Common use of Termination for Cessation of Activities Clause in Contracts

Termination for Cessation of Activities. If at any time during the period commencing on the Effective Date, there is a consecutive twelve (12) month period during which Kiniksa (a) does not conduct any material Development or Commercialization activities for a Product in the Kiniksa Field in the Territory as demonstrated by written and senior management approved budgets and development plans as well as bona fide FTE allocations, or (b) has not granted rights (or an option to obtain rights) to a Third Party to Develop or Commercialize a Product pursuant to a written and executed agreement between Kiniksa and such Third Party (provided that grant of a non-exclusive license to a distributor to sell the Product shall not qualify pursuant to this clause (b)), and such suspension of activity set forth in clauses (a) and (b) is not (i) by written agreement of the Parties, (ii) a result of Kiniksa’s reasonable response to guidance from or action or inaction by a Regulatory Authority or other Governmental Authority (such as a clinical hold, a recall, or withdrawal), (iii) a direct result, in whole or in part, of any events outside of the reasonable control of Kiniksa, such as an event of Force Majeure, or any Third Party litigation relating to the Product, then Regeneron may terminate this Agreement with thirty (30) days’ written notice to Kiniksa, unless within such thirty (30) day period Kiniksa provides to Regeneron suitable documentation evidencing Kiniksa’s conduct of such material Development or Commercialization activities during the applicable twelve (12) month or that Kiniksa is in active and ongoing partnering or licensing discussions with a Third Party to grant rights (or an option to obtain rights) to such Third Party to Develop and Commercialize such Product as demonstrated by at least one term sheet exchange between Kiniksa and such Third Party (the last exchange of which has occurred within seventy-five (75) days before the completion such twelve (12) month period). Upon Regeneron’s written request to Kiniksa, Kiniksa shall inform Regeneron promptly after receiving such request whether there has been any cessation of material Development or Commercialization activities for a Product in the Kiniksa Field in the Territory and length of such cessation as of the date of such request by Regeneron.