Document:

akba-ex101_250.htm

Exhibit 10.1

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Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed.  Double asterisks denote omissions.

 

SECOND AMENDED AND RESTATED
LICENSE AGREEMENT

THIS SECOND AMENDED AND RESTATED LICENSE AGREEMENT (this “Agreement”), effective as of this 17th day of April, 2019 (the “Second Amendment Effective Date”), by and between Panion & BF Biotech, Inc., with offices at 16F No. 3, Yuanqu Street, Nangang District, Taipei, Taiwan, ROC (hereinafter “Licensor”), and Akebia Therapeutics, Inc., with offices at 245 First Street, Cambridge, MA as successor-in-interest to Keryx Biopharmaceuticals, Inc. (hereinafter “Licensee”).

WHEREAS, Dr. Chen Hsing Hsu (the “Inventor”), an employee of the University of Michigan (the “Institution”), is the named inventor on U.S. Patent No. 5,753,706, issued May 19th, 1998 (“the ’706 Patent”), which is part of Licensed Patent Property (defined below), 

WHEREAS, the Institution has transferred to the Inventor all of the Institution’s right, title, and interest in and to the Licensed Patent Property (subject to certain non­commercial applications, specified below), by an Agreement for the Reassignment of Intellectual Property, with a last-signed date of August 16, 2000,

WHEREAS, the Inventor has granted the Licensor the exclusive license, throughout the world (except the People’s Republic of China) to make, use, and sell products embodying the inventions described in the ’706 Patent and Taiwan Patent No. 108,931, entitled “Compound For Treating Renal Failure,” issued on November 11, 1999,

WHEREAS, Licensor has developed certain Licensor Know-How (as hereinafter defined),

WHEREAS, by operation of this exclusive license, Licensor is the sole and exclusive licensee of the entire right, title and interest in the ’706 Patent within the Licensee Territory (defined below) and Licensor Know-How claimed in the ’706 Patent,

WHEREAS, effective November 7, 2005 (the “Effective Date”), Licensor and Keryx Biopharmaceuticals, Inc. (Licensee’s predecessor-in-interest) entered into an Original License Agreement (“Original License Agreement”), as amended and restated by the Amended and Restated Licensed Agreement with an effective date of March 17, 2008 (the “A&R License Agreement”), under which Keryx Biopharmaceuticals, Inc. obtained an exclusive license under such Licensor Patent Property and Licensor Know-How to develop, have developed, make, have made, use, have used, offer to sell, sell, have sold, import and export the Compound and Product in the Licensee Territory (as hereinafter defined),

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WHEREAS, Licensor is the assignee and/or owner of the entire right, title and interest in the remaining assets that fall within the scope of the Licensor Patent Rights and Licensor Know-How.                                                  

WHEREAS, on or about September 26, 2007 Keryx Biopharmaceuticals, Inc. entered into a sublicense agreement with Japan Tobacco Inc. and Torii Pharmaceutical Co., Ltd (“Japan Sublicense”),

WHEREAS, on December 18, 2018 Keryx Biopharmaceuticals, Inc. merged with Akebia Therapeutics, Inc. (“Akebia”) with Akebia continuing as the surviving corporation, and pursuant to such merger, Akebia assumed all of Keryx’s rights and obligations under the A&R License Agreement,

WHEREAS, Licensor continues to have the authority and is willing to grant such license to Licensee, and Licensee is willing to accept such license from Licensor, under the terms and conditions set forth in this Second Amended and Restated License Agreement, and

WHEREAS, the parties now wish to amend and restate the A&R License Agreement in its entirety on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree to amend and restate the A&R Agreement to read in its entirety as follows:

Article 1.  DEFINITIONS

As used in this Agreement, the following terms, whether used in the singular or the plural, shall have the following meanings:

1.1“Affiliate” means any corporation or non-corporate business entity, that controls, is controlled by, or is under common control with a party to this Agreement.  A corporation or non-corporate business entity shall be regarded as in control of another corporation if it owns or directly or indirectly controls at least fifty-one percent (51%) of the voting stock of the other corporation, or (i) in the absence of the ownership of at least fifty-one percent (51%) of the voting stock of a corporation, or (ii) in the case of a non­corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or non-corporate business entity, as applicable.

1.2“Combination Product” means a Product containing one or more therapeutically active ingredients in addition to the Compound.

1.3“Commercially Reasonable Efforts” means, with respect to the Development, manufacture and Commercialization of a Product by Licensee, those efforts and resources, including reasonably necessary personnel, equivalent to [**].

1.4“Compound” means ferric citrate or any other iron-based compound that falls within the scope of the Licensed Patent Property.

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1.5“Controlled” means, with respect to a party or its Affiliate, any know-how, patent right or other intellectual property right that such party or affiliate, as the case may be, owns or has a license to and has the ability to grant to the other party a license or sublicense to, or a right of access with respect to, such know-how, patent right or other intellectual property right, without violating the terms of any agreement or other arrangements with any Third Party or incurring any additional payment obligations to a Third Party. Notwithstanding the foregoing, no know-how, patent right or other intellectual property right will be “Controlled” by either party hereunder if such know-how, patent right or other intellectual property right is owned or in-licensed by a Third Party that becomes an Affiliate of such Party after the Second Amendment Effective Date as a result of such party being acquired by such Third Party, whether by merger, stock purchase, or purchase of assets and prior to the date of such transaction and neither such party nor any of its Affiliates had any rights to any such know-how, patent right or other intellectual property right. However, any such know-how, patent right or other intellectual property right that is owned or in-licensed by such an acquiring Third Party and that is used by such acquiring Third Party (or acquired party) following the date of such transaction in connection with the development, manufacture, or commercialization of the Compound or any Product will be “Controlled” by such Third Party (as an Affiliate) or acquired Party for purposes of this Agreement.

1.6“EU” means the European Union.

1.7“FDA” means the United States Food and Drug Administration.

1.8“First Commercial Sale” means with respect to a Product, the first sale for end use or consumption of such Product in a country after all Registrations in such country have been obtained.

1.9“IND” means an Investigational New Drug Application in the United States.

1.10 “Indication” means any therapeutic application for a Product that is covered by the Licensor Patent Rights.

1.11“Improvements” means any and all improvements, materials, technical data and information whether patented or unpatented, including any changes to the Compound, to the Product or to the Licensor Know-How or Licensee Know-How including any analogues, or derivatives of the Compound, and changes in the manufacturing process for the Compound or the Product, in each case, that are conceived or reduced to practice during the term of this Agreement. 

1.12“Licensed Patent Property” means U.S. Patent No. 5,753,706, issued May 19, 1998 and entitled “Methods for Treating Renal Failure” together with all patents and patent applications listed under the heading “Licensed Patent Property” on Exhibit 1 (which Licensor shall update from time to time), including any and all divisionals, continuations, continuations-in-part, extensions, substitutions, renewals, registrations, supplementary protection certificates, revalidations, reissues or additions of or to any of the aforesaid patents and patent applications, and any and all patents that may issue from any of the foregoing.

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1.13“Licensee Development Data” means and includes all data relating to the Compound or the Product and all chemistry, manufacturing and control data relating to the development and manufacture of the Compound or the Product, results of pre-clinical and clinical studies and all other documentation containing or embodying any pre­ clinical, clinical, chemistry, manufacturing and control data relating to any application for Registrations for a Product, in each case, that is generated by Licensee, its agents or any Sublicensees during the term of this Agreement.

1.14“Licensee Know-How” means all information and materials, including discoveries, processes, instructions, formulas, data, inventions, know­how and trade secrets, patentable or otherwise, in each case, Controlled by Licensee that arise out of the development, manufacture or commercialization by Licensee of the Compound or the Product, including all biological, chemical, pharmacological, toxicological, pharmaceutical, physical, analytical, clinical, safety, manufacturing and quality control data and information related thereto, and all applications, registrations, licenses authorizations, documents, approvals and correspondence relating to the Compound or the Product, including correspondence submitted to Regulatory Authorities and all information and data contained in Registrations. Licensee Know-How shall also include Licensee’s interest in Improvements.

1.15“Licensee Patent Rights” means (a) any and all patents and patent applications that are directed to or otherwise pertain to the Compound or the Product or its manufacture or use and in which Licensee holds rights (at any time during the term of this Agreement), including those patents and patent applications that cover or claim Licensee’s interest in Improvements. 

1.16“Licensee Territory” means the entire world, other than the Licensor Territory. 

1.17“Licensor Development Data” means and includes all data to which Licensor has rights relating to the Compound or the Product and all chemistry, manufacturing and control data relating to the development and manufacture of the Compound or the Product, results of pre-clinical and clinical studies and all other documentation containing or embodying any pre-clinical, clinical, chemistry, manufacturing and control data relating to any application for Registrations for the Product, whether such Licensor Development Data is in existence as of the Effective Date or generated by Licensor during the term of this Agreement.

1.18“Licensor Know-How” means all information and materials to which Licensor has rights, including discoveries, processes, formulas, instructions, data, inventions, know-how and trade secrets, patentable or otherwise, in each case, Controlled by Licensor as of the Effective Date or during the term of this Agreement and that are necessary or useful to Licensee in connection with the development, registration, manufacture, marketing, use or sale of any Product.  Licensor Know-How shall also include all biological, chemical, pharmacological, toxicological, pharmaceutical, physical, analytical, clinical, safety, manufacturing and quality control data and information related thereto and all applications, registrations, licenses, authorizations, documents, approvals and correspondence relating to a Compound or a Product.  Licensor Know-How shall also include Licensor’s interest in Improvements.

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1.19“Licensor Patent Rights” means (a) the Licensed Patent Property, (b) all patents and patent applications listed under the heading “Other Licensor Patent Rights” on Exhibit 1 (which Licensor shall update from time to time), (c) any and all divisionals, continuations, continuations-in-part, extensions, substitutions, renewals, registrations, supplementary protection certificates, revalidations, reissues or additions of or to any of the aforesaid patents and patent applications listed in clause (b), and any and all patents that may issue from any of the foregoing listed in clause (b), and (d) all other patents and patent applications that are directed to or otherwise pertain to the Compound or Product or its manufacture or use and in which Licensor holds rights (at any time during the term of this Agreement), including those patents and patent applications that cover or claim Licensor’s interest in Improvements.

1.20“Licensor Territory” means [**] in the Asian Pacific Region, [**].

1.21“NDA” means a New Drug Application in the United States.

1.22“Net Sales” with respect to any Product other than a Combination Product means the gross sales (i.e., gross invoice prices) of such Product billed by Licensee or Licensor, as applicable, or their respective Sublicensees to Third Party customers on all sales of a Product and exclusive of inter­company transfer or sales, less the reasonable and customary deductions from such gross sales, including:

(i)actual credited allowances to such Third Party customers for spoiled, damaged, outdated, recalled or returned Product and for retroactive price reductions or billing corrections,

(ii)the amounts of trade, cash discounts and rebates, to the extent such discounts and rebates were not deducted by Licensee or Licensor, as applicable, or their respective Sublicensees at the time of invoice in order to arrive at the gross invoice prices,

(iii)all transportation, handling charges and freight insurance, sales taxes, excise taxes, use taxes, import/export duties paid or distribution fees paid to third parties, 

(iv)invoiced amounts from a prior period that have not been collected and have been written off by Licensor or Licensee or its Sublicensee (as applicable), including bad debts, to the extent such amounts have not been previously deducted and do not exceed, in the aggregate, [**]% of Net Sale in the applicable period; provided that any such amounts that are written off will be added back in a subsequent period to the extent later collected, and

(v)all other reasonable and customary allowances and adjustments whether during the specific royalty period or not.

Subject to the above, Net Sales will be determined in accordance with U.S. generally accepted accounting principles (U.S. GAAP) or international financial reporting standards (IFRS), as applicable, consistently applied.

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If Licensor, Licensee or a Sublicensee receives non-cash consideration for a Product sold to a Third Party, then the Net Sales amount for such Product will be calculated based on the average arms-length cash selling price for such Product over the immediately prior four calendar quarters in the relevant countries. 

The sale of a Product between Licensee or Licensor, as applicable, and any of their respective Sublicensees solely for the research or clinical testing of such Product shall be excluded from the computation of Net Sales of such Product, provided that Licensee’s or Licensor’s (as applicable) sale of the Product was at cost and such Product was used for research or clinical testing.

“Net Sales” with respect to any Combination Product means the gross sales of such Product billed by Licensee or Licensor, as applicable, or their respective Sublicensees to Third Party customers on all sales of a Combination Product, exclusive of inter-company transfer or sales, less all the allowances, adjustment, reductions, discounts, taxes, duties and other charges referred to in Section 1.22 multiplied by a fraction to be determined by Licensor and Licensee at such time when the Combination Product becomes available.

The sale of a Combination Product between Licensee or Licensor, as applicable, and any of their respective Sublicensees solely for the research or clinical testing of such Product shall be excluded from the computation of Net Sales for such Combination Product, provided that Licensee’s or Licensor’s (as applicable) sale of the Combination Product was at cost and such Combination Product was used for research or clinical testing.

1.23“Payment Default” means (i) Licensee’s failure to pay Licensor the license fee and milestone payments in accordance with Article 4 and (ii) Licensee’s or Licensor’s (as applicable) failure to pay the royalties in accordance with Section 6.1 or Section 6.2, in each case ((i) and (ii)), for more than ninety (90) days past the date on which these amounts are due.

1.24“Product” means the Compound or any pharmaceutical product containing the Compound as an active ingredient, either alone or in combination with other active ingredients.

1.25“Proprietary Information” means all information, including all Licensee Know-How, Licensor Know-How and all other scientific, clinical, regulatory, marketing, financial and commercial information or data, whether communicated in writing, orally or electronically, in each case, that is provided by one party to the other party in connection with this Agreement.

1.26“Registration” in relation to any Product means such approvals by a Regulatory Authority in a country or community or association of countries as may be legally required before such Product may be commercialized in such country or community or association of countries.

1.27“Regulatory Authority” means the applicable government regulatory authority in each country in the Territory involved in granting regulatory approval for the Product.  Such term includes the FDA and any successor agency thereto and the European Medicines Agency and any successor agency thereto.

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1.28“Sublicensee” means a Third Party to which Licensee or Licensor (as applicable) has granted sublicense rights under the license granted to Licensee or Licensor (as applicable) hereunder, which rights include at least the right to sell the Product.  Third Parties that are permitted to manufacture the Compound or the Product for supply only to Licensee or Licensor (as applicable) or only to Sublicensees are not “Sublicensees” and such transaction shall be deemed a transfer and not a sale of the Product.

1.29“Territory” means the Licensee Territory or the Licensor Territory, collectively or individually (as applicable).

1.30“Third Party” means any party other than Licensor or Licensee or their respective Affiliates or Sublicensees of Licensee or its Sublicensees.

1.31“Valid Claim” means a claim of an issued and unexpired patent included within the Licensor Patent Rights or Licensee Patent Rights (as applicable) that has not been held unenforceable or invalid in the applicable jurisdiction by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and that has not been admitted to be invalid or unenforceable through dedication, disclaimer or otherwise.

Article 2.  REPRESENTATIONS AND WARRANTIES

2.1Each party represents and warrants to the other party as of the Second Amendment Effective Date that it has the full right and authority to enter into this Agreement, and that, to the best of its knowledge, there are no prior agreements, commitments or other obstacles that could prevent it from carrying out all of its obligations hereunder.

2.2Licensor represents to Licensee that, as of the Second Amendment Effective Date: 

(a)it is the exclusive licensee, owner or assignee of the entire right, title and interest in and to the Licensor Patent Rights in the Licensee Territory, and to the best of its knowledge, there are no charges, encumbrances, licenses, options, restrictions, liens, rights of others, disputes, proceedings or claims relating to, affecting, or limiting its rights or the rights granted to Licensee under this Agreement, with the exception of non-commercial uses of the ’706 Patent reserved to the Institution;

(b)except as disclosed in writing to or known by Licensee prior to the Second Amendment Effective Date, there is no claim, pending or threatened, of infringement, interference or invalidity regarding any part or all of the Licensor Patent Rights and their use as contemplated in this Agreement, and it has no present knowledge from which Licensor can infer that the Licensor Patent Rights are invalid or that their exercise would infringe the patent rights of any Third Party;

(c)it has the right to enter into this Agreement and to grant the licenses granted herein and there is nothing in any Third Party agreement Licensor has entered into as of the Effective Date that in any way will limit the ability of Licensor to perform any and all of the obligations undertaken by Licensor hereunder;

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(d)it will not enter into any agreement after the Second Amendment Effective Date that will limit its ability to perform any and all of the obligations undertaken by Licensor hereunder;

(e)it has delivered to Licensee all Licensor Development Data and Licensor Know-How; and

(f)to the best of its knowledge neither this Agreement, nor any document or piece of Licensor Development Data, Licensor Know-How or Licensor Patent Rights contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein misleading.

2.3Licensee represents to Licensor that, as of the Second Amendment Effective Date:

(a)it is the exclusive licensee, owner or assignee of the entire right, title and interest in and to the Licensee Patent Rights in the Licensor Territory, and to the best of its knowledge, there are no charges, encumbrances, licenses, options, restrictions, liens, rights of others, disputes, proceedings or claims relating to, affecting, or limiting its rights or the rights granted to Licensor under this Agreement;

(b)it has no present knowledge from which Licensee can infer that the Licensee Patent Rights are invalid or that their exercise would infringe the patent rights of any Third Party; 

(c)it has the right to enter into this Agreement and to the best of its knowledge, there is nothing in any Third Party agreement Licensee has entered into as of the Effective Date that in any way will limit the ability of Licensee to perform any and all of the obligations undertaken by Licensee hereunder, and

(d)it will not enter into any agreement after the Second Amendment Effective Date that will limit its ability to perform any and all of the obligations undertaken by Licensee hereunder; and 

(e)to the best of its knowledge neither this Agreement, nor any document or piece of Licensee Know-How or Licensee Patent Rights contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein misleading. 

Article 3.  LICENSE GRANTS

3.1Grant to Licensee.  Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee an exclusive license, in the Licensee Territory, with the right to sublicense, to develop, have developed, make, have made, use, have used, offer to sell, sell, have sold and import and export the Product in the Licensee Territory under the Licensor Know-How and the Licensor Patent Rights for all Indications.

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3.2Sublicensing by Licensee.  Sublicensees of Licensee shall be entitled to sublicense to Third Parties the right to manufacture the Product, provided such Third Party manufacturers are permitted to sell only to Licensee or its immediate Sublicensees.  Sublicensees of Licensee may not grant sublicenses of the rights granted by Licensor under this Agreement without the written consent of Licensor, which consent shall not be unreasonably withheld or delayed.  Should Licensee or any Sublicensee of Licensee grant any sublicenses, the terms and conditions of such sublicenses and the identity of Sublicensees shall be at the sole discretion of Licensee and no consent shall be required from Licensor in connection with the terms and conditions of such sublicenses or the identity of Sublicensees.

3.3Grant to Licensor.  Subject to the terms and conditions of this Agreement, Licensee hereby grants to Licensor an exclusive license, in the Licensor Territory, with the right to sublicense (solely in accordance with Section 3.4), to develop, have developed, make, have made, use, have used, offer to sell, sell, have sold and import and export the Product in the Licensor Territory under the Licensee Patent Rights for all Indications.

3.4Sublicensing by Licensor. Licensor may not grant sublicenses of the rights granted by Licensee under this Agreement without the written consent of Licensee, which consent shall not be unreasonably withheld or delayed.  Licensee shall use good faith efforts to respond to approve or disapprove a request for consent from Licensor within [**] of receipt of the request. 

3.5Consent of Inventor.  The Inventor has provided his written consent to the terms and conditions of the licenses granted to Licensee under this Agreement and the terms and conditions of the Original License Agreement.  The Written Consent of the Inventor is set forth in Exhibit 2 hereto. 

Article 4. GOVERNANCE

4.1Formation and Purpose of the JSC. The EU Joint Steering Committee (“JSC”) will coordinate and oversee or monitor the parties’ development and commercialization activities hereunder for the Products in accordance with this Article 4. The parties will establish the JSC no later than [**] after the Second Amendment Effective Date. The JSC will establish a charter that will include details regarding the operation of the JSC consistent with this Article 4 and the JSC will have the responsibilities set forth under this Agreement. The JSC will dissolve upon the First Commercial Sale of the first Product in the EU.  

4.2Membership. Each party will designate up to two (2) representatives with appropriate knowledge and expertise to serve as members of the JSC. Each party may replace its JSC representatives at any time upon written notice to the other party.  The parties’ representatives will prepare and circulate an agreed agenda in advance of each meeting, and prepare and issue minutes of each meeting no later than [**] after each meeting.  Such minutes will not be finalized until all JSC members have had an adequate opportunity to review and confirm the accuracy of such minutes. 

4.3Meetings.  The JSC will hold meetings at such times as it elects to do so, but in no event will such meetings be held less frequently than [**], unless otherwise agreed by the parties.  The JSC will meet at such locations as the parties may agree.  Meetings of the JSC may be held 

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by audio or video teleconference with the consent of each party.  Each party will be responsible for all of its own expenses of participating in any JSC meeting.

4.4Specific Responsibilities of the JSC.  Other than as set forth in Section 8.1 with respect to approval of the Commercialization Plan, the JSC’s responsibilities will be limited to oversight and information sharing with respect to development and commercialization of the Products in the EU. 

4.5Additional Participants. At the request of either party, other employees or consultants of such party or any of its Affiliates involved in the development, manufacturing or commercialization of the Products may attend meetings of the JSC as non-voting participants; provided, however, that such Third Party participants must be under written obligations of confidentiality and non-use applicable to the Proprietary Information of each party that are at least as stringent as those set forth in Article 12.

Article 5.  SUBLICENSE PAYMENTS

5.1Sublicense Payments.  In the event that Licensee enters into a sublicense agreement other than the Japan Sublicense, Licensee shall pay to Licensor a sublicense payment in an amount equal to [**] of any Sublicense Income within thirty (30) days of receipt thereof by Licensee.  For purposes of this Section 5.1, Sublicense Income shall mean consideration in any form received by Licensee or an Affiliate of Licensee in connection with a grant to one or more Third Parties of a sublicense or other right, license, privilege or immunity to make, have made, use, sell, have sold, distribute, import or export Products or to practice licensed methods.  Sublicense Income shall mean any license signing fee, license maintenance fee, unearned portion of any minimum royalty payment received by Licensee, equity, distribution or joint marketing fee, research and development funding in excess of Licensee’s cost of performing such research and development and any consideration received for an equity interest in, extension of credit to or other investment in Licensee to the extent such consideration exceeds the fair market value of the equity or other interest received as determined by agreement of the parties or by an independent appraiser mutually agreeable to the parties.  Notwithstanding the foregoing, Sublicense Income shall not include (i) sales-based milestones; (ii) payments based on sales of the Products (including royalty payments and profit share payments); (iii) sublicense income received by Licensee under the Japan Sublicense; or (iv) consideration received in connection with a sale of Licensee.  

Article 6.  ROYALTIES

6.1Royalties Payable by Licensee.  In consideration of the license rights granted to Licensee hereunder, on a country-by-country basis in the Licensee Territory, Licensee shall pay or cause any Sublicensee to pay to Licensor a royalty on their respective Net Sales of each Product in a country as follows: for each Product where the manufacture, use or sale of such Product in such would, but for the license granted hereunder, infringe a Valid Claim of a Licensor Patent Right in such country, a royalty of [**] on Net Sales of such Product in such country. 

6.2Royalties Payable by Licensor.  In consideration of the license rights granted to Licensor hereunder, on a country-by-country basis in the Licensor Territory, Licensor shall pay or cause any Sublicensee to pay to Licensee a royalty on their respective Net Sales of each Product 

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in a country as follows: for each Product where the manufacture, use or sale of such Product in such would, but for the license granted hereunder, infringe a Valid Claim of a Licensee Patent Right in such country, a royalty of [**] on Net Sales of such Product in such country.

6.3Limitation.  If the laws of any country where royalties are payable under Section 6.1 or Section 6.2 limit the amount of royalty or the duration of such royalty payments to less than the amount specified herein, then the royalty payment to Licensor or Licensee (as applicable) shall be limited to that permitted by law.

6.4Accrual of Royalties.  No royalty shall be payable on a Product made, sold or used for testing or development purposes or distributed as samples, provided such samples are sold by Licensee or Licensor (as applicable) or their respective Sublicensee at cost.  No royalties shall be payable on sales among Licensee or Licensor (as applicable) and their respective Sublicensees, but royalties shall be payable on subsequent sales by Licensee or its Sublicensees to a Third Party.  No multiple royalty shall be payable because the manufacture, use, or sale of a Product is covered by more than one Valid Claim.

6.5Royalty Withheld due to Invalid Claims.  In the event that (i) all applicable claims of a patent included within the Licensor Patent Rights under which Licensee is paying a royalty according to Section 6.1 shall be held invalid or unenforceable by a court of competent jurisdiction in a given country of the Licensee Territory, or (ii) all applicable claims of a patent included within the Licensee Patent Rights under which Licensor is paying a royalty according to Section 6.2 shall be held invalid or unenforceable by a court of competent jurisdiction in a given country of the Licensor Territory, in each case ((i) or (ii)), Licensor or Licensee (as applicable) may withhold payments of royalties that would otherwise have been due on Net Sales in that country by reason of Section 6.1 or Section 6.2 (as applicable) until such judgment shall be finally reviewed by an unappealed or unappealable decree of a higher court of competent jurisdiction in such country.  Licensee shall promptly pay Licensor any withheld royalty payments upon a final adjudication that at least one applicable claim of a patent included within the Licensor Patent Rights under which Licensee is paying a royalty under Section 6.1 is valid and enforceable. Licensor shall promptly pay Licensee any withheld royalty payments upon a final adjudication that at least one applicable claim of a patent included within the Licensee Patent Rights under which Licensor is paying a royalty under Section 6.2 is valid and enforceable.

6.6Compulsory Licenses.  If Licensee is caused to grant a compulsory license to any Third Party with respect to a Product in any country in the Licensee Territory, then the royalty rate to be paid by Licensee on Net Sales due on such Product in that country under Section 6.1 shall be reduced to the rate paid by such Third Party compulsory licensee on such Product in such country. If Licensor is caused to grant a compulsory license to any Third Party with respect to a Product in any country in the Licensor Territory, then the royalty rate to be paid by Licensor on Net Sales due on such Product in that country under Section 6.2 shall be reduced to the rate paid by such Third Party compulsory licensee on such Product in such country.

Article 7.  ROYALTY REPORTS AND ACCOUNTING

7.1Flash Reports. No later than [**] after the end of each calendar quarter during the Term, the Selling Party will provide to the non-Selling Party a “flash” report that will set forth (i) 

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for the first and second month of such calendar quarter: (a) the actual gross sales of the Products sold by the Selling Party and its Affiliates and Sublicensees in the applicable Territory in such months; and (b) the actual total aggregate Net Sales of the Products sold by the Selling Party and its Affiliates and Sublicensees  in the applicable Territory in such months, and (ii) for the third month of such calendar quarter, the Selling Party’s good faith estimate of the amounts set forth in the foregoing clauses (i)(a) and (i)(b) of this Section 7.1.

7.2Royalty Reports and Records.  In addition to the “flash” reports to be provided in accordance with Section 7.1, beginning with the First Commercial Sale (i) by Licensee or any Sublicensee, as the case may be, of a Product in any country of the Licensee Territory or (ii) by Licensor or any Sublicensee, as the case may be, of a Product in any country of the Licensor Territory (each of Licensee in the Licensee Territory or Licensor in the Licensor Territory, as applicable, the “Selling Party”), and continuing thereafter during the term of this Agreement, the  Selling Party shall furnish, and shall cause any Sublicensee to furnish, to the non-Selling Party a written report covering each calendar quarter (the “Reporting Period”) showing (a) the Net Sales of each Product in each country of the applicable Territory where royalties are payable under Section 6.1 or Section 6.2 (as applicable) during the Reporting Period; (b) the royalties, payable in United States Dollars, that shall have accrued hereunder in respect of such sales with a summary computation of such royalties during the Reporting Period; (c) withholding taxes, if any required by law to be deducted in respect of such sales in such Reporting Period; and (d) the exchange rates used in determining the amount of United States Dollars payable in respect of sales outside the United States.  With respect to sales of a Product invoiced in a currency other than United States Dollars, the Net Sales and royalty payable shall be expressed in the domestic currency of the party making the sale together with the United States Dollars equivalent of the royalty payable, calculated using the simple average of the exchange rate published in the Wall Street Journal on the last day of each month of the Reporting Period.  If any Sublicensee makes any sale invoiced in a currency other than its domestic currency, then the Net Sales shall be converted to its domestic currency in accordance with its normal accounting principles. The Selling Party’s Sublicensees shall have the option of making any royalty payment directly to the non-Selling Party.  However, notwithstanding anything to the contrary, the Selling Party shall continue to be liable for all royalties due under Section 6.1 or Section 6.2 (as applicable) until they are paid.  The Selling Party or its Sublicensee shall furnish to the non-Selling Party appropriate evidence of payment of, and itemize any tax, credits or specific amount deducted from any royalty payment.

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7.3Royalty Reports and Payments.  Royalty reports and payments shall be due sixty (60) days after the close of each Reporting Period.  Payment of royalties in whole or in part may be made in advance of such due date.  In case no royalty is due for any given Reporting Period, then the Selling Party shall so report to the non-Selling Party.  The Selling Party and its Sublicensees shall keep accurate records in sufficient detail to enable the royalty payable hereunder to be determined and confirmed.  The Selling Party shall be responsible for all royalties, late payments and interest that are due but have not been paid by the Selling Party’s Sublicensees.

7.4Right to Audit.  Upon written request of the non-Selling Party, but not more than once in each calendar year nor more than once in respect to any given calendar year, the Selling Party shall permit an independent public accountant, selected by the non-Selling Party and acceptable to the Selling Party, which acceptance shall not be unreasonable withheld, to have access during normal business hours to those records of the Selling Party as may be reasonably necessary to verify the accuracy of the royalty reports hereunder in respect of any calendar year ending not more than thirty-six (36) months prior to the date of such request.  The Selling Party shall include in each Sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to keep and maintain records of sales made pursuant to such sublicense and to grant the same right of access to such records to the non-Selling Party’s independent accountant.  Upon the expiration of thirty-six (36) months following the end of any calendar year, the calculation of royalties payable with respect to such calendar year shall be binding and conclusive upon the parties, and the Selling Party and its Sublicensees shall be released from any liability or accountability with respect to royalties (and the non-Selling Party for an overpayment of royalties) for such calendar year, unless (a) an audit requested by the non-Selling Party prior to expiration of such thirty-six (36) months period has not yet been completed, or (b) the non-Selling Party has notified the Selling Party prior to the expiration of such thirty-six (36) months period that such audit has revealed a discrepancy regarding such calculation.  The report prepared by such independent public accountant, a copy of which promptly shall be provided to the Selling Party, shall disclose only the amount of any underpayment or overpayment of royalties, if any, without disclosure of or reference to supporting documentation.  If such independent accountant’s report shows any underpayment of royalties, the Selling Party shall remit or shall cause its Sublicensees to remit to the non-Selling Party the amount of such underpayment within thirty (30) days after the Selling Party’s receipt of such report, and if such underpayment exceeds five percent (5%) of the royalty due, then the Selling Party shall reimburse the non-Selling Party for its reasonable out-of-pocket expenses for the audit, upon submission of supporting documentation.  Any overpayment of royalties shall be creditable against future royalties payable in subsequent royalty periods, allocated evenly over the next-following two (2) Reporting Periods.  In the event this Agreement is terminated or expires before such overpayment is fully credited, then the non-Selling Party shall pay the Selling Party the portion of such overpayment not credited within one hundred twenty (120) days after the date of such termination or expiration.

7.5Confidentiality of Records.  The non-Selling Party agrees that all information subject to review under Section 7.4 or under any sublicense agreement shall be deemed the Proprietary Information of the Selling Party.

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7.6Late Payment Interest.  Royalties and other payments required to be paid by the Selling Party pursuant to this Agreement shall, if overdue, bear interest at the rate equal to two percent (2%) over the prime rate as quoted by Citibank NA and not to exceed ten percent (10%) per annum until paid.  The payment of such interest shall not preclude the non-Selling Party from exercising any other rights it may have because any payment is overdue.

Article 8.  Commercialization PROGRAM

8.1Commercialization in the EU. The JSC will use Commercially Reasonable Efforts to develop, discuss and, no later than [**] after the Second Amendment Effective Date, reach consensus on a written plan for the commercialization of the Product in the EU (the “Commercialization Plan”). If the JSC has not reached consensus on such a Commercialization Plan within [**] after the Second Amendment Effective Date, then Licensee, at its sole discretion, will either (i) launch (itself or through a Sublicensee) the Product in at least one of [**] no later than [**] after the Second Amendment Effective Date, (ii) agree to pay to Licensor a license maintenance fee equal to $[**] for the first calendar year after the Second Amendment Effective Date (which amount will be pro rated based on the remaining portion of such calendar year), $[**] for the second calendar year after the Second Amendment Effective Date and $[**] for each subsequent calendar year after the Second Amendment Effective Date or (iii) expand the Licensor Territory to include the EU on commercially reasonable terms to be negotiated by the parties; provided that in such case (iii), Licensor will not be required to pay to Licensee any upfront payment in connection with such an expansion of the Licensor Territory. If Licensee elects to agree to pay to Licensor the license maintenance fee pursuant to the foregoing clause (ii), then Licensee will have no further obligation with respect to the development or commercialization of the Product in the EU.

8.2Suspension of Diligence Obligations.  Licensee’s obligation to satisfy its obligations under Section 8.1(i) to launch (itself or through a Sublicensee) the Product in at least one of [**] no later than [**] after the Second Amendment Effective Date is expressly conditioned on the continuing absence of any event or condition (such as a regulatory action affecting the Product or the existence of an issue relating to the safety or efficacy of the Product, the introduction of a generic form of the Product or a therapy that has superior safety or efficacy in the EU, or the existence of any circumstances, economic or otherwise, that make the development or marketing of the Product, in Licensee’s judgment, commercially unrewarding) that would suggest to Licensee, in exercising prudent and justifiable business judgment, that the activities described in Section 8.1(i) should be suspended or stopped altogether, and Licensee’s obligation thereunder may be suspended for up to six (6) months, after which time Licensee must resume the activities described in Section 8.1(i) or elect to take one of the actions set forth in Section 8.1(ii) or Section 8.1(iii), and if Licensee does not so resume such activities or make such an election, then  Licensor may elect, in its sole discretion, to terminate this Agreement pursuant to Section 13.3.1(a). 

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8.3Mutual Assistance.

(a)Licensor Development Data.  As soon as practical after the Second Amendment Effective Date, Licensor will make available to Licensee all Licensor Development Data in the possession of Licensor that is not already in the possession of Licensee and will cooperate with and provide reasonable assistance to Licensee in its evaluation of such Licensor Development Data.  On a continuing basis during the term of this Agreement, Licensor shall make available to Licensee all additional Licensor Development Data generated by Licensor or any Third Party on behalf of Licensor.  Licensor shall provide Licensee with a right of reference to all such Licensor Development data and Licensee shall have the right to include such Licensor Development Data in any of its applications for Registrations.  All such Licensor Development Data shall be deemed the Proprietary Information of Licensor, and all rights, title and interests in and to such Licensor Development Data shall remain vested in Licensor. 

(b)Licensee Development Data.  On a continuing basis during the term of this Agreement, Licensee shall make available to Licensor all Licensee Development Data generated by Licensee or any Third Party on behalf of Licensee. Licensee shall provide Licensor with a right of reference to all such Licensee Development data and, subject to the terms of this Agreement. Licensee will provide to Licensor free of charge [**] per calendar year of assistance in connection with Licensee’s delivery of such Licensee Development Data to Licensor pursuant to this Section 8.3(b), and if Licensor requests additional assistance beyond such [**] per year, then Licensor will be responsible for all internal costs (at a rate to be agreed by the Parties in advance of Licensee providing any such additional assistance) and in any event all out-of-pocket costs, in each case reasonably incurred by Licensee in connection with such assistance.  Licensor shall reimburse Licensee for its reasonable costs and expenses incurred in connection with providing any Licensee Development Data, upon presentation by Licensee of an invoice documenting such costs and expenses. Licensee shall have no obligation to disclose to Licensor or any of its Affiliates any Licensee Development Data except as expressly set forth in this Section 8.3(b) and notwithstanding any such disclosure to Licensor, all Licensee Development Data shall be deemed the Proprietary Information of Licensee, and all rights, title and interests in and to such Licensee Development Data shall vest in Licensee, subject to Section 13.5.2.

(c)In the event that either party receives any inquiries from any Regulatory Authority that may affect the development and marketing of a Product, such party shall immediately notify the other party.  Licensee shall be responsible for responding to Regulatory Authorities within the Licensee Territory and Licensor shall be responsible for responding to Regulatory Authorities within the Licensor Territory.  The parties agree to exchange regulatory information and reports for compliance with local Regulatory Authorities and to provide reasonable assistance to the other in formulating a response to the aforementioned inquiries, including being available to meet with the Regulatory Authority if necessary.  Licensee shall reimburse Licensor for its reasonable expenses incurred in rendering such assistance in the Licensee Territory, upon presentation by Licensor of an invoice documenting such expenses and Licensor shall reimburse Licensee for its reasonable expenses incurred in rendering such assistance in the Licensee Territory, upon presentation by Licensee of an invoice documenting such expenses.

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8.4Registrations.  Subject to the terms and conditions of this Agreement, each application for Registration in the Licensee Territory shall be filed in the name of Licensee or a designated Affiliate or Sublicensee.  Licensee shall own all rights, title and interests in and to all applications for Registrations and granted Registrations in the Licensee Territory.  Licensee shall be responsible for all disclosures and correspondence to and with the Regulatory Authorities, and all disclosures and correspondence with any Regulatory Authority in the Licensee Territory involving Licensor shall be made through Licensee. Licensee shall keep Licensor advised of the status of all Registrations and any applications for Registration in the Licensee Territory and Licensor shall keep Licensee advised of the status of all Registrations and any applications for Registration in the Licensor Territory.

8.5Progress Reports.  Commencing upon the launch of the Product in the EU by Licensee or a Sublicensee of Licensee and continuing until the end of the Term, no later than thirty (30) days of the close of each calendar year, Licensee shall provide to Licensor a written high-level summary of Licensee’s or its Sublicensee’s progress and activities with respect to the commercialization of the Product in the EU (“Progress Report”). 

Article 9.  PATENTS AND IMPROVEMENTS

9.1Patents. 

9.1.1Patent Prosecution and Maintenance.  Licensee shall use reasonable efforts in the Licensee Territory to prosecute the patent applications that are enumerated in Exhibit 1 of this Agreement, to conduct any interference, re-examination, reissue and opposition proceedings and to maintain patents included in the Licensor Patent Rights in effect during the term of this Agreement.  Licensee shall be solely responsible for all costs and expenses relating to such patent applications and patents.

9.1.2Patent Counsel.  Licensee may select patent counsel to prosecute and maintain the Licensor Patent Rights under this Agreement in the Licensee Territory, which patent counsel will be reasonably acceptable to Licensor. 

9.1.3Consultation and Decision.  Licensee shall regularly consult with Licensor and shall keep Licensor advised of the status of all patent applications and patents relating to the Licensor Patent Rights by providing Licensor with copies of such patent applications and patents and copies of all patent office correspondence relating thereto including any office actions received by Licensee and responses or other papers filed by Licensee.  Licensee specifically agrees to provide Licensor with copies of patent office correspondence in sufficient time for Licensor to review and comment on such correspondence and submit to Licensee any proposed response thereto.  Licensee further agrees to provide Licensor with sufficient time and opportunity, but in no event less than ten (10) days, to review, comment and consult on all proposed responses to patent office correspondence relating to such patent applications and patents.  Licensor agrees that all final decisions regarding the preparation and prosecution of such patent applications and patents, reissues, reexaminations, interferences and oppositions relating thereto may be made by Licensee after consultation with Licensor.  Notwithstanding the foregoing, in the event of a decision regarding a Significant Event, Licensee will provide Licensor with notice of such Significant Event and Licensor shall have thirty (30) working days in which to assent or refuse to 

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assent to such action, with such assent not to be unreasonably withheld.  For purposes of this Section 9.1.3, “Significant Event” shall mean abandonment of an application, the filing of divisional or continuation applications, the filing of any fact or expert declaration, or a significant narrowing of the scope of patent application claims.  Licensee shall have the right in its sole discretion, after consultation with Licensor, to discontinue the prosecution of any such patent applications or the maintenance of any such patents, and Licensor shall have the right to assume responsibility for the prosecution of such patent applications or the maintenance of such patents at its own expense.  If Licensee elects not to prosecute, and Licensor elects not to assume, any such patent applications or not to maintain any such patents in any country within the Licensee Territory, then Licensee’s license rights and its obligations under this Agreement with respect to such patent applications and patents in such country shall terminate, without affecting its license rights and other obligations to pay with respect to any other patent applications or patents included in the Licensor Patent Rights.

9.1.4Additional Patents.  After the Effective Date, the parties may, by written agreement, amend Exhibit 1 to add additional patents related to the Compound (“Additional Patents”).  Upon the written amendment of Exhibit 1, such Additional Patents shall be prosecuted and maintained in accordance with the provisions of this Section 9.1.

9.2Improvements.

(a)Each party shall notify the other party promptly of any sole or joint inventions directed to Improvements under such party’s Control.

(b)As between the parties, Licensee shall own all rights, title and interests in and to Improvements invented solely by Licensee’s employees or contractors and Licensor shall own all rights, title and interests in and to Improvements invented solely by Licensor’s employees or contractors. Patent applications and patents directed to jointly invented Improvements shall be jointly assigned to and owned by Licensee and Licensor, and the rights of the parties with respect thereto shall be determined according to the laws of the countries in which such patent applications and patents are held.  During the term of this Agreement, either party shall have the liberty to freely practice Improvements in its respective Territories.

(c)During the term of this Agreement, for patent applications and patents relating to Improvements invented solely by Licensor, the provisions of Section 9.1.4 shall apply.

(d)Following expiration or termination of this Agreement, Licensor shall be solely responsible, at its sole discretion and expense, for preparing, filing, prosecuting and maintaining in such countries where it deems appropriate, patent applications and patents relating to Improvements invented solely by Licensor and for conducting interference, re-examination, reissue and opposition proceedings relating to such patent applications and patents.

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(e)During the term of this Agreement, Licensee shall be responsible, in its sole discretion and expense, for preparing, filing, prosecuting and maintaining in such countries where it deems appropriate, patent applications and patents relating to Improvements invented solely by Licensee or jointly by Licensee and Licensor.  Notwithstanding the foregoing, if Licensee elects (after consultation with Licensor) not to prosecute, or to discontinue the prosecution of any patent applications concerning joint inventions, or to discontinue the maintenance of any patents concerning joint inventions, then (i) Licensor shall have the right to assume the full responsibility for the prosecution of such patent applications or the maintenance of such patents at its own costs expense, (ii) Licensee shall assign its interest in such patents and patent applications to Licensor and (iii) such patents and patent applications shall no longer be subject to this Agreement.

(f)Following expiration or termination of this Agreement, Licensee shall be solely responsible, in its sole discretion and expense, for preparing, filing, prosecuting and maintaining in such countries where it deems appropriate, patent applications and patents relating to Improvements invented solely by Licensee and for conducting interference, re-examination, reissue and opposition proceedings relating to such patent applications and patents.

(g)Following expiration or termination of this Agreement, the parties shall be jointly responsible for preparing, filing, prosecuting and maintaining in such countries where the parties jointly agree, patent applications and patents relating to Improvements jointly invented by the parties and for conducting interference, re­examination, reissue and opposition proceedings relating to such patent applications and patents.  The parties shall jointly bear all costs relating thereto.  If one party elects to discontinue the prosecution of any patent applications and patents filed pursuant to this Section 9.2(g), or not to conduct any further activities with respect to such patent applications or patents, the party electing to discontinue any such activities shall assign to the other party all right, title and interest in and to such patents or patent applications.  The party electing to continue such activities shall be solely responsible for all costs relating to such activities.

Article 10.  INFRINGEMENT

10.1Infringement by a Third Party.  In the event that either party becomes aware that a Compound or a Product being made, used or sold by a Third Party infringes the Licensor Patent Rights or Licensee Patent Rights licensed hereunder, such party shall promptly, and in any event not later than within three (3) days of becoming aware of such infringement, advise the other party of all known facts and circumstances relating thereto.  Licensee shall have the sole right, but not the obligation, to enforce at Licensee’s sole expense the Licensor Patent Rights licensed under this Agreement against infringement by Third Parties in the Licensee Territory and shall have the sole right to control the prosecution of such legal action and make all decisions with respect to such litigation, including the selection of outside counsel.  Licensor shall reasonably cooperate in any such enforcement and, if necessary, join as a party therein, at the expense of Licensee.  Licensee shall have the right to retain 100% of the proceeds of any such enforcement action. Subject to any protective orders and Licensee’s confidentiality obligations to Third Parties, Licensee will keep Licensor timely and fully apprised of all pleadings, motions, briefs and discovery requests, as well as all claims and defenses being asserted, and all material strategic decisions in any infringement litigation for any Product. Licensor shall have the sole right, but not the obligation, to enforce at Licensor’s sole expense the Licensee Patent Rights licensed under this Agreement against 

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infringement by Third Parties in the Licensor Territory and shall have the sole right to control the prosecution of such legal action and make all decisions with respect to such litigation, including the selection of outside counsel.  Licensee shall reasonably cooperate in any such enforcement and, if necessary, join as a party therein, at the expense of Licensor.  Licensor shall have the right to retain 100% of the proceeds of any such enforcement action. Subject to any protective orders and Licensor’s confidentiality obligations to Third Parties, Licensor will keep Licensee timely and fully apprised of all pleadings, motions, briefs and discovery requests, as well as all claims and defenses being asserted, and all material strategic decisions in any infringement litigation for any Product.

10.2Infringement by Licensee.  In the event that it is determined by any court of competent jurisdiction that the manufacture, use or sale of any Product by Licensee or its Sublicensees in accordance with the terms and conditions of this Agreement infringes, or Licensee and Licensor reasonably determine and agree that the manufacture, use or sale of such Product is likely to infringe, an additional Third Party patent or related intellectual property right in any country in the Licensee Territory, then Licensee shall in consultation with Licensor use its reasonable best efforts to: (i) procure at Licensee’s expense a license from such Third Party authorizing Licensee to continue to manufacture, use or sell such Product; or (ii) modify such Product or its manufacture so as to render it non­infringing.  In the event that neither of the foregoing alternatives is reasonably available or commercially feasible, then Licensee may at its option either (a) cease the manufacture, use and sale of such Product for so long as and to the extent that such activities are infringing the relevant Third Party patents, in which case the obligation of Licensee hereunder to pay royalties shall also cease, or (b) terminate the rights and licenses granted solely with respect to a country or countries within the Licensee Territory in which the infringement of Third Party patents has occurred or is likely to occur, in which case the obligation of Licensee hereunder to pay royalties shall also terminate with respect to that country or countries within the Licensee Territory.

Article 11.  INDEMNIFICATION

11.1Indemnification by Licensee.  Licensee agrees to indemnify and hold Licensor, its directors, officers, employees and agents harmless from and against any liabilities or damages or expenses in connection therewith (including reasonable attorneys’ fees and costs and other expenses of litigation) resulting from (i) any willful misrepresentation of a material fact or breach of this Agreement, (ii) claims by Third Parties arising out of Licensee’s or its Sublicensees’ manufacture, use, sale or testing of Product; and (iii) the enforcement by Licensor of its indemnification rights against Licensee under clause (ii) of this Section 11.1.

11.2Indemnification by Licensor.  Licensor hereby agrees to indemnify and hold Licensee and its officers, directors, employees and agents harmless from and against any liabilities or damages or expenses in connection therewith (including reasonable attorneys’ fees and costs and other expenses of litigation) resulting from (i) any willful misrepresentation of a material fact or breach of this Agreement, (ii) claims by Third Parties arising out of Licensor’s or its Sublicensees’ manufacture, use, sale or testing of Product; and (iii) the enforcement by Licensee of its indemnification rights against Licensor under clause (ii) of this Section 11.2.

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11.3Indemnification Procedures.  Each indemnified party shall promptly notify the indemnifying party in writing of any action, claim or liability in respect of which the indemnified party intends to claim indemnification from the indemnifying party.  The indemnified party shall permit the indemnifying party, at its discretion, to settle any such action, claim or liability, and agrees to the complete control of such defense or settlement by the indemnifying party, provided however, that such settlement does not adversely affect the rights of the indemnified party hereunder or impose any obligations on the indemnified party in addition to those set forth herein in order for it to exercise such rights.  No such action, claim or liability shall be settled by the indemnified party without the prior written consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed, and the indemnifying party shall not be responsible for any legal fees or other costs incurred by the indemnified party other than as provided herein.  The indemnified party and its directors, officers, employees and agents shall cooperate fully with the indemnifying party and its legal representatives in the investigation and defense of any action, claim or liability covered by this indemnification, and shall have the right, but not the obligation, to be represented by counsel of their own selection and at their own expense.

11.4Limitation of Liability.  Notwithstanding anything to the contrary herein, neither party shall be liable to the other party for any indirect, incidental or consequential damages arising out of any terms or conditions in this Agreement or with respect to the performance hereof.

11.5Survival of Representations and Warranties.  The representations and warranties contained in this Agreement shall survive the expiration or termination of this Agreement and shall remain in full force and effect.

Article 12.  CONFIDENTIALITY

12.1Treatment of Proprietary Information.  Except as otherwise provided in this Article 12, during the term of this Agreement and for a period of five (5) years following expiration or termination thereof, a party (the “Receiving Party”) will retain in confidence and use only for purposes of this Agreement Proprietary Information supplied by or on behalf of the other party (the “Disclosing Party”).  

12.2Right to Disclose.  To the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement or any rights which survive termination or expiration hereof, a Receiving Party may disclose Proprietary Information to its Affiliates, Sublicensees, consultants, agents, outside contractors and clinical investigators (collectively the “Representatives”) on condition that such Representatives agree (i) to keep the Proprietary Information confidential for a least the same time periods and to the same extent as such party is required to keep the Proprietary Information confidential and (ii) to use the Proprietary Information only for such purposes as the Receiving Party is entitled to use the Proprietary Information.  Each party warrants that each of its Representatives to whom any Proprietary Information is disclosed shall previously have been informed of the confidential nature of the Proprietary Information and shall be under written obligations of confidentiality and non-use applicable to the Proprietary Information of each party that are at least as stringent as those set forth in this Article 12.  The Receiving Party shall ensure that the Proprietary Information provided by the Disclosing Party shall not be used or disclosed by such Representatives except as permitted by this Agreement.  The Receiving Party shall stand responsible for any breach by its Representatives of the confidentiality provisions set forth in this Agreement.

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12.3Release From Restrictions.  The obligation not to disclose Proprietary Information shall not apply to any part of such Proprietary Information that:

(i)is or becomes patented, published or otherwise part of the public domain other than by the unauthorized acts of the Receiving Party or its Affiliates or Sublicensees in contravention of this Agreement; or

(ii)is disclosed to the Receiving Party by a Third Party that did not obtain such Proprietary Information directly or indirectly from the Disclosing Party; or

(iii)prior to disclosure under this Agreement, was already in the possession of the Receiving Party as evidenced by its written records, provided such Proprietary Information was not obtained, directly or indirectly, from the Disclosing Party; or

(iv)is developed by the Receiving Party independent of Proprietary Information received from the Disclosing Party as evidenced by its written records.

12.4Public Domain.  For the purpose of this Agreement, specific information disclosed as part of the Proprietary Information shall not be deemed to be in the public domain or in the prior possession of the Receiving Party merely because it is embraced by more general information in the public domain or by more general information in the prior possession of the Receiving Party.

12.5Ownership of Proprietary Information.  Except as otherwise agreed to hereunder, all Proprietary Information disclosed by the Disclosing Party shall remain the property of the Disclosing Party.  Upon the written request of the Disclosing Party (i) all tangible Proprietary Information provided by the Disclosing Party (including all copies thereof and all unused samples of materials provided by the Disclosing Party) except for Proprietary Information consisting of analyses, studies and other documents prepared by or for the benefit of the Receiving Party shall be promptly returned to the Disclosing Party, and (ii) all portions of such analyses, studies and other documents not prepared by or for the benefit of the Receiving Party (including all copies thereof) which are within the definition of Proprietary Information shall be destroyed, and the Receiving Party shall certify such destruction in writing to the Disclosing Party.  Notwithstanding the foregoing, the Receiving Party may retain one copy of the Proprietary Information of the Disclosing Party in its legal department for the sole purpose of determining its obligations hereunder.

12.6Legal Disclosure.  The Receiving Party may disclose the Proprietary Information of the Disclosing Party to the extent reasonably necessary in prosecuting or defending litigation, complying with applicable laws, governmental regulations or court order, or otherwise submitting required information to tax or other governmental authorities.  If the Receiving Party intends to so disclose any such Proprietary Information, the Receiving Party shall provide the Disclosing Party prompt prior notice of such fact so that the Disclosing Party may seek to obtain a protective order or other appropriate remedy concerning any disclosure of such Proprietary Information.  The Receiving Party will reasonably cooperate with the Disclosing Party in connection with the Disclosing Party’s efforts to obtain any such order or other remedy.  If any such order or other remedy does not fully preclude the disclosure of such Proprietary Information, the Receiving Party will make such disclosure only to the extent that such disclosure is legally required and will use its reasonable efforts to have confidential treatment accorded to the disclosed Proprietary Information.

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12.7No Title.  Except as otherwise expressly set forth in this Agreement, nothing herein shall be construed as giving the Receiving Party any right, title and interest in and to the Proprietary Information of the Disclosing Party.

12.8Permitted Disclosures.

12.8.1Disclosure by Licensee.  Notwithstanding the foregoing, subject to review and comment by Licensor, Licensee may disclose Licensor Proprietary Information to the extent such disclosure is reasonably necessary for the following activities (i) the development of the Compound or the Product in the Licensee Territory, (ii) the filing of applications for Registration in the Licensee Territory, (iii) the commercialization of the Compound or the Product in the Licensee Territory or (iv) the filing or prosecution of a patent applications and patents relating to Improvements invented solely by Licensee or jointly by Licensee and Licensor. 

12.8.2Disclosure by Licensor.  Notwithstanding the foregoing, subject to review and comment by Licensee, Licensor may disclose Licensee Proprietary Information to the extent such disclosure is reasonably necessary for the following activities (i) the filing or prosecution of patent applications and patents relating to Improvements invented solely by Licensor or jointly by Licensor and Licensee, and (ii) in the Licensor Territory and to the extent approved in writing by Licensee, (a) the development of the Compound or the Product, (b) the filing of applications for Registration or (c) the commercialization of the Compound or the Product.

12.9Publications.  Neither party shall submit or present any written or oral publication, any manuscript, abstract or the like which includes data or other information related to the Compound or the Products or the Proprietary Information of the other party without first obtaining the prior written consent of the other party.

Article 13.  TERM AND TERMINATION

13.1Term.  Unless terminated sooner as provided herein, this Agreement shall continue in full force and effect from the Effective Date until the expiration of each of Licensee’s and Licensor’s obligation to pay royalties hereunder.  Upon the expiration of Licensee’s obligation to pay royalties hereunder, the license granted to Licensee in this Agreement will become perpetual, irrevocable and fully-paid.  Likewise, upon the expiration of Licensor’s obligation to pay royalties hereunder, the license granted to Licensor in this Agreement will become perpetual, irrevocable and fully-paid.  Except as otherwise expressly provided in this Agreement, upon expiration or termination of this Agreement with respect to one or more countries of the Licensee Territory or Licensor Territory, as applicable, the rights and obligation of the parties with respect to each such country or countries shall cease, except as follows:

(i)upon expiration or termination by either party for any reason, the rights and obligations under Articles 7, 11, 12, 13 and 23 and the applicable provisions of Section 9.2; 

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(ii)expiration or termination of this Agreement shall not relieve either party of any obligations that accrued to that party prior to such expiration or termination for any reason; and

(iii)any cause of action or remedy for breach shall survive the expiration or termination of this Agreement.

13.2Termination by Licensee.

13.2.1Licensee may terminate this Agreement (i) in its entirety or (ii) with respect to one or more countries of the Licensee Territory without affecting the Agreement or the licenses granted hereunder in any other country of the Licensee Territory, in each case ((i) and (ii)), without cause at any time upon at least ninety (90) days prior written notice to Licensor.

13.2.2Licensee may terminate this Agreement upon or after the material breach of this Agreement by Licensor if such breach is not cured within ninety (90) days after Licensee gives Licensor written notice thereof or upon a Payment Default. 

13.2.3Licensee may terminate this Agreement in its entirety for cause upon at least ninety (90) days prior written notice to Licensor upon or after the bankruptcy, insolvency, dissolution or winding up of Licensor other than for the purpose of reconstruction or amalgamation.

13.3Termination by Licensor.

13.3.1Licensor may terminate this Agreement for cause at any time upon at least ninety (90) days prior written notice to Licensee upon the occurrence of any of the following:

(a)upon or after the material breach of this Agreement by Licensee if such breach is not cured within ninety (90) days after Licensor gives Licensee written notice thereof;

(b)upon a Payment Default; or.

(c)upon or after the bankruptcy, insolvency, dissolution or winding up of Licensee other than for the purpose of reconstruction or amalgamation.

Such termination will be in its entirety, unless the termination is for a material breach that relates to one or more countries (but not all) of the Licensee Territory, in which case, Licensor may terminate this agreement only with respect to such country(ies) and such termination will not affect the Agreement or the licenses granted hereunder in any other country of the Licensee Territory.

13.4Disputes Regarding Material Breach.  Notwithstanding the foregoing, if a party gives to the other party a notice of a material breach by such other party, and such other party provides notice during the applicable cure period set forth above that such other party disputes the basis for termination pursuant to Section 13.2.2 or Section 13.3.1, then this Agreement will not terminate during the pendency of such dispute for so long as the disputing party continues to seek a resolution of such dispute in accordance with Article 24. 

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Execution Version

 

13.5Rights Following Termination.

13.5.1Subject to the provisions of Section 9.2 with respect to Improvements, in the event of termination (but not expiration) of this Agreement with respect to all countries in the Licensee Territory, to the extent in Licensee’s possession, Licensee will promptly transfer and hand over to Licensor all Licensor Development Data and Licensor Know-How provided to Licensee hereunder.  Each party will return to the other party all copies of the Proprietary Information supplied by one party to the other party hereunder, except that copies of such Proprietary Information may be retained by each party for archival purposes only.

13.5.2Upon termination (but not expiration) of this Agreement or the license rights granted hereunder by either party for any reason with respect to one or all countries of the Licensee Territory (other than a termination by Licensee for an uncured breach or default by Licensor), Licensee will grant Licensor access to (and allow Licensor to obtain copies of) all Licensee Development Data and Licensee Know-How and shall promptly take all steps necessary to transfer all rights, title and interests in any Registration, marketing authorizations or other regulatory approvals to Licensor.  Licensor shall have the right to disclose to a Third Party all such Licensee Development Data and Licensee Know-How in connection with Licensor’s effort to license to such Third Party the right to manufacture and sell a Product in those countries where termination of Licensee’s rights has occurred.  Such use or disclosure shall be subject to the Licensee’s rights in countries where termination has not occurred and to the right, title and interest in such Licensee Development Data and Licensee Know-How that shall remain vested in Licensee.  The Third Party shall not be entitled to sublicense, assign or transfer any of the rights granted to it by Licensor except to an Affiliate of such Third Party.  Licensee agrees to cooperate with and provide reasonable assistance to Licensor in its effort to license to a Third Party the use of such Licensee Development Data and Licensee Know-How.  In consideration thereof, Licensor shall pay to Licensee a royalty of [**] on Net Sales of Product sold by Licensor or such Third Party for a period of [**] from the commencement of the sale of the Product by Licensor or such Third Party.  Any license granted by Licensor to such Third Party that bears a royalty payable to Licensee (a “Covered License”) shall be consistent with the terms and conditions of this Agreement and shall include provisions necessary to ensure that Licensor or such Third Party comply with royalty reporting and audit requirements and confidentiality.  Any act or omission by such Third Party under a Covered License that would have constituted a breach of this Agreement had it been the act or omission of Licensor shall be deemed to constitute a breach of this Agreement by Licensor.  Licensor shall advise Licensee in writing without delay of any breach by such Third Party and Licensor shall exercise without delay its rights with respect to such breach against such Third Party.

13.6Disposition of Product.  Upon termination (but not expiration) of this Agreement with respect to any country, Licensee shall provide Licensor a written inventory of all Product (in the form of raw material, work-in-progress and finished goods) in its and its Sublicensees’ possession in such country and shall have the right to dispose of such Product within six (6) months thereafter, subject to fulfillment of the royalty obligations under this Agreement relating thereto.

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Execution Version

 

13.7Survival of Sublicenses.  In the event that this Agreement is terminated by Licensor for any reason, at the request of any Sublicensee, Licensor will grant such Sublicensee a direct license to under the Licensor Know-How and Licensor Patent Rights on substantially the same terms as is set forth in the sublicense agreement between Licensee and such Sublicensee, so that the Sublicensee is put in the same position as it was prior to this Agreement being terminated; provided, however, that (i) Licensor will not have any increased obligations as a result of such direct license to the Sublicensee, (ii) as consideration for such direct license, the Sublicensee will be required to pay Licensor the same amount as Licensor would have received from Licensee (had this Agreement survived) as a result of the sublicense agreement and the Sublicensee’s performance thereunder and (iii) any such direct license may be conditioned upon the Sublicensee being in good standing under the terms of the sublicense agreement.  

13.8Restrictions Following Expiration.  

13.8.1On a country-by-country basis, during the Term and continuing until the second (2nd) anniversary of the expiration of a Licensee’s obligation to pay royalties to Licensor hereunder in a country in which Licensee has any Product for sale on the date of the expiration of a Licensee’s obligation to pay royalties in the Licensee Territory, Licensor and its Affiliates will not, directly or indirectly, (i) sell, distribute or otherwise commercialize any Product in such country or (ii) supply or cause to supply Product to any Third Party for sale or distribution in such country.  

13.8.2Likewise, on a country-by-country basis, during the Term and continuing until the second (2nd) anniversary of the expiration of a Licensor’s obligation to pay royalties to Licensee hereunder in a country in which Licensor has any Product for sale on the date of the expiration of a Licensor’s obligation to pay royalties in the Licensor Territory, Licensee and its Affiliates will not, directly or indirectly, (i) sell, distribute or otherwise commercialize any Product in such country or (ii) supply or cause to supply Product to any Third Party for sale or distribution in such country.

Article 14.  ASSIGNMENT

This Agreement may not be assigned or otherwise transferred by either party without the written consent of the other party except that either party without such consent may assign this Agreement (in whole or in part) (i) in connection with the transfer or sale of all or substantially all of its business assets to which this Agreement relates to a Third Party, (ii) in the event of its merger or consolidation with another company or (iii) to an Affiliate.  Any purported assignment in violation of this clause shall be void.  Any permitted assignee shall assume all the obligations of its assignor under this Agreement.  No assignment shall relieve either party of its responsibility for the performance of any obligation that such party has accrued hereunder as of the date of assignment.

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Execution Version

 

Article 15.  PATENT MARKINGS

Licensee agrees to mark all Products made, used or sold in the Licensee Territory under the terms of this Agreement, or their containers, in accordance with applicable patent marking laws consistent with its patent marking practices for its other products. Licensor agrees to mark all Products made, used or sold in the Licensor Territory under the terms of this Agreement, or their containers, in accordance with applicable patent marking laws consistent with its patent marking practices for its other products. 

Article 16.  REGISTRATION OF LICENSES

Licensee agrees to register or give required notice concerning this Agreement, through itself or through a Sublicensee, in each country where there exists an obligation under law to so register or give notice, to pay all costs and legal fees connected therewith, and to otherwise comply with all national laws applicable to this Agreement.  Upon request by Licensee, Licensor agrees to promptly execute any “short form” licenses in a form submitted to it by Licensee in order to effectuate the foregoing registration in each such country.

Article 17.  PATENT TERM EXTENSION

Licensee agrees, as exclusive Licensee, to apply for and to exercise due diligence in obtaining an extension of the term of any patent included within the Licensor Patent Rights under the applicable laws of any country where such extensions are available, including, but not limited to, the Drug Price Competition and Patent Term Restoration Act of 1984 in the United States.  Licensor agrees to execute such documents and take such additional actions as Licensee may reasonably request in connection therewith.  Each party shall bear its own expenses in connection with the application for patent term extensions.

Article 18.  FORCE MAJEURE

Neither party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement, other than an obligation to make a payment, when such failure or delay is caused by or results from fires, floods, embargoes, government regulations, prohibitions or interventions, wars, acts of war, terrorism, insurrections, riots, civil disobedience, strikes, lockouts, acts of God, or any other cause beyond the reasonable control of the affected party.

Article 19.  NEGATION OF AGENCY.

Nothing herein contained shall be deemed to create an agency, joint venture, amalgamation, partnership, or similar relationship between Licensee and Licensor.  The relationship between the parties established by this Agreement is that of independent contractors.  Neither party shall have the power to bind, obligate, incur any debts or make any commitments for the other party except to the extent, if at all, specifically provided herein.

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Execution Version

 

Article 20.  PUBLICITY

Each party shall give notice to the other party prior to issuing any press release relating to this Agreement within due time to allow for reasonable consideration.  The party issuing the press release shall give due consideration and weight to any comments or concerns raised by the other party.  Notwithstanding the foregoing, neither party shall issue a press release announcing the execution of this Agreement outside of a joint press release, which will be prepared jointly by the parties.

Article 21.  FILING OF THE AGREEMENT

To the extent, if any, that a party concludes in good faith that it is required to file this Agreement or a notification thereof with any governmental authority, including without limitation the U.S. Securities and Exchange Commission in accordance with applicable laws and regulations, such party may do so, subject to the confidentiality obligations set forth herein, and the other party shall cooperate in such filing or notification and shall execute all documents reasonably required in connection therewith at the, expense of the requesting party.  The parties shall promptly inform each other as to the activities or inquiries of any such governmental authority relating to this Agreement, and shall cooperate, in responding to any request for further information therefrom at the expense of the requesting party.

Article 22.  SEVERABILITY

Each party hereby expressly agrees and contracts that it is not the intention of either party to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries.  If any word, sentence, paragraph, clause or combination thereof in this Agreement is found by a court or executive body with judicial powers having jurisdiction over this Agreement or any of the parties hereto in a final unappealable order to be in violation of any such provisions in any country or community or association of countries, such word, sentence, paragraph, clause or combination thereof shall be inoperative in such country or community or association of countries, and the parties will seek in good faith to amend this Agreement in order to cure such violation; the remainder of this Agreement shall in any event remain binding upon the parties hereto.

Article 23.  NOTICES

Any notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been properly given if delivered in person, or if mailed by registered or certified mail (return receipt requested), postage prepaid, or by telex or facsimile or e-mail promptly confirmed by first class mail, to the addresses given below or such other addresses as may be designated in writing by the parties from time to time during the term of this Agreement.  Any notice sent or by telex or facsimile or e-mail shall be effective when sent, and any notice sent by registered or certified mail shall be effective when mailed.

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Execution Version

 

In the case of Licensee:

Akebia Therapeutics, Inc. 
245 First Street
Cambridge, MA  02142 
Attn:  Chief Executive Officer
Email:  [**]

 

With a copy to (which will not constitute notice for purposes of this Agreement):

 

Akebia Therapeutics, Inc. 
245 First Street
Cambridge, MA  02142 
Attn:  General Counsel
Email:  [**]

 

and

 

Ropes & Gray LLP 
Prudential Tower, 800 Boylston Street 
Boston, MA  02199-3600 
Attn:  David M. McIntosh
Email:  david.mcintosh@ropesgray.com

 

In the case of Licensor:

Panion & BF Biotech, Inc.
16F No. 3, Yuanqu Street,
Nangang District,
Taipei, Taiwan, ROC
Attn: Michael Chiang

With a copy to (which will not constitute notice for purposes of this Agreement):

 

Finnegan, Henderson, Farabow, Garrett & Dunner, LLP 
901 New York Avenue, NW
Washington, DC  20001-4413 
Attn:  Li Feng
Email:  Li.Feng@Finnegan.com

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Execution Version

 

Article 24.  GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of New York, exclusive of choice-of-law rules.  Any dispute between Licensor and Licensee arising from or relating to this Agreement will be determined exclusively by the United States District Court for the Southern District of New York (and the appellate courts thereof), to whose jurisdiction the parties irrevocably consent; provided, however, if for any reason that Court should lack jurisdiction over any such suit, the same shall be brought exclusively in the New York State Supreme Court, New York County, to whose jurisdiction the parties irrevocably consent.  Licensor irrevocably consents that service of process may be effected in connection with any such action by certified mail addressed to its offices at 16F No. 3, Yuanqu Street, Nangang District, Taipei, Taiwan and agrees that such service shall constitute good and sufficient service for all purposes; provided, further, that the prevailing party in any such action shall be awarded its reasonable attorneys’ and expert fees and expenses incurred in connection with the action.

Article 25.  AFFILIATES

Each party may perform its obligations hereunder personally or through one or more Affiliate and shall be responsible for the performance of such obligations, and any liabilities resulting from such performance.  Neither party shall permit any of its Affiliates to commit any act (including any act of omission) that such party is prohibited hereunder from committing directly.

Article 26.  ENTIRE AGREEMENT

This Agreement and the Exhibits hereto which are a part hereof, contain the entire understanding of the parties with respect to the subject matter hereof.  All express or implied agreements and understanding, either oral or written, heretofore made are expressly merged in and made a part of this Agreement.  The parties hereto may alter any of the provisions of this Agreement, but only by a written instrument duly executed by both parties hereto.  This Agreement may be executed in counterparts.

Article 27.  WAIVER

The failure of a party to enforce at any time for any period any of the provisions hereof shall not be construed as a waiver of such provisions or of the right of such party thereafter to enforce each such provision.

Article 28.  interpretation

(a) Whenever any provision of this Agreement uses the term “including” (or “includes”), such term will be deemed to mean “including without limitation” and “including but not limited to” (or “includes without limitations” and “includes but is not limited to”) regardless of whether the words “without limitation” or “but not limited to” actually follow the term “including” (or “includes”); (b) “herein,” “hereby,” “hereunder,” “hereof,” and other equivalent words will refer to this Agreement in its entirety and not solely to the particular portion of this Agreement in which any such word is used; (c) all definitions set forth herein will be deemed applicable whether the words 

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Execution Version

 

defined are used herein in the singular or the plural; (d) wherever used herein, any pronoun or pronouns will be deemed to include both the singular and plural and to cover all genders; (e) the recitals set forth at the start of this Agreement, along with the schedules and exhibits to this Agreement, and the terms and conditions incorporated in such recitals and schedules and exhibits will be deemed integral parts of this Agreement and all references in this Agreement to this Agreement will encompass such recitals and schedules and exhibits and the terms and conditions incorporated in such recitals and schedules and exhibits; provided that in the event of any conflict between the terms and conditions of this Agreement and any terms and conditions set forth in the recitals, schedules, or exhibits, the terms of this Agreement will control; (f) in the event of any conflict between the terms and conditions of this Agreement and any terms and conditions that may be set forth on any order, invoice, verbal agreement, or otherwise, the terms and conditions of this Agreement will govern; (g) this Agreement will be construed as if both Parties drafted it jointly, and will not be construed against either Party as principal drafter; (h) unless otherwise provided, all references to Sections, Articles, and Schedules in this Agreement are to Sections, Articles, and Schedules of and to this Agreement; (i) any reference to any federal, national, state, local, or foreign statute or law will be deemed to also refer to all rules and regulations promulgated thereunder, unless the context requires otherwise; (j) wherever used, the word “shall” and the word “will” are each understood to be imperative or mandatory in nature and are interchangeable with one another; (k) the word “or” will not be exclusive; (l) references to a particular person include such person’s successors and assigns to the extent not prohibited by this Agreement; and (m) the captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely guides or labels to assist in location and reading the several Articles and Sections hereof.

 

 

 

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IN WITNESS HEREOF, the parties have executed this Agreement through their duly authorized representatives to be effective as of the Second Amendment Effective Date.

 

	
AKEBIA THERAPEUTICS, INC.
	
 
	
PANION & BF BIOTECH INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Jason A. Amello
	
 
	
 
	
By:
	
/s/ Michael Chiang

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Name:
	
 
	
Jason A. Amello
	
 
	
 
	
Name:
	
Michael Chiang

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
SVP, Chief Financial Officer
	
 
	
 
	
Title:
	
Executive President

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
AKEBIA THERAPEUTICS, INC.
	
 
	
 
	
PANION & BF BIOTECH INC.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ John Butler
	
 
	
 
	
By:
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Name:
	
 
	
John Butler
	
 
	
 
	
Name:
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
CEO
	
 
	
 
	
Title:
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

 

 

 

[Signature Page to Second Amendment and Restated License Agreement]

73794276_14akba-ex102_249.htm

Exhibit 10.2

CONFIDENTIAL

Execution Version

 

 

 

Certain identified information has been excluded from the exhibit because it is both (i) not material

and (ii) would likely cause competitive harm to the Company, if publicly disclosed.  

Double asterisks denote omissions.

 

 

AMENDED AND RESTATED LICENSE AGREEMENT

 

BY AND BETWEEN

 

AKEBIA THERAPEUTICS, INC.

 

AND

 

Vifor (INTERNATIONAL) LTD.

 

 

Dated April 8, 2019

 

 

CONFIDENTIAL

 

Table of Contents

 

			
	
 
	
 
	
Pages

	
 
	
 
	
 

	
Article 1
	
DEFINITIONS
	
2

	
Article 2
	
GOVERNANCE
	
10

	
Article 3
	
LICENSE GRANT
	
11

	
Article 4
	
SALES OF LICENSED PRODUCTS
	
12

	
Article 5
	
SUPPLY AGREEMENTS
	
14

	
Article 6
	
PRICING AND PRICE REPORTING
	
17

	
Article 7
	
EXCLUSIVITY
	
18

	
Article 8
	
REGULATORY
	
18

	
Article 9
	
TRADEMARKS; NAMES
	
19

	
Article 10
	
MANUFACTURING AND SUPPLY
	
20

	
Article 11
	
PAYMENTS
	
21

	
Article 12
	
INFORMATION AND ADVERSE DRUG EVENTS AND REPORTS
	
22

	
Article 13
	
REPRESENTATIONS, WARRANTIES, AND COVENANTS
	
23

	
Article 14
	
CONFIDENTIALITY
	
26

	
Article 15
	
INDEMNIFICATION
	
28

	
Article 16
	
TERM AND TERMINATION
	
29

	
Article 17
	
DISPUTE RESOLUTION; GOVERNING LAW
	
34

	
Article 18
	
MISCELLANEOUS
	
35

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
Schedule 1.7
	
(Akebia Patents)
	
 

	
Schedule 1.9
	
(Akebia Trademarks)
	
 

	
Schedule 1.53
	
(Executive Leadership Teams)
	
 

	
Schedule 5.5
	
(Authorized Dialysis Centers)
	
 

 

 

 

i

CONFIDENTIAL

 

AMENDED AND RESTATED LICENSE AGREEMENT

THIS AMENDED AND RESTATED LICENSE AGREEMENT (this “Amended Agreement”) is made and entered into as of April 8, 2019 (the “Amendment Execution Date”) between Akebia Therapeutics, Inc., a company organized and existing under the laws of the State of Delaware, United States of America with its principal offices at 245 First Street, Cambridge, MA 02142 (“Akebia”), and Vifor (International) Ltd., a corporation established in accordance with Swiss laws and registered in the commercial registry under CH-107.360.718, with its premises at Rechenstrasse 37, 9014 St. Gallen, Switzerland (“Licensee”).

Akebia and Licensee may be referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Akebia is the owner of, or otherwise controls, the Akebia Technology, the Licensed Compound, and the Licensed Products in the Territory;

WHEREAS, as of the Amendment Execution Date, the Licensed Product is an investigational agent in Phase 3 clinical trials for the treatment of anemia secondary to chronic kidney disease for which the safety and effectiveness in the Territory has not yet been established, and, as of such date, the Licensed Product has not yet received Regulatory Approval;

WHEREAS, Licensee has commercial capabilities in the Territory, and is interested in obtaining an exclusive license to sell Licensed Products in the Field in the Territory;

WHEREAS, as of the Amendment Execution Date, Vifor Pharma Ltd. (formerly Galenica Ltd), the ultimate parent company of Licensee, and Fresenius Medical Care AG & Co KGaA (“FMC”), the parent company of FMCNA, are joint venture partners of Vifor Fresenius Medical Care Renal Pharma Ltd. (“VFMCRP”), with Vifor Pharma Ltd. owning a controlling interest of VFMCRP; 

WHEREAS, Licensee and its Affiliates (including VFMCRP) are strategic partners of Fresenius Kidney Care Group LLC, a Delaware limited liability company (“FKC”), which is an Affiliate of FMCNA, and Licensee, indirectly through VFMCRP, has entered into a supply agreement with FKC and intends to enter into supply agreements with certain approved Third Party Dialysis Organizations;  

WHEREAS, pursuant to such supply agreement with FKC, FKC will provide such Licensed Products only to Authorized Dialysis Centers (other than Formulary Clinics owned by Third Party Dialysis Organizations), and pursuant to such supply agreements with Third Party Dialysis Organizations, such Third Party Dialysis Organizations will provide such Licensed Products only to Formulary Clinics owned by such Third Party Dialysis Organizations; 

WHEREAS, Akebia and Licensee are parties to that certain License Agreement dated May 12, 2017 (the “Original Execution Date”, and such agreement, the “Original Agreement”) pursuant to which Akebia granted Licensee an exclusive license to sell Licensed Products to FKC in the Field in the Territory;

 WHEREAS, Akebia and Licensee now desire to amend and restate the Original Agreement by entering into this Amended Agreement (the Original Agreement, as amended by this Amended Agreement, the “Agreement”); and

1

CONFIDENTIAL

 

WHEREAS, Licensee acknowledges that Akebia has entered into as of the Amendment Execution Date, and may during the Term enter into, other agreements with Third Parties with respect to the Licensed Products in the Territory, including granting such Third Parties rights and licenses to Promote or otherwise commercialize such Licensed Products in the Territory, and Licensee agrees that this Agreement is subject to and will be consistent with such agreements. 

NOW THEREFORE, the Parties agree to amend and restate the Agreement to read in its entirety as follows:

Article 1

DEFINITIONS

	
1.1
	
“Accounting Standards” means (a) International Financial Reporting Standards, as adopted in Switzerland, (b) U.S. GAAP, or (c) the applicable accounting standards to which the entity making the Net Sales is subject.

	
1.2
	
“Affiliate” means, with respect to an entity, any corporation, or other business entity controlled by, controlling, or under common control with the first entity, with “control” meaning direct or indirect beneficial ownership of at least 50% of the voting stock of, or at least a 50% interest in the income of, the applicable entity. For clarity, as of the Amendment Execution Date, Licensee is not an Affiliate of FMC, FMCNA or any member of the FMC/TPDO Group.

	
1.3
	
“Agreement” has the meaning set forth in the Recitals.

	
1.4
	
“Akebia” has the meaning set forth in the Preamble.

	
1.5
	
“Akebia Indemnitees” has the meaning set forth in Section 15.2 (Indemnification by Licensee).

	
1.6
	
“Akebia Know-How” means all Know-How that is both (a) Controlled as of the Original Execution Date or during the Term by Akebia or any of its Affiliates, and (b) is either (i) disclosed to Licensee or any of its Affiliates pursuant to this Agreement, or (ii) reasonably necessary for the sale of a Licensed Product.

	
1.7
	
“Akebia Patents” means all Patents that both (a) are Controlled as of the Amendment Execution Date or during the Term by Akebia or any of its Affiliates in the Territory; and (b) [**]. All Akebia Patents as of the Amendment Execution Date are, and as of the Effective Date will be, set forth on Schedule 1.7.

	
1.8
	
“Akebia Technology” means Akebia Know-How and Akebia Patents.

	
1.9
	
“Akebia Trademarks” means one or more trademarks selected by Akebia or its Affiliates or licensees under which Akebia or its Affiliates or licensees [**], as well as the Akebia company name and logo, and all trademark registrations and applications therefor, and all goodwill associated therewith. All Akebia Trademarks as of the Amendment Execution Date are, and as of the Effective Date will be, set forth on Schedule 1.9.

	
1.10
	
“Amended Agreement” has the meaning set forth in the Preamble.

	
1.11
	
“Amendment Execution Date” has the meaning set forth in the Preamble.

2

CONFIDENTIAL

 

	
1.12
	
“API” means active pharmaceutical ingredient, which is also commonly referred to as drug substance.  For the avoidance of doubt, API will include any prodrug form.

	
1.13
	
“Applicable Law” means any applicable law (including common law), statute, rule, regulation, order, judgment, or ordinance of any Governmental Authority (including the FDA), including those concerning environmental, health, regulatory, privacy, and safety matters.

	
1.14
	
“Authorized Dialysis Center” means Majority Owned Clinics and Formulary Clinics, and home dialysis programs administered through Majority Owned Clinics or Formulary Clinics. 

	
1.15
	
“Breaching Party” has the meaning set forth in Section 16.2 (Termination for Breach).

	
1.16
	
“Bundle Period” means the period during which a Licensed Product is reimbursed under the ESRD PPS Bundled Payment System.

	
1.17
	
“Business Day” means any day (other than a Saturday or Sunday) on which the banks in both Cambridge, Massachusetts and Zurich, Switzerland are open for business.

	
1.18
	
“CMS” means the Centers for Medicare & Medicaid Services.

	
1.19
	
“Combination Product” means any Licensed Product that is comprised of two or more APIs, at least one of which is the Licensed Compound.  

	
1.20
	
“Commercially Reasonable Efforts” means, with respect to the efforts to be expended by a Party with respect to any objective under this Agreement, those efforts and resources that a company within the biopharmaceutical industry of comparable size and resources would typically devote to accomplishing such similar objective under similar circumstances, in each case, with respect to Akebia’s efforts, taking into account the Relevant Factors in effect at the time such efforts are expended. 

	
1.21
	
“Comparative Sales Percentage” means [**]%; provided, however, that if the market share of patients potentially receiving treatment [**]% or more (as compared to the percentage market share of patients potentially receiving treatment [**], then the Comparative Sales Percentage shall be equal to [**].   For example, if the market share of patients potentially receiving treatment [**] is [**]%, and subsequently [**] to [**]%, then the new Comparative Sales Percentage would be equal to:   [**]%.

	
1.22
	
“Competing Product” means any product or product candidate that is not a Licensed Product and that (a) [**] and is approved for the DD-CKD Indication or the NDD-CKD Indication, or (b) is based on [**]. For the avoidance of doubt, the Parties acknowledge and agree that [**].

	
1.23
	
“Confidential Information” means Know-How and any technical, scientific, trade, research, manufacturing, business, financial, marketing, product, supplier, intellectual property, and other information that may be disclosed by one Party to the other Party pursuant to this Agreement (including information disclosed prior to the Original Execution Date pursuant to a Confidential Disclosure Agreement between the Parties dated [**], as amended by Amendment No. 1 dated [**]), regardless of whether such information is specifically designated as confidential and regardless of whether such information is in written, oral, electronic, or other form.

3

CONFIDENTIAL

 

	
1.24
	
“Controlled” means, with respect to a Party or its Affiliate, any Know-How, Patents, or other intellectual property right that such Party or Affiliate, as the case may be, owns or has a license to and has the ability to grant to the other Party a license or sublicense to, or a right of access with respect to, such Know-How, Patent, or other intellectual property right without violating the terms of any agreement or other arrangements with any Third Party or incurring any additional payment obligations to a Third Party. 

	
1.25
	
“Coordination Committee” has the meaning set forth in Section 2.1 (Formation and Purpose of the Coordination Committee).

	
1.26
	
“Co-Packaged Product” means a product that contains a Licensed Product and one or more Other Components and that is either (a) packaged together for sale or shipment as a single unit or sold at a single price, or (b) marketed or sold collectively as a single product.

	
1.27
	
“Cost of Goods Sold” or “COGS” means, with respect to any Licensed Product in [**] (a) for products and services acquired from or performed by Third Parties, the [**] actual amounts [**] such Third Parties to the extent [**]; and (b) to the extent manufacturing services are performed by [**] or its Affiliates, the fully-burdened cost of all direct materials and labor and fully allocated manufacturing overhead directly attributable to the manufacture, storage, packaging, and shipping of a Licensed Product [**], calculated in accordance with the Accounting Standards provided that for any Licensed Product manufactured by Akebia, [**] will be excluded from the calculation of COGS. In each case ((a) or (b)), COGS includes all [**], Licensed Product testing and yield loss costs, quality control, quality assurance, or other testing of Licensed Products, together with all reasonably allocated indirect costs and overhead applicable to the manufacturing of each Licensed Product, quality control, or technical operations functions, less costs of goods returned in accordance with Akebia’s, or its suppliers’, return policy. 

	
1.28
	
“Cover” means with respect to a particular subject matter at issue and a relevant Patent, that the manufacture, use, sale, offer for sale, or importation of the subject matter would fall within the scope of a claim in such Patent. 

	
1.29
	
“DD-CKD Indication” means the treatment of anemia in dialysis patients with chronic kidney disease.

	
1.30
	
“Dollars” or “$” means the legal tender of the U.S.

	
1.31
	
“Effective Date” has the meaning set forth in Section 3.2.1 (Effectiveness).

	
1.32
	
“Effective Period” has the meaning set forth in Section 3.2.2 (Suspension).

	
1.33
	
“ESA” means erythropoiesis stimulating agent.

	
1.34
	
“ESRD” means end-stage renal disease.

	
1.35
	
“ESRD PPS Bundled Payment System” means Medicare’s ESRD prospective payment system for a single per-treatment bundled payment that is made for the collection of renal dialysis products and services furnished to individuals for the treatment of ESRD in an ESRD facility or in a patient’s home, as set forth under 42 U.S.C. § 1395rr, as in effect as of the Amendment Execution Date.

	
1.36
	
“FDA” means the U.S. Food and Drug Administration or any successor agency thereto.

4

CONFIDENTIAL

 

	
1.37
	
“Field” means the treatment of FMCNA/TPDO Dialysis Patients solely at Authorized Dialysis Centers with a Licensed Product (a) for which Akebia receives Regulatory Approval in the DD-CKD Indication in the Territory, and (b) that is reimbursed either (i) using the TDAPA, or (ii) under the ESRD PPS Bundled Payment System. 

	
1.38
	
“Finished Form” means a Licensed Product containing the Licensed Compound as its sole API in the [**] form in any dosage strength that receives Regulatory Approval in the Territory in the DD-CKD Indication, with all applicable packaging and labeling.

	
1.39
	
“First Commercial Sale” means, for each Licensed Product in the Territory, the first sale for end use or consumption to a Third Party of such Licensed Product in the Territory by Licensee or its Affiliates after the granting of Regulatory Approval in the DD-CKD Indication in the Territory for such Licensed Product by the FDA. 

	
1.40
	
“FKC” has the meaning set forth in the Recitals. 

	
1.41
	
“Flash Reports” has the meaning set forth in Section 11.3.1 (Flash Reports).

	
1.42
	
“FMC” has the meaning set forth in the Recitals. 

	
1.43
	
“FMC/TPDO Group” means FMCNA, FMCNA’s Affiliates (including FKC), Majority Owned Clinics, Third Party Dialysis Organizations, and Formulary Clinics.

	
1.44
	
“FMCNA” or “Fresenius Medical Care North America” means Fresenius Medical Care Holdings, Inc., and any successor entity of all or substantially all of Fresenius Medical Care Holdings, Inc.’s dialysis clinic business in the Territory (by operation of law or by sale, merger, restructuring, or other transfer of direct or indirect ownership of dialysis clinics).  

	
1.45
	
“FMCNA/TPDO Dialysis Patients” means those patients who receive treatment with a Licensed Product in the DD-CKD Indication through an Authorized Dialysis Center, and for which one of the following is true: (a) the treatment is reimbursed using the TDAPA or under the ESRD PPS Bundled Payment System, (b) the treatment is reimbursed through any similar state program or commercial insurance plan, in each case, on a bundled payment basis for a defined set of services and medications, or (c) the Parties agree to include such patients as FMCNA/TPDO Dialysis Patients for purposes of this Agreement in accordance with Section 2.3.3 (Specific Responsibilities of the Coordination Committee). For clarity, FMCNA/TPDO Dialysis Patients includes TPDO Dialysis Patients.

	
1.46
	
“Formulary Clinics” means all dialysis clinics (including home dialysis programs) in the Territory that [**]. 

	
1.47
	
“Global Phase 3 DD-CKD Program” means the Phase 3 global clinical studies for the DD-CKD Indication, known informally as the INNO2VATE studies, consisting of a conversion study and a correction study, and known formally as the “Phase 3, Randomized, Open-Label, Active-Controlled Study Evaluating the Efficacy and Safety of Oral Vadadustat for the Maintenance Treatment of Anemia in Subjects with Dialysis-Dependent Chronic Kidney Disease (INNO2VATE – Conversion)” (AKB-6548-CI-0017) and the “Phase 3, Randomized, Open-Label, Active-Controlled Study Evaluating the Efficacy and Safety of Oral Vadadustat for the Correction of Anemia in Subjects with Incident Dialysis-Dependent Chronic Kidney Disease (INNO2VATE – Correction)” (AKB-6548-CI-0016).

5

CONFIDENTIAL

 

	
1.48
	
“Governmental Authority” means any court, agency, department, authority, or other instrumentality of any national, state, county, city, or other political subdivision.

	
1.49
	
“HIF” means hypoxia-inducible factor.

	
1.50
	
“Indemnified Party” has the meaning set forth in Section 15.3 (Indemnification Procedure).

	
1.51
	
“Indemnifying Party” has the meaning set forth in Section 15.3 (Indemnification Procedure). 

	
1.52
	
“Know-How” means inventions, discoveries, trade secrets, information, experience, data, formulas, procedures, technology and results (whether or not patentable), including practices, knowledge, know-how, experience and test data (including physical, chemical, biological, toxicological, pharmacological, clinical and veterinary data), dosage regimens, control assays, product specifications, analytical and quality control data, marketing, pricing, distribution cost and sales data or descriptions.

	
1.53
	
“Knowledge” means the actual knowledge of each Party’s [**], in each case, without any inquiry or investigation. 

	
1.54
	
“License” has the meaning set forth in Section 3.1 (Grant of License to Licensee).

	
1.55
	
“Licensed Compound” means vadadustat, formerly known as AKB-6548, and any salt or crystal form thereof. Licensed Compound includes any prodrug form of vadadustat.

	
1.56
	
“Licensed Product” means any pharmaceutical product, drug product, preparation, formulation, or dosage form thereof that has the Licensed Compound as at least one API.

	
1.57
	
“Licensed Product Plan” has the meaning set forth in Section 4.7 (Licensed Product Plan).

	
1.58
	
“Licensee” has the meaning set forth in the Preamble.

	
1.59
	
“Licensee Indemnitees” has the meaning set forth in Section 15.1 (Indemnification by Akebia).

	
1.60
	
“Licensee-FKC Supply Agreement” has the meaning set forth in Section 5.1 (Licensee-FKC Supply Agreement).

	
1.61
	
“Licensee-TPDO Supply Agreement” has the meaning set forth in Section 5.3 (Licensee-TPDO Supply Agreements).

	
1.62
	
“Losses” has the meaning set forth in Section 15.1 (Indemnification by Akebia).

	
1.63
	
“LSP” has the meaning set forth in Section 5.2.1 (Terms of the Licensee-FKC Supply Agreement).

	
1.64
	
“MACE” means any major adverse cardiovascular event, specifically, [**]. 

	
1.65
	
“MACE Endpoint” means a [**]. 

	
1.66
	
“Majority Owned Clinics” means all dialysis clinics and home dialysis programs in the Territory that are Affiliates of FMCNA.

	
1.67
	
“Milestone Payment” has the meaning set forth in Section 11.2 (Milestone Payment).

6

CONFIDENTIAL

 

	
1.68
	
“NDA” means a New Drug Application or its equivalent for submission to the FDA.

	
1.69
	
“NDD-CKD Indication” means the treatment of anemia in non-dialysis patients with chronic kidney disease.

	
1.70
	
“Net Sales” means the gross amounts invoiced by Licensee or its Affiliates for the sales of a Licensed Product to FKC and all Third Party Dialysis Organizations in the Territory, to the extent recognized and allowed in accordance with the Accounting Standards, as applicable and consistently applied, less the following deductions:   

	
 
	
1.70.1
	
inventory management fees paid to distributors and reasonably allocated to such Licensed Product, not to exceed [**]% of aggregate Net Sales in the applicable period;

	
 
	
1.70.2
	
tariffs, duties, excises, value added tax, and other sales taxes, and other taxes imposed upon and paid with respect to the sale, transportation, delivery, use, exportation, or importation of such Licensed Product (which taxes do not include income taxes); 

	
 
	
1.70.3
	
amounts actually repaid or credited upon returns, rejections, defects, recalls (due to spoilage, damage, or expiration of useful life), price adjustments, billing errors, or trial prescriptions;

	
 
	
1.70.4
	
freight, shipping, and insurance expenses specific to such Licensed Product and allocated accordingly;

	
 
	
1.70.5
	
allowances or credits actually paid or given to customers on account of price reductions affecting such Licensed Product; and 

	
 
	
1.70.6
	
discounts actually paid under state-legislated or Licensee-sponsored discount prescription drug programs or reductions or coupon and voucher programs.

Net Sales will be determined from books and records of Licensee or its applicable Affiliate, maintained in accordance with the Accounting Standards, as consistently applied, with respect to sales of any Licensed Product.

The sale of Licensed Products among Licensee or Licensee’s Affiliates that are [**], but in such cases Net Sales will [**] of such Licensed Products to a person or entity who is not an Affiliate.

Net Sales will not include Licensed Products transferred for use in connection with promotional use (including samples).

If Licensee or any of its Affiliates receives [**] for a Licensed Product, then the Net Sales amount for such Licensed Product will be [**].

In the event that a Licensed Product is sold as part of a Combination Product or a Co-Packaged Product, the Net Sales from the Combination Product or Co-Packaged Product, for the purposes of determining payments hereunder based on Net Sales, will be determined by multiplying the Net Sales of the Combination Product or Co-Packaged Product (as applicable), during the applicable reporting period, by the fraction, A/(A+B), where A is the average sale price of a Licensed Product when sold separately in Finished Form and B is either (a) the average sale price of the other APIs included in the Combination 

7

CONFIDENTIAL

 

Product when sold separately in finished form (in the case of a Combination Product), or (b) the average sale price of the Other Components included in the Co-Packaged Product when sold separately (in the case of a Co-Packaged Product), in each case, during the applicable reporting period or, if sales of both such Licensed Product and the other APIs did not occur in such period, then in the most recent reporting period in which sales of both occurred.  In the event that such average sale price cannot be determined for both a Licensed Product and all other APIs included in such Combination Product or all Other Components included in such Co-Packaged Product (as applicable), then Net Sales for the purposes of determining payments to Akebia hereunder will be calculated by multiplying the Net Sales of the Combination Product or Co-Packaged Product (as applicable) during the applicable reporting period by the fraction of C/(C+D) where C is the fair market value of a Licensed Product and D is either (i) the fair market value of all other APIs included in the Combination Product (in the case of a Combination Product), or (ii) the average sales price of the Other Components included in such Co-Packaged Product when sold separately (in the case of a Co-Packaged Product).  In such event, Licensee will in good faith make a determination of the respective fair market values of such Licensed Product and all other APIs or Other Components, as applicable, included in the Combination Product or Co-Packaged Product (as applicable).

If a Licensed Product is sold as part of a Co-Packaged Product, then Licensee or its applicable Affiliate [**]. 

	
1.71
	
“Non-Breaching Party” has the meaning set forth in Section 16.2 (Termination for Breach).

	
1.72
	
“Original Agreement” has the meaning set forth in the Recitals.

	
1.73
	
“Original Execution Date” has the meaning set forth in the Recitals.

	
1.74
	
“Other Component” means one or more other devices or components.

	
1.75
	
“Party” and collectively “Parties” has the meaning set forth in the Preamble.

	
1.76
	
“Patents” means (a) all patents and patent applications in any country or jurisdiction in the Territory, and (b) any substitutions, divisions, continuations, continuations-in-part, reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary protection certificates, and the like.

	
1.77
	
“Product Materials” means any and all promotional materials, training materials, medical education materials, packaging and labeling, and all other literature or other information related to a Licensed Product.

	
1.78
	
“Profit” means, with respect to a Licensed Product in the Territory, the Net Sales or other revenue received in the Territory for such Licensed Product in a given period minus (a) the Supply Price paid by Licensee for such Licensed Product, minus (b) an amount equal to [**], and minus (c) [**]. 

	
1.79
	
“Promote,” “Promotion,” or “Promoting” means to market, detail, advertise, or otherwise promote a Licensed Product, but does not include the sale of such Licensed Product.

	
1.80
	
“Quarterly Report” has the meaning set forth in Section 11.3.2 (Quarterly Reports).

	
1.81
	
“Recipient” has the meaning set forth in Section 14.2 (Exceptions).

	
1.82
	
“Regulatory Approval” means any NDA approval by the FDA.

8

CONFIDENTIAL

 

	
1.83
	
“Regulatory Filings” means all applications, filings, dossiers, and other documents submitted to the FDA in support of research or development of the Licensed Compound and the Licensed Products, including for the purpose of obtaining Regulatory Approval from the FDA.  Regulatory Filings will include all INDs and NDAs.

	
1.84
	
“Relevant Factors” means the following factors that may affect the research, development, Regulatory Approval, manufacturing, or commercialization of a Licensed Product (without taking into account any other product or products that Akebia or its Affiliates may be developing, manufacturing, or commercializing): actual issues of safety, efficacy, or stability; product profile (including product modality, category and mechanism of action); stage of development or life cycle status; actual and projected research, development, Regulatory Approval, manufacturing, and commercialization costs; issues regarding the ability to manufacture or have manufactured any Licensed Product; the likelihood of obtaining Regulatory Approvals for any Licensed Product in the Territory and the timing of such Regulatory Approvals; the labeling and anticipated labeling of such Licensed Product; past performance of such Licensed Product or similar products; present and future market potential of such Licensed Product; existing or projected pricing, sales, reimbursement, and profitability of such Licensed Product; pricing or reimbursement changes in relevant countries in the Territory; and proprietary position, strength, and duration of patent protection and anticipated exclusivity of such Licensed Product; and other relevant scientific, technical, operational, and commercial factors.

	
1.85
	
“Safety Data” has the meaning set forth in Section 12.2 (Adverse Drug Events).

	
1.86
	
“Sale Transaction” has the meaning set forth in Section 18.2 (Standstill).

	
1.87
	
“Statistically Significant” means a p-value less than [**].

	
1.88
	
“Supply Agreement” has the meaning set forth in Section 10.2 (Commercial Supply Agreement).

	
1.89
	
“Supply Price” has the meaning set forth in Section 10.2 (Commercial Supply Agreement).

	
1.90
	
“Suspension Period” has the meaning set forth in Section 3.2.2 (Suspension).

	
1.91
	
“TDAPA” means Medicare’s transitional drug add-on payment adjustment as defined under 42 CFR § 413.234(c) and as amended in the Federal Register / Vol. 83, No. 220 / November 14, 2018 and in effect as of the Amendment Execution Date.

	
1.92
	
“TDAPA Period” means the period of time during which a Licensed Product is reimbursed using the TDAPA.

	
1.93
	
“Term” has the meaning set forth in Section 16.1 (Term).

	
1.94
	
“Territory” means the United States of America and its possessions, including Puerto Rico. 

	
1.95
	
“Third Party” means any person or entity other than a Party or its Affiliates.

	
1.96
	
“Third Party Dialysis Organization” (or “TPDO”) means a Third Party identified on Schedule 5.5 that owns Formulary Clinics, has been approved by Akebia in accordance with Section 5.5.1 (FMC/TPDO Group; Addition of Third Party Dialysis Organizations), and has entered into a Licensee-TPDO Supply Agreement meeting the requirements set forth in Section 5.3 (Licensee-TPDO Supply Agreements). 

9

CONFIDENTIAL

 

	
1.97
	
“TPDO Dialysis Patient” means those FMCNA/TPDO Dialysis Patients who receive treatment through a Formulary Clinic owned by a Third Party Dialysis Organization.

	
1.98
	
“U.S.” means the United States of America and its territories and possessions, including Puerto Rico.

	
1.99
	
“Valid Claim” means (a) a claim in any issued and unexpired Akebia Patent in the Territory, which claim has not been held invalid or unenforceable by a non-appealed or un-appealable decision of a court or Governmental Authority or other appropriate body of competent jurisdiction and has not been admitted invalid or unenforceable through reissue, reexamination, or disclaimer, or has not been made unenforceable due to failure to pay maintenance fees; or (b) a claim in any pending Akebia Patent in the Territory that has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application; provided that such claim has not been pending more than seven years from the priority date of such application (but if such pending claim with a pendency of seven years or longer subsequently issues it will be considered a Valid Claim upon issuance). “Valid Claim” does not include any claim in any issued and unexpired Akebia Patent in the Territory Covering an alternative manufacturing process to produce the Licensed Compound or a Licensed Product, including its components (i.e., a manufacturing process other than the manufacturing process used to produce the Licensed Compound or a Licensed Product as of the Effective Date).

	
1.100
	
“VFMCRP” has the meaning set forth in the Recitals. 

Article 2

GOVERNANCE

	
2.1.
	
Formation and Purpose of Coordination Committee.  Licensee and Akebia will establish the coordination committee (“Coordination Committee”), which committee will coordinate and oversee the Parties’ activities hereunder and have the additional responsibilities provided for herein. The Coordination Committee will dissolve upon the expiration of the Term. Each Party will designate up to three representatives with appropriate knowledge and expertise to serve as members of the Coordination Committee. Each Party may replace its Coordination Committee representatives at any time upon written notice to the other Party.  

	
2.2.
	
Meetings.  The Coordination Committee will hold meetings at such times as it elects to do so, but in no event will such meetings be held less frequently than [**] per calendar year, and such meetings may be held by audio or video teleconference. Other employees of each Party involved in activities under this Agreement may attend meetings of the Coordination Committee as participants, and, with the consent of each Party, consultants, representatives, or advisors involved in the same activities may attend meetings of the Coordination Committee as observers; provided, however, that such Third Party participants and observers are under legally binding obligations of confidentiality and non-use applicable to the Confidential Information of each Party that are at least as stringent as those set forth in Article 14 (Confidentiality).

	
2.3.
	
Specific Responsibilities of the Coordination Committee.  The Coordination Committee will:

	
 
	
2.3.1
	
coordinate the activities of the Parties hereunder;

	
 
	
2.3.2
	
[**] a Party’s indication of interest in having [**], as described in [**];

10

CONFIDENTIAL

 

	
 
	
2.3.3
	
[**] whether to add or remove any patient populations from the definition of FMCNA/TPDO Dialysis Patients, as described in Section 4.5 (FMCNA/TPDO Dialysis Patients);

	
 
	
2.3.4
	
[**] whether to add or remove any Authorized Dialysis Centers from Schedule 5.5;

	
 
	
2.3.5
	
[**] any required revisions to this Agreement in response to any reimbursement system change, as described under Section 4.6 (Reimbursement System Changes);

	
 
	
2.3.6
	
[**] Akebia’s initial Licensed Product Plan or any amendment or update thereto, or any matter related to the Licensed Product Plan referred to the Coordination Committee by either Party, as described under Section 4.7 (Licensed Product Plan); 

	
 
	
2.3.7
	
[**] supply of the Licensed Products in the Territory;

	
 
	
2.3.8
	
perform such other functions as appropriate to further the purposes of this Agreement as determined by the Parties; 

	
 
	
2.3.9
	
receive at least on a [**] basis updates regarding Akebia’s [**] of all Licensed Products for the DD-CKD Indication that are [**] as defined in this Agreement [**] in the Territory; and

	
 
	
2.3.10
	
[**] any adjustment to the Comparative Sales Percentage following a [**] in the market share of patients potentially receiving treatment [**].

Article 3

LICENSE GRANT

	
3.1.
	
Grant of License to Licensee.  Subject to the terms and conditions of this Agreement (including Section 3.2 (Effectiveness and Suspension), Section 3.3 (No Implied Rights), and Section 7.1 (Akebia Restrictions)), Akebia hereby grants to Licensee an exclusive (even as to Akebia), non-sublicensable, non-transferrable, license under the Akebia Technology to sell the Licensed Products solely to FKC and Third Party Dialysis Organizations in the Territory in the Field during the Term, subject to the limitations set forth in Section 3.2 (Effectiveness and Suspension) (the “License”). 

	
3.2.
	
Effectiveness and Suspension.  

	
 
	
3.2.1
	
Effectiveness. The License granted in Section 3.1 (Grant of License to Licensee) will only become effective and exercisable by Licensee if and when (a) the FDA has granted Regulatory Approval for a Licensed Product in the DD-CKD Indication in the Territory, (b) upon the earlier of a determination by CMS that such Licensed Product is either (i) to be reimbursed using the TDAPA or (ii) included as part of the ESRD PPS Bundled Payment System, and (c) Licensee has paid to Akebia the Milestone Payment in accordance with Section 11.2 (Milestone Payment) (the date on which (a), (b), and (c) have occurred, the “Effective Date”).  Furthermore, such License will become effective with respect to each particular Third Party Dialysis Organization if, as of the Effective Date, Licensee has entered into, or thereafter upon Licensee entering into, a Licensee-TPDO Supply Agreement with such Third Party Dialysis Organization in accordance with Section 5.5.1 (FMC/TPDO Group; Addition of Third Party Dialysis Organizations).

11

CONFIDENTIAL

 

	
 
	
3.2.2
	
Suspension. Following the Effective Date, the License granted in Section 3.1 (Grant of License to Licensee), will remain in effect and exercisable by Licensee (a) during the TDAPA Period and (b) during the Bundle Period, in each case ((a) and (b)), except during any period during which the License is suspended pursuant to Section 4.6 (Reimbursement System Changes), Section 4.7 (Licensed Product Plan), Section 16.7 (Termination or Suspension for Impacts on Pricing), or Section 16.8.3 (Suspension Based on Comparative Sales Levels) (the “Effective Period”). During any period after the Effective Date during the Term that is not an Effective Period (a “Suspension Period”), the provisions set forth in Section 16.14 (Suspension of Licensed Rights) shall apply. 

	
3.3.
	
No Implied Rights.  Licensee will not practice the Akebia Technology or exploit the Licensed Compound or any Licensed Product other than as expressly licensed and permitted under this Agreement. Nothing in this Agreement will be interpreted to grant Licensee or any of its Affiliates any rights under any intellectual property rights owned or Controlled by Akebia or its Affiliates (including Akebia Technology) that are not expressly granted herein, whether by implication, estoppel, or otherwise. Any rights not expressly granted to Licensee by Akebia under this Agreement are hereby retained by Akebia. Without limiting the generality of the foregoing, Akebia retains the exclusive right to sell Licensed Products to any Third Party outside of the Field. 

Article 4

SALES OF LICENSED PRODUCTS

	
4.1.
	
No Unauthorized Sales.  Licensee will not import, offer for sale, sell, or distribute the Licensed Compound or any Licensed Product (a) other than as expressly set forth in this Agreement in the Field in the Territory, (b) outside of the Territory, or (c) to any person or entity who uses or who Licensee reasonably expects will use such Licensed Product outside of the Field in the Territory. Licensee will promptly report to Akebia any unauthorized use, distribution, or transfer of the Licensed Compound or any Licensed Product in the Territory by or on behalf of Licensee or its Affiliates, FKC, the LSP, the Third Party Dialysis Organizations or any Authorized Dialysis Center. Licensee will use Commercially Reasonable Efforts to stop any such unauthorized use, distribution, or transfer of such Licensed Compound or Licensed Product. In addition, if there is any unauthorized use, distribution, or transfer of any Licensed Product by FKC, the LSP, the Third Party Dialysis Organizations or any Authorized Dialysis Center or any of their Affiliates to or by a Third Party that is not an FMCNA/TPDO Dialysis Patient or Authorized Dialysis Center, then, if Licensee does not cause such unauthorized use, distribution, or transfer to cease or terminate the rights of FKC or the offending LSP, Third Party Dialysis Organization, Authorized Dialysis Center or any of their Affiliates, in each case, within [**] of the date on which Licensee knows or should have known about such unauthorized use, distribution, or transfer, then the Parties will discuss in good faith an agreeable resolution for a period of [**]. If the Parties do not reach such a resolution during such [**] period, then Akebia may terminate this Agreement pursuant to Section 16.4 (Termination by Akebia for Unauthorized Sales). 

	
4.2.
	
Codes, Marks, and Packaging.  Unless otherwise agreed by the Parties, the Licensed Products sold by Licensee to FKC and Third Party Dialysis Organizations under this Agreement will not be resold or distributed under a different labeler code, product code, trade name, trademark, or packaging than units sold by Akebia outside of this Agreement or supplied by Akebia under this Agreement. Licensee will not change any such code, trade name, trademark, or packaging of any Licensed Product supplied to it under the Supply Agreement and will not affix any label or sticker on any Licensed Product without Akebia’s prior written consent. 

12

CONFIDENTIAL

 

	
4.3.
	
Promotion and Detailing.  Akebia retains for itself and on behalf of its Affiliates and licensees (other than Licensee) the sole right to Promote the Licensed Products, and Licensee and its Affiliates will not, and Licensee will ensure that the entities in the FMC/TPDO Group do not, Promote any Licensed Product. If either Party desires [**], then such Party will provide such [**] to the other Party in writing as soon as possible after [**] for a Licensed Product in the DD-CKD Indication in the Territory, and the Parties will [**] such [**] in the Territory through the Coordination Committee pursuant to Section 2.3.2 (Specific Responsibilities of the Coordination Committee). In any event, Licensee will provide written notification to Akebia of [**] no later than [**] after (a) the [**] in the DD-CKD Indication in the Territory, and (b) [**] (i) [**] the TDAPA or (ii) [**] the ESRD PPS Bundled Payment System, and following such notice the Parties will [**]. Nothing in this Agreement will prohibit FKC or any entity in the FMC/TPDO Group from including references to any Licensed Product or otherwise engaging in customary and routine clinical communications with their respective patient care staff regarding any Licensed Product or dosing regimens that include any Licensed Product. Licensee and its Affiliates will only use Product Materials that are prepared by Akebia, or otherwise approved in advance in writing by Akebia, in each case, in connection with its sale of such Licensed Products under this Agreement or any [**] that may be [**] in accordance with this Section 4.3 (Promotion and Detailing). In addition, Licensee will ensure that the entities in the FMC/TPDO Group only use Product Materials that are consistent with those Product Materials prepared and provided by Akebia.  For the avoidance of doubt, unless otherwise agreed in writing by the Parties pursuant to this Section 4.3 (Promotion and Detailing), nothing in this Agreement will prevent Akebia or its Affiliates or licensees (other than Licensee) from Promoting any Licensed Product at any Authorized Dialysis Center. 

	
4.4.
	
Use by the FMC/TPDO Group. 

	
 
	
4.4.1
	
Medicaid or 340B Programs.  Licensee will, will cause its Affiliates to, and will require the FMC/TPDO Group to, use and sell (as applicable) each Licensed Product solely in the Field in the Territory. To the fullest extent permitted by Applicable Law, Licensee will not, and will not knowingly permit its Affiliates, or the FMC/TPDO Group to, use or sell (as applicable) any Licensed Product in any manner that [**]. In addition, to the fullest extent permitted by Applicable Law, in a written agreement with each of its Affiliates, or the FMC/TPDO Group, Licensee will cause and require such Affiliates, or members of the FMC/TPDO Group not to use or sell (as applicable) any Licensed Product in any manner that [**]. Licensee will provide prompt written notice to Akebia if Licensee or any of its Affiliates, or member of the FMC/TPDO Group uses or sells, or plans to use or sell, in each case, any Licensed Product in any manner that [**].  

	
 
	
4.4.2
	
Licensed Product Prices.  To the fullest extent permitted by Applicable Law, Licensee will not, and will not knowingly permit its Affiliates, or the FMC/TPDO Group to, use or sell (as applicable) any Licensed Product in any manner that would result in [**].  In addition, to the fullest extent permitted by Applicable Law, in a written agreement with each of its Affiliates, or any member of the FMC/TPDO Group that receives any Licensed Product, Licensee will cause and require such Affiliates, or member of the FMC/TPDO Group not to use or sell (as applicable) such Licensed Product in any manner that would result in [**].

13

CONFIDENTIAL

 

	
4.5.
	
FMCNA/TPDO Dialysis Patients.  Without limiting the generality of Section 6.2 (Intention Regarding Impacts on Pricing), it is the intention of the Parties that no patient will receive any Licensed Product supplied under this Agreement if the supply of such Licensed Product to such patient [**]. The Coordination Committee will [**] of any patient populations from the definition of FMCNA/TPDO Dialysis Patients, and following such recommendation by the Coordination Committee the Parties may agree in writing whether to [**] (as applicable) such patient populations in or from the definition of FMCNA/TPDO Dialysis Patients; provided that no patient will be included in the definition of FMCNA/TPDO Dialysis Patient if the supply of such Licensed Product to such patient would violate the intention statement set forth in the first sentence of Section 4.5 (FMCNA/TPDO Dialysis Patients), and any such patient will be removed from such definition. 

	
4.6.
	
Reimbursement System Changes.  In the event of a proposed rule change to the TDAPA or the ESRD PPS Bundled Payment System, the Coordination Committee will [**] revisions to this Agreement, if any, in response to such proposed rule change. Following such [**] by the Coordination Committee, the Parties may [**] for the purpose of entering into a written amendment to this Agreement or such other changes to this Agreement as the Parties may agree. If such proposed rule change is not [**] to the TDAPA or the ESRD PPS Bundled Payment System and the Parties fail to enter into such a written amendment within [**] of issuance of the proposed rule change (unless the Parties agree in writing that no amendment is necessary), (a) if the License is not then in effect, then the License will not go into effect under Section 3.2.1 (Effectiveness) (and the Effective Date will not occur) until the Parties enter into such an amendment, or (b) if the License is then in effect, then Akebia may elect to suspend the License and commence a Suspension Period under Section 3.2.2 (Suspension), which Suspension Period will continue until the Parties enter into such an amendment. 

	
4.7.
	
Licensed Product Plan.  [**], Akebia will prepare and submit to the Coordination Committee for its [**], pursuant to Section 2.3.6 (Specific Responsibilities of the Coordination Committee), a plan setting forth [**] (the “Licensed Product Plan”). The Licensed Product Plan may include information relating to [**].  In any event, the Licensed Product Plan must be [**].  Prior to the Effective Date, the Parties, working through the Coordination Committee, will [**] the Licensed Product Plan, and Akebia will [**] into a revised Licensed Product Plan. [**]. After the Effective Date, Akebia may prepare and submit to the Coordination Committee for its [**] amendments to the Licensed Product Plan on an as-needed basis, for example [**]. The Parties, working through the Coordination Committee, will [**] such amendments, and Akebia will give due consideration to and use good faith efforts to incorporate any reasonable recommendations of Licensee into such amendments. After the Effective Date, if Licensee does not implement the Licensed Product Plan meeting the requirements of this Section 4.7 (Licensed Product Plan), and any amendments thereto, then Akebia may elect to suspend the License and commence a Suspension Period under Section 3.2.2 (Suspension).

Article 5

SUPPLY AGREEMENTS

	
5.1.
	
Licensee-FKC Supply Agreement.  Licensee has entered into a supply agreement with its Affiliate VFMCRP dated as of December 18, 2018, and in turn VFMCRP has entered into an identical supply agreement with FKC with an effective date of December 18, 2018, pursuant to which, after the Effective Date, Licensed Products will be sold by Licensee to VFMCRP and from VFMCRP to FKC in an arms-length transaction for use in Authorized Dialysis Centers, other than those Formulary Clinics owned by Third Party Dialysis Organizations (together, the “Licensee-FKC Supply Agreement”), and only pursuant to such agreements. 

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5.1.1
	
Initial Supply Agreements.  Licensee represents and warrants that the Licensee-FKC Supply Agreement satisfies the requirements of Section 5.2 (Terms of the Licensee-FKC Supply Agreement), and does not include any terms related to [**] of any Licensed Product.  If the Licensee-FKC Supply Agreement is terminated or expires, then Akebia may terminate this Agreement pursuant to Section 16.6 (Termination by Akebia for Failure to Amend the Licensee-FKC Supply Agreement). 

	
 
	
5.1.2
	
Amendment to Supply Agreement. No later than [**] after (a) the FDA has granted Regulatory Approval for a Licensed Product in the DD-CKD Indication in the Territory, and (b) the earlier of a determination by CMS that such Licensed Product (i) is to be reimbursed using the TDAPA or (ii) is included as part of the ESRD PPS Bundled Payment System, Licensee and FKC will amend the Licensee-FKC Supply Agreement to finalize such agreement in order to satisfy all requirements of Section 5.2 (Terms of the Licensee-FKC Supply Agreement). If Licensee and FKC do not enter into an amendment of such Licensee-FKC Supply Agreement during such [**] period, then Akebia may terminate this Agreement pursuant to Section 16.6 (Termination by Akebia for Failure to Amend the Licensee-FKC Supply Agreement). Licensee will provide notice to Akebia that the amendments described herein have been executed and delivered by the parties thereto no later than [**] after entering into such amendments. 

	
5.2.
	
Terms of the Licensee-FKC Supply Agreement.  Licensee will ensure that the Licensee-FKC Supply Agreement:  

	
 
	
5.2.1
	
requires that FKC either (a) use [**] logistic service providers (each, an “LSP”) to provide the Licensed Products solely to the Authorized Dialysis Centers (other than those Formulary Clinics owned by Third Party Dialysis Organizations), in which arrangement LSP will not own or take title to any Licensed Product, or (b) itself directly provide such Licensed Products solely to Authorized Dialysis Centers other than those Formulary Clinics owned by Third Party Dialysis Organizations;

	
 
	
5.2.2
	
prohibits FKC from distributing or transferring Licensed Products to any person or entity other than (a) the LSPs or (b) Authorized Dialysis Centers that are not Formulary Clinics owned by Third Party Dialysis Organizations;

	
 
	
5.2.3
	
requires that FKC report any unauthorized use, distribution, or transfer of any Licensed Product promptly to Licensee;

	
 
	
5.2.4
	
names Akebia as an intended third party beneficiary of such Licensee-FKC Supply Agreement with respect to relevant and appropriate provisions of such agreement;

	
 
	
5.2.5
	
(a) prohibits FKC and FMCNA, FMCNA’s Affiliates (including FKC), or Majority Owned Clinics from [**], except as required by Applicable Law), and (b) [**]; 

	
 
	
5.2.6
	
requires FKC to cause each Authorized Dialysis Center to (a) not distribute or transfer any Licensed Product to any person or entity other than an FMCNA/TPDO Dialysis Patient or another Authorized Dialysis Center, (b) use each Licensed Product, and implement reasonable measures to ensure that each Licensed Product is used, only for (i) the treatment of FMCNA/TPDO Dialysis Patients in the DD-CKD Indication, and (ii) delivering clinical treatment consistent with the requirements of Section 4.4 (Use by the FMC/TPDO Group) and to FMCNA/TPDO Dialysis Patients; (c) report any unauthorized use, distribution, or transfer of any Licensed Product promptly to Licensee; and (d) [**], except as required by Applicable Law and to promptly inform Licensee, FKC, and Akebia if the Authorized Dialysis Center believes that it is required by Applicable Law [**]; and  

	
 
	
5.2.7
	
contains such additional provisions as may be necessary to ensure Licensee’s compliance with the terms set forth in this Agreement.

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5.3.
	
Licensee-TPDO Supply Agreements.  Licensee will enter into supply agreements with each Third Party Dialysis Organization pursuant to which, after the Effective Date, Licensee will sell Licensed Products to such Third Party Dialysis Organizations in arms-length transactions for use in Formulary Clinics owned by such Third Party Dialysis Organizations (each such supply agreement, a “Licensee-TPDO Supply Agreement”), and only pursuant to such agreement. Licensee will ensure that each Licensee-TPDO Supply Agreement with each Third Party Dialysis Organization:  

	
 
	
5.3.1
	
requires that the Third Party Dialysis Organization itself directly provide Licensed Products solely to Formulary Clinics owned by such Third Party Dialysis Organization that have been approved by Akebia as provided in Section 5.5 (FMC/TPDO Group); 

	
 
	
5.3.2
	
prohibits the Third Party Dialysis Organization from distributing or transferring Licensed Products to any person or entity other than Formulary Clinics owned by such Third Party Dialysis Organization and approved by Akebia as provided in Section 5.5 (FMC/TPDO Group);

	
 
	
5.3.3
	
requires that the Third Party Dialysis Organization report any unauthorized use, distribution, or transfer of any Licensed Product promptly to Licensee;

	
 
	
5.3.4
	
names Akebia as an intended third party beneficiary of such Licensee-TPDO Supply Agreement with respect to relevant and appropriate provisions of such agreement;

	
 
	
5.3.5
	
(a) prohibits the Third Party Dialysis Organization and its Formulary Clinics from [**], except as required by Applicable Law, and (b) [**];

	
 
	
5.3.6
	
requires the Third Party Dialysis Organization to (a) not distribute or transfer any Licensed Product to any person or entity other than a TPDO Dialysis Patient or a Formulary Clinic owned by such Third Party Dialysis Organization, (b) use each Licensed Product, and implement reasonable measures to ensure that each Licensed Product is used, only for (i) the treatment of TPDO Dialysis Patients in the DD-CKD Indication, and (ii) delivering clinical treatment consistent with the requirements of Section 4.4 (Use by the FMC/TPDO Group); (c) report any unauthorized use, distribution, or transfer of any Licensed Product promptly to Licensee; and (d) [**], except as required by Applicable Law and to promptly inform Licensee, the Third Party Dialysis Organization, and Akebia if such Third Party Dialysis Organization or any of its Formulary Clinics believes that it is required by Applicable Law [**];

	
 
	
5.3.7
	
permits Licensee to terminate such Licensee-TPDO Supply Agreement as contemplated by Section 16.8.2 (Termination of Third Party Dialysis Organizations);

	
 
	
5.3.8
	
permits Akebia to take assignment of such Licensee-TPDO Supply Agreement in the event this Agreement is terminated pursuant to Section 16.8.1 (Termination Based on Aggregate Sales Levels) or Section 16.8.4 (Termination Based on Comparative Sales Levels); and

	
 
	
5.3.9
	
contains such additional provisions as may be necessary to ensure Licensee’s compliance with the terms set forth in this Agreement.

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5.4.
	
Akebia’s Right to Review Agreements.  Upon request, Licensee further agrees to permit an independent auditor or law firm selected by Akebia and approved by Licensee, which approval will not be unreasonably withheld or delayed, to examine the Licensee-FKC Supply Agreement and each Licensee-TPDO Supply Agreement, or other agreements between Licensee and FKC, or any member of the FMC/TPDO Group, regarding a Licensed Product, in each case, solely to ensure that such agreements are consistent with the terms set forth in this Agreement.  Such auditor or law firm will be bound by a legal agreement obligating it to maintain the confidentiality of such information and not to share such information with Akebia or any other person.  Such auditor or law firm will summarize its findings solely by stating whether or not such agreements are consistent with Licensee’s obligations hereunder, and if such agreements are inconsistent with Licensee’s obligations, identify such inconsistencies to Akebia. Such examination will not be performed more than once per calendar year.  Akebia will be responsible for the expenses incurred in connection with such examination, except in the event that the results of any examination reveal that such agreements are materially inconsistent with the terms set forth in this Agreement, in which case reasonable fees for such examination will be paid by Licensee.  

	
5.5.
	
FMC/TPDO Group.  

	
 
	
5.5.1
	
FMC/TPDO Group; Addition of Third Party Dialysis Organizations. As of the Amendment Execution Date, listed on Schedule 5.5 are all of the Authorized Dialysis Centers (including each Formulary Clinic and Majority Owned Clinic, which are each separately identified on Schedule 5.5) and each Third Party Dialysis Organization and each Formulary Clinic owned by each such Third Party Dialysis Organization.  Licensee will provide to the Coordination Committee an updated Schedule 5.5 [**], and on the Effective Date; provided that, [**], Licensee will promptly provide to the Coordination Committee an updated Schedule 5.5 that includes, under the heading ‘Formulary Clinics,’ each Third Party Dialysis Organization [**] and such Third Party Dialysis Organization’s Formulary Clinics; and provided further that the License granted in Section 3.1 (Grant of License to Licensee) will only become effective and exercisable by Licensee with respect to a Third Party Dialysis Organization and its Formulary Clinics, and such Third Party Dialysis Organization and its Formulary Clinics will only be considered Authorized Dialysis Centers for the purposes of this Agreement when Licensee has entered into a supply agreement with such Third Party Dialysis Organization that contains the supply agreement terms set forth in Section 5.3 (Licensee-TPDO Supply Agreements) and only for so long as such Licensee-TPDO Supply Agreement remains in effect.  Licensee will cause each Third Party Dialysis Organization to adhere to the obligations set forth in Article 4 (Sales of Licensed Products). 

	
 
	
5.5.2
	
Schedule 5.5. [**] the Third Party Dialysis Organizations and their Formulary Clinics set forth on Schedule 5.5 hereto as of the Amendment Execution Date. Licensee represents and warrants that attached hereto as Schedule 5.5 is an updated version of Schedule 5.5 that is accurate and complete as of the Amendment Execution Date.

Article 6

PRICING AND PRICE REPORTING

	
6.1.
	
Pricing.  Other than with respect to the FMC/TPDO Group’s customary dialysis clinic cost reporting to CMS and any other Governmental Authority, Licensee will not, will cause its Affiliates not to, and will require the FMC/TPDO Group not to, disclose [**], and in each case, such information will be Confidential Information subject to the terms of Article 14 (Confidentiality). 

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6.2.
	
Intention Regarding Impacts on Pricing.  Akebia intends, and enters into this Agreement in reliance upon, the Agreement and the supply of Licensed Product by Akebia to Licensee under the Supply Agreement not giving rise to, or otherwise affecting, [**].   

	
6.3.
	
Impacts on Pricing.  If, at any time, (a) there has been a breach of Section 6.1 (Pricing), (b) through the actions by or on behalf of Licensee or any of its Affiliates, or members of the FMC/TPDO Group [**], and even if such actions do not constitute a breach by Licensee under Section 4.4.2 (Licensed Product Prices)), [**], or (c) [**], then, in each case, without limiting Akebia’s other rights and remedies under this Agreement, the Parties will [**] an agreeable resolution for a period of [**].  If the Parties do not reach such a resolution during such [**] period, then Akebia may suspend the License or terminate this Agreement pursuant to Section 16.7 (Termination or Suspension by Akebia for Impacts on Pricing). 

Article 7

EXCLUSIVITY

	
7.1.
	
Akebia Restrictions.  During the Effective Period, Akebia will not, and will cause its Affiliates and licensees to not, sell any Licensed Product directly to any member of the FMC/TPDO Group for any use in the Field in the Territory; provided, however, that Akebia will not be required to prohibit any Third Party wholesaler or distributor from selling any Licensed Product to the FMC/TPDO Group. 

	
7.2.
	
Licensee Restrictions.  Without the prior written consent of Akebia, neither Licensee nor any of its Affiliates will directly or indirectly Promote, sell, or have sold, or enter into any agreement to Promote, sell, or have sold, any Competing Product in the Territory to FKC, any entity in or member of the FMC/TPDO Group, or any Authorized Dialysis Center. Notwithstanding the foregoing, if [**]. 

Article 8

REGULATORY

Akebia will use Commercially Reasonable Efforts to (a) prepare the NDA in the Territory for each Licensed Product based on its global development plan for such Licensed Product, and (b) obtain and maintain Regulatory Approval in the DD-CKD Indication in the Territory for each Licensed Product. Akebia will be responsible for preparing, filing, and submitting, directly or through its Affiliates or licensees, all Regulatory Filings and correspondence with the applicable regulatory authorities for each Licensed Product at its sole cost and expense.

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Article 9

TRADEMARKS; NAMES

	
9.1.
	
Trademark Responsibility.  Akebia will be responsible for (a) registering, prosecuting, maintaining, and enforcing the Akebia Trademarks in the Territory, (b) preparing any guidelines applicable to the use of the Akebia Trademarks, and (c) investigating and defending any infringement or threatened infringement relating to any of the foregoing, in each case, at its sole cost and expense.  Licensee will cooperate and assist Akebia with any of the foregoing activities with respect to all Akebia Trademarks, including, if requested by Akebia, providing any specifications, affidavits, declarations, or other documents necessary for Akebia to submit to appropriate Governmental Authorities in order to register and prosecute the Akebia Trademarks.  Akebia will own and be responsible for securing any domain names associated with the Akebia Trademarks, and will be responsible for the costs associated with protecting such domain names.  Neither Licensee nor any of its Affiliates will obtain or hold any such domain name in its own name.  

	
9.2.
	
Trademark License.  Subject to the terms and conditions of this Agreement, effective as of the Effective Date, Akebia hereby grants and will grant to Licensee and its Affiliates a non-exclusive non-sublicensable, non-transferrable, royalty-free license to use the Akebia Trademarks solely in connection with the sale, and, [**], of the Licensed Products in the Field in the Territory in accordance with this Agreement. Licensee will maintain the quality of the Licensed Products in accordance with this Agreement and the Supply Agreement. Licensee additionally will assure at all times that the Licensed Products are sold in accordance with Applicable Law. 

	
9.3.
	
Trademark Ownership and Cooperation.  Each Party acknowledges that Akebia has sole and exclusive ownership of all rights, title, and interests in and to the Akebia Trademarks. Licensee will not, and will cause its Affiliates and the entities in the FMC/TPDO Group not to, register in their own name any trademark, corporate name, domain name, social media account, or other source identifier containing any trademark owned by Akebia or any word or mark that is confusingly similar to any such trademark.  All use of any Akebia Trademark and all goodwill and benefit arising from such use will inure to the sole and exclusive benefit of Akebia.  Licensee will place and display the Akebia Trademarks on and in connection with the Licensed Products only in such form and manner as specified in the guidelines adopted from time-to-time by Akebia and provided to Licensee.  Except as otherwise expressly provided in this Agreement, Licensee is not granted any license under, and will not use, any trademarks of Akebia in connection with any Licensed Product.

	
9.4.
	
Defense of Third Party Infringement Claims. 

	
 
	
9.4.1
	
Notice; Akebia Initiation.  Licensee will immediately provide written notice to Akebia if a Third Party asserts that a Patent or other right controlled by such Third Party is or will be infringed by Licensee’s activities under this Agreement or Licensee becomes aware of a Patent or other right that might form the basis for such a claim, which notice will include all facts related to such claim in reasonable detail. [**]. 

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9.4.2
	
Right to Defend.  If, during the Term of the Agreement, a Third Party asserts that a Patent or other right controlled by such Third Party is infringed or will be infringed in the Territory by Licensee’s exercise of the rights granted to it under this Agreement, then: 

	
 
	
(a)
	
[**] in the Territory, [**] will defend [**] against any such claim at its own expense using the counsel of its own choosing, so long as [**] is in breach of any of its obligations under this Agreement. [**] will be responsible for [**]% of the amounts owed to any Third Party directly related to such claim, whether by settlement or judgment; and 

	
 
	
(b)
	
[**] in the Territory, [**] will have the right, but not the obligation, to defend any such claim at its own expense using the counsel of its own choosing. If [**] exercises such right to defend, then it will be responsible for [**]% of the amounts owed to any Third Party directly related to such claim, whether by settlement or judgment. 

In addition, with respect to any such claim by a Third Party that a Patent or other right controlled by such Third Party is infringed or will be infringed as a result of Licensee’s activities under this Agreement in the Territory (whether or not [**]), the Parties will reasonably assist each other and cooperate and share information related to any such claim.

	
 
	
9.4.3
	
Responsibility for Third Party Licenses.  If at any time during the Term, Akebia believes that it is necessary or advisable to seek to acquire or obtain a license from any Third Party in order to avoid infringement of Patents owned or controlled by such Third Party as a result of Licensee’s activities under this Agreement, whether or not such Third Party has instituted an infringement claim, then Akebia will have the sole right, but not the obligation, [**] under such Patents from such Third Party. [**]. This Section 9.4.3 (Responsibility for Third Party Licenses) will not be interpreted as placing on either Party a duty of inquiry regarding Third Party intellectual property rights. 

Article 10

MANUFACTURING AND SUPPLY

	
10.1.
	
Commercial Supply.  Subject to the terms and conditions of this Agreement and the Supply Agreement, Licensee will purchase from Akebia all of Licensee’s requirements of the Licensed Products in Finished Form for sale in the Territory.

	
10.2.
	
Commercial Supply Agreement.  During the [**] period after the [**], the Parties will discuss and use good faith efforts to agree on the material terms to be included in the Supply Agreement.  No later than [**] after the filing of the NDA, the Parties will enter into a supply agreement for the commercial supply to Licensee of the Licensed Products in Finished Form that contains standard and customary terms for commercial supply arrangements (the “Supply Agreement”), which Supply Agreement will include those material terms on which the Parties have agreed pursuant to this Article 10 (Manufacturing and Supply). The supply price for the Licensed Products supplied by Akebia to Licensee pursuant to the Supply Agreement will be equal to [**] plus [**] (the “Supply Price”) and the term and effective period of the Supply Agreement will be conterminous with the Term and Effective Period of this Agreement. 

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Article 11

PAYMENTS

	
11.1.
	
Profit Share.  Subject to the provisions of this Agreement, as partial consideration for the License, Licensee will pay to Akebia [**]% of the Profit accrued by Licensee or its Affiliates with respect to the sale of Licensed Products in each [**]; provided that if [**] then, in lieu of the foregoing [**]% profit share, Licensee will pay to Akebia [**]% of the Profit accrued by Licensee or its Affiliates with respect to the sale of Licensed Products in each [**]. Licensee will make each such payment to Akebia [**]. 

	
11.2.
	
Milestone Payment.  Subject to the provisions of this Agreement, including Section 4.6 (Reimbursement System Changes), as further consideration for the License, Licensee will pay to Akebia a non-creditable, nonrefundable payment of $25,000,000 (the “Milestone Payment”) no later than [**] following the date on which the following conditions are satisfied: (a) the FDA has granted Regulatory Approval for a Licensed Product in the DD-CKD Indication in the Territory, and (b) either upon the earlier of a determination by CMS that such Licensed Product (i) is to be reimbursed using the TDAPA or (ii) is included as part of the ESRD PPS Bundled Payment System. For clarity, if there has been a reimbursement system change under Section 4.6 (Reimbursement System Changes), the Milestone Payment shall not be due unless the Parties have either (A) entered into an amendment to this Agreement with respect to such change or (B) agreed in writing that no such amendment is necessary.

	
11.3.
	
Sales Reports. 

	
 
	
11.3.1
	
Flash Reports.  Within [**] after the end of each calendar quarter in which Licensee or its Affiliates sell a Licensed Product, Licensee will provide to Akebia a “flash” report. Each such flash report will set forth (a) for the first and second month of such calendar quarter: (i) the actual gross sales of all Licensed Products sold by Licensee or its Affiliates in the Territory in such months; and (ii) the actual total aggregate Net Sales of the Licensed Products sold by Licensee or its Affiliates in the Territory in such months, and (b) for the third month of such calendar quarter, Licensee’s good faith estimate of the amounts set forth in the foregoing clauses (a)(i) and (a)(ii) of this Section 11.3.1 (Flash Reports). All amounts for the third month of each calendar quarter included in each Flash Report will be prepared as good faith estimates and will be updated with definitive numbers in the applicable Quarterly Report.

	
 
	
11.3.2
	
Quarterly Reports.  In addition to the flash reports to be provided in accordance with Section 11.3.1 (Flash Reports), within [**] after the end of each calendar quarter in which Licensee or its Affiliate sells any Licensed Product, Licensee will provide to Akebia a detailed written sales report (each, a “Quarterly Report”) that sets forth (a) the units of each Licensed Product purchased by FKC and each Third Party Dialysis Organization, (b) the number of units of each Licensed Product held in inventory at all centralized warehouses of FKC and each Third Party Dialysis Organization, (c) the number of units of Licensed Products dispensed to FMCNA/TPDO Dialysis Patients (including a breakdown of units dispensed to TPDO Dialysis Patients), (d) Net Sales of Licensed Products sold to FKC and each Third Party Dialysis Organization during such calendar quarter and the Profit in such calendar quarter from such sales, together with all calculations used to determine such Net Sales and Profit, and (e) a certification of an executive officer of FKC and each Third Party Dialysis Organization stating whether or not the [**]% threshold set forth in Section 16.8.1 (Termination Based on Aggregate Sales Levels) or Section 16.8.2 

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(Termination of Third Party Dialysis Organizations), respectively, has been achieved for the previous calendar quarter, which, in the case of ((a) through (d)), will be broken down on a monthly and quarterly basis. In addition, on an annual basis, Licensee will provide to Akebia the annual Net Sales and Profit forecasts for each Licensed Product to be sold by Licensee under the License in the upcoming calendar year. The Parties will seek to resolve any questions or issues related to a Quarterly Report within [**] following receipt by Akebia of such Quarterly Report. 

	
11.4.
	
Accounting.  Licensee agrees to keep full, clear, and accurate records in accordance with the Accounting Standards consistently applied for a period of at least three years after the relevant payment is owed pursuant to this Agreement in sufficient detail to enable compensation payable to Akebia hereunder to be determined.  Licensee further agrees to permit its books and records to be examined by an independent accounting firm selected by Akebia and approved by Licensee, which approval will not be unreasonably withheld or delayed, to verify the reports provided in Section 11.3 (Sales Reports), including the FMC/TPDO Group’s [**] during the applicable period. Such auditor will be bound by a legal agreement obligating it to maintain the confidentiality of such information and to not share it with Akebia. The auditor’s report will be provided simultaneously to both Licensee and Akebia, will be limited to a disclosure of the extent of any underpayment or overpayment by Licensee in sufficient detail to allow Akebia and Licensee to understand the source of any error. Such audit will not be performed more frequently than once per calendar year.  Such examination is to be made at the expense of Akebia, except in the event that the results of the audit reveal an underpayment by Licensee of [**]% or more during the period being audited, in which case reasonable audit fees for such examination will be paid by Licensee.

	
11.5.
	
Methods of Payment.  All payments due to Akebia under this Agreement will be made in U.S. Dollars by wire transfer to a bank account of Akebia designated from time-to-time in writing by Akebia.

	
11.6.
	
Late Payments.  Any amount owed by Licensee to Akebia under this Agreement that is not paid within the applicable time period set forth herein will accrue interest at the lesser of (a) the London Interbank Offered Rate plus [**]%, or (b) the highest rate permitted under Applicable Law.  If a Party disputes an invoice or other payment obligation under this Agreement, then such Party will timely pay the undisputed amount of the invoice or other payment obligation, and the Parties will resolve such dispute in accordance with Article 17 (Dispute Resolution; Governing Law).

Article 12

INFORMATION AND ADVERSE DRUG EVENTS AND REPORTS

	
12.1.
	
Data Security.  During the Term of this Agreement, Licensee will maintain and, as applicable, cause its Affiliates to maintain, environmental, safety, and facility procedures, data security procedures and other safeguards against the disclosure, destruction, loss, or alteration of any clinical data, post-marketing data, commercialization information, or any other information concerning the Licensed Compound or the Licensed Products known by Licensee or any of its Affiliates at any time during the Term that are no less rigorous than those maintained by Licensee (or any of its Affiliates) for its own information of a similar nature.

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12.2.
	
Adverse Drug Events.  Licensee will provide to Akebia any information that it becomes aware of in the Territory concerning any adverse event relating to the Licensed Compound or any Licensed Product, whether or not determined to be attributable to the Licensed Compound or any Licensed Product, including any such information received by either Party from a Third Party (subject to receipt of any required consents from such Third Party) (such information, the “Safety Data”) no later than [**] after becoming aware of any such Safety Data.  Akebia will own all of the Safety Data, and the global safety database associated with the Licensed Products will be owned and maintained by Akebia. [**] will have the sole right and responsibility to administer and otherwise make decisions with respect to recalls and withdrawals of a Licensed Product, and [**] will, [**], provide assistance and cooperation reasonably requested by [**] in connection with any such recall or withdrawal. 

Article 13

REPRESENTATIONS, WARRANTIES, AND COVENANTS

	
13.1.
	
Mutual Representations and Warranties.  Each of Licensee and Akebia hereby represents and warrants to the other Party as of the Amendment Execution Date that:

	
 
	
13.1.1
	
(a) It is a corporation or entity duly organized and validly existing under the laws of the state, municipality, provinces, administrative division, or other jurisdiction of its incorporation or formation, and (b) it has full power and authority and the legal right to own and operate property and assets and to carry on its business as it is now being conducted and as it is contemplated to be conducted by this Agreement.

	
 
	
13.1.2
	
The execution, delivery and performance of this Agreement by it has been duly authorized by all requisite corporate action.

	
 
	
13.1.3
	
This Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid, and binding obligation of such Party and is enforceable against such Party in accordance with its terms, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity.

	
 
	
13.1.4
	
It has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and such performance does not conflict with or constitute a breach of any of its agreements with Third Parties.

	
 
	
13.1.5
	
It has obtained all necessary consents, approvals, and authorizations of all Governmental Authorities and other Third Parties required to be obtained in connection with the execution and delivery of this Agreement and the performance of its obligations hereunder.

	
 
	
13.1.6
	
The execution and delivery of this Agreement and the performance of its obligations hereunder (a) do not conflict with or violate any requirement of Applicable Law or any provision of its articles of incorporation, bylaws, limited partnership agreement, or any similar instrument, as applicable, and (b) do not conflict with, violate, or breach or constitute a default or require any consent under, any Applicable Law or any contractual obligation or court or administrative order by which it is bound.

	
 
	
13.1.7
	
It has the right to grant the rights and licenses described in this Agreement.

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13.2.
	
Additional Mutual Representations and Warranties.  Each of Licensee and Akebia represents and warrants as of the Amendment Execution Date that it has not been debarred by the FDA, is not the subject of a conviction described in Section 306 of the FD&C Act, and is not subject to any similar sanction of other Governmental Authorities outside of the Territory, and neither it nor any of its Affiliates has used, in any capacity, any person who either has been debarred by the FDA, is the subject of a conviction described in Section 306 of the FD&C Act, or is subject to any such similar sanction.  

	
13.3.
	
Additional Akebia Representations and Warranties.  Akebia hereby represents and warrants as of the Amendment Execution Date that: 

	
 
	
13.3.1
	
The Akebia Patents and the Akebia Trademarks have been duly filed in the Territory. 

	
 
	
13.3.2
	
All applicable filing, maintenance, and other fees have been timely paid for all of the Akebia Patents set forth on Schedule 1.7 and the Akebia Trademarks set forth on Schedule 1.9, and, to Akebia’s Knowledge, all of the Akebia Patents set forth on Schedule 1.7 that are issued patents and the Akebia Trademarks set forth on Schedule 1.9 that are registered trademarks, in each case, are in full force and effect.

	
 
	
13.3.3
	
There is no pending or, to Akebia’s Knowledge, threatened (in writing) re-examination, opposition, interference, inter partes review, or claim challenging the inventorship, ownership, validity, enforceability, or patentability of the Akebia Patents or other litigation or proceeding in the Territory relating to any of the Akebia Patents. 

	
 
	
13.3.4
	
The sale of the Licensed Products does not and will not infringe any valid Patent or other intellectual property rights of any Third Party in the Territory.  

	
 
	
13.3.5
	
Akebia has received no written notice of any claim that a patent or trade secret owned or controlled by a Third Party is or would be infringed or misappropriated by the sale of the Licensed Products in the Territory.  

	
 
	
13.3.6
	
To Akebia’s Knowledge, there is no use, infringement, or misappropriation of the Akebia Technology in the Territory in derogation of the rights granted to Licensee in this Agreement. 

	
 
	
13.3.7
	
There are no investigations, inquiries, actions, or other proceedings pending before or to Akebia’s Knowledge threatened by the FDA or other Governmental Authority in the Territory with respect to the Licensed Products arising from any default by Akebia or a Third Party acting on behalf Akebia in the research or development of the Licensed Compound, and Akebia has not received written notice threatening any such investigation, inquiry, action or other proceeding. 

	
 
	
13.3.8
	
Akebia owns or has licensed the rights, title, and interests in and to the Akebia Technology granted to Licensee pursuant the License.

	
 
	
13.3.9
	
The research, development, and manufacture of the Licensed Products conducted by Akebia or its Affiliates has been conducted in compliance with Applicable Law and, to Akebia’s Knowledge, the research, development, and manufacture of the Licensed Products conducted by Akebia’s Third Party contractors has been conducted in compliance with Applicable Law. 

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13.4.
	
Additional Licensee Representations and Warranties.  Licensee hereby represents and warrants as of the Amendment Execution Date that:

	
 
	
13.4.1
	
Vifor Pharma Ltd. and Fresenius Medical Care AG & Co KGaA are the joint venture partners of VFMCRP, with Vifor Pharma Ltd. owning a controlling interest of VFMCRP and Fresenius Medical Care AG & Co KGaA owning the remaining interest.

	
 
	
13.4.2
	
FKC is an Affiliate of FMCNA and a strategic partner of Licensee. 

	
 
	
13.4.3
	
Licensee is not an Affiliate of FMC, FMCNA or any member of the FMC/TPDO Group.

	
 
	
13.4.4
	
Licensee is a drug manufacturer that is not engaged in the wholesale distribution of prescription drugs to “retail community pharmacies” (as that term is defined in 42 U.S.C. § 1396r-8(k)(10)).

	
 
	
13.4.5
	
The transmission of all information required to be included in each Quarterly Report pursuant to this Agreement is consistent with Applicable Law and Licensee’s contractual obligations with Third Parties.

	
13.5.
	
Additional Covenants.  

	
 
	
13.5.1
	
Each Party covenants that it will not engage, in any capacity in connection with this Agreement or any ancillary agreements, any person who either has been debarred by the FDA, is the subject of a conviction described in Section 306 of the FD&C Act, or is subject to any such similar sanction. Each Party will inform the other Party in writing promptly if it or any person engaged by it or any of its Affiliates who is performing services under this Agreement, or any ancillary agreements, is debarred or is the subject of a conviction described in Section 306 of the FD&C Act, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or, to each Party’s knowledge, is threatened, relating to the debarment or conviction of a Party, any of its Affiliates, or any such person performing services hereunder or thereunder.

	
 
	
13.5.2
	
Each Party covenants that it will comply with all Applicable Laws in performing its activities hereunder.

	
 
	
13.5.3
	
If either Party determines, based on reasonable advice of counsel, that its compliance with this Agreement will violate Applicable Law, then the Parties will negotiate to amend this Agreement as necessary to ensure that the terms hereof to permit such Party to comply with Applicable Law and this Agreement during the Term. 

	
 
	
13.5.4
	
Licensee covenants that throughout the Term it will not, and will cause each of its Affiliates that are involved in the supply or distribution of any Licensed Product to not, engage in the wholesale distribution of prescription drugs to “retail community pharmacies” (as that term is defined in 42 U.S.C. § 1396r-8(k)(10)) in the Territory.

	
 
	
13.5.5
	
Licensee covenants that throughout the Term it will provide prompt written notice to Akebia in the event that any of its Affiliates intends to engage, or has engaged, in the wholesale distribution of prescription drugs to “retail community pharmacies” (as that term is defined in 42 U.S.C. § 1396r-8(k)(10)) in the Territory.

	
 
	
13.5.6
	
On the Effective Date, Akebia will provide to Licensee an updated Schedule 1.7 that includes all Akebia Patents as of the Effective Date, and an updated Schedule 1.9 that includes all Akebia Trademarks as of the Effective Date.

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13.6.
	
Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH HEREIN, INCLUDING THE WARRANTIES SET FORTH IN SECTION 13.3 (ADDITIONAL AKEBIA REPRESENTATIONS AND WARRANTIES), THE INTELLECTUAL PROPERTY RIGHTS PROVIDED BY AKEBIA ARE PROVIDED “AS IS” AND WITHOUT WARRANTY.  EXCEPT AS EXPRESSLY SET FORTH HEREIN, INCLUDING THE WARRANTIES SET FORTH IN SECTION 13.3 (ADDITIONAL AKEBIA REPRESENTATIONS AND WARRANTIES), AKEBIA EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY, OR ENFORCEABILITY OF ITS RESPECTIVE INTELLECTUAL PROPERTY RIGHTS, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, ARISING FROM A COURSE OF DEALING, USAGE, OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO.

	
13.7.
	
Limitation of Liability.  NEITHER OF THE PARTIES WILL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES OR DAMAGES FOR LOSS OF PROFIT OR LOST OPPORTUNITY IN CONNECTION WITH THIS AGREEMENT, ITS PERFORMANCE OR LACK OF PERFORMANCE HEREUNDER, OR ANY LICENSE GRANTED HEREUNDER, EXCEPT TO THE EXTENT THE DAMAGES RESULT FROM A PARTY’S WILLFUL MISCONDUCT, OR INTENTIONAL BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT, A BREACH OF THE OBLIGATIONS OF A PARTY UNDER [**], A VIOLATION BY A PARTY OR ITS AFFILIATES OF [**]. 

Article 14

CONFIDENTIALITY

	
14.1.
	
Generally.  During the Term and for a period of seven years following the early termination of this Agreement, each Party (a) will maintain in confidence all Confidential Information of the other Party; (b) will not use such Confidential Information for any purpose except in connection with the activities contemplated by this Agreement or in order to further the purpose of this Agreement; and (c) will not disclose such Confidential Information, except that each Party may disclose such Confidential Information to its Affiliates, investors, prospective investors, lenders, prospective lenders, financing sources, prospective financing sources (including, in each case, in connection with any royalty factoring or similar transaction), prospective acquirers, licensees, sublicensees, prospective sublicensees, employees, consultants, financial or legal advisors, agents, or subcontractors who are bound by obligations of nondisclosure and non-use no less stringent than those set forth in this Article 14 (Confidentiality) and to whom such disclosure is reasonably necessary or advisable in connection with such Party’s activities as contemplated in this Agreement or in connection with financing or acquisition activities (including its right to assign its rights hereunder pursuant to Section 18.1 (Assignment) as part of a royalty factoring or other similar transaction). Each Party will ensure that its Affiliates, investors, prospective investors, lenders, prospective lenders, acquirors, licensees, sublicensees, prospective acquirors, licensees, sublicensees, prospective sublicensees, employees, consultants, agents, consultants, and subcontractors comply with these obligations.  Each Party will notify the other Party promptly on discovery of any unauthorized use or disclosure of the other Party’s Confidential Information, including the other Party’s trade secrets or proprietary information.  Licensee acknowledges that all (i) Safety Data, (ii) Akebia Know-How, and (iii) other information related to Akebia’s and its Affiliates’, licensees’, and sublicensees’ development and commercialization of the Licensed Compound and the Licensed Products constitutes Confidential Information of Akebia. The terms of this Agreement will be the Confidential Information of each Party. 

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14.2.
	
Exceptions.  The obligations of confidentiality, non-disclosure, and non-use set forth in Section 14.1 (Generally) will not apply to the extent the receiving Party (the “Recipient”) can demonstrate that the disclosed information (a) was in the public domain at the time of disclosure to the Recipient by the other Party, or thereafter entered the public domain, in each case, other than as a result of actions of the Recipient, its Affiliates, employees, licensees, agents, or subcontractors, in breach of this Agreement; (b) was rightfully known by the Recipient or its Affiliates (as shown by its written records) prior to the date of disclosure to the Recipient by the other Party; (c) was received by the Recipient or its Affiliates on an unrestricted basis from a Third Party rightfully in possession of such information and not under a duty of confidentiality to the other Party; or (d) was independently developed by or for the Recipient or its Affiliates without reference to or reliance on the Confidential Information of the other Party (as demonstrated by written records).  Notwithstanding any other provision of this Agreement, the Recipient’s disclosure of Confidential Information will not be prohibited if such disclosure: (i) is in response to a valid order of a court or other Governmental Authority; or (ii) is otherwise required by Applicable Law or regulation or rules of a nationally recognized securities exchange.  Further notwithstanding any other provision of this Agreement, Akebia may disclose Licensee’s Confidential Information to the extent disclosure is required in connection with the filing or prosecuting patent applications, prosecuting, or defending litigation, responding to an investigation by a Governmental Authority, or otherwise establishing rights or enforcing obligations under this Agreement, making Regulatory Filings with respect to the Licensed Products, or conducting research, development, or clinical studies with respect to the Licensed Products. If a Recipient is required to disclose Confidential Information pursuant to this Section 14.2 (Exceptions), then prior to any disclosure the Recipient will provide the other Party with prior written notice of such disclosure in order to permit the other Party to seek a protective order or other confidential treatment of such Confidential Information.

	
14.3.
	
Publicity.  The Parties recognize that each Party may from time-to-time desire to issue press releases and make other public statements or disclosures regarding the terms of this Agreement.  In such event, the Party desiring to issue a press release or make a public statement or disclosure will provide the other Party with a copy of the proposed press release, statement, or disclosure for review and approval as soon as practicable prior to publication, which advance approval will not be unreasonably withheld or delayed.  No other public statement or disclosure of, or concerning, the terms of this Agreement will be made, either directly or indirectly, by either Party, without first obtaining the written approval of the other Party.  Once any public statement or disclosure has been approved in accordance with this Section 14.3 (Publicity), then either Party may appropriately communicate information contained in such permitted statement or disclosure.  Notwithstanding the foregoing provisions of this Article 14 (Confidentiality), a Party may disclose the terms of this Agreement where required, as reasonably determined by the disclosing Party, by Applicable Law, regulation or legal process, or by applicable stock exchange rule (with prompt notice of any such legally required disclosure to the other Party and, to the extent practicable, sufficient opportunity for the other Party to review and comment on such required disclosure and request confidential treatment thereof or a protective order therefor).

	
14.4.
	
Publications.  If, [**], Licensee, its Affiliates, FMCNA, the FMC/TPDO Group, or any healthcare professional having an investigator initiated trial agreement in place with any of the previously listed entities desires to publish any clinical data or other clinic results from the administration of the Licensed Compound or any Licensed Product, then Licensee will, will cause its Affiliates to, and will cause FMCNA, the FMC/TPDO Group, and such healthcare professionals to, in each case, [**].  If Akebia determines that any such proposed publication contains patentable subject matter requiring protection, then Akebia may require the delay of such publication for a period of time not to exceed an additional [**] to pursue such protection or negotiate with such healthcare professional. If Akebia determines that the proposed publication contains Confidential Information, 

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then Akebia may require such Confidential Information to be deleted from such publication.  If, [**], Licensee, its Affiliates, FMCNA, or the FMC/TPDO Group desires to publish any preclinical or non-clinical results from the research and development of the Licensed Compound or any Licensed Product, then Licensee will, will cause its Affiliates to, and will cause FMCNA and the FMC/TPDO Group to, in each case, [**].

Article 15

INDEMNIFICATION

	
15.1.
	
Indemnification by Akebia.  Unless otherwise provided herein, Akebia will indemnify, hold harmless, and defend Licensee and its Affiliates and their respective, directors, officers, employees, and agents (the “Licensee Indemnitees”) from and against any and all Third Party suits, claims, actions, demands, liabilities, expenses, or losses (including reasonable attorneys’ fees, court costs, witness fees, damages, judgments, fines, and amounts paid in settlement) (“Losses”) to the extent that such Losses arise out of (a) a breach of this Agreement by Akebia, (b) [**] of a Licensed Product by or on behalf of Akebia or its Affiliates or licensees (other than Licensee, the LSP, or a member of the FMC/TPDO Group), or (c) the negligence or willful misconduct of any Akebia Indemnitee (as defined in Section 15.2 (Indemnification by Licensee)). Notwithstanding the foregoing, Akebia will not have any obligation to indemnify the Licensee Indemnitees to the extent that any Losses arise out of the negligence or willful misconduct of any Licensee Indemnitee or any breach of this Agreement by Licensee.

	
15.2.
	
Indemnification by Licensee.  Unless otherwise provided herein, Licensee will indemnify, hold harmless, and defend Akebia and its Affiliates and their respective directors, officers, employees, and agents (the “Akebia Indemnitees”) from and against any and all Losses, to the extent that such Losses arise out of (a) a breach of this Agreement by Licensee, (b) [**], in each case, of a Licensed Product by or on behalf of Licensee, the LSP, or the FMC/TPDO Group (including any communications regarding such Licensed Product by Licensee, the LSP, or the FMC/TPDO Group), or (c) the negligence or willful misconduct of any Licensee Indemnitee.  Notwithstanding the foregoing, Licensee will not have any obligation to indemnify the Akebia Indemnitees (i) to the extent that any Losses arise out of the negligence or willful misconduct of any Akebia Indemnitee or any breach of this Agreement by Akebia, or (ii) for any [**] of any Licensed Product, other than any [**] of any Licensed Product by or on behalf of Licensee, the LSP, or the FMC/TPDO Group. 

	
15.3.
	
Indemnification Procedure.  Each Party, if seeking indemnification under this Article 15 (Indemnification) (the “Indemnified Party”), will give [**] written notice of the claim to the other Party (the “Indemnifying Party”); provided, however, that any failure or delay in providing such notice will not relieve the Indemnifying Party of its indemnification obligation, except to the extent it is actually prejudiced by such failure or delay.  Each Party will promptly furnish to the other Party copies of all papers and official documents received in respect of any Losses.  The Indemnifying Party will have the right, exercisable by written notice to the Indemnified Party, to assume and control the defense of the indemnification claim at its own expense with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party; provided, however, that an Indemnified Party will have the right to retain its own counsel, at its own expense, except that the fees and expenses of the Indemnified Party’s counsel will be paid by the Indemnifying Party if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and any other party represented by such counsel in such proceedings. If the Indemnifying Party does not assume the defense of the indemnification claim as described in this Section 15.3 (Indemnification Procedure), then the Indemnified Party may defend the 

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indemnification claim but will have no obligation to do so.  The Indemnified Party will not settle or compromise the indemnification claim without the prior written consent of the Indemnifying Party, and the Indemnifying Party will not settle or compromise the indemnification claim in any manner that would have an adverse effect on the Indemnified Party’s interests (including any rights under this Agreement or the scope or enforceability of any Patents, Confidential Information, or other rights licensed to Licensee by Akebia hereunder), without the prior written consent of the Indemnified Party, which consent, in each case (by the Indemnifying Party or Indemnified Party, as the case may be), will not be unreasonably withheld or delayed.  The Indemnified Party will reasonably cooperate with the Indemnifying Party at the Indemnifying Party’s expense and will make available to the Indemnifying Party all pertinent information under the control of the Indemnified Party, which information will be subject to Article 14 (Confidentiality). The Indemnifying Party will provide periodic updates to the Indemnified Party (and its counsel, if applicable) regarding its defense of the action with immediate notice regarding any material developments. The Indemnifying Party will not be liable for any settlement or other disposition of Losses by the Indemnified Party if such settlement is reached without the written consent of the Indemnifying Party pursuant to this Section 15.3 (Indemnification Procedure).

	
15.4.
	
Insurance.  Akebia and Licensee will each, at their own expense, obtain and maintain insurance with respect to the use and sale of the Licensed Products under this Agreement in such amount and subject to such deductibles and other limitations as biopharmaceutical companies in the Territory customarily maintain with respect to the use and sale of similar products.  Each Party will provide a copy of such insurance policy to the other Party upon request. 

Article 16

TERM AND TERMINATION

	
16.1.
	
Term.  The term of this Agreement will begin on the Original Execution Date and, unless earlier terminated in accordance with the terms of this Article 16 (Term and Termination), will extend until the later of (a) expiration of the last-to-expire Valid Claim [**] that would, but for the licenses granted hereunder, be infringed by the making, using, selling, or importing of such Licensed Product in the Territory, or (b) expiration of marketing or regulatory exclusivity in the Territory (the “Term”). 

	
16.2.
	
Termination for Breach.  Subject to the terms and conditions of this Section 16.2 (Termination for Breach), a Party (the “Non-Breaching Party”) will have the right, in addition to any other rights and remedies, to terminate this Agreement in its entirety in the event the other Party (the “Breaching Party”) is in material breach of any of its obligations under this Agreement.  The Non-Breaching Party will first provide written notice to the Breaching Party, which notice will identify with particularity the alleged breach and state the Non-Breaching Party’s intent to terminate this Agreement if such breach is not cured.  With respect to material breaches of any payment provision hereunder, the Breaching Party will have a period of [**] after such written notice is provided to cure such breach.  With respect to all other breaches, the Breaching Party will have a period of [**] after the Non-Breaching Party provides written notice to cure such breach. Notwithstanding the foregoing, if a Non-Breaching Party provides notice to the Breaching Party pursuant to this Section 16.2 (Termination for Breach) of an alleged material breach by such Breaching Party, and such Non-Breaching Party provides notice during the applicable cure period set forth above that such Non-Breaching Party disputes the basis for termination pursuant to this Section 16.2 (Termination for Breach) and initiates the dispute resolution procedure set forth in Article 17 (Dispute Resolution; Governing Law) during the applicable cure period, then the cure periods set forth in this Section 16.2 (Termination for Breach) for the alleged material breach will run from the date 

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that such written notice is first provided to the Breaching Party through the resolution of such dispute pursuant to Article 17 (Dispute Resolution; Governing Law) and it is understood and acknowledged that, during the pendency of a dispute pursuant this Section 16.2 (Termination for Breach), all of the terms and conditions of this Agreement will remain in effect, and the Parties will continue to perform all of their respective obligations under this Agreement. The waiver by either Party of any breach of any term or condition of this Agreement will not be deemed a waiver as to any subsequent or similar breach. 

	
16.3.
	
Termination for Bankruptcy.  Subject to the terms and conditions of this Agreement, either Party may terminate this Agreement upon notice to the other Party should the other Party: (a) consent to the appointment of a receiver or a general assignment for the benefit of creditors of the other Party that is not discharged within [**], or (b) file a petition under any bankruptcy or insolvency law or have any such petition filed against it that has not been stayed within [**] of such filing.

	
16.4.
	
Termination by Akebia for Unauthorized Sales.  If the Parties do not reach a resolution of the applicable matter during the [**] period as set forth under Section 4.1 (No Unauthorized Sales), or Licensee does not (a) [**] any unauthorized use, distribution, or transfer of the Licensed Compound or any Licensed Product by Licensee, FKC, its LSP, any Third Party Dialysis Organization, or any Authorized Dialysis Center to or by a Third Party that is not an FMCNA/TPDO Dialysis Patient or Authorized Dialysis Center, or (b) [**] of FKC or any LSP, Third Party Dialysis Organization or Authorized Dialysis Center that is using, distributing, or transferring the Licensed Compound or any Licensed Product other than as expressly permitted under this Agreement, in each case ((a) and (b)), then Akebia may terminate this Agreement with immediate effect upon written notice to Licensee.  

	
16.5.
	
Termination by Akebia Upon Occurrence of Certain Events.  If any of the following events occur, then, Akebia may terminate this Agreement with immediate effect upon written notice to Licensee:

	
 
	
16.5.1
	
Licensee or its Affiliate involved in the supply or distribution of any Licensed Product becomes an Affiliate of FMC, FMCNA or any member of the FMC/TPDO Group; or

	
 
	
16.5.2
	
There is no affiliation or other strategic relationship between Licensee or its Affiliate involved in the supply or distribution of any Licensed Product and FMC or FMCNA.

	
16.6.
	
Termination by Akebia for Failure to Amend the Licensee-FKC Supply Agreement.  Akebia may terminate this Agreement with immediate effect upon written notice to Licensee if (a) Licensee does not enter into an amendment of the Licensee-FKC Supply Agreement in accordance with Section 5.1.2 (Amendment to Supply Agreement) within [**] after (i) the FDA has granted Regulatory Approval for a Licensed Product in the DD-CKD Indication in the Territory, and (ii) the earlier of a determination by CMS that a Licensed Product (A) is to be reimbursed using the TDAPA or (B) is included as part of the ESRD PPS Bundled Payment System, or (b) the Licensee-FKC Supply Agreement is terminated or expires. 

	
16.7.
	
Termination or Suspension by Akebia for Impacts on Pricing.  If (a) there has been a breach of Section 6.1 (Pricing), (b) through the actions by or on behalf of Licensee, any of its Affiliates or any member of the FMC/TPDO Group  (even if pursuant to FMC/TPDO Group’s customary dialysis clinic cost reporting to CMS or any other Governmental Authority, and even if such actions do not constitute a breach by Licensee under Section 4.4.2 (Licensed Product Prices)), any Third Party purchaser or potential purchaser (other than either Party’s Affiliates or FMCNA, FMCNA’s Affiliates (including FKC), or Majority Owned Clinics) becomes aware of the price at which 

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Licensee, any of its Affiliates or any member of the FMC/TPDO Group acquired any Licensed Product, or the price at which such entity sells any Licensed Product to any purchaser (even if pursuant to FMC/TPDO Group’s customary dialysis clinic cost reporting to CMS or any other Governmental Authority), (c) [**], or (d) Licensee, any of its Affiliates or any member of the FMC/TPDO Group sells, or plans to sell, in each case, any Licensed Product in any manner that [**], and, in each case ((a) through (d)), the Parties do not reach an agreeable resolution within [**] after Akebia notifies Licensee of its intent to terminate based on such condition, then, in either case, Akebia may elect to either (i) terminate this Agreement or (ii) suspend the License and commence a Suspension Period under Section 3.2.2 (Suspension), in each case ((i) and (ii)), with immediate effect upon written notice to Licensee. If Akebia elects to suspend the License, Akebia may reinstate the License (such reinstatement resuming the Effective Period) at any time during the Term upon written notice to Licensee.

	
16.8.
	
Termination or Suspension by Akebia for Net Sales Levels.  

	
 
	
16.8.1
	
Termination Based on Aggregate Sales Levels. Commencing on the [**] of First Commercial Sale of a Licensed Product in the Territory, Akebia may terminate this Agreement with immediate effect upon written notice to Licensee within the time period stated herein if the aggregate Net Sales of all Licensed Products during any [**] period is less than or equal to [**]% of the FMC/TPDO Group’s [**] during the preceding [**] period. To exercise the foregoing termination right, Akebia must provide such notice of termination to Licensee no later than [**] after Akebia’s receipt of the Quarterly Report that documents that the aggregate Net Sales of all Licensed Products in the preceding [**] is less than or equal to [**]% of the FMC/TPDO Group’s total spending (amounts paid to manufacturers or wholesalers) for all [**] during such [**] period and, absent such timely notice, [**].

	
 
	
16.8.2
	
Termination of Third Party Dialysis Organizations.  Commencing on the [**] of the First Commercial Sale of a Licensed Product in the Territory, Akebia may require Licensee to terminate a Licensee-TPDO Supply Agreement by providing a written request to Licensee no later than [**] after Akebia’s receipt of a Quarterly Report that documents that the aggregate Net Sales of all Licensed Products under such Licensee-TPDO Supply Agreement in the preceding [**] is less than or equal to [**]% of the applicable Third Party Dialysis Organization’s [**] during such [**] period. Upon receiving such request, Licensee will terminate the Licensee-TPDO Supply Agreement with such Third Party Dialysis Organization.  Upon such termination, [**] for the purposes of this Agreement, and [**].

	
 
	
16.8.3
	
Suspension Based on Comparative Sales Levels.  Commencing with the [**] the First Commercial Sale and [**], if the [**] of all Licensed Products under this Agreement during [**] the Comparative Sales  Percentage [**] period, then Akebia may suspend the License in accordance with Section 16.14 (Suspension of Licensed Rights) with effect [**] after written notice to Licensee. To exercise the foregoing suspension right, Akebia must provide such notice of suspension to Licensee no later than [**] after Akebia’s receipt of the Quarterly Report that documents Licensee’s aggregate Net Sales of all Licensed Products for the [**] of [**].  Notwithstanding the foregoing, Akebia will not have the right to suspend the License pursuant to this Section 16.8.3 (Suspension Based on Comparative Sales Levels) [**] by Licensee in accordance with the Supply Agreement.

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16.8.4
	
Termination Based on Comparative Sales Levels.  [**], if the [**] of all Licensed Products under this Agreement during any preceding [**] period are [**] the Comparative Sales Percentage [**] during such [**] period, then Akebia may terminate this Agreement by providing written notice of such termination to Licensee; provided, however, that such termination will not become effective if during the [**] following the conclusion of such [**] period there are [**] the Comparative Sales Percentage [**], in which case, this Agreement shall not terminate at the end of such [**] period. To exercise the foregoing termination right, Akebia must provide its written notice of termination to Licensee no later than [**] after Akebia’s receipt of the Quarterly Report that documents Licensee’s [**] period. Such termination will become effective upon the date that Akebia receives the Quarterly Report that documents that there have not been [**] period [**] as defined in this Agreement; provided, however, that if Licensee does not provide such Quarterly Report within the [**] period required by Section 11.3.2 (Quarterly Reports), then such termination will become effective upon the expiration of such [**] period. Notwithstanding the foregoing, Akebia will not have the right to terminate this Agreement pursuant to this Section 16.8.4 (Termination Based on Comparative Sales Levels) [**] Licensee in accordance with the Supply Agreement.

	
16.9.
	
Termination by Akebia for Patent Challenge.  Akebia may terminate this Agreement with immediate effect upon written notice to Licensee if Licensee or any of its Affiliates contests the validity or enforceability of any Patent Controlled by Akebia or any of its Affiliates that Covers a Licensed Product or its manufacture, use, sale, or importation, in any court, arbitration proceeding, or other tribunal, including the United States Patent and Trademark Office and the United States International Trade Commission.  As used in this definition, the term “contest” includes (a) filing an action under 28 U.S.C. §§ 2201-2202 seeking a declaration of invalidity or unenforceability of any such Patent; (b) filing, or joining in, a petition under 35 U.S.C. § 311 to institute inter partes review of any such Patent; (c) filing, or joining in, a petition under 35 U.S.C. § 321 to institute post-grant review of any such Patent or any portion thereof; (d) filing or commencing any opposition, nullity, or similar proceedings challenging the validity of any such Patent in any country, or (e) any foreign equivalent of clauses (a), (b), (c), or (d). 

	
16.10.
	
Termination by Licensee for Convenience.  At any time after release of the topline data from the Global Phase 3 DD-CKD Program, Licensee may terminate this Agreement in its entirety by providing written notice to Akebia thereof, which termination will be effective 12 months following the date of such notice; provided, however, that such 12-month notice period may be shortened by written agreement of both Akebia and Licensee. 

	
16.11.
	
Termination Based on Written Agreement of the Parties.  This Agreement may be terminated in its entirety upon the written agreement of both Akebia and Licensee.  

	
16.12.
	
Effects of Termination.  In the event of any expiration or termination of this Agreement, the following will apply:

	
 
	
16.12.1
	
Termination of Licenses.  Except as expressly set forth in this Section 16.12 (Effects of Termination), and subject to Section 16.15 (Survival; Accrued Rights), all rights and licenses granted to Licensee under this Agreement will automatically terminate. 

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CONFIDENTIAL

 

	
 
	
16.12.2
	
Return of Confidential Information.  Licensee will cease using the Akebia Technology and will return to Akebia all copies of any documents containing any Akebia Know-How. Each Party will return or destroy all Confidential Information of the other Party in its possession upon expiration or termination of this Agreement at the disclosing Party’s election and written request.  The Recipient will provide a written confirmation of such destruction within [**] of such request; provided, however, that the foregoing will not apply to any Confidential Information that is necessary to allow such Party to perform its obligations or exercise any of its rights that expressly survive the termination or expiration of this Agreement, provided, further, that [**].

	
 
	
16.12.3
	
Cessation of Sales.  Except for sales made in accordance with Section 16.12.4(a)(i) (Termination Other than for Cause by Akebia), Licensee will cease all sales of Licensed Product in the Territory. 

	
 
	
16.12.4
	
Sell-Off or Buy-Back.  

	
 
	
(a)
	
Termination Other than for Cause by Akebia.  If this Agreement is terminated by Licensee pursuant to Section 16.3 (Termination for Bankruptcy), then, after the effective date of such termination: (i) Licensee may continue to sell the Licensed Products for a period of [**] after the effective date of such termination in order to fill existing binding orders and commitments, and (ii) following such [**] period, at Akebia’s option and in its sole discretion, [**] for such Licensed Products by Licensee or its Affiliates. Licensee will destroy, or cause to be destroyed, all Licensed Products remaining in inventory that [**] following such [**] period, at Licensee’s cost and expense. 

	
 
	
(b)
	
Termination for Cause by Akebia.  If this Agreement is terminated by Akebia pursuant to Section 16.2 (Termination for Breach), Section 16.4 (Termination by Akebia for Unauthorized Sales), Section 16.5 (Termination by Akebia Upon Occurrence of Certain Events), Section 16.6 (Termination by Akebia for Failure to Amend the Licensee-FKC Supply Agreement), Section 16.7 (Termination or Suspension by Akebia for Impacts on Pricing), 16.8.1 (Termination Based on Aggregate Sales Levels), Section 16.8.4 (Termination Based on Comparative Sales Levels), Section 16.9 (Termination by Akebia for Patent Challenge), or Section 16.10 (Termination by Licensee for Convenience), then, after the effective date of such termination, at Akebia’s option in its sole discretion, [**] for such Licensed Products by Licensee or its Affiliates. Licensee will destroy, or cause to be destroyed, all Licensed Products remaining in inventory as of the effective date of termination that [**], at Licensee’s cost and expense.

	
16.13.
	
Additional Effect of Termination for Net Sales Levels.  If Akebia terminates this Agreement pursuant to 16.8.1 (Termination Based on Aggregate Sales Levels) or Section 16.8.4 (Termination Based on Comparative Sales Levels), then, in addition to the effects of termination set forth in Section 16.12 (Effects of Termination), upon Akebia’s request (in its sole discretion) Akebia [**] effective upon the date of such termination.

	
16.14.
	
Suspension of Licensed Rights. Promptly following the commencement of any Suspension Period (as set forth under Section 3.2.2 (Suspension)), Licensee will [**]. During any Suspension Period the Articles and Sections set forth in Section 16.15 (Survival; Accrued Rights) will survive. Upon the commencement of any Suspension Period, if and only if sales of Licensed Products have commenced, Akebia will [**] at a [**] of [**]% of [**]. Except as provided in this Section 16.14 (Suspension of Licensed Rights) and Section 16.15 (Survival; Accrued Rights), during the Suspension Period, all other rights and obligations of the Parties pursuant to the License will be suspended and be of no force and effect.  

33

CONFIDENTIAL

 

	
16.15.
	
Survival; Accrued Rights.  The following Articles and Sections of this Agreement will survive suspension of the License or expiration or early termination of the Agreement for any reason: Section 9.1 (Trademark Responsibility), Section 9.3 (Trademark Ownership and Cooperation), Section 11.3 (Sales Reports), but only with respect to Net Sales made during the Term, Section 11.4 (Accounting), Section 11.5 (Methods of Payment), Section 11.6 (Late Payments), Section 13.7 (Limitation of Liability), Article 14 (Confidentiality), Article 15 (Indemnification), other than Section 15.4 (Insurance), Section 16.12 (Effects of Termination), Section 16.13 (Additional Effects of Termination for Net Sales Levels), this Section 16.15 (Survival; Accrued Rights), Article 17 (Dispute Resolution; Governing Law), and Article 18 (Miscellaneous). In any event, suspension of the License or expiration or termination of this Agreement will not relieve the Parties of any liability that accrued hereunder prior to the effective date of such suspension, expiration or termination (including Licensee’s obligation to pay Akebia pursuant to Article 11 (Payments) with respect to sales made prior to such suspension, expiration or termination), nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement, nor prejudice either Party’s right to obtain performance of any obligation. 

Article 17

DISPUTE RESOLUTION; GOVERNING LAW

	
17.1.
	
Executive Officers.  Unless otherwise set forth in this Agreement, in the event of a dispute arising under this Agreement between the Parties, the Parties will refer such dispute to their respective chief executive officers, and such chief executive officers will attempt in good faith to resolve such dispute. 

	
17.2.
	
Litigation.  Any unresolved dispute which was subject to Section 17.1 (Executive Officers) must be brought exclusively in a court of competent jurisdiction, federal or state, located in the State of New York, and in no other jurisdiction. Each Party hereby consents to personal jurisdiction and venue in, and agrees to service of process issued or authorized by, such court. 

	
17.3.
	
Jurisdiction.  Each Party to this Agreement, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and state courts located in New York, New York for the purpose of any and all unresolved disputes which were subject to Section 17.1 (Executive Officers), (b) hereby waives to the extent not prohibited by Applicable Law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts in such jurisdiction should be dismissed on grounds of forum non conveniens, should be transferred to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court, and (c) hereby agrees not to commence any such action other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action to any court other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise.  Notwithstanding the foregoing, application may be made to any court of competent jurisdiction with respect to the enforcement of any judgment or award.

	
17.4.
	
Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York, without reference to conflict of law principles.

34

CONFIDENTIAL

 

	
17.5.
	
Injunctive Relief.  Notwithstanding the foregoing, in the event of an actual or threatened breach hereunder, the aggrieved Party may seek equitable relief (including restraining orders, specific performance, or other injunctive relief) in any court or other forum, without first submitting to the dispute resolution procedures set forth in Section 17.1 (Executive Officers).

Article 18

MISCELLANEOUS

	
18.1.
	
Assignment.  Neither Party may assign this Agreement and the licenses herein granted without the other Party’s prior written consent, except that either Party may assign this Agreement in its entirety in writing to a Third Party successor or purchaser of all or substantially all of the assets or businesses to which this Agreement relates whether pursuant to a sale of assets, merger, or other transaction, in which case the assigning Party will provide prior written notice to the other Party and need not obtain the other Party’s consent; provided that the permitted assignee must assume all obligations of the assigning Party under the Agreement in writing and the assigning Party will remain fully liable for the performance of its obligations hereunder by such permitted assignee. In addition, and notwithstanding the foregoing, Akebia may assign its right to receive payments under this Agreement as part of a royalty factoring or other similar transaction undertaken for bona fide financing purposes. Any other assignment of this Agreement by a Party requires the prior written consent of the other Party.  Any assignment in violation of this Section 18.1 (Assignment) will be null, void, and of no legal effect.  This Agreement will be binding on and will inure to the benefit of the permitted successors and assigns of the Parties. 

	
18.2.
	
Standstill.  Except in connection with the acquisition of shares by Licensee pursuant to the terms of the Investment Agreement dated as of the Original Execution Date by and between the Parties, Licensee will not, without the written consent of Akebia, acquire directly or indirectly, in a public or private transaction, including by purchase in the open market, any common stock of Akebia if the Licensee’s beneficial ownership of the common stock of Akebia would thereafter exceed [**]%. In addition, unless approved in advance in writing by Akebia, Licensee will not, directly or indirectly:

	
 
	
(a)
	
Make any statement or proposal to Akebia, other than a non-public statement or proposal delivered directly to the chief executive officer or chairman of the board of directors, or to any of Akebia’s stockholders regarding, or make any public announcement, proposal, or offer (including a “solicitation” of “proxies” as such terms are defined or used in Regulation 14A of the Exchange Act) with respect to, or otherwise solicit, seek, or offer to effect (including, for the avoidance of doubt, indirectly by means of communication with the press or media) (i) any business combination, merger, tender offer, exchange offer, or similar transaction involving Akebia, (ii) any restructuring, recapitalization, liquidation, or similar transaction involving Akebia, (iii) any acquisition of any of Akebia’s equity securities or assets or rights or options to acquire equity securities or assets, (iv) any proposal to seek representation on the board of directors of Akebia or otherwise seek to control or influence the management, board of directors, or policies of Akebia, or (v) any proposal, arrangement, or other statement that is inconsistent with this Section 18.2 (Standstill);

35

CONFIDENTIAL

 

	
 
	
(b)
	
Instigate, encourage, or assist any Third Party (including forming a “group” with any such Third Party) to do, or enter into any discussions or agreements with any Third Party with respect to, any of the actions set forth in Section 18.2 (Standstill); or

	
 
	
(c)
	
Take any action that would reasonably be expected to require Akebia or any of its Affiliates to make a public announcement regarding any of the actions set forth in Section 18.2 (Standstill).

Notwithstanding the foregoing provisions, the restrictions set forth in this Section 18.2 (Standstill) will terminate and be of no further force and effect (a) [**], provided that the provisions of this Section 18.2 (Standstill) will be revived if such [**]; or (b) upon the expiration or termination of this Agreement. For the avoidance of doubt, nothing in this Section 18.2 (Standstill) will prohibit Licensee from acquiring beneficial ownership of the common stock of Akebia to the extent such ownership remains less than [**]% of Akebia’s total outstanding common stock.  For purposes of this Section 18.2 (Standstill), “Sale Transaction” means a transaction between Akebia and a Third Party (i) involving the direct or indirect acquisition by such Third Party of [**]% or more of Akebia’s outstanding shares of common stock or consolidated assets (including assets held by subsidiaries), excluding a transaction in which (A) [**], or (B) [**], or (ii) involving the sale of substantially all of Akebia’s rights with respect to the Licensed Products.

	
18.3.
	
Force Majeure.  If either Party will be delayed, interrupted in, or prevented from the performance of any obligation hereunder by reason of any cause beyond its reasonable control, including an act of God, fire, flood, earthquake, war (declared or undeclared), public disaster, act of terrorism, or strikes (other than strikes of a Party’s own employees), then such Party will not be liable to the other therefor; and the time for performance of such obligation will be extended for a period equal to the duration of the force majeure that occasioned the delay, interruption, or prevention.  The Party invoking such force majeure rights of this Section 18.3 (Force Majeure) must notify the other Party by courier or overnight dispatch (e.g., Federal Express) no later than 30 days after each of the first and last day of the force majeure unless the force majeure renders such notification impossible, in which case notification will be made as soon as possible.  If the delay resulting from the force majeure exceeds three months, then the Party not affected by the force majeure will have the right to terminate this Agreement forthwith pursuant to Section 16.2 (Termination for Breach) with the consequences set out in Section 16.12 (Effects of Termination), as if the Party affected by the force majeure were in material breach of this Agreement.

	
18.4.
	
Entire Agreement.  This Agreement, together with exhibits and schedules attached hereto, (a) constitutes the entire agreement between the Parties with respect to the subject matter hereof, (b) amends and restates the Original Agreement in its entirety, and (c) supersedes all prior understandings of the Parties with respect thereto (including the Original Agreement and that certain Confidential Disclosure Agreement between the Parties dated [**], as amended by Amendment No. 1 dated [**]) and will not be modified, amended, or terminated, except as herein provided or except by another agreement in writing executed by the Parties.

	
18.5.
	
Severability.  If any provision of this Agreement is declared invalid by a court of last resort or by any court or other governmental body from the decision of which an appeal is not taken within the time provided by law, then and in such event, this Agreement will be deemed to have been terminated only as to the portion thereof that relates to the provision invalidated by that decision and only in the relevant jurisdiction, but this Agreement, in all other respects and all other jurisdictions, will remain in force; provided, however, that if the provision so invalidated is essential to the Agreement as a whole, then the Parties will negotiate in good faith to amend the terms hereof as nearly as practical to carry out the original intent of the Parties, and, failing to agree to such amendment, then either Party may submit the matter for resolution pursuant to Article 17 (Dispute Resolution; Governing Law). 

36

CONFIDENTIAL

 

	
18.6.
	
Notices.  Any notice or report required or permitted to be given under this Agreement will be in writing and will be mailed by internationally recognized express delivery service, or sent by email or facsimile and confirmed by mailing, as follows:

If to Akebia:

Akebia Therapeutics, Inc. 
245 First Street
Cambridge, MA  02142 
Attention:  Chief Executive Officer 
Facsimile:  [**]

Email:  [**]

 

With copies to (which will not constitute notice for purposes of this Agreement):

Akebia Therapeutics, Inc. 
245 First Street
Cambridge, MA  02142 
Attention:  Senior Vice President, Chief Legal Officer and Secretary
Facsimile:  [**]

Email:  [**]

 

and

Ropes & Gray LLP 
Prudential Tower, 800 Boylston Street 
Boston, MA  02199-3600 
Attention:  [**] 
Facsimile:  [**]

Email:  [**]

 

If to Licensee:

Vifor Pharma Management Ltd.
Flughofstrasse 61, 8152 Glattbrugg, Switzerland
Attention:  [**] 
Facsimile:  [**]

Email:  [**]

 

With a copy to (which will not constitute notice for purposes of this Agreement):

Vifor Pharma Management Ltd
Flughofstrasse 61, 8152 Glattbrugg, Switzerland 
Facsimile:  [**] 
Attention:  [**]

Email:  [**]

 

37

CONFIDENTIAL

 

	
18.7.
	
Further Assurances.  The Parties agree to reasonably cooperate with each other in connection with any actions required to be taken as part of their respective obligations under this Agreement, and will (a) furnish to each other such further information; (b) execute and deliver to each other such other documents; and (c) do such other acts and things (including working collaboratively to correct any clerical, typographical, or other similar errors in this Agreement), all as the other Party may reasonably request for the purpose of carrying out the intent of this Agreement.

	
18.8.
	
Agency.  Neither Party is, nor will be deemed to be an employee, agent, or representative of the other Party for any purpose.  Each Party is an independent contractor, not an employee or partner of the other Party.  Neither Party will have the authority to speak for, represent, or obligate the other Party in any way without prior written authorization from the other Party.

	
18.9.
	
No Waiver.  Any omission or delay by either Party at any time to enforce any right or remedy reserved to it, or to require performance of any of the terms, covenants, or provisions hereof, by the other Party, will not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement.  Any waiver by a Party of a particular breach or default by the other Party will not operate or be construed as a waiver of any subsequent breach or default by the other Party.

	
18.10.
	
Interpretation.  (a) Whenever any provision of this Agreement uses the term “including” (or “includes”), such term will be deemed to mean “including without limitation” and “including but not limited to” (or “includes without limitations” and “includes but is not limited to”) regardless of whether the words “without limitation” or “but not limited to” actually follow the term “including” (or “includes”); (b) “herein,” “hereby,” “hereunder,” “hereof,” and other equivalent words will refer to this Agreement in its entirety and not solely to the particular portion of this Agreement in which any such word is used; (c) all definitions set forth herein will be deemed applicable whether the words defined are used herein in the singular or the plural; (d) wherever used herein, any pronoun or pronouns will be deemed to include both the singular and plural and to cover all genders; (e) the recitals set forth at the start of this Agreement, along with the schedules and exhibits to this Agreement, and the terms and conditions incorporated in such recitals and schedules and exhibits will be deemed integral parts of this Agreement and all references in this Agreement to this Agreement will encompass such recitals and schedules and exhibits and the terms and conditions incorporated in such recitals and schedules and exhibits; provided that in the event of any conflict between the terms and conditions of this Agreement and any terms and conditions set forth in the recitals, schedules, or exhibits, the terms of this Agreement will control; (f) in the event of any conflict between the terms and conditions of this Agreement and any terms and conditions that may be set forth on any order, invoice, verbal agreement, or otherwise, the terms and conditions of this Agreement will govern; (g) this Agreement will be construed as if both Parties drafted it jointly, and will not be construed against either Party as principal drafter; (h) unless otherwise provided, all references to Sections, Articles, and Schedules in this Agreement are to Sections, Articles, and Schedules of and to this Agreement; (i) any reference to any federal, national, state, local, or foreign statute or law will be deemed to also refer to all rules and regulations promulgated thereunder, unless the context requires otherwise; (j) wherever used, the word “shall” and the word “will” are each understood to be imperative or mandatory in nature and are interchangeable with one another; (k) the word “or” will not be exclusive; (l) references to a particular person include such person’s successors and assigns to the extent not prohibited by this Agreement; and (m) the section headings and captions used herein are inserted for convenience of reference only and will not be construed to create obligations, benefits, or limitations.

38

CONFIDENTIAL

 

	
18.11.
	
Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each will be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

	
18.12.
	
Counterparts.  This Agreement may be executed in counterparts, all of which taken together will be regarded as one and the same instrument. This Agreement may be executed by facsimile, .pdf, or other electronically transmitted signatures and such signatures will be deemed to bind each Party hereto as if they were the original signatures.

[Remainder of page intentionally left blank; signature page follows.]

 

 

39

 

 

IN WITNESS WHEREOF, the Parties have executed this Amended Agreement through their duly authorized representatives to be effective as of the Amendment Execution Date.

 

	
AKEBIA THERAPEUTICS, INC.
	
 
	
Vifor (INTERNATIONAL) LTD.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Jason A. Amello
	
 
	
By:
	
 
	
/s/ Dr. Christoph Springer

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Name:
	
 
	
 Jason A. Amello
	
 
	
Name:
	
 
	
Dr. Christoph Springer

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
 SVP, CFO
	
 
	
Title:
	
 
	
Chief Strategy Officer

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
AKEBIA THERAPEUTICS, INC.
	
 
	
Vifor (INTERNATIONAL) LTD.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ John P. Butler
	
 
	
By:
	
 
	
/s/ Dr. Oliver P. Kronenberg

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Name:
	
 
	
John P. Butler
	
 
	
Name:
	
 
	
Dr. Oliver P. Kronenberg

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
CEO
	
 
	
Title:
	
 
	
Group General Counsel

 

[Signature Page to Amended and Restated License Agreement]

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