Common use of Failure to Exercise IND-Ready Option Clause in Contracts

Failure to Exercise IND-Ready Option. Unless AstraZeneca timely provides an Option Maintenance Notice pursuant to Section 5.10.2(b)(3), if AstraZeneca does not exercise the IND-Ready Option for an Option Compound within the IND-Ready Option Period, then, subject to Section 5.10.2(c), Targacept shall thereafter have the right in all respects, itself or with, for the benefit of or sponsored by any Third Party, to research, develop, commercialize and otherwise Exploit, or to grant a license or other rights to any Third Party to research, develop, commercialize and otherwise Exploit, such Option Compound either (A) if the Option Indication designated in the IND-Ready Notice is a Primary Indication, in or outside of the Field or (B) if (x) the Option Indication designated in the IND-Ready Notice is Schizophrenia, solely outside the Field, and (y) as of the last day of the IND-Ready Option Period for such Option Compound, (i) no Option Compound has or had become an Option Compound Candidate Drug for which the Principal Indication is Schizophrenia, (ii) there is no other Option Compound for which Targacept has delivered to AstraZeneca an IND-Ready Notice or a POC Notice or that otherwise is the subject of an Option Compound Development Plan or Targacept Option Compound Development Plan that specifies Schizophrenia as the Option Indication, and (iii) there is no other Option Compound Candidate Drug or Option Compound Product that AstraZeneca is otherwise Developing or Commercializing for Schizophrenia, the last day of the IND-Ready Option Period shall be the Schizophrenia Expiration Date. If (1) the last day of the IND-Ready Option Period is not the Schizophrenia Expiration Date because there is one or more Option Compound(s) for which Targacept has delivered to AstraZeneca an IND-Ready Notice or a POC Notice or that otherwise is the subject of an Option Compound Development Plan or Targacept Option Compound Development Plan that specifies Schizophrenia as the Option Indication or because AstraZeneca is Developing an Option Compound Candidate Drug for Schizophrenia (other than an Option Compound Candidate Drug for which the Principal Indication is Schizophrenia), (2) all such Option Compound(s) become Terminated Compound(s) or Unexercised Option Compound(s), (3) as of the date all such Option Compound(s) have become Terminated Compound(s) or Unexercised Option Compound(s), each of clauses (i), (ii) and (iii) above are true, (4) then, if not occurring earlier pursuant to Section 5.10.2(d)(2), the Schizophrenia Expiration Date shall be the date, if any, on which all such Option Compound(s) have become Terminated Compound(s) or Unexercised Option Compound(s). For purposes of clarity, if prior to the Schizophrenia Expiration Date, AstraZeneca has exercised an Option for an Option Compound Candidate Drug for which Schizophrenia is a Principal Indication or AstraZeneca otherwise Commercializes an Option Compound Product for Schizophrenia there shall be no Schizophrenia Expiration Date. For purposes of clarity, Targacept shall have no right to Exploit any Compound under this Section for which it did not provide AstraZeneca with an IND-Ready Notice in material compliance with, and otherwise satisfy its material obligations with respect thereto under, this Section 5.10.2(b).

Failure to Exercise IND-Ready Option. Unless AstraZeneca timely provides an Option Maintenance Notice pursuant to Section 5.10.2(b)(3), if AstraZeneca does not exercise the IND-Ready Option for an Option Compound within the IND-Ready Option Period, then, subject to Section 5.10.2(c), Targacept shall thereafter have the right in all respects, itself or with, for the benefit of or sponsored by any Third Party, to research, develop, commercialize and otherwise Exploit, or to grant a license or other rights to any Third Party to research, develop, commercialize and otherwise Exploit, such Option Compound either (A) if the Option Indication designated in the IND-Ready Notice is a Primary Indication, in or outside of the Field or (B) if (x) the Option Indication designated in the IND-Ready Notice is Schizophrenia, solely outside the Field, and (y) as of the last day of the IND-Ready Option Period for such Option Compound, (i) no Option Compound has or had become an Option Compound Candidate Drug for which the Principal Indication is Schizophrenia[********], (ii) there is no other Option Compound for which Targacept has delivered to AstraZeneca an IND-Ready Notice or a POC Notice or that otherwise is the subject of an Option Compound Development Plan or Targacept Option Compound Development Plan that specifies Schizophrenia as the Option Indication[********], and (iii) there is no other Option Compound Candidate Drug or Option Compound Product that AstraZeneca is otherwise Developing or Commercializing for Schizophrenia[********], the last day of the IND-Ready Option Period shall be the Schizophrenia Expiration Date[********]. If (1) the last day of the IND-Ready Option Period is not the Schizophrenia Expiration Date because there is one or more Option Compound(s) for which Targacept has delivered to AstraZeneca an IND-Ready Notice or a POC Notice or that otherwise is the subject of an Option Compound Development Plan or Targacept Option Compound Development Plan that specifies Schizophrenia as the Option Indication [********] or because AstraZeneca is Developing an Option Compound Candidate Drug for Schizophrenia [********] (other than an Option Compound Candidate Drug for which the Principal Indication is Schizophrenia)[********], (2) all such Option Compound(s) become Terminated Compound(s) or Unexercised Option Compound(s), (3) as of the date all such Option Compound(s) have become Terminated Compound(s) or Unexercised Option Compound(s), each of clauses (i), (ii) and (iii) above are true, (4) then, if not occurring earlier pursuant to Section 5.10.2(d)(2), the Schizophrenia Expiration Date shall be the date, if any, on which [********] all such Option Compound(s) have become Terminated Compound(s) or Unexercised Option Compound(s). For purposes of clarity, if prior to the Schizophrenia Expiration Date[********], AstraZeneca has exercised an Option for an Option Compound Candidate Drug for which Schizophrenia is a Principal Indication [********] or AstraZeneca otherwise Commercializes an Option Compound Product for Schizophrenia there shall be no Schizophrenia Expiration Date[********]. For purposes of clarity, Targacept shall have no right to Exploit any Compound under this Section for which it did not provide AstraZeneca with an IND-Ready Notice in material compliance with, and otherwise satisfy its material obligations with respect thereto under, this Section 5.10.2(b).