Common use of Assumption of Option Compound Development Plan by AstraZeneca Clause in Contracts

Assumption of Option Compound Development Plan by AstraZeneca. If AstraZeneca elects to complete the Option Compound Development Plan in accordance with Section 5.10.2(b)(4), Targacept shall, at the request and sole expense of AstraZeneca, provide AstraZeneca with such assistance as is reasonably necessary to effectuate a smooth and orderly transition of such Option Compound Development Plan so as to minimize any disruption of activities being conducted pursuant to such plan. In particular, Targacept shall transfer to AstraZeneca, in each case as they relate directly to the Option Compound, (i) at AstraZeneca’s written request, all of Targacept’s and its Affiliates’ right, title and interest in all INDs, (ii) all material aspects of Confidential Information Controlled by Targacept or its Affiliates as of the date of transfer, (iii) at AstraZeneca’s written request, control of all Clinical Trials then being conducted and, if so requested, Targacept shall assign (or cause its Affiliates to assign) to AstraZeneca all agreements with any Third Party with respect to the conduct of such Clinical Trials, (iv) all supplies of such Option Compound in the possession of Targacept or any of its Affiliates or contractors pursuant to Article 16. Following such transfer AstraZeneca shall use Commercially Reasonable Efforts to complete the Option Compound Development Plan; provided that AstraZeneca shall have the right to amend the Option Compound Development Plan (including by winding down or varying one or more Clinical Trials or studies being conducted pursuant to the plan and undertaking additional or substitute Clinical Trials and studies). If completion of the Option Compound Development Plan demonstrates Option Compound Proof of Concept: (A) AstraZeneca shall promptly notify Targacept in writing thereof andthereupon shall be deemed to have exercised [********] with respect to such Option Compound; (B) within twenty (20) days after such notice, AstraZeneca shall pay to Targacept the sum of [********] being the Option Exercise Fee [********] AstraZeneca [********] for such Option Compound in accordance with [********] (and, if Option Compound Proof of Concept is demonstrated by [********] Clinical Trial (and not by achievement of [********] Clinical Trial), AstraZeneca shall also then pay to Targacept the sum of [********], which amount represents [********] that would be then payable pursuant to clause (C)); and (C) such Option Compound shall become an [********] in respect of which milestones (for purposes of clarity, [********] shall be payable with respect to such Option Compound Candidate Drug) and royalties shall be paid thereafter in accordance with Sections 6.5 (column B) and 6.6.1(a)(1) (column B). If Option Compound Proof of Concept is not achieved, AstraZeneca shall promptly notify Targacept in writing thereof and Section 5.10.2(e) shall apply, except that if pursuant to that Section the applicable Option Compound does not become an Option Compound Candidate Drug for any reason, such Option Compound shall, notwithstanding Section 5.10.2(e)(4), become a Terminated Compound (but not a Terminated AZ Compound) and and Targacept’s rights thereto shall be subject to the restrictions applicable to Terminated Compounds (but not Terminated AZ Compounds) as set forth in Section 8.6. For purposes of clarity, an uncured breach by AstraZeneca of its obligations to use Commercially Reasonable Efforts to complete an Option Compound Development Plan for an Option Compound assumed and conducted by AstraZeneca pursuant to this Section 5.10.2(b)(5) shall not give rise to a right to terminate this Agreement, and Targacept’s sole and exclusive remedy therefor shall be to terminate AstraZeneca’s rights under this Section 5.10.2(b)(5) with respect to such Option Compound, whereupon such Option Compound shall become a Terminated Compound (but not a Terminated AZ Compound) as expressly prescribed in the foregoing sentence.

Assumption of Option Compound Development Plan by AstraZeneca. If AstraZeneca elects to complete the Option Compound Development Plan in accordance with Section 5.10.2(b)(4), Targacept shall, at the request and sole expense of AstraZeneca, provide AstraZeneca with such assistance as is reasonably necessary to effectuate a smooth and orderly transition of such Option Compound Development Plan so as to minimize any disruption of activities being conducted pursuant to such plan. In particular, Targacept shall transfer to AstraZeneca, in each case as they relate directly to the Option Compound, (i) at AstraZeneca’s written request, all of Targacept’s and its Affiliates’ right, title and interest in all INDs[********], (ii) all material aspects of Confidential Information Controlled by [********] Targacept or its Affiliates as of the date of transfer, (iii) at AstraZeneca’s written request, control of all Clinical Trials then being conducted and[********], if so requested, Targacept shall assign (or cause its Affiliates to assign) to AstraZeneca all agreements with any Third Party [********] with respect to the conduct of [********] such Clinical Trials, (iv) all supplies of such Option Compound in the possession of Targacept or any of its Affiliates or contractors pursuant to Article 16. Following such transfer AstraZeneca shall use Commercially Reasonable Efforts to complete the Option Compound Development Plan; provided that AstraZeneca shall have the right to amend the Option Compound Development Plan (including by winding down or varying one or more Clinical Trials or studies being conducted pursuant to the plan and undertaking additional or substitute Clinical Trials and studies)[********]. If completion of the Option Compound Development Plan demonstrates Option Compound Proof of Concept: (A) AstraZeneca shall promptly notify Targacept in writing thereof andthereupon shall be deemed to have exercised and [********] with respect to such Option Compound; (B) within twenty (20) days after such notice, AstraZeneca shall pay to Targacept the sum of [********] being the Option Exercise Fee [********] AstraZeneca [********] for such Option Compound in accordance with [********] (and, if Option Compound Proof of Concept is demonstrated by [********] Clinical Trial (and not by achievement of [********] Clinical Trial)], AstraZeneca shall also then pay to Targacept the sum of [********], which amount represents [********] that would be then payable pursuant to clause (C))]; and (C) such Option Compound shall become an [********] in respect of which milestones (for purposes of clarity, [********] shall be payable with respect to such Option Compound Candidate Drug) and royalties shall be paid thereafter in accordance with Sections 6.5 (column B) and 6.6.1(a)(1) (column B). If Option Compound Proof of Concept is not achieved, AstraZeneca shall promptly notify Targacept in writing thereof and Section 5.10.2(e) shall apply, except that if pursuant to that Section the applicable Option Compound does not become an Option Compound Candidate Drug for any reason, such Option Compound shall, notwithstanding Section 5.10.2(e)(4), become a Terminated Compound (but not a Terminated AZ Compound) and and Targacept’s rights thereto shall be subject to the restrictions applicable to Terminated Compounds (but not Terminated AZ Compounds) as set forth in Section 8.6[********]. For purposes of clarity, an uncured breach by AstraZeneca of its obligations to use Commercially Reasonable Efforts to complete an Option Compound Development Plan for an Option Compound assumed and conducted by AstraZeneca pursuant to this Section 5.10.2(b)(5) shall not give rise to a right to terminate this Agreement, and Targacept’s sole and exclusive remedy therefor shall be to terminate AstraZeneca’s rights under this Section 5.10.2(b)(5) with respect to such Option Compound, whereupon such Option Compound shall become a Terminated Compound (but not a Terminated AZ Compound) as expressly prescribed in the foregoing sentence.