Provision Language
ARTICLE 13. TERM AND TERMINATION
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13.2. Termination for Breach.
(a) Notice. If either Party believes that the other Party is in material breach of this Agreement, then the Party holding such belief (the “Non-Breaching Party”) may deliver notice of such breach to the other Party (the “Notified Party”). The Notified Party shall have [**] days to cure such breach to the extent involving non-payment of undisputed amounts due and payable hereunder, and [**] days to either cure such breach for all other material breaches. If the Notified Party fails to cure a material breach of this Agreement as provided for in this Section 13.2(a), then the Non-Breaching Party may terminate this Agreement upon written notice to the Notified Party. Notwithstanding the foregoing, if cure of a breach other than non-payment cannot reasonably be effected within such [**] day period, the Notified Party may deliver to the Non-breaching Party a plan reasonably calculated to cure such breach within a timeframe that is reasonably prompt in light of the circumstances then prevailing but in no event longer than an additional [**] days. Following delivery of such a plan, the Notified Party shall carry out the plan and cure the breach within the timeframe set forth in the plan and the failure of the Notified Party to cure the breach within such timeframe shall result in the immediate and automatic termination of this Agreement upon the expiration of such timeframe. Without limiting the foregoing, if SIIL materially breaches this Agreement with respect to the Manufacture of the Product and fails to timely cure such breach as provided in this Section 13.2(a), Visterra may elect to terminate this Agreement solely with respect to the rights granted to SIIL hereunder to make, have made or otherwise Manufacture the Licensed Antibody and Product upon written notice to SIIL. If Visterra so elects, promptly following the effective date of such termination, the Parties will negotiate and agree upon an agreement pursuant to which Visterra would Manufacture and supply Licensed Antibody and Product to SIIL for Development and Commercialization in the Licensed Territory.
(b) Disputes. If a Party gives notice of termination under this Section 13.2 and the other Party disputes whether such termination is proper under this Section 13.2, then the issue of whether this Agreement may properly be terminated upon expiration of the notice period (unless such breach is cured as provided in Section 13.2(a)) shall be resolved in accordance with Article 14. If as a result of such dispute resolution process it is determined that the notice of termination was proper, then such termination shall be deemed to be effective on the date of termination based on the original termination notice prior to the initiation of the related dispute or, if later, [**] days following the resolution of the relevant dispute.If as a result of such dispute resolution process it is determined that the notice of termination was improper, then no termination shall have occurred and this Agreement shall remain in effect.
(c) Royalty Reduction. If Visterra materially breaches this Agreement and such breach is not cured within the applicable notice period set forth in Section 13.2(a), SIIL, at its sole discretion, may either:
(i) terminate this Agreement in accordance with Section 13.2 (in addition to pursuing any remedy that may be available to SIIL at law or in equity as a result of Visterra’s breach of this Agreement); or
(ii) elect (A) not to terminate this Agreement, (B) to retain the license granted under Section 2.1, subject to allterms and conditions hereof, and (C) pursue any remedy that may be available to SIIL at law or in equity as a result of Visterra’s breach of this Agreement, without prejudice to SIIL’s right to terminate this Agreement at a later date pursuant to Section 13.2 (for that uncured material breach or any other uncured material breach of this Agreement by Visterra). If SIIL so elects not to terminate this Agreement and such breach is undisputed or it is finally determined pursuant to Section 13.2(b) that such notice was proper, thereafter (x) the JSC shall be disbanded and, in lieu thereof, within [**] days after the end of each Calendar Year, SIIL shall deliver a written report to Visterra summarizing in reasonable detail SIIL’s efforts to Develop the Product during the just-ended Calendar Year and (y) the royalty rates set forth in Section 8.3(a) shall be reduced by [**] percent ([**]%) with respect to Net Sales occurring after the date of such notice.
13.3. Termination by SIIL. SIIL may terminate this Agreement without cause on (a) ninety (90) day’s prior written notice if the First Commercial Sale of the Product in the Licensed Territory has not occurred or (b) one hundred eighty (180) day’s prior written notice if the First Commercial Sale of the Product in the Licensed Territory has occurred.
13.4. Termination for Patent Challenge. If SIIL or any of its Affiliates (a) commences or participates in any action(including any patent opposition, re-examination or invalidation proceeding), or otherwise asserts any claim, challenging or denying the validity or enforceability of any Visterra Patents or any claim thereof or (b) actively assists any person or entity in bringing or prosecuting any action (including any patent opposition, re-examination or invalidation proceeding) challenging or denying the validity or enforceability of any Visterra Patents or any claim thereof (each of (a) and (b), a “Patent Challenge”), then, to the extent permitted by Law, Visterra may, in its sole discretion, give at least thirty (30) days prior written notice to SIIL that Visterra may terminate this Agreement, and, unless SIIL or its Affiliates, as applicable, withdraw or cause to be withdrawn all such challenges within thirty (30) days after SIIL’s receipt of notice regarding such Patent Challenge, Visterra may terminate this Agreement by providing written notice thereof to SIIL.