Common use of Diligence Obligations of Xencor and Transfer of Ongoing Phase 1 Trial Clause in Contracts

Diligence Obligations of Xencor and Transfer of Ongoing Phase 1 Trial. Xencor shall use Commercially Reasonable Efforts to carry out its responsibilities under the Xencor Development Plan as it may be amended from time to time by the JDC, which shall include for the purposes of this Section, using the facilities and equipment in a good scientific manner and in compliance with applicable scientific standards, laboratory practices and legal and regulatory requirements, adhering to the timelines according to Exhibit J, adhere to all applicable national and international regulations and guidelines, appointing and retaining adequately trained personnel and engage, retain and control adequately qualified external personnel (e.g., CROs and consultants) and thereby collecting and retaining all relevant Know-How for the development and commercialization of Licensed Antibody(ies) and/or Licensed Products, and at any time use the same diligence and efforts as a similar biotechnology company, but in no event less than such efforts Xencor would use for the clinical trials of its own program(s) to complete all of the activities included in the Xencor Development Plan in Exhibit J, as it may be amended from time to time by the JDC, and shall use Commercially Reasonable Efforts to do so within the timeframe for Completion (Reporting Purposes) suggested in the Xencor Development Plan. (a) In the event that Xencor does not meet the Xencor Development Plan timeline for Completion (Performance Metric), by more than […***…] due to a […***…] then the milestone payments for milestone events 1. and 2. for oncology indications according to Section 5.2 shall be reduced by […***…] ([…***…]%). To avoid doubt, this reduction shall not be made to the extent the delay of Completion (Performance Metric) relative to the timeline of the Xencor Development Plan results in whole or in part from any reason other than a […***…]. (b) Moreover, if Xencor does not meet the Xencor Development Plan timeline for Completion (Performance Metric), by more than […***…], then: (i) Regardless of whether the delay is a […***…] or not, upon MorphoSys’ request, Xencor shall arrange for transfer of the sponsorship for the Ongoing Phase 1 Trial to MorphoSys without undue delay and in agreement with MorphoSys, and MorphoSys, in its sole discretion (subject to its diligence obligations under this Agreement), may assume responsibility for the Ongoing Phase 1 Trial. In the event that sponsorship for the Ongoing Phase 1 Trial is transferred to MorphoSys, Xencor shall use Commercially Reasonable Efforts to provide MorphoSys with any information within the Licensed Know-How and/or assistance requested by MorphoSys, including assisting MorphoSys as requested in conducting the Ongoing Phase 1 Trial to a successful completion in the shortest amount of time reasonably possible; and (ii) If the delay resulted from a […***…], then (x) the milestone payments for milestone events 1. and 2. for oncology indications according to Section 5.2 shall each be reduced by […***…] ([…***…]%), (y) no Sublicensing Revenue shall be paid by MorphoSys to Xencor in any case, and (z) any costs that MorphoSys has to bear to complete the Ongoing Phase 1 Trial will be credited against future payments due to Xencor by MorphoSys under this Agreement, provided however, that the sum of such credited costs shall not exceed the difference between the Budget and all costs, which Xencor already spent for completion of such activities until the arrangement of transfer of the sponsorship to MorphoSys. To avoid doubt, this Section 3.3(b) (ii) shall not apply to the extent the delay of Completion (Performance Metric) relative to the timeline of the Xencor Development Plan results in whole or in part from any reason other than a […***…]. (c) Notwithstanding anything express or implied in this Agreement (including Article 10), the remedies set forth in Section 3.3(a) and (b)(ii) shall be the sole and exclusive remedies for […***…], and no other remedies shall be available to MorphoSys for […***…], express or implied, under this Agreement, at law, or in equity.