Common use of Non-Technical Termination Clause in Contracts

Non-Technical Termination. The Parties acknowledge and agree that termination of the Program with respect to both Indications for any reason (even a commercially reasonable reason) other than a Technical Failure shall be a “Non-Technical Termination”. (For clarity, any termination with respect to only a single Indication due to any reason other than a Technical Failure shall not be a Non-Technical Termination.) Upon the occurrence of a Non-Technical Termination, Dermavant shall (i) promptly notify NovaQuest of such termination and (ii) within [***] of the date of termination or deemed Non-Technical Termination under this Section 3.2(b) (Non- Technical Termination), pay NovaQuest the Non-Technical Termination Payment. A Non- Technical Termination shall be deemed to have occurred if: (A) there has been no Technical Failure with respect to both Indications, and (B) Dermavant and its Responsible Parties fail, for at least [***], to use Commercially Reasonable Efforts to actively and materially engage in the Development of the Product in a manner consistent with Dermavant’s obligations hereunder to Develop the Product (a “Deemed Non-Technical Termination”). If NovaQuest provides notice to Dermavant of a Deemed Non-Technical Termination, such Deemed Non-Technical Termination shall be effective [***] from the date of such notice unless during such [***] period Dermavant reasonably demonstrates that it is using Commercially Reasonable Efforts to Develop the Product in a manner consistent with its obligations hereunder.