect to the subject matter
hereof and supersedes, as of the Effective Date, all prior agreements and
understandings between the Parties with respect to the subject matter hereof.   There are no covenants,
promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the Parties other than as are
set forth herein and therein.  No
subsequent alteration, amendment, change or addition to this Agreement shall be
binding upon the Parties unless reduced to writing and signed by an authorized
officer of each Party.


 


15.2    Force Majeure.  Each Party shall be excused from the
performance of its obligations under this Agreement to the extent that such
performance is prevented by force majeure and the nonperforming Party promptly
provides notice of the prevention to the other Party.  Such excuse shall be continued so long as the
condition constituting force majeure continues and the nonperforming Party
takes reasonable efforts to remove the condition.  For purposes of this Agreement, force majeure  shall include conditions beyond the reasonable control of
the nonperforming Party, including without limitation, an act of God or
terrorism, voluntary or involuntary compliance with any regulation, law or
order of any government, war, civil commotion, labor strike or lock-out,
epidemic, failure or default of public utilities or common carriers, destruction
of production facilities or materials by fire, earthquake, storm or like
catastrophe.  Notwithstanding the
foregoing, a Party shall not be excused from making payments owed hereunder
because of a force majeure affecting such Party.  If a force majeure persists for more than
ninety (90) days, then the Parties will discuss in good faith the modification
of the Parties’ obligations under this Agreement in order to mitigate the
delays caused by such force majeure.


 


15.3    Notices.  Any notice required or permitted to be given
under this Agreement shall be in writing, shall specifically refer to this
Agreement, and shall be addressed to the appropriate 


 


53

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Party at the address specified below or such other
address as may be specified by such Party in writing in accordance with this Section 15.3,
and shall be deemed to have been given for all purposes (a) when received,
if hand-delivered or sent by confirmed facsimile or a reputable courier service, or (b) five (5) business days
after mailing, if mailed by first class certified or registered airmail, postage prepaid, return receipt requested.


 


	
  If
  to Tranzyme:

  	
   

  	
  Tranzyme, Inc.

  
	
   

  	
   

  	
  4819
  Emperor Blvd. Suite 400

  
	
   

  	
   

  	
  Durham,
  NC 27703

  
	
   

  	
   

  	
  Attn:
  [***]

  
	
   

  	
   

  	
  Fax:
  [***]

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Cooley
  LLP

  
	
   

  	
   

  	
  One
  Freedom Square, Reston Town Center

  
	
   

  	
   

  	
  11951
  Freedom Drive

  
	
   

  	
   

  	
  Reston,
  VA 20190-5656

  
	
   

  	
   

  	
  Attention:
  [***]

  
	
   

  	
   

  	
  Facsimile:
  [***]

  
	
   

  	
   

  	
   

  
	
  If
  to Norgine:

  	
   

  	
  Norgine
  B.V.

  
	
   

  	
   

  	
  Hogehilweg
  7

  
	
   

  	
   

  	
  1101
  CA Amsterdam ZO

  
	
   

  	
   

  	
  The
  Netherlands

  
	
   

  	
   

  	
  Attention:
  [***]

  
	
   

  	
   

  	
  Facsimile
  No: [***]

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  Norgine
  Limited

  
	
   

  	
   

  	
  Norgine
  House

  
	
   

  	
   

  	
  Widewater
  Place

  
	
   

  	
   

  	
  Moorhall
  Road

  
	
   

  	
   

  	
  Harefield

  
	
   

  	
   

  	
  Middlesex,
  UB9 6NS, UK

  
	
   

  	
   

  	
  Attention:
  [***]

  
	
   

  	
   

  	
  Facsimile
  No: [***]

  



 


15.4    No Strict Construction; Headings.  This Agreement has been prepared jointly and
shall not be strictly construed against either Party.  Ambiguities, if any, in this Agreement shall
not be construed against any Party, irrespective of which Party may be deemed
to have authored the ambiguous provision. 
The headings of each Article and Section in this Agreement
have been inserted for convenience of reference only and are not intended to
limit or expand on the meaning of the language contained in the particular Article or
Section.


 


15.5    Assignment.


 


(a)           Neither Party may assign or
transfer this Agreement without the prior written consent of the other, except
that a Party may make such an assignment without the other 


 


54

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Party’s consent to Affiliates or to a successor to
all or substantially all of the assets of such Party to which this Agreement
relates (whether by merger, sale of stock, sale of assets or other transaction)
(the “Acquisition”).  Any permitted successor or assignee of rights
and/or obligations hereunder shall, in writing to the other Party, expressly
assume performance of such rights and/or obligations.  Any permitted assignment shall be binding on
the successors of the assigning Party.


 


(b)           For clarity, the
intellectual property rights of a Third Party who becomes an assignee or an
Affiliate of a Party as a result of a transaction in which such Third Party
purchases all or substantially all of such Party’s assets or stock to which
this Agreement relates, as existing on the date of closing of such transaction,
shall be automatically excluded from the rights licensed to the other Party
under this Agreement, except to the extent such intellectual property rights
are necessary for the non-assigning Party to practice the license granted to it
hereunder in the same manner as it is practiced (or is contemplated to be
practiced as evidenced by written proof of the non-assigning Party) as of the
date of such assignment.  The foregoing
shall not be construed as limiting or in any other way modifying any existing
agreement between the non-assigning Party and such Third Party that are entered
into prior to such assignment.


 


(c)           Any assignment or attempted
assignment by either Party in violation of the terms of this Section 15.5
shall be null, void and of no legal effect.


 


(d)           Tranzyme shall not, and
Tranzyme shall ensure that Tranzyme Pharma Inc. shall not, convey, transfer or
assign any Tranzyme Technology or its interest in Joint Patents or Joint
Inventions in any manner that would materially adversely affect the scope of
the license granted to Norgine under this Agreement.  Norgine shall not convey, transfer or assign
any Norgine Technology or its interest in Joint Patents or Joint Inventions in
any manner that would materially adversely affect the scope of the license
granted to Tranzyme under this Agreement.


 


15.6    Performance by Affiliates.  Each Party may discharge any obligations and
exercise any right hereunder through any of its Affiliates.  Each Party hereby guarantees the performance
by its Affiliates of such Party’s obligations under this Agreement, and shall
cause its Affiliates to comply with the provisions of this Agreement in
connection with such performance.  Any
breach by a Party’s Affiliate of any of such Party’s obligations under this
Agreement shall be deemed a breach by such Party, and the other Party may
proceed directly against such Party without any obligation to first proceed
against such Party’s Affiliate.


 


15.7    Further Actions.  Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts (and agrees to
procure that its Affiliates do the same) as may be necessary or appropriate in
order to carry out the purposes and intent of this Agreement including so as to
allow Norgine to register the licenses granted to it under the Tranzyme Patents
and Joint Patents in this Agreement with Patent Offices in the Licensed
Territory (and to allow the Parties to un-register such licenses upon any
termination of such licenses).


 


15.8    Severability.  If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable by any court of competent
jurisdiction from which no appeal can be or is taken, the provision shall be
considered severed from this Agreement and shall not serve to 


 


55

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


invalidate any remaining provisions hereof.  The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one
such that the objectives contemplated by the Parties when entering this
Agreement may be realized.


 


15.9    No Waiver.  Any delay in enforcing a Party’s rights under
this Agreement or any waiver as to a particular default or other matter shall
not constitute a waiver of such Party’s rights to the future enforcement of its
rights under this Agreement, except with respect to an express written and
signed waiver relating to a particular matter for a particular period of time.


 


15.10  Independent Contractors.  Each Party shall act solely as an independent
contractor, and nothing in this Agreement shall be construed to give either
Party the power or authority to act for, bind, or commit the other Party in any
way.  Nothing herein shall be construed
to create the relationship of partners, principal and agent, or joint-venture
partners between the Parties.


 


15.11  English Language; Governing Law. This
Agreement was prepared in the English language, which language shall govern the
interpretation of, and any dispute regarding, the terms of this Agreement.  This Agreement shall be governed by and
construed under the laws of the State of New York, without giving effect to any
choice of law principles that would require the application of the laws of a
different state.  Any Excluded Claims
arising out of or relating to this Agreement shall be subject to the exclusive
jurisdiction of the courts of New York, New York.


 


15.12  Counterparts.  This Agreement may be executed in one (1) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


[Remainder of this Page Intentionally Left Blank.]


 


56

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


EXECUTION COPY


 


IN WITNESS WHEREOF, the Parties have executed
this Agreement in duplicate originals by their duly authorized officers as of
the Effective Date.


 


	
  TRANZYME,
  INC.

  	
  NORGINE
  B.V.

  
	
   

  	
   

  
	
  By:
  

  	
  /s/
  Vipin K. Garg

  	
   

  	
  By:
  

  	
  /s/
  Frank Nooteboom

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:
  

  	
  Vipin
  K. Garg

  	
   

  	
  Name:
  

  	
  Frank
  Nooteboom

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:
  

  	
  President
  & CEO

  	
   

  	
  Title:
  

  	
  Director

  



 

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Exhibit A


 


Tranzyme Patents Existing as of the Effective Date


 


Part A:
Tranzyme Other-Product Patents


 


[***]    [four
pages omitted]


 














 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Part B:
Tranzyme Product-Specific Patents


 


[***]    [two
pages omitted]


 

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Exhibit B


 


TZP-101


 


[***]


 

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Exhibit C


 


Initial Development Plan


 


TZP-101
Intravenous Injection Postoperative Ileus Development Programme


 


[***]    [2
pages omitted]


 

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


	
  Clinical Program / Regulatory Activity

  	
   

  	
  Status / Start

  Date

  	
   

  	
  Data Available /

  End Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single dose safety, tolerability and PK/PD assessments in
  healthy volunteers

  	
   

  	
  Complete

  	
   

  	
  Q2 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single dose safety, tolerability and PK/PD assessments and
  effect on gastric emptying in patients with diabetic gastroparesis

  	
   

  	
  Complete

  	
   

  	
  Q1 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Multi-dose safety, tolerability, PK/PD assessments in
  healthy volunteers

  	
   

  	
  Complete

  	
   

  	
  Q4 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  End of Phase 1 meeting with the FDA

  	
   

  	
  Complete

  	
   

  	
  Q1 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thorough ECG Evaluation (QT) Study

  	
   

  	
  Complete

  	
   

  	
  Q2 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phase 2 dose-ranging study in POI patients

  	
   

  	
  Complete

  	
   

  	
  Q3 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phase 2 dose-ranging study in diabetic gastroparetic
  patients

  	
   

  	
  Complete

  	
   

  	
  Q2 2009

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EOP2 POI meeting with the FDA

  	
   

  	
  Complete

  	
   

  	
  Q4 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EOP2 gastroparesis meeting with the FDA

  	
   

  	
  Complete

  	
   

  	
  Q1
  2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Remaining Activities

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMEA Scientific Advice

  	
   

  	
  -

  	
   

  	
  Q3
  2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  



 


[***]    [table omitted]


 

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT;
[***] DENOTES OMISSIONS.


 


Exhibit D


 


Equity Documents


 






 










 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


	
  

  	
  

  



 


Exhibit E


 


Press Release


 


For Immediate Release — Month Day, 2010


 


Tranzyme Pharma and Norgine Sign License Agreement for
Late-Stage

Development Product, Ulimorelin (TZP-101), in Europe and Other Select

Regions


 


Companies to Jointly Initiate
Pivotal Phase 3 Studies in 2010


 


RESEARCH
TRIANGLE PARK, NC and AMSTERDAM, NETHERLANDS (Month Day, 2010) — Tranzyme
Pharma, a clinical-stage biopharmaceutical company, and Norgine B.V., a
European specialty pharmaceutical company, announced today that they have
entered into a licensing agreement that provides Norgine with the exclusive
rights to develop and commercialize Tranzyme’s novel ghrelin agonist,
ulimorelin (TZP-101), in Europe, Australia, New Zealand, the Middle East, South
Africa and North Africa. Ulimorelin is entering Phase 3 development for the
treatment of gastrointestinal dysmotility conditions in acute care settings.


 


Under
the agreement, Norgine will make an upfront payment of $8 million and will also
make an equity investment in Tranzyme. Further, Tranzyme is eligible to receive
up to approximately $150 million if certain development, regulatory and
commercial milestones are achieved. Tranzyme will also receive escalating
double-digit royalties on net sales in the licensed territories. The companies
will jointly fund further development of ulimorelin and anticipate initiating
pivotal Phase 3 studies in the second half of 2010.


 


“Norgine’s
focus on pharmaceutical products that address unmet medical needs, and their
development and commercial experience and expertise in European markets, make
them an ideal strategic and co-development partner for Tranzyme,” said Vipin K.
Garg, PhD, President and CEO of Tranzyme. “This partnership allows us to
monetize part of the value of ulimorelin, while still retaining the significant
upside of North American and Asian markets”.


 


Peter
Stein, Chairman and CEO of Norgine said, “There is a critical need for a new,
safe and effective prokinetic drug for use in acute care settings, as there are
no satisfactory treatments on the market. 
We have been very impressed with the work that Tranzyme have done to
take ulimorelin through Phase 2 development and we are excited to be working
with them on this innovative therapy, which could bring relief to millions of
patients.”


 


About Ulimorelin


 


Ulimorelin is an intravenous
ghrelin agonist with potent prokinetic properties currently in clinical
development for the treatment of gastrointestinal dysmotility disorders in
acute care settings. Ulimorelin has been comprehensively studied in the
management of severe gastroparesis and postoperative ileus (POI), and has the
potential to treat other serious conditions 


 

















 


PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.


 


requiring administration of
intravenous prokinetic agents. The safety and pharmacokinetic profiles of
ulimorelin have been extensively characterized in healthy subjects and patients
across multiple dose levels, and the GI prokinetic properties of the compound
are well-established. Ulimorelin was discovered using Tranzyme’s proprietary
drug discovery technology.


 


About Norgine


 


Norgine is an independent,
successful European specialty pharmaceutical company that has been established
for over 100 years and has a presence in all major European markets. In 2009,
Norgine’s net product sales were €253 million, the 23rd year of double-digit
growth at constant exchange rates. The company employs over 1,200 people.


 


Norgine’s focus is the
development and marketing of pharmaceutical products that address significant
unmet clinical needs in areas such as gastroenterology, hepatology and pain
management. The company currently markets a range of products in various
markets in its key therapeutic areas e.g., MOVICOL® for the treatment of
constipation and fecal impaction, MOVIPREP® a new generation of bowel cleansing
preparation, KLEAN-PREP® for bowel preparation prior to colonoscopy, XIFAXAN®
for the treatment of travelers’ diarrhea and ORAMORPH® for the treatment of
moderate to severe pain associated with cancer.


 


Norgine is active in
research and development and currently has products in various stages of
clinical development. Norgine manufactures most of its own products in Hengoed,
Wales and Dreux in France. www.norgine.com


 


About Tranzyme Pharma


 


Tranzyme
Pharma is a clinical-stage drug development company that discovers and develops
novel small molecule macrocyclic drugs for both acute care (hospital-based) and
chronic indications with significant unmet medical needs. The Company’s
pipeline is derived from its proprietary drug discovery (chemistry) technology,
MATCHTM, and targets products for gastrointestinal motility, metabolic diseases
and cancer supportive care.


 


Tranzyme
recently entered into a broad drug discovery partnership with Bristol-Myers
Squibb to discover, develop and commercialize novel drug candidates in multiple
therapeutic areas. www.tranzyme.com.


 


	
  Tranzyme Contacts

  	
   

  	
   

  	
   

  	
   

  
	
  Vipin
  K. Garg, PhD

  	
   

  	
  Jennifer
  A. Filbey, PhD

  	
   

  	
  Susan
  S. Josselyn

  
	
  President
  and CEO

  	
   

  	
  VP,
  Business Development

  	
   

  	
  Corporate
  Communications Manager

  
	
  (919)
  313-4764

  	
   

  	
  (256)
  417-8568

  	
   

  	
  (919)
  313-4761

  
	
  vgarg@tranzyme.com

  	
   

  	
  jfilbey@tranzyme.com

  	
   

  	
  sjosselyn@tranzyme.com

  



 


Norgine Contact


Julie Hornby Winfield


Global Corporate
Communications Manager


+44 (0) 1895 826600


jhornbywinfield@norgine.com