Common use of Shared Liabilities Clause in Contracts

Shared Liabilities. The following shall apply if and after Acucela exercises its Opt-In Right under Section 3.1 (with respect to a Licensed Product for the Initial Indication in the Initial Formulation), or an opt-in right under Section 3.2 or Section 3.3 (with respect to an Other Indication Product or a New Formulation, respectively): to the extent a Third Party Claim arises from (a) any decision of the JDC or the JCC and such Third Party Claim is not otherwise subject to indemnity under Section 11.1 or Section 11.2, or (b) any Intrinsic Defect, then, in either case (a) or (b), all Liabilities with respect to the Territory with respect to the Licensed Product for the Initial Indication in the Initial Formulation for which Acucela has exercised its Opt-In Right under Section 3.1 and/or with respect to an Other Indication Product or New Formulation for which Acucela has exercised its opt-in right under Section 3.2 or Section 3.3 (in each case, an “Opt-in Product”) that are incurred by the Parties as a result of such Third Party Claim shall be shared by the Parties as follows: Acucela shall bear the Participation Percentage of all such Liabilities, and Otsuka shall bear the remaining share of all such Liabilities. In the event that one or more Third Party Claims involves both (i) claims subject to this Section 11.3 with respect to an Opt-in Product and (ii) claims that relate to a Non-Opt-in Product and/or claims that are otherwise not subject to this Section 11.3, then this Section 11.3 shall apply with respect to that portion of the applicable Third Party Claim(s) or those Liabilities that are allocable to the Opt-in Product and shall not apply with respect to that portion of the applicable Third Party Claim(s) or those Liabilities that are allocable to the Non-Opt-in Product. By way of illustration and not limitation, if Acucela exercises its Opt-In Right with respect to Licensed Product for the Initial Indication but does not exercise its right to opt-in with respect to Licensed Product for any Other Indications, then a Third Party Claim alleging Intrinsic Defects of Licensed Product both with respect to the Initial Indication and with respect to Other Indications that distinguishes between the Initial Indication and Other Indications or that otherwise differentiates and allocates Liabilities between the Initial Indication and Other Indications would be subject to this Section 11.3 to the extent such third Party Claim or Liabilities are attributable to the Licensed Product for the Initial Indication (and would not be subject to this Section 11.3 to the extent such Third Party Claim or Liabilities are attributable to the Licensed Product for Other Indications). By way of further illustration and not limitation, if (1) a Third Party Claim relates to both (x) one or more Opt-in Products and (y) one or more Non-Opt-in Products, (2) such Third Party Claim does not differentiate between claims related to the Opt-in Products and claims related to the Non-Opt-in Products (such as, for example, a class action suit brought on behalf of a class of individuals who used the License Product, which class includes individuals who used the Licensed Product for the Initial Indication and also individuals who used the Licensed Product for an Other Indication for which Acucela has not exercised its Opt-In Right), and (3) some or all the Liabilities with respect to such Third Party Claim are determined in a manner that does not differentiate and allocate Liabilities between Opt-in Products and Non-Opt-in Products, then as between the Parties those Liabilities that are determined in a manner that does not differentiate and allocate Liabilities between Opt-in Products and Non-Opt-in Products will be allocated between applicable Opt-in Products and Non-Opt-in Products based on the pro rata Net Sales of such Opt-in Products and Non-Opt-in Products, and the portion of such Liabilities that is allocated in this manner to Opt-in Products (i.e., the percentage obtained by dividing Net Sales of Opt-in Products by the sum of Net Sales of Opt-in Products plus Net Sales of Non-Opt-in Products and multiplying such quotient by 100) would be subject to this Section 11.3, and the portion of such Liabilities that is allocated in this manner to Non-Opt-in Products would not be subject to this Section 11.3. Unless the Parties mutually agree otherwise at the time, Otsuka shall have the right to assume and conduct the defense of such Third Party Claim and, for purposes of Section 11.4, Otsuka shall be deemed the “Indemnifying Party” and Acucela shall be deemed the “Indemnified Party” with respect to such Third Party Claim.