Provision Language
Definitions
“Issued Claim” means an unexpired claim of an issued patent which has not been found to be unpatentable, invalid or unenforceable by an unreversed and unappealable decision of a court or other authority in the subject country.
“Payee” means UBC.
“Payor” means Alnylam, Tekmira or Protiva.
“Pending Claim” means a claim of a pending patent application, which patent application has been pending for more than [**] years from the date of filing of such patent application.
“Royalty Term” means, separately with respect to each Licensed Product in each country, the period (a) commencing on the First Commercial Sale of such Licensed Product in such country (provided that either (i) such Licensed Product is covered by an Outstanding Claim of a UBC Controlled Patent Right in such country, or (ii) the manufacture of such Licensed Product is covered by an Outstanding Claim of a UBC Controlled Patent Right in the country or countries of manufacture, in each case at the time of such First Commercial Sale in such country), and (b) concluding on the expiration of the latest of (i) the last to expire Valid Claim of a UBC Controlled Patent Right in such country covering such Licensed Product, (ii) the last to expire Valid Claim of a UBC Controlled Patent Right in the country or countries of manufacture of such Licensed Product covering such Licensed Product, and (iii) twelve (12) years from the date of First Commercial Sale of such Licensed Product in such country.
“Valid Claim” means (a) an Issued Claim; or (b) a claim of a pending patent application, which patent application has been pending for less than [**] years from the date of filing of such patent application.
4. Administration Payment; Research Program Funding
4.1 Administration Payment. Alnylam agrees to make an administration payment to AlCana totaling $ [**] during the Research Term. Such administration payment shall be made in [**] equal installments of $[**] each, with the first installment payable within [**] days after the Effective Date, and the remaining installments on the first day of the next [**] Contract Quarters thereafter.
4.2 Research Program Funding. Alnylam agrees to fund the Research Program during the Research Term. The terms and conditions of such funding are set forth in the budget (the “Budget”) and payment schedule for the Research Program set forth in Exhibit B. Research Program funds will be used by AlCana and UBC solely in the performance of the Research Program for wages, supplies, operating expenses and other expenses as set forth in the Budget.
4.3 Administration payments to, and research funding for, AlCana shall be made to AlCana directly. Research funding for [**], as specified in Exhibit B, shall be made by payment to UBC.
8. Collaboration IP
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8.4 Compensation for Exclusive License. In consideration for the rights granted to it under the Supplemental Agreement, each Payor, as applicable, shall make the following payments to Payee for the benefit of UBC and AlCana (as set forth in Section 8.4.4 below):
8.4.1 Milestone Payments. Each Payor shall make a milestone payment to Payee based on achievement of each of the milestone events listed below by such Payor or its Related Parties for Licensed Products that are directed to a particular Target. Such Payor shall notify Payee in writing of the achievement of each such milestone event and pay to Payee the applicable payment amount set forth below within [**] days of such Payor’s or its Related Parties’ achievement of such milestone event for each such Licensed Product. Each milestone payment by such Payor to Payee hereunder shall be payable only once by a Payor and its Related Parties with respect to each Target, regardless of the number of times the same milestone is achieved with respect to such Target by a Licensed Product. For clarity, once a Payor has made a particular milestone payment with respect to a Licensed Product that is directed to a particular Target, such Payor will have no obligation to make such milestone payment again with respect to any other Licensed Product that is directed to the same Target. For example, in the event that further clinical development of a Licensed Product with respect to which one or more milestones payments have been made (an “Original Product”) is halted, and such Licensed Product is replaced in development by a different Licensed Product (a “Backup Product”),then such Payor shall not be obligated to make any payments with respect to milestones achieved by the Backup Product for which such Payor has already made a milestone payment with respect to the Original Product. However, if such Original Product or Backup Product is subsequently directed to a different Target, then such Payor shall be obligated to make any payments with respect to the milestones achieved by such Original Product or Backup Product directed to such different Target. Except as set forth above, each milestone payment shall be nonrefundable and non–creditable against any other payments due under this Agreement.
8.4.2 Royalties
(a) Rates; Royalty Term. Subject to the other terms of this Section 8.4.2, with respect to each Licensed Product, during the Royalty Term for such Licensed Product, each Payor shall pay Payee for the benefit of AlCana and UBC (as set forth in Section 8.4.4 below) royalties of (i) [**] percent ([**]%) of Net Sales by such Payor and its Related Parties with respect to each Licensed Product sold during the Royalty Term covered by a Valid Claim of a UBC Controlled Patent Right and (ii) [**] percent ([**]%) of Net Sales by such Payor and its Related Parties with respect to each Licensed Product sold during the Royalty Term covered by a Pending Claim of a UBC Controlled Patent Right. Notwithstanding anything in this Agreement to the contrary, if a Licensed Product is (x) covered by an Issued Claim of a UBC Controlled Patent Right in a country, or (y) the manufacture of such Licensed Product is covered by an Issued Claim of a UBC Controlled Patent Right in the country or countries of manufacture, in each case at the time of such First Commercial Sale in such country, then even if there is no Outstanding Claim of a UBC Controlled Patent Right covering such Licensed Product in either such country or the country or countries of manufacture, the Royalty Term for such Licensed Product shall not terminate until twelve (12) years from the date of First Commercial Sale of such Licensed Product in such country and the royalty rate set forth in Section 8.4.2(a)(ii) above shall apply to such Licensed Product after expiration of all Valid Claims of UBC Controlled Patent Rights covering such Licensed Product in such country and the country or countries of manufacture. For clarity, examples of the application of this Section 8.4.2(a) are set forth in Exhibit G. After expiration of the Royalty Term for such Licensed Product, the Licenses with respect to such Licensed Product shall become fully paid and perpetual.
(b) Royalty Adjustments. If a Payor or any of its Related Parties obtains or has obtained a license or similar right from any Payor Third Party under any Patent Rights covering [**] technology that are reasonably necessary for the manufacture, sale or import of a Licensed Product (including, without limitation, under the [**] Agreement, if and as applicable), and if such Payor or any of its Related Parties is required to pay to such Payor Third Party in consideration for the grant of such license or similar right by the Payor Third Party, a royalty calculated on such Payor or its Related Parties’ Net Sales of such Licensed Product (the “Third Party Royalty“), then the royalties due pursuant to Section 8.4.2(a) shall be reduced by an amount not exceeding [**] percent ([**]%) of the actual Third Party Royalty [**]; provided, however, that (i) if the Third Party Royalty is paid by a Sublicensee, then such Third Party Royalty will only be applied to reduce the amount of the royalty payable by Payor to Payee if such Sublicensee’s payment to Payor of royalties on the Sublicensee’s Net Sales of License Products is also reduced by in accordance with provisions substantially equivalent to those contained in this subsection 8.4.2(b) and (ii) the royalties payable to Payee shall in no event be reduced to less than [**] percent([**]%) of the amounts set forth in Section 8.4.2(a) regardless of the total amount of Third Party Royalties paid by such Payor or its Related Parties, and regardless of the number of Third Party Royalty obligations that may arise with regards to the sale of any Licensed Product.