13. TERM, TERMINATION, AND MODIFICATION OF RIGHTS
13.01 This Agreement is effective when signed by all parties and shall extend on a country-by-country basis to the expiration of the last to expire of the Licensed Patent Rights in each country unless sooner terminated as provided in this Article 13.
13.02 In the event that Licensee is in default in the performance of any material obligations under this Agreement, including but not limited to the obligations listed in Article 13.05, and if the default has not been remedied within ninety (90) days after the date of notice in writing of such default, PHS may terminate this Agreement by written notice and pursue outstanding amounts owed through procedures provided by the Federal Debt Collection Act.
13.03 In the event of the commencement of a bankruptcy proceeding by or against Licensee under the Bankruptcy Code that is not dismissed within ninety (90) days after it is filed, PHS may, at its option, terminate this Agreement . In the event of a bankruptcy of Licensee (unless PHS has already terminated this Agreement ), all rights to Licensed Patent Rights granted to Licensee under this Agreement to the extent same survive prior to filing of such bankruptcy are, and shall be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, as amended from time to time (the “Bankruptcy code”), licenses of right to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. The Parties agree that Licensee, as a licensee of such rights under this Agreement, shall retain and may fully exercise all its rights and elections under the Bankruptcy Code.
13.04 Licensee shall have a unilateral right to terminate this Agreement and/or any licenses in any country or territory by giving PHS sixty (60) days written notice to that effect.
13.05 PHS shall specifically have the right to terminate or modify, at its option, this Agreement, if PHS determines that the Licensee:
1) is not executing the Commercial Development Plan submitted with its request for a license and the Licensee cannot otherwise demonstrate to PHS ’s reasonable satisfaction that the Licensee has taken, or can be expected to take within a reasonable time, effective steps to achieve Practical Application of the Licensed Products or Licensed Processes;
2) has not achieved the Benchmarks as may be modified under Paragraph 9.02;
3) has willfully made a false statement of, or willfully omitted, a material fact in the license application or in any report required by the Agreement;
4) has committed a material breach of a covenant or agreement contained in the Agreement;
5) is not keeping Licensed Products or Licensed Processes reasonably available to the public after commercial use commences;
6) cannot reasonably satisfy unmet health and safety needs within the Licensed Field of Use or
7) cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.02 unless waived.
In making this determination, PHS will take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by Licensee under Paragraph 9.02. Prior to invoking its rights under this Paragraph 13.05 upon any of the triggers described in items 1) through 7) above, PHS shall give written notice to Licensee providing Licensee specific notice of, and a ninety (90) day opportunity to respond to, PHS ’s concerns as to the previous items 1) through 7). If Licensee fails to alleviate PHS ’s concerns as to the previous items 1) through 7) during such 90-day period or fails to initiate corrective action to PHS ’s satisfaction during such 90-day period, PHS may terminate this Agreement .
13.06 When the public health and safety so require, and after written notice to Licensee providing Licensee a ninety (90) day opportunity to respond, PHS shall have the right to require Licensee to grant sublicenses to responsible applicants, on reasonable terms, in the Licensed Field of Use under the Licensed Patent Rights , unless Licensee can reasonably demonstrate that the granting of the sublicense would not materially increase the availability to the public of the subject matter of the Licensed Patent Rights . PHS will not require the granting of a sublicense unless the responsible applicant has first negotiated in good faith with Licensee . If Licensee is required to grant sublicense(s) under this Paragraph 13.06, Licensee agrees to provide PHS and said sublicensee(s) with all data, documents and materials generated or produced by or on behalf of Licensee that would be or could be used in regulatory filings with the Food and Drug Administration (or foreign equivalent regulatory agency). Licensee agrees that such data, documents and/or materials can be used by PHS or said sublicensee(s) to prepare regulatory filings with the Food and Drug Administration (or equivalent foreign regulatory agencies). Licensee may charge a fee to said sublicensee(s) that is equal to its direct costs only (i.e., no overhead shall be compensated) for producing said data, documents and materials that said sublicensee(s) actually use in their regulatory filings.
13.07 PHS reserves the right according to 35 U.S.C. § 209(f)(4) to terminate or modify this Agreement if it is determined that such action is necessary to meet requirements for public use specified by federal regulations issued after the date of this Agreement and such requirements are not reasonably satisfied by Licensee.
13.08 Within thirty (30) days of receipt of written notice of PHS ’s unilateral decision to modify or terminate this Agreement pursuant to the express provisions in this Agreement , Licensee may, consistent with the provisions of 37 CFR 404.11, appeal the decision by written submission to the designated PHS official. The decision of the designated PHS official shall be the final agency 13 decision. Licensee may thereafter exercise any and all administrative or judicial remedies that may be available.
13.09 Within ninety (90) days of expiration or termination of this Agreement under this Article 13, a final report, as per Paragraphs 9.02, 9.04 and 9.05, shall be submitted by Licensee. Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expense, due to PHS shall become immediately due and payable upon termination or expiration. If terminated under this Article 13, sublicensees may elect to convert their sublicenses to direct licenses with PHS pursuant to Paragraph 4.03. Unless otherwise specifically provided for under this Agreement , upon termination or expiration of this Agreement, Licensee shall return all Licensed Products or other materials included within the Licensed Patent Rights to PHS or provide PHS with certification of the destruction thereof.
13.10 In the event Licensee unilaterally terminates this Agreement under Paragraph 13.04 or this Agreement is terminated for cause by PHS under Paragraphs 13.02, 13.03 or 13.05, Licensee agrees to provide PHS with all data, documents and materials generated or produced by or on behalf of Licensee that would be or could be used in regulatory filings with the Food and Drug Administration (or foreign equivalent regulatory agencies). Licensee agrees that such data, documents and/or materials can be used by PHS or future third party licensee(s) of Licensed Patent Rights to prepare regulatory filings with the Food and Drug Administration (or equivalent foreign regulatory agencies).
14. GENERAL PROVISIONS