Common use of LTS Caused Clause in Contracts

LTS Caused. With respect to any IP Claims arising from the development, manufacture, sale and use of the Patches under this Agreement by or for NeurogesX, which IP Claims are caused by use of any technology or intellectual property owned or supplied by LTS, including without limitation the design of the Patch and any LTS Technology (as defined in Section 6.4(a)(iii)) (an “LTS Infringement”), the following shall apply: (i) If either Party is sued for an alleged LTS Infringement, LTS is liable up to an amount of [***] incurred by NeurogesX in connection with the defense of such IP Claims, provided that this does not apply in the event that NeurogesX is sued for an alleged LTS Infringement in case the Patches being subject of such IP Claims were manufactured by a third party in accordance with Section 6.4. For all costs and expenses ***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. incurred by NeurogesX in defense of such IP Claims in excess of [***], NeurogesX is liable and shall indemnify and hold harmless LTS. In the event LTS is the Party sued for an alleged LTS Infringement, and LTS desires indemnification from NeurogesX, LTS shall [***] notify NeurogesX of the alleged LTS Infringement, permit NeurogesX [***] of the defense and/or settlement of the alleged LTS Infringement as requested (but LTS may participate in such defense and/or settlement with counsel of its choice and its own expense), and cooperate with NeurogesX with respect to such defense and settlement. (ii) LTS agrees to automatically reduce the royalty rates under this Agreement by the royalty rate or other amounts a court may require NeurogesX to pay to a third party claiming a LTS Infringement in satisfaction of a judgment against NeurogesX, or by the royalty rate or other amounts owed by NeurogesX in any settlement of the LTS Infringement; provided, that in no event shall the royalty rate under this Agreement fall below [***] (iii) In case of a final and non-appealable court judgment which prohibits NeurogesX from using or selling Patches as a result of an LTS Infringement, LTS shall reimburse NeurogesX for [***] of the Development Costs (as defined in the Clinical Supply Agreement). This obligation shall only be valid during the term of this Agreement.