Common use of Backup License Clause in Contracts

Backup License. LTS hereby grants NeurogesX a world-wide right and license, with the right to grant and authorize sublicenses, under LTS Technology, to use, make, have made, sell, offer for sale, import, promote, market, develop, obtain regulatory approval for and otherwise commercialize Patches and any derivatives or improvements thereof made by or for NeurogesX, its Affiliates or Sublicensees, and to practice any methods, processes or procedures described or claimed therein in connection with the foregoing; provided that NeurogesX, its Affiliates or Sublicensees shall not exercise any rights set forth in this Section 6.4(d) except and until after a Failure Event and after LTS has informed NeurogesX in writing that LTS will not exercise the option set forth in Section 6.4(c), or such option or the Negotiation Period have expired and the Parties have not come to an agreement as contemplated under Section 6.4(c) above. NeurogesX shall not disclose any LTS Know-how to any third party except in connection with exercising the rights set forth in this Section 6.4(d), and subject to reasonable confidentiality obligations on the part of such third party. The license set forth in this Section 6.4(d) (the “Backup License”) shall be exclusive for any LTS patent in the Field as defined in Section 6.3 in case of a Failure Event for a period of five years, unless such LTS patent expires or is abandoned earlier. The period shall be referred to as the “Maximum Backup License Exclusivity Period.” Notwithstanding Section 6.3, this Section and subject to Section 6.4(e) below, beginning [***] months after a Force Majeure Event or a Notice of Suspension, LTS shall have the right to develop, by itself or with third parties, manufacture and supply products to [***] in the Field; provided that it does not utilize any [***] of the patent application referred to in Section 6.3(a)(2) and / or the patent possibly resulting therefrom for a period of [***] years, unless such patent expires or is abandoned earlier, it being understood that this exemption shall only pertain to the patent and the claims granted, if any. In the event NeurogesX desires at any time to have the license set forth in this Section 6.4(d) become non-exclusive, NeurogesX shall notify LTS in writing. This Section 6.4 shall be NeurogesX’s [***] for the breach of LTS’ general obligation under this Agreement to supply Patches ordered by NeurogesX, provided that LTS has employed its [***] to do so; but the foregoing shall not limit any remedies set forth in this Agreement NeurogesX may have for the breach of any specific obligations of LTS.