Exhibit 10.8

EXECUTION VERSION

COLLABORATION AGREEMENT

between

ARIAD Pharmaceuticals, Inc.

and

Otsuka Pharmaceutical Co., Ltd

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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TABLE OF CONTENTS

 

ARTICLE 1 – DEFINITIONS

  2  

ARTICLE 2 – GRANT OF LICENSES

  15  

ARTICLE 3 – RESERVED TERRITORIES AND NON-COMPETITION

  17  

ARTICLE 4 – DEVELOPMENT AND COMMERCIALIZATION COMMITTEES

  21  

ARTICLE 5 – DEVELOPMENT

  25  

ARTICLE 6 – EXCHANGE OF KNOW-HOW AND IMPROVEMENTS

  29  

ARTICLE 7 – PRICING AND REIMBURSEMENT

  30  

ARTICLE 8 – REGULATORY MATTERS

  31  

ARTICLE 9 – PHARMACOVIGILANCE

  35  

ARTICLE 10 – FORECASTS AND ORDERING

  36  

ARTICLE 11 – SHIPMENT AND DELIVERY

  39  

ARTICLE 12 – MANUFACTURE AND FINAL MANUFACTURING OF THE PRODUCT

  42  

ARTICLE 13 – QUALITY ASSURANCE

  44  

ARTICLE 14 – RECALLS AND PRODUCT WITHDRAWAL

  47  

ARTICLE 15 – MARKETING AND DISTRIBUTION OF THE PRODUCT

  48  

ARTICLE 16 – CO-PROMOTION

  53  

ARTICLE 17 – MEDICAL AFFAIRS ACTIVITIES

  55  

ARTICLE 18 – PRODUCT TRADEMARKS

  55  

ARTICLE 19 – CONSIDERATION AND PAYMENTS

  57  

ARTICLE 20 – REPRESENTATIONS AND WARRANTIES

  64  

ARTICLE 21 – COMPLIANCE WITH LAW; DATA PRIVACY; ANTI-BRIBERY AND ANTI-CORRUPTION

  68  

ARTICLE 22 – INDEMNIFICATION, LIMITATIONS OF LIABILITY AND INSURANCE

  70  

ARTICLE 23 – THE PATENTS

  74  

ARTICLE 24 – CONFIDENTIALITY

  80  

ARTICLE 25 – TERM

  82  

ARTICLE 26 – TERMINATION

  82  

ARTICLE 27 – STANDSTILL

  88  

ARTICLE 28 – FORCE MAJEURE

  88  

ARTICLE 29 – LAW TO GOVERN AND JURISDICTION

  89  

ARTICLE 30 – DISPUTE RESOLUTION

  89   APPENDICES

APPENDIX 1 – PATENTS

APPENDIX 2 – PRE-APPROVED SUBLICENSEES

APPENDIX 3 – TRADEMARKS

APPENDIX 4 – PRESS RELEASE

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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THIS COLLABORATION AGREEMENT (“Agreement”) is effective as of December 22, 2014
(hereinafter called “Effective Date”), between ARIAD Pharmaceuticals, Inc., a
Delaware corporation with a principal place of business at 26 Landsdowne Street,
Cambridge, Massachusetts 02139-4234, USA (“ARIAD”) and Otsuka Pharmaceutical
Co., Ltd, a corporation organised and existing under the law of Japan with a
principal place of business at Shinagawa Grand Central Tower, 2-16-4 Konan,
Minato-Ku, Tokyo 108-8242, Japan (“Otsuka”).

RECITALS

 

a. ARIAD develops, Manufactures, licenses and markets pharmaceutical compounds
and products and has rights to certain patents and know-how that are used to
make, have made, develop, register, market, distribute and sell, directly or
indirectly, the Compound and pharmaceutical preparations containing said
Compound as an active pharmaceutical ingredient. As of the Effective Date, such
pharmaceutical preparations have been commercialized in certain countries under
the brand name Iclusig™.

 

b. ARIAD owns or has rights under certain know-how relating to the Compound and
Product, and certain patents directed to the Compound and Product in the
Territory.

 

c. Otsuka is an international pharmaceutical company with its headquarters in
Japan, having particular expertise, experience, skills, infrastructure and
appropriately qualified personnel, to effectively develop, package and
Commercialize the Product in the Field throughout the Territory in accordance
with the terms and conditions of this Agreement.

 

d. Prior to entering into discussions with ARIAD, Otsuka possessed no
confidential technology or information of its own relating to the Compound
and/or the Product. ARIAD and Otsuka entered into a Confidential Disclosure
Agreement on May 14, 2014 (the “CDA”) by means of which ARIAD disclosed to
Otsuka confidential information and data relating to the Compound and the
Product.

 

e. Otsuka wishes to purchase the Product in bulk form from ARIAD and to acquire
a license to package, label, promote, advertise, distribute and sell the Product
in the Territory and the right to serve as the marketing authorization holder in
the Territory, and to perform certain development activities, and ARIAD wishes
to supply the Product in bulk form to Otsuka and to grant such license, all as
further set forth herein.

 

f. The Parties agree that this preamble constitutes an integral part of this
Agreement and that all capitalized terms used in this preamble shall have the
respective meanings given above or in Article 1 or elsewhere in this Agreement.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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NOW, THEREFORE, in consideration of the above premises and the mutual promises
set forth below, the Parties hereby agree as follows:

ARTICLE 1 – DEFINITIONS

Capitalized terms used in this Agreement shall have the meanings specified below
or elsewhere herein.

 

1.1 “Acquiring Party” has the meaning set forth in Section 3.2.5.

 

1.2 “Adverse Ruling” has the meaning set forth in Section 26.1.

 

1.3 “Affiliate” means any corporation or business entity that, whether now or in
the future, controls, is controlled by or is under common control with a Party.
For the purposes of this definition, the terms “controls”, “controlled by” and
“under common control with” as used with respect to any Party, means (i) to
possess (directly or indirectly) the power to direct the management or affairs
of a corporation or other business entity, whether through ownership of voting
securities or other equity rights or by contract relating to voting rights or
corporate governance or otherwise, or (ii) to own, directly or indirectly, more
than fifty percent (50%) of the outstanding voting securities or other ownership
interest of such corporation or other business entity.

 

1.4 “Alliance Manager” has the meaning set forth in Section 4.5.

 

1.5 “Anti-Corruption Laws” means all Applicable Laws for the prevention of
fraud, kickbacks, bribery, corruption, racketeering, money laundering or
terrorism, including the FCPA, each, as amended from time to time.

 

1.6 “Applicable Laws” means the applicable provisions of any and all national,
regional, state and local laws, treaties, statutes, rules, regulations,
administrative codes, and ordinances, and any and all directives, and orders or
administrative decisions of any governmental agency or authority (including
Regulatory Authorities) having jurisdiction over or related to the subject
matter in question, including Regulatory Requirements, Regulatory Laws, Export
Control Laws, and the FCPA and other Anti-Corruption Laws, which are applicable
to the subject matter of this Agreement.

 

1.7 “Assigned Otsuka Improvements” has the meaning set forth in Section 5.7.

 

1.8 “Baseline” has the meaning set forth in Section 16.5.

 

1.9 “BMS” means Bristol-Myers Squibb Company.

 

1.10 “BMS Agreement” has the meaning set forth in Section 3.2.4.

 

1.11 “Breaching Party” has the meaning set forth in Section 26.1.

 

1.12 “Bulk Product” has the meaning set forth in Section 10.2.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.13 “Bulk Tablet Cost” means, per unit (tablet) of Bulk Product, an amount
equal to [***] US dollars ($[***]).

 

1.14 “Business Day” means a day other than a Saturday or Sunday or any public
holiday in the United States or Japan or any other day on which banks are
required or authorized by applicable law to be closed in the United States or
Japan. For the avoidance of doubt, any reference in this Agreement to “days” in
the lower case means calendar days.

 

1.15 “CDA” has the meaning set forth in the recitals above.

 

1.16 “Certificate of Analysis” has the meaning set forth in Section 13.1.2.

 

1.17 “Certificate of Conformance” has the meaning set forth in Section 13.1.3.

 

1.18 “cGMP” means all applicable current good manufacturing practices as adopted
by the authorities of the country where such manufacture takes place, including
current good manufacturing standards, practices and procedures promulgated by
the FDA and set forth in 21 C.F.R. Parts 210 and 211 and standards relating to
manufacturing practices for active pharmaceutical ingredients, intermediates,
bulk products or finished pharmaceutical products.

 

1.19 “Claim Notice” has the meaning set forth in Section 22.4.1.

 

1.20 “CNDA” means a Chinese new drug application, or an amendment or supplement
thereof, filed with the CFDA (China Food and Drug Administration) pursuant to
the Drug Registration Regulation (SFDA Order 28).

 

1.21 “Commercialization Plan” has the meaning set forth in Section 15.2.

 

1.22 “Commercialize” means all activities directed to importing (into, or
within, the Territory), exporting (within the Territory), storing, marketing,
promoting, selling, offering for sale and distributing the Product in the
Territory. “Commercializes,” “Commercialized,” “Commercialization” and other
forms of the word “Commercialize” shall have the correlative meaning. For
clarity, “Commercialize” excludes Manufacture and Final Manufacturing.

 

1.23 “Competitive Product” means [***].

 

1.24 “Compliance Event” has the meaning set forth in Section 21.7.

 

1.25 “Composition Patent” means any patent in the Territory granted from a
national stage application of International Published Patent Application [***]
(a “national stage patent of [***]”), or a divisional or continuation of such
national stage patent of [***]. For clarity, national stage patents of [***] or
divisionals or continuations thereof, in the Territory, include the following:

 

  (i) [***], granted in Japan on [***];

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  (ii) [***], granted in China on [***];

 

  (iii) [***], granted in South Korea on [***];

 

  (iv) any patent granted from pending Japanese Patent Application [***];

 

  (v) any patent granted from pending Chinese Patent Application [***];

 

  (vi) any other patent granted from a continuation or divisional application of
(iv) or (v); and

 

  (vii) if, but only if, [***] is added to the Territory pursuant to
Section 3.1, [***], granted in [***] on [***].

 

1.26 “Compound” means the active pharmaceutical ingredient known as ponatinib,
as a free base or as a salt, as a solvate or not, and if in solid form,
regardless of the specific form, whether amorphous or crystalline, including
without limitation, crystalline ponatinib monohydrochloride.

 

1.27 “Confidential Information” has the meaning set forth in Section 24.1.

 

1.28 “Control” (including any variations such as “Controlled” and “Controlling”)
means, with respect to any item of Know-how, Regulatory Documentation, material,
patent, or other Intellectual Property Right, the possession of the right,
whether directly or indirectly, and whether by ownership, license or otherwise
(other than by operation of the license grants under this Agreement), to grant a
license, sublicense or other right (including the right to reference Regulatory
Documentation) to or under such Know-how, Regulatory Documentation, material,
patent, or other Intellectual Property Right as provided for herein without
violating the terms of any then-existing agreement with any Third Party;
provided, that Intellectual Property Rights of an acquirer of a Party or its
Affiliates in existence prior to the acquisition date, or developed after the
acquisition date solely by such acquirer without use of or reference to such
Party’s preexisting Know-how, Regulatory Documentation, material, patent, or
other Intellectual Property Right and without contribution from employees of a
Party or its Affiliates other than the acquirer, shall not be deemed to be
“Controlled” by such Party or Affiliate.

 

1.29 “Co-Promotion Agreement” has the meaning set forth in Section 16.3.

 

1.30 “Co-Promotion Fee” has the meaning set forth in Section 16.5.

 

1.31 “Co-Promotion Notice” has the meaning set forth in Section 16.1.

 

1.32 “Co-Promotion Option” has the meaning set forth in Section 16.1.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.33 “Customer” means any entity or person that is authorized to purchase and
dispense or sell the Product in the Territory under Applicable Law.

 

1.34 “Data Protection Laws” has the meaning set forth in Section 21.6.

 

1.35 “Debarred” has the meaning set forth in Section 15.5.3.

 

1.36 “Default Notice” has the meaning set forth in Section 26.1.

 

1.37 “Defending Party” has the meaning set forth in Section 23.5.1.

 

1.38 “Delivery” has the meaning set forth in Section 11.2.

 

1.39 “Destination Terminal” has the meaning set forth in Section 11.2.

 

1.40 “Development Plan” has the meaning set forth in Section 5.1.1.

 

1.41 “Disqualified” has the meaning set forth in Section 15.5.3.

 

1.42 “Escalation Notice” has the meaning set forth in Section 4.6.1(b).

 

1.43 “Excluded” has the meaning set forth in Section 15.5.3.

 

1.44 “Excluded Claim” has the meaning set forth in Section 30.3.6.

 

1.45 “Export Control Laws” means all applicable U.S. laws and regulations
relating to (a) economic and trade sanctions and embargoes imposed by the Office
of Foreign Assets Control of the U.S. Department of Treasury or (b) the export
or re-export of commodities, technologies, or services, including the Export
Administration Act of 1979, 24 U.S.C. §§ 2401-2420, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701-1706, the International Traffic in Arms
Regulations, 22 C.F.R. parts 120-130, the Trading with the Enemy Act, 50 U.S.C.
§§ 1 et. seq., the Arms Export Control Act, 22 U.S.C. §§ 2778 and 2779, and the
International Boycott Provisions of Section 999 of the U.S. Internal Revenue
Code of 1986 (as amended).

 

1.46 “FCPA” means the U.S. Foreign Corrupt Practices Act (15 U.S.C.
Section 78dd-1, et. seq.) as amended.

 

1.47 “FDA” means the U.S. Food and Drug Administration.

 

1.48 “Field” means oncology.

 

1.49 “Final Manufacturing” means all activities required to prepare the Product
(which, for clarity, is to be supplied by ARIAD to Otsuka as finished drug
product in bulk packaging except as set forth in Section 10.2) for commercial
sale in the Territory, including primary and secondary packaging and labeling
with the approved packaging and label for the country in the Territory in which
it is to be sold; stability or other testing; quality control; and release of
the Product for sale in the Territory.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.50 “First Commercial Sale” means the first sale to a Third Party of Product
for use or consumption by an end-user in the Field in a given country in the
Territory after Registration has been obtained in such country. A First
Commercial Sale shall not include a sale of Product for use in clinical trials,
for research or for other non-commercial uses, or supply of Product without
charge as part of a Named Patient Program or similar program.

 

1.51 “Forecast” has the meaning set forth in Section 10.4.

 

1.52 “Full Royalty Term” means, on a country-by-country basis within the
Territory, the period from the date of First Commercial Sale in a country until
the later of (i) [***] (ii) [***] or (iii) [***] ([***])[***] after the date of
First Commercial Sale in such country.

 

1.53 “Global Product Profile” has the meaning set forth in Section 15.3.3.

 

1.54 “Global Study” has the meaning set forth in Section 5.5.1.

 

1.55 “Global Third Party License” has the meaning set forth in
Section 23.6.3(a).

 

1.56 “Government Official” means (a) any officer or employee of a government or
any department, agency or instrumentality of a government; (b) any person acting
in an official capacity for or on behalf of a government or any department,
agency, or instrumentality of a government; (c) any officer or employee of a
company or business owned or controlled by a government; (d) any officer or
employee or person acting in an official capacity for or on behalf of a public
international organization or any department, agency, or instrumentality of such
public international organization such as the World Bank or United Nations;
(e) any political party or official thereof; and/or (f) any candidate for
political office.

 

1.57 “Healthcare Professional” means any member of the medical, pharmacy or
nursing professions or any other person who in the course of his or her
professional activities may prescribe, administer or dispense to an end-user a
medicinal product.

 

1.58 “ICDR” has the meaning set forth in Section 30.3.1.

 

1.59 “Improvements” means all improvements, modifications or developments
relating to the Compound and/or to the Product in the Field other than as
described in the US NDA or the marketing authorization for the Product approved
in the European Economic Area as of the Effective Date.

 

1.60 “Incremental Sales” has the meaning set forth in Section 16.5.

 

1.61 “Indemnified Party” has the meaning set forth in Section 22.4.1.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.62 “Indemnifying Party” has the meaning set forth in Section 22.4.1.

 

1.63 “Industry Guidelines” means voluntary industry codes or guidelines to which
a Party has publically stated it adheres as of the Effective Date, or
subsequently during the Term, including, with respect to Otsuka, the Code of
Practice and the “Transparency Guideline for the Relation between Corporate
Activities and Medical Institutions” as promulgated by the Japan Pharmaceutical
Manufacturers Association, and the Fair Competition Code as promulgated by the
Fair Trade Council of the Ethical Pharmaceutical Drugs Marketing Industry (as
such codes or guidelines are revised from time to time by their promulgating
organization).

 

1.64 “Initial Fee” has the meaning set forth in Section 19.1.

 

1.65 “Inspected Party” has the meaning set forth in Section 13.7.1.

 

1.66 “Inspecting Party” has the meaning set forth in Section 13.7.1.

 

1.67 “Intellectual Property Rights” means all rights in, to and under patents,
trademarks, copyrights, databases, data, trade secrets and confidential
information, and all other intellectual or industrial property and other
proprietary rights throughout the world.

 

1.68 “JDCC” has the meaning set forth in Section 4.1.

 

1.69 “JNDA” means a Japanese new drug application, or an amendment thereof filed
with the MHLW through PMDA under Article 14 of the Pharmaceuticals and Medical
Devices Act of Japan (Law No. 145 of 1960, as amended).

 

1.70 “Know-how” means valuable, secret and substantial information regarding the
Product, including documentation, processes, data and other information on file
with any competent Regulatory Authority in support of a Marketing Authorization,
which may be necessary, useful or advisable to enable Otsuka to research,
develop, Commercialize or conduct Final Manufacturing of the Product in the
Field in the Territory, Controlled by ARIAD or its Affiliates as of the
Effective Date or at any time during the Term. Know-how includes all unpatented
Assigned Otsuka Improvements owned by ARIAD as provided in Section 5.7 and
unpatented Intellectual Property Rights licensed to ARIAD pursuant to a Global
Third Party License.

 

1.71 “Knowledge” shall mean, with respect to a fact or matter, that the
applicable Party’s senior-most executive management employee directly
responsible for such fact or matter is actually aware of such fact or matter
after making reasonable inquiry with respect to such fact or matter of the
persons directly reporting to him or her. “Known” has a correlative meaning.

 

1.72 “Latent Defect” means a Non-Conformance that is not discoverable or
actually discovered upon reasonable visual inspection performed pursuant to
Section 11.5.1, but that is discovered at a later time (e.g., a failure to
comply with the shelf-life set forth in the Specification that is identified as
a result of long-term stability studies conducted by ARIAD or its Affiliates or
a Third Party authorized by ARIAD or its Affiliates).

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.73 “Launch Quantities” has the meaning set forth in Section 10.3.

 

1.74 “Local Currencies” means the currency used in each of the respective
countries in the Territory.

 

1.75 “Losses” has the meaning set forth in Section 22.1.

 

1.76 “MAH” means the marketing authorization holder for the Product in each
country in the Territory.

 

1.77 “Manufacture” means the manufacturing of the Product up to and including
finished drug product in bulk packaging, and all activities related to such
manufacturing of Product, or any ingredient thereof, either directly or through
a contract manufacturer, including in-process and semi-finished Product testing,
ongoing stability tests and regulatory activities related to any of the
foregoing. “Manufactured” or “Manufacturing” and other forms of the word
“Manufacture” shall have correlative meaning. For the avoidance of doubt,
“Manufacture” shall not include Final Manufacturing of the Product for sale in
the Territory.

 

1.78 “Manufacturing Process” has the meaning set forth in Section 12.3.

 

1.79 “Marketing Authorization” means a marketing authorization for the Product
granted in a country in the Territory, including for Japan, an approved JNDA,
and for China, an approved CNDA.

 

1.80 “MHLW” means the Japanese Ministry of Health, Labour and Welfare.

 

1.81 “Named Patient Program” means a compassionate use, named patient use, or
similar program for the supply of the Product in the Field in the Territory
prior to obtainment of Registrations, to the extent permitted by and in
accordance with Applicable Laws.

 

1.82 “Net Sales” means, with respect to a Product, the amount invoiced by Otsuka
or its Sublicensees for such Product, less the following deductions (to the
extent such amounts are included in the amount invoiced for such Product):

 

  (a) [***], [***], [***] and/or other [***] actually allowed and taken directly
with respect to such sales;

 

  (b) [***] (including [***], [***] to [***] and [***], [***] or [***] for
[***],[***],[***],[***] and similar types of [***]);

 

  (c) [***], [***], [***], [***] or other [***] and paid with respect to the
[***],[***],[***] or [***] of such Product (excluding [***], [***] or [***]
based on [***]);

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  (d) the amount of [***] and amounts [***] or [***] by reason of [***], [***],
[***] amounts, [***] or [***] of [***], or because of [***];

 

  (e) charges for [***] and [***] directly related to the [***] of Product
[***], to the extent not already deducted or excluded from the gross amount
invoiced; and

 

  (f) [***] that are not [***] by Otsuka or its Sublicensees (i.e., [***]) after
Otsuka or its Sublicensee (as the case may be) has made commercially reasonable
efforts to [***] the same, provided that, such deduction shall be taken only in
the [***] in which such [***] are no longer [***].

 

  (g) Notwithstanding the foregoing, no [***], [***], [***], [***], [***], or
any similar amount, however designated, that is given or associated with the
purchase by the Third Party of any product or service in addition to the
Products shall be [***] to the Product.

Such amounts shall be determined from the books and records of Otsuka and its
Sublicensees maintained in accordance with generally accepted accounting
principles, consistently applied throughout such party’s organization.

In the case of any sale of such Product for consideration other than (or in
addition to) cash, such as barter or countertrade, Net Sales shall be calculated
on the [***] of the [***] consideration received.

In the case of any sale of a Product that contains Compound and one or more
other active ingredients in a single dosage form (“Combination Product”), the
Net Sales in a country in the Territory for purposes of determining payments
based on Net Sales hereunder shall be calculated by [***] the [***] of such
Combination Product in such country during the applicable reporting period by
the [***], [***] where: [***] is the [***] of the [***] received by Otsuka or
its Sublicensees when [***] in [***] in such country and [***] is the [***] by
Otsuka or its Sublicensees of the other [***] included in the [***] when [***]
in [***] in such country, in each case during the applicable reporting period
or, if sales of both the Product and the other active ingredient(s) did not
occur in such period, then in the most recent reporting period in which sales of
both occurred. In the event that such [***] cannot be determined for both the
[***] and all other [***] included in such [***], Net Sales in a country in the
Territory for purposes of determining payments based on Net Sales hereunder
shall be calculated by [***] the [***] of the Combination Product in such
country during the applicable reporting period (using the above provisions) by
the [***] of [***] where [***] is the [***] if determinable as set forth above,
and if not determinable, the [***] of the Product and [***] is the [***] if
determinable as set forth above, and if not determinable, then the [***] of all
other [***] included in the [***], as such [***] are determined by the Parties
in good faith.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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If such Product is sold to any Third Party together with other products or
services, the price of such Product, solely for purposes of the calculation of
Net Sales, shall be deemed to be [***] than the [***] at which such Product
would be [***] in a [***] transaction to a Third Party [***].

For avoidance of doubt, in the case of any sale of such Product between or among
Otsuka or its Sublicensees for resale, Net Sales shall be calculated as [***]
only on the value charged or invoiced on the [***] thereafter to [***].

 

1.83 “New Formulation” means any formulation of Product other than the Tablet
Formulation. For clarity, any Combination Product shall be a New Formulation.

 

1.84 “New Indication” means any indication in the Field, excluding the first
indication approved in Japan under a JNDA approval obtained using data from the
Ongoing Study, but including any additional indication that the Parties mutually
agree (through the JDCC) to develop under any Development Plan and any
indication developed separately by ARIAD pursuant to Section 5.5.3. For clarity,
an earlier line of treatment (e.g., first-line when only second-line has been
approved) shall be a New Indication.

 

1.85 “NHI List Price” means the price for the Product (in its various
Presentations), as adjusted by the MHLW from time to time, specified in the
Japanese National Health Insurance Drug Price List, which comprises a list of
drug prices to be reimbursed to hospitals, pharmacies and other health-insurance
medical service providers under the Japanese national health insurance programs.

 

1.86 “Non-Breaching Party” has the meaning set forth in Section 26.1.

 

1.87 “Non-Conformance” means a failure of the Product supplied hereunder to
comply with (i) any of the Product warranties set forth in Section 20.1.6(a),
(b) or (c) with respect to Bulk Product, and/or (ii) any of the Product
warranties set forth in Section 20.1.7(a), (b) or (c) with respect to Secondary
Packaged Product. For clarity, a Latent Defect is an instance of
Non-Conformance. The adjective “Non-Conforming” shall have the correlative
meaning. “Non-Conformance” does not include damage caused to Products caused by
actions of or on behalf of Otsuka following Delivery by ARIAD to Otsuka,
including Final Manufacturing.

 

1.88 “Notified Party” has the meaning set forth in Section 21.7.

 

1.89 “Notifying Party” has the meaning set forth in Section 21.7.

 

1.90 “Objection Notice” has the meaning set forth in Section 11.5.2.

 

1.91 “Ongoing Study” means [***] clinical trial of Product in Japan that was
started prior to the Effective Date and is scheduled to be completed after the
Effective Date.

 

1.92 “Option Exercise Period” has the meaning set forth in Section 16.1.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

10

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1.93 “Otsuka Iclusig Staff” means all personnel of Otsuka or its Sublicensees
who are routinely involved in the further development, Final Manufacturing, or
Commercialization of the Product, including: (i) the marketing and promotion of
the Product, (ii) seeking and maintaining Registrations for the Product, or
(iii) the performance of the Pharmacovigilance Agreement and/or the Quality
Agreements.

 

1.94 “Otsuka Improvements” has the meaning set forth in Section 5.7.

 

1.95 “Parties” means ARIAD and Otsuka and “Party” means either of them as the
context indicates.

 

1.96 “Patents” means (a) all patents and patent applications in the Territory
that are Controlled by ARIAD or its Affiliates as of the Effective Date and at
any time during the Term that (i) are necessary or useful (or, with respect to
patent applications, would be necessary or useful if such patent applications
were to issue as patents) for the research, development, Commercialization or
Final Manufacturing of Product in the Field in the Territory, including as
listed in Appendix 1 hereto, or (ii) claim or cover any Assigned Otsuka
Improvements owned by ARIAD as provided in Section 5.7 or (iii) are licensed to
ARIAD pursuant to a Global Third Party License; (b) all patents in the Territory
issuing from the applications in subclause (a); (c) any additions, divisions,
continuations, continuations-in-part, counterparts, amendments, amalgamations,
reissues and re-examinations of such applications or patents in the Territory;
(d) any confirmation, importation and registration patents thereof in the
Territory; and (e) any extensions and renewals of all such patents and patent
applications in the Territory in whatever legal form and by whatever legal title
they are granted.

 

1.97 “Payment” has the meaning set forth in Section 19.8.

 

1.98 “Pharmacovigilance Agreement” has the meaning set forth in Section 9.4.

 

1.99 “PMDA” means the Japanese Pharmaceutical and Medical Devices Agency, or any
successor agency thereto.

 

1.100 “Preexisting Named Patients” has the meaning set forth in Section 3.5.

 

1.101 “Presentation” means each stock-keeping unit of Product differentiated by
dosage strength, bottle count, packaging presentation, and/or country-specific
labeling for the Product for which Marketing Authorization has been received in
a country in the Territory (e.g., a 60 count bottle of 15mg tablets labeled for
a specific country in the Territory).

 

1.102 “Price Cut” has the meaning set forth in Section 19.5.3.

 

1.103

“Pricing and Reimbursement Approval” means any official, final, binding and
non-appealable determination of the reimbursable price of the Product in
accordance with Applicable Laws and approval by relevant Regulatory Authorities
pertaining to the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

11

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  reimbursement of the Product, as applicable in each country in the Territory
in which a Regulatory Authority approves or determines the price and/or
reimbursement of pharmaceutical products. For clarity, Pricing and Reimbursement
Approval for Japan means the NHI List Price.

 

1.104 “Proceeding” means any (i) Third Party private action, claim or lawsuit,
and any (ii) governmental, judicial, administrative or adversarial proceeding,
hearing, probe or inquiry brought by any Third Party public entity, including
whistleblower complaints. Proceedings shall not include any action, claim or
lawsuit brought by one Party or its Affiliates against the other Party or its
Affiliates.

 

1.105 “Product” means any pharmaceutical product containing Compound as an
active chemical entity, alone or in combination with one or more other active
ingredients, in any and all forms, presentations, dosages, and formulations.

 

1.106 “Product-Related Inspection” has the meaning set forth in Section 12.6.

 

1.107 “Product Withdrawal” means removal of Product from the market in any
country in the Territory on grounds of public health or safety resulting in
discontinuation of all or substantially all distribution of Product in such
country in the Territory. Product Withdrawal does not include a Recall.

 

1.108 “Protected Personal Information” has the meaning set forth in
Section 21.6.

 

1.109 “Quality Agreement” means a written agreement to be entered into by the
Parties relating to quality assurance for the Product, as set forth in
Section 12.5.

 

1.110 “Raw Materials” means any raw materials, components, or other ingredients
required for the Manufacture of the Product.

 

1.111 “Recall” means a recall or retrieval of Product on grounds of
Non-Compliance, public health or safety which is limited as to lot(s) or
batch(es) of Product in the Territory.

 

1.112 “Reconciliation Payment” has the meaning set forth in Section 19.5.2.

 

1.113 “Reduced Royalty Term” has the meaning set forth in Section 19.3.2.

 

1.114 “Reference Sample” has the meaning set forth in Section 13.4.

 

1.115 “Registrations” means (a) Marketing Authorizations, (b) Pricing and
Reimbursement Approval, (c) receipt of any license required to import Product(s)
into each country in the Territory, and (d) any other official license or
approval which is legally required to Commercialize the Product in each country
of the Territory (e.g., wholesale licenses).

 

1.116 “Regulatory Authority” means the MHLW or any other government agencies
that are the competent authorities for the issuance of the Registrations, or any
part of them, in each country of the Territory throughout the Term.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

12

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1.117 “Regulatory Documentation” means all letters, correspondence and other
documents and information submitted to Regulatory Authorities or received from
Regulatory Authorities in writing, including in electronic format.

 

1.118 “Regulatory Laws” means all laws, and all orders, determinations,
regulations, licenses and directions made or issued under such laws, in respect
of the Marketing Authorization, Registrations, Final Manufacturing and
Commercialization of the Product in each country of the Territory.

 

1.119 “Regulatory Requirements” means all licenses, registrations, mandatory
standards, conditions, manufacturing principles, directions, orders and
determinations in force from time to time set out in the Regulatory Laws and all
other Applicable Laws that apply to the manufacture (including Manufacture and
Final Manufacturing), supply, packaging, labeling and/or Commercialization of
medicinal products in each country in the Territory.

 

1.120 “Royalty Term” means, with respect to a country in the Territory, the Full
Royalty Term and the Reduced Royalty Term, collectively.

 

1.121 “Safety Information” has the meaning set forth in Section 9.5.

 

1.122 “SEC” means the U.S. Securities and Exchange Commission or any successor
agency.

 

1.123 “Secondary Packaged Product” has the meaning set forth in Section 10.2.

 

1.124 “Sell-Off Period” has the meaning set forth in Section 26.7.5.

 

1.125 “Senior Officer” means, (i) with respect to ARIAD, its Chief Executive
Officer and (ii) with respect to Otsuka, its President.

 

1.126 “Specifications” means the specifications for the Product (in bulk product
form, or, as applicable, in the form of Secondary Packaged Product) as defined
by ARIAD and incorporated into the Quality Agreements, together with changes to
such specifications made at the request of a Regulatory Authority in the
Territory or in accordance with Section 12.3.

 

1.127 “Sprycel” means the product containing the compound known as Dasatinib.

 

1.128 “Sublicensee” means (a) each Affiliate of Otsuka and Third Party listed in
Appendix 2 hereto, which listed Affiliates and Third Parties have been
pre-approved by ARIAD to fulfill any of Otsuka’s obligations under this
Agreement, and (b) any other Affiliate of Otsuka or Third Party approved by
ARIAD in accordance with Section 2.1.2.

 

1.129 “Subcontractor” means a Third Party appointed by Otsuka, subject to
Section 2.5, to perform activities under this Agreement on behalf of Otsuka in
any part of the Territory. For clarity, a Subcontractor does not include a
Sublicensee.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

13

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1.130 “Supply Agreement” has the meaning set forth in Section 10.1.

 

1.131 “Tablet Formulation” means the Product containing the Compound as its sole
active pharmaceutical ingredient in the solid, oral tablet form as Manufactured
by ARIAD or any Affiliate or Third Party contract manufacturer of ARIAD as of
the Effective Date (i.e., the 15mg and 45mg dosage strengths) or at any time
during the Term (e.g., the 30mg dosage strength). For clarity, the Tablet
Formulation excludes [***].

 

1.132 “Taxes” has the meaning set forth in Section 19.8. The terms “Taxable” and
“Tax” have correlative meanings.

 

1.133 “[***] Price” has the meaning set forth in Section 19.5.1.

 

1.134 “Term” means the period beginning on the Effective Date and ending,
subject to any earlier termination of this Agreement in accordance with the
provisions hereof, on the later of (x) the date of expiration of the
last-to-expire Royalty Term in the Territory, or (y) the last sale by Otsuka or
its Sublicensees of a Product in the Territory under any of the Trademarks or
any Registration for the Product obtained under this Agreement.

 

1.135 “Terminated Product” has the meaning set forth in Section 26.7.3.

 

1.136 “Terminated Country” has the meaning set forth in Section 26.7.3.

 

1.137 “Territory” means Indonesia, Japan, Malaysia, People’s Republic of China
(including Hong Kong, and referred to herein as “China”), Philippines,
Singapore, South Korea, Taiwan, Thailand, and Vietnam. If, but only if, the
Parties enter into an amendment as provided in Section 3.1, the Territory shall
also include [***].

 

1.138 “Territory-Only Third Party License” has the meaning set forth in
Section 23.6.2(a).

 

1.139 “Territory Product Profile” has the meaning set forth in Section 15.3.3.

 

1.140 “Third Party” means any Person other than ARIAD, Otsuka and their
respective Affiliates. For purposes of this definition, “Person” means any
(i) natural person, (ii) partnership, company, corporation or other form of
business organization or legal entity, and (iii) any governmental or
administrative entity.

 

1.141 “Third Party Infringement Claim” has the meaning set forth in
Section 23.5.1.

 

1.142 “Third Party License” has the meaning set forth in Section 23.5.6.

 

1.143 “Third Party Research Project” has the meaning set forth in Section 5.9.

 

1.144 [***]

 

1.145 “Tie-Breaking Decisions” has the meaning set forth in Section 4.6.2.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

14

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1.146 “Trademark Guidelines” has the meaning set forth in Section 15.3.4.

 

1.147 “Trademarks” means any trademark owned by or licensed to ARIAD or its
Affiliate under which the Product shall be Commercialized by Otsuka within the
Field in the Territory, as it shall be determined and indicated in due course by
ARIAD to Otsuka, whether registered in the Territory or not (including any
trademarks, service marks, names or logos that include any corporate name or
logo of ARIAD). As of the Effective Date, the Trademarks are those set forth in
Appendix 3.

 

1.148 “Transaction” has the meaning set forth in Section 3.2.5.

 

1.149 “Transfer Price” has the meaning set forth in Section 19.4.

 

1.150 “US NDA” means a new drug application filed with the US Food and Drug
Administration (FDA).

ARTICLE 2 – GRANT OF LICENSES

 

2.1 Grant of licenses.

 

  2.1.1 Subject to the terms and conditions of this Agreement, including any
reservation of ARIAD’s rights expressly set forth herein, ARIAD hereby grants to
Otsuka, and Otsuka hereby accepts:

 

  (a) an exclusive license under the Patents, the Know-how, the Trademarks and
any other Intellectual Property Rights of ARIAD and its Affiliates in and to the
Compound or Product to perform Final Manufacturing of Product and to
Commercialize Product in the Field in the Territory during the Term, in each
case in accordance with the terms of this Agreement.

 

  (b) a co-exclusive license (with ARIAD and its Affiliates and their respective
contractors) under the Patents, the Know-how, the Trademarks and any other
Intellectual Property Rights of ARIAD and its Affiliates in and to the Compound
or the Product to conduct research and development of the Compound and the
Product in the Territory as expressly set forth in this Agreement.

 

  (c) For clarity, the licenses set forth in Sections 2.1.1(a) and (b) do not
include the right to Manufacture the Product for clinical or commercial use
(unless, and only to the extent, the Parties mutually agree through the JDCC or
pursuant to Section 4.6.1(c)(iii) to develop Product in one or more New
Formulation(s) and the Parties agree that Otsuka shall be responsible for the
Manufacture of Product in such agreed New Formulation(s)).

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

15

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  (d) If a joint venture between ARIAD and one or more Third Parties qualifies
as an Affiliate of ARIAD under this Agreement, then the Intellectual Property
Rights owned by such Third Party and such joint venture are excluded from the
license granted to Otsuka pursuant to this Section 2.1.1, provided, that, for
clarity any Intellectual Property Rights licensed, transferred or assigned from
ARIAD to such joint venture shall be included within the scope of the license
granted to Otsuka pursuant to this Section 2.1.1, and provided, further that any
Intellectual Property Rights of such joint venture relating to Improvements that
are developed with the use of or reference to the Intellectual Property Rights
licensed, transferred or assigned from ARIAD to such joint venture shall be
included within the scope of the license granted to Otsuka pursuant to this
Section 2.1.1.

 

  2.1.2 The licenses set forth in Section 2.1.1 shall be sublicenseable by
Otsuka without ARIAD’s consent to its Sublicensees listed in Appendix 2 hereto.
The licenses set forth in Section 2.1.1 shall otherwise be sublicenseable by
Otsuka only with ARIAD’s prior written consent. Any such permitted sublicenses
shall not be further sublicenseable or assignable without ARIAD’s prior written
consent. Otsuka shall be liable for all acts or omissions of its Sublicensees.
Any act or omission by any Sublicensee that would constitute a breach of this
Agreement if done, or omitted to be done, by Otsuka, shall be deemed to be a
breach of this Agreement by Otsuka.

 

  2.1.3 The licenses set forth in Section 2.1.1 shall be non-transferable and
non-assignable except as expressly set forth in Section 31.8.1.

 

2.2 ARIAD agrees that, subject to ARIAD’s rights under Section 3.5 with respect
to Preexisting Named Patients, it shall not appoint any Third Party in the
Territory to Commercialize or conduct the Final Manufacturing of the Product in
the Field or otherwise in contravention of the licenses set forth in
Section 2.1.1. Otsuka acknowledges that ARIAD has, or may have, other licensing
or distribution arrangements for the Product outside the Territory.

 

2.3 Otsuka acknowledges that ARIAD grants the licenses and rights to Otsuka set
forth in this Article 2 in reliance upon the particular expertise, experience,
skills, infrastructure and qualified personnel of Otsuka in respect of the
Commercialization of pharmaceutical products in the Territory.

 

2.4

In consideration of the licenses and appointment granted to Otsuka by ARIAD
under Section 2.1, and in order to maintain at all times the highest quality for
the Product and to ensure a scientifically proper and safe exploitation of the
Know-how and Patents and in order to maintain and to protect the goodwill of the
Trademarks, throughout the Term, Otsuka agrees that it and its Sublicensees and
its Affiliates shall not, directly or indirectly, purchase Product from any
person other than ARIAD or a source approved in writing by ARIAD, whether for
clinical or commercial use (other than a contract

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

16

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  manufacturer in connection with the Final Manufacturing of Product in the
Territory or, if applicable, Otsuka’s Manufacture of New Formulation(s), if any,
as permitted under this Agreement).

 

2.5 Other than agreements with (i) its Sublicensees, (ii) Customers entered into
in the normal course of business of selling the Product, (iii) Third Party
contract manufacturers for the Final Manufacturing in the Territory, or
(iv) contracted medical representatives, and subject further to Section 2.1.2,
Otsuka shall not enter into any agreement with Third Parties with respect to
Otsuka’s pharmacovigilance or quality assurance obligations relating to the
Product, or subcontracting or sublicensing rights to Commercialize the Product
in a country in the Territory, except as may be expressly permitted by ARIAD
hereunder or otherwise by prior approval in writing from ARIAD. Otsuka may
subcontract other activities under this Agreement, provided that Otsuka has
given ARIAD prior written notice identifying the activity and the Subcontractor.

ARTICLE 3 – RESERVED TERRITORIES AND NON-COMPETITION

 

3.1 Development of the Product for and commercialization of the Product in all
countries other than those in the Territory are reserved exclusively to ARIAD or
its Affiliates, or to Third Parties appointed by ARIAD or its Affiliates, as the
case may be. Notwithstanding the foregoing, at Otsuka’s request made within
[***] ([***])[***] after the Effective Date, the Parties shall discuss expanding
the Territory under this Agreement to include [***] (provided that ARIAD is not
prohibited from engaging in such discussions with Otsuka as a result of any
agreement with, exclusive negotiation restriction, or other legally binding
exclusivity obligations to a Third Party), and if mutually agreed by the Parties
within [***] ([***])[***] of Otsuka’s request (or such longer period as the
Parties may agree upon) (each in its sole discretion and with no obligation for
either Party to agree), the Parties shall execute an amendment to this Agreement
to include [***] in the definition of the Territory under this Agreement (with
all other terms and provisions of this Agreement remaining unchanged). In
consideration of the licenses granted to Otsuka by ARIAD under Section 2.1,
Otsuka shall refrain from selling the Product to Customers located outside the
Territory. Without limiting the foregoing, Otsuka shall refrain from the
following activities solely with respect to the Product:

 

  (a) sales or marketing visits or details outside of the Territory;

 

  (b) direct mail, including the sending of unsolicited e-mails, to persons or
entities located outside of the Territory;

 

  (c) advertising in media, on the Internet or other promotions, where such
advertising or promotion is specifically targeted at potential purchasers
outside the Territory;

 

  (d)

online advertisements addressed to potential purchasers outside the Territory
and other efforts specifically designed to be found by potential purchasers

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

17

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  outside the Territory, including the use of outside-the-Territory based
banners on Third Party websites and paying a search engine or online
advertisement provider to have advertisements or higher search rankings
displayed specifically to potential purchasers outside the Territory; and

 

  (e) advertising or promotion in any form, or translation of Otsuka’s website
into a language other than an official language of any country forming part of
the Territory, that in each case Otsuka would not reasonably carry out but for
the likelihood that it will reach potential customers in countries outside the
Territory.

 

3.2 Competitive Product.

 

  3.2.1 As of the Effective Date, and thereafter during the Term, neither Party
nor its Affiliates shall develop, register, file for registration, manufacture,
purchase, sell, promote, distribute, commercialize or otherwise exploit any
Competitive Product in the Territory nor enable or authorize any Third Party to
do so; provided that, subject to Section 3.2.4, Otsuka shall be permitted to
[***] for a maximum of [***] ([***]) [***] after the Effective Date.

 

  3.2.2 Without limiting Section 3.2.1, in the event of early termination of
this Agreement by ARIAD pursuant to Section 26.1, 26.2, 26.4.2, 26.4.3, 26.4.4,
or 26.5, for a [***] ([***]) [***] period after such termination, Otsuka and its
Affiliates shall not develop, register, manufacture, purchase, sell, promote,
distribute, commercialize or otherwise exploit any Competitive Product in the
Territory nor enable or authorize any Third Party to do so.

 

  3.2.3 Without limiting Section 3.2.1, in the event of early termination of
this Agreement by Otsuka pursuant to Section 26.1 or 26.2, for a [***] ([***])
[***] period after such termination ARIAD and its Affiliates shall not, directly
or indirectly, commercialize or otherwise exploit any Competitive Product in the
Territory, nor enable or authorize any Third Party to do so.

 

  3.2.4 Within [***] ([***]) [***] after Effective Date, Otsuka shall give
notice to Bristol-Myers K.K. (“BMKK”) under the Japan co-commercialization
agreement between Otsuka and BMKK dated on or about January 1, 2011 (the “BMS
Agreement”) that Otsuka shall cease promoting and shall terminate its right to
promote Sprycel in Japan, with such termination taking effect within [***]
([***]) [***] after the Effective Date. [***].

 

  3.2.5

Notwithstanding Section 3.2.1, 3.2.2 or 3.2.3, if a Party (the “Acquiring
Party”) or any of its Affiliates, either as a result of a merger, acquisition,
change of control or similar transaction (including an acquisition of assets)
(the “Transaction”) acquires or is acquired by or otherwise merges with an
entity that owns, has a license to, or a right to distribute, a Competitive
Product that would otherwise result in a violation of Section 3.2.1, 3.2.2 or
3.2.3, then the Acquiring Party shall (i) promptly, and in any event no later
than [***] ([***]) [***] following the date of the Transaction, notify the other
Party in writing of the Transaction and the Competitive Product, and (ii) in
order to avoid termination of this Agreement as provided below,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

18

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  divest, or cause its relevant Affiliate to divest, all rights (including
distribution rights) to the Competitive Product in accordance with this
Section 3.2.5. The Acquiring Party shall promptly, and in any event no later
than [***] ([***]) [***] following the date of the Transaction, notify the other
Party whether or not it (or its Affiliate) intends to undertake good faith
efforts to divest the Competitive Product. If the Acquiring Party notifies the
other Party that it (or its Affiliate) does not intend to undertake good faith
efforts to divest the Competitive Product in a particular country in the
Territory, then the other Party may terminate this Agreement on a
country-by-country basis with respect to such country by written notice to the
Acquiring Party, such termination to be effective [***] ([***]) [***] after the
Acquiring Party’s receipt of notice of termination from the other Party,
provided, that any termination pursuant to this Section 3.2.5 with respect to
Japan shall give the terminating Party the right to simultaneously terminate
this Agreement with respect to the entire Territory. If the Acquiring Party
notifies the other Party that it or its Affiliate, as the case may be, intends
to undertake good faith efforts to divest the Competitive Product, such
divestiture shall be completed within [***] ([***]) [***] after the date of the
Transaction and shall occur by (1) a termination of or an outright sale or
assignment to a Third Party of all of the Acquiring Party’s or its Affiliate’s
rights and interest in and to the Competitive Product (including all rights
under any contract, such as a license or distribution agreement) or (2) an
outlicense arrangement under which the Acquiring Party and its Affiliates have
no ongoing involvement in the development or commercialization of the
Competitive Product and derive no material ongoing financial return following
the effective date of divestiture and no financial benefit tied to sales or
success of the divested Competitive Product. Should such divestiture not have
occurred with respect to any country in the Territory within such [***] ([***])
[***] period, and provided that the Acquiring Party has been using good faith
efforts to divest the owned Competitive Product in such country during such
[***] ([***]) [***] period, then the Acquiring Party shall have the right to
discontinue (and cause its Affiliates to discontinue) developing or
commercializing the Competitive Product (i.e., withdraw the Competitive Product
IND or Marketing Authorization and, to the extent applicable, cease all
promotion, marketing and other commercialization activities with respect to the
Competitive Product) in such country and if such discontinuation shall not have
occurred within [***] ([***]) [***] of the expiration of the original [***]
([***]) [***] period then the other Party may terminate this Agreement with
respect to such country after such total [***] ([***]) [***] period by written
notice to the Acquiring Party, such termination to be effective [***] ([***])
[***] after the Acquiring Party’s receipt of notice of termination from the
other Party, provided, that any termination pursuant to this Section 3.2.5 with
respect to Japan shall give the terminating Party the right to simultaneously
terminate this Agreement with respect to the entire Territory.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

19

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  3.2.6 For the avoidance of doubt, if a Third Party contractor of a Party or of
its Affiliate (including a Sublicensee or Subcontractor) independently (not with
the authorization of such Party or Affiliate) develops, registers, files for
registration, manufactures, purchases, sells, promotes, distributes,
commercializes or otherwise exploits a Competitive Product in the Territory,
such Party shall not be or be deemed to be in breach of this Section 3.2 by
virtue of such Third Party’s independent activities. Further for the avoidance
of doubt, the terms of this Section 3.2 shall not preclude either Party or its
Affiliates from conducting research relating to Competitive Products.

 

3.3 Nothing in this Agreement shall be construed as giving Otsuka any right to
use or otherwise exploit the Know-how, the Patents, the Trademarks, ARIAD’s
other Intellectual Property Rights in the Product and/or any other information
received hereunder for purposes other than to perform Otsuka’s obligations and
exercise its rights under this Agreement, including for purposes of meeting its
responsibilities as the MAH in the Territory, solely in accordance with the
terms and conditions of this Agreement. Except as expressly set forth in this
Agreement, neither Party grants to the other Party any right or license to any
of its Intellectual Property Rights.

 

3.4 The Parties acknowledge and agree that the restrictions imposed on and
accepted by Otsuka in this Article 3 are restrictions that ARIAD has
independently and unilaterally determined are necessary in order to protect
ARIAD’s Intellectual Property Rights and ensure Otsuka is able to effectively
commit and apply its skills, resources, networks and qualified personnel so that
Otsuka may comply with and perform its obligations under this Agreement.

 

3.5 Otsuka acknowledges that, as of the Effective Date, ARIAD, directly or
through an Affiliate or Third Party contractor, is supplying Product labeled for
the US, EEA or Australia to certain patients in the Territory (the “Preexisting
Named Patients”) under one or more non-chargeable Named Patient Programs. Otsuka
acknowledges that ARIAD may (or shall if required by Applicable Law) continue to
supply Product to such Preexisting Named Patients in the Territory in accordance
with the Applicable Laws of each country in the Territory in which Product is
being dispensed to such Preexisting Named Patients. For clarity, Otsuka shall
not have any obligation to supply Product to such Preexisting Named Patients
unless agreed upon by the Parties and it is the expectation of each Party that,
to the extent permitted by Applicable Law, the Preexisting Named Patients will
stop receiving Product under Named Patient Programs upon receipt of Marketing
Authorization for Product in the country in the Territory in which Product is
being dispensed to them, and will transition to commercially-supplied Product.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

20

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ARTICLE 4 – DEVELOPMENT AND COMMERCIALIZATION COMMITTEES

 

4.1 Joint Development & Commercialization Committee. The Parties shall, within
[***] ([***]) [***] of the Effective Date, establish a Joint Development &
Commercialization Committee (the “JDCC”), comprised of [***] ([***])
representatives of ARIAD and [***] ([***]) representatives of Otsuka, at least
one of whom from each Party, who shall serve as co-chair, shall have experience
and seniority sufficient to enable him or her to make decisions on behalf of the
Party he or she represents concerning issues within the remit of the JDCC.

 

4.2 Development-Related Responsibilities. The JDCC shall be responsible for:
(i) confirming and preparing annual (or, if needed, more frequent) updates and
revisions to the Development Plan for the Territory prepared jointly by the
Parties pursuant to Section 5.1; (ii) monitoring activities and progress under
the Development Plan; (iii) overseeing the maintenance of all Marketing
Authorizations in the Territory, including the performance of post-approval
commitments in the Territory; (iv) overseeing the sharing of regulatory
correspondence and other regulatory information, and overseeing planning and
submissions for Marketing Authorizations in the Territory that are filed after
the Effective Date; (v) subject to Article 5, overseeing further medical and
development work for the Product in the Territory, including development of the
Product for any New Indication or in any New Formulation as may be mutually
agreed by the Parties; (vi) subject to Article 5, overseeing clinical trials,
investigator-initiated trials, post-hoc data analyses, and sponsored research
arrangements for the Territory; (vii) overseeing pharmacovigilance activities
for the Territory; (viii) overseeing medical affairs activities for the
Territory; (ix) developing a publication strategy in the Territory and review
procedures for such publications; (x) attempting to resolve disagreements
escalated by any subcommittees or project teams; and (xi) assuming such other
responsibilities as are set forth in this Agreement, or as mutually agreed in
writing by duly authorized representatives of the Parties from time to time.

 

4.3 Commercialization-related Responsibilities. The JDCC shall be responsible
for: (i) reviewing and discussing the Commercialization Plan, and updates
thereto, prepared by Otsuka as set forth in Section 15.2; (ii) monitoring actual
Commercialization activities and progress in accomplishing the Commercialization
Plan in the Territory; (iii) overseeing and evaluating geographic expansion,
market access plans (including any proposed submissions of health economics and
outcomes studies or analyses), and plans and strategies for obtaining Pricing
and Reimbursement Approval (as applicable) in the Territory, including in light
of ARIAD’s global positioning of the Product and pricing and reimbursement
strategies and tactics outside of the Territory; (iv) ensuring a process is in
place for the review and discussion by the Parties of Otsuka’s core promotional
and sales training materials; (v) discussing whether and under what terms to
initiate any Named Patient Programs in any country in the Territory (in addition
to those described in Section 3.5), which, if implemented, shall be governed by
the Pharmacovigilance Agreement, the Quality Agreements and any applicable terms
of this Agreement; (vi) attempting to resolve disagreements escalated by any
subcommittees or project teams; and (vi) assuming such other responsibilities as
are set forth in this Agreement, or as mutually agreed in writing by duly
authorized representatives of the Parties from time to time. [***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

21

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4.4 Committee Administration.

 

  4.4.1 Subcommittees. The JDCC may form subcommittees or project teams as it
deems appropriate to fulfill its responsibilities. The parties intend to
establish joint pharmacovigilance (PV) and supply chain subcommittees or project
teams as soon as practicable after the Effective Date in order to facilitate
discussions and coordination of the Parties’ efforts and activities relating to
Product PV and manufacture, supply and quality assurance (including Manufacture
and Final Manufacturing) under this Agreement. If a subcommittee or project team
cannot reach agreement on any matter within its remit, such matter shall be
submitted to the JDCC for discussion and resolution prior to any further dispute
resolution action being taken.

 

  4.4.2 Changes to Representatives. A Party may change any one or more of its
representatives to the JDCC or to a subcommittee or project team at any time
upon written notice to the other Party. The number of representatives appointed
by each Party to the JDCC or to a subcommittee or project team may be modified
by mutual agreement of the Parties; provided, that at all times the number of
representatives from each Party shall be equal.

 

  4.4.3 Schedule and Minutes. The representatives of the JDCC shall mutually
agree on the schedule for meetings, provided that there shall be at least [***]
([***]) meeting per [***]. Either Party may schedule an emergency meeting of the
JDCC upon reasonable advance written notice to the other Party. A representative
of the Party hosting a meeting of the JDCC shall serve as secretary of that
meeting. The secretary of the meeting shall prepare and distribute to all
members of the JDCC: (a) agenda items at least [***] ([***]) [***] in advance of
the applicable meeting and (b) draft minutes of the meeting within [***] ([***])
[***] following the meeting to allow adequate review and comment. Such minutes
shall provide a description in reasonable detail of the discussions held at the
meeting and a list of any actions, decisions or determinations approved by the
JDCC. Minutes of the JDCC meeting shall be approved or disapproved, and revised
as necessary, within [***] ([***]) [***] after their initial circulation in
draft form. Minutes for any subcommittees shall be prepared in the same manner
and in accordance with the same timelines. The final minutes of any subcommittee
shall be provided to the JDCC. The final minutes of the JDCC shall be provided
to the Alliance Managers.

 

  4.4.4

Location and Attendance. The location of JDCC meetings shall alternate between
ARIAD’s principal place of business and Otsuka’s principal place of business, or
as otherwise agreed by the Parties. The JDCC may also meet by means of telephone
conference call or videoconference, provided

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

22

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  that at least [***] ([***]) meeting per [***] shall be held in person. Each
Party shall use reasonable efforts to cause its representatives to attend JDCC
meetings. If a Party’s representative to the JDCC or any subcommittee is unable
to attend a meeting, such Party may designate an alternate to attend such
meeting in place of the absent representative. In addition, each Party may, at
its discretion, invite non-voting employees, and, with the consent of the other
Party, consultants or scientific advisors, to attend the meetings of a
Committee.

 

4.5 Alliance Managers. Each Party shall appoint a business representative who
possesses a general understanding of the relevant technical, business and legal
issues to act as its Alliance Manager (each, an “Alliance Manager”). The
Alliance Managers shall be responsible for creating and maintaining
collaborative, efficient and responsive communication within and between the
Parties, and for day-to-day management of operational matters other than matters
within the remit of the JDCC. The Alliance Managers shall have no authority to
modify this Agreement or waive any non-compliance with its terms. Alliance
Managers may attend JDCC and subcommittee meetings as observers.

 

4.6 Decision Making Process.

 

  4.6.1 Each Party shall have one vote on the JDCC. Each co-chair shall be
responsible for casting his or her Party’s vote. If such co-chair is unable to
attend a JDCC meeting, he or she may act through a substitute who is a member of
the JDCC by notice to the other Party. Any decision of the JDCC shall require
unanimous agreement of the Parties (through the affirmative vote of both
Parties’ co-chairs of the JDCC). If the JDCC fails to unanimously agree on any
matter within the JDCC’s responsibilities within [***] ([***]) [***], or such
other period as the JDCC co-chairs may agree upon, after the JDCC has met and
attempted to agree on such matter, then such matter shall first be presented to
the Alliance Managers for resolution, and if the dispute is not resolved within
[***] ([***]) [***]after such referral to the Alliance Managers, then:

 

  (a) with respect to (i) all matters relating to [***], and (ii) other
responsibilities of the JDCC relating to [***], Otsuka shall have final
decision-making authority and the decision of Otsuka’s co-chair of the JDCC with
respect to such matters shall be final and binding on the Parties; provided,
however, that (A) decisions with respect to [***], and (B) any [***] matter
[***], may be referred by ARIAD to the Senior Officers as provided in the
following paragraph, and Otsuka’s co-chair of the JDCC shall not have the final
decision-making authority with respect to such matter;

 

  (b)

with respect to all matters that are within the JDCC’s responsibilities other
than those relating to [***], including with respect to the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

23

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  responsibilities of the JDCC set forth in Section 4.2, either Party may, by
written notice to the other Party (“Escalation Notice”), refer such matter to
the Senior Officers for resolution. In addition, ARIAD may provide an Escalation
Notice regarding (i) decisions with respect to [***], and (ii) any [***] matter
[***]. The Senior Officers shall use good faith efforts to resolve any matter
referred to them as soon as practicable. Any final decision that the Senior
Officers mutually agree to in writing shall be conclusive and binding on the
Parties; and

 

  (c) If the Senior Officers are unable to resolve any matter set forth in an
Escalation Notice within [***] ([***]) [***]after the applicable Party receives
such Escalation Notice (or such longer period as the Senior Officers may agree
upon), then (i) with respect to [***], ARIAD shall have final decision-making
authority and the decision of ARIAD’s Senior Officer with respect to such
matters shall be final and binding on the Parties, (ii) with respect to [***],
Otsuka shall have final decision-making authority, and the decision of Otsuka’s
Senior Officer with respect to [***] shall be final and binding on the Parties,
provided that such decision by Otsuka is [***], and (iii) all other matters set
forth in an Escalation Notice that are not resolved by the Senior Officers shall
be subject to the mutual agreement of both Parties and shall not be subject to
arbitration or any other form of external dispute resolution and, unless and
until such mutual agreement is reached, the status quo shall be maintained,
except as set forth in the final sentence of this Section 4.6.1(c). For clarity,
neither Party shall have final decision-making authority with respect to the
following, which shall be subject to the mutual agreement of both Parties and
shall not be subject to arbitration or any other form of external dispute
resolution: (x) [***]; and (y) [***]. Notwithstanding the foregoing,
disagreements of the JDCC regarding [***] that are not resolved by the Senior
Officers as provided in this Section 4.6.1 shall be resolved by expedited
arbitration as provided in Section 30.4.

 

  4.6.2 A Party’s right to exercise final decision-making authority pursuant to
Section 4.6.1 (“Tie-Breaking Decisions”) shall be subject to the following
limitations: all Tie-Breaking Decisions shall be subject to all Applicable Laws;
no Tie-Breaking Decision shall amend or breach any term or condition of this
Agreement or diminish the rights or increase the obligations of either Party
under this Agreement; and the Party with final decision-making authority shall
make all Tie-Breaking Decisions only after giving reasonable consideration to
the other Party’s comments (through its JDCC members or Senior Officer, as
applicable) on such matters.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

24

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ARTICLE 5 – DEVELOPMENT

 

5.1 Development Plan.

 

  5.1.1 ARIAD and Otsuka shall use good faith efforts to agree, through the
JDCC, upon a development plan with respect to the development and Registration
of the Product in the Territory (once approved by the JDCC the “Development
Plan”). The Development Plan shall be updated by the JDCC at least [***]. The
Development Plan shall include country-specific timelines and activities. The
Development Plan shall, as applicable, clearly identify any allocation of
responsibility between the Parties for the development activities described
therein. Disputes over the content of the Development Plan shall be resolved in
accordance with Section 4.6, and shall not be subject to arbitration or any
other form of external dispute resolution except as provided in the last
sentence of Section 4.6.1(c).

 

  5.1.2 The JDCC shall approve the initial Development Plan within [***] ([***])
[***] after the Effective Date. The initial Development Plan shall address the
development and Registration of the Product in all countries of the Territory
other than [***], and at a minimum, shall provide that, contingent on ARIAD
delivering all required data and other information to Otsuka on a timely basis,
Otsuka or its Sublicensee shall, on a country-by-country basis in the Territory
excluding [***] (i) file an application for Marketing Authorization in each such
country that does not require additional clinical trials within [***] ([***])
[***]of the Effective Date, or (ii) file an investigational new drug application
for conducting clinical trials of the Product within [***] ([***]) [***]of the
Effective Date in each such country that requires such additional clinical
trials to support an application for Marketing Authorization.

 

5.2 Development Efforts.

 

  5.2.1 The Parties shall use commercially reasonable efforts to further develop
the Product broadly in Philadelphia chromosome-positive (Ph+) leukemias,
including as a first-line therapy for CML, in Japan. Within [***] ([***]) [***]
after the receipt of the first Marketing Authorization for the Product in Japan,
the Parties shall meet to discuss the strategy and priorities for further
development of the Product in Japan. The JDCC shall update the Development Plan
accordingly when specific activities to meet those objectives have been agreed
upon by the JDCC.

 

  5.2.2 Otsuka shall use commercially reasonable efforts to develop the Product
for any New Indication and in any New Formulation, if and to the extent mutually
agreed by the Parties on a country-by-country basis in the Territory, and the
JDCC shall update the Development Plan to incorporate such agreed activities.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

25

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5.3 ARIAD shall continue to conduct the Ongoing Study and shall bear [***]
percent ([***]%) of the costs of the Ongoing Study until completion of such
trial, including [***] costs associated with obtaining clinical supplies of the
Product for the Ongoing Study. For clarity, (i) ARIAD shall continue to control
the conduct of the Ongoing Study and shall continue to be listed as the sponsor
of such trial until completion of such trial; (ii) any extension or expansion of
the Ongoing Study whether or not required by PMDA, including, without
limitation, additional patients beyond the number of patients enrolled as of the
Effective Date or any addition to the activities specified therein, shall not be
part of the Ongoing Study and Otsuka shall be responsible for [***] percent
([***]%) of the cost thereof pursuant to Section 5.4; and (iii) ARIAD, through
the JDCC, may agree, but shall not be required to agree, to take responsibility
for, or pay the costs of, activities under the Development Plan in excess of the
activities and costs required in connection with the Ongoing Study.

 

5.4 Otsuka shall bear [***] percent ([***]%) of (i) the costs of any commitments
made to Regulatory Authorities as a condition of, or following, the grant of
Marketing Authorization in the Territory, and (ii) the costs of any clinical
trials conducted in and solely for the benefit of the Territory, including any
extension or expansion of the Ongoing Study as described in Section 5.3 and any
clinical trials conducted in connection with development of the Product for any
New Indication or in any New Formulation solely in and for the benefit of the
Territory, if and to the extent mutually agreed by the Parties on a
country-by-country basis in the Territory, in each case of (i) and (ii),
excluding costs in connection with the Ongoing Study and other costs for which
ARIAD is responsible as described in Section 5.3. For clarity, this Section 5.4
pertains to clinical trials conducted solely in and for the benefit of the
Territory, and does not apply to clinical trials that are conducted in the
Territory as part of global clinical trials, the costs of which shall be borne
by the Parties as and to the extent provided in Section 5.5.

 

5.5 Global Studies.

 

  5.5.1 If, after the Effective Date, ARIAD is interested in undertaking any
global development of the Product for any New Indication or in any New
Formulation (i.e., any global clinical trial of the Product that includes
clinical trial sites in (x) the US and/or the European Economic Area and
(y) Japan and the data from which, if such trial is successful, could be used to
obtain marketing authorization for the Product in the US, the European Economic
Area and Japan under a protocol that PMDA has indicated is sufficient to support
an application for Marketing Authorization in Japan, or, with respect to a New
Formulation, any non-clinical study or research for the benefit of the US, the
European Economic Area and Japan (each a “Global Study”)), ARIAD shall inform
Otsuka of such interest and shall provide Otsuka with information and plans
relating to such Global Study, including budgets for out-of-pocket costs and, as
applicable, proposed protocols and clinical trial designs.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

26

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  5.5.2 If Otsuka, in its sole discretion, agrees to participate in the funding
of any such Global Study with respect to a New Indication or a New Formulation,
Otsuka shall coordinate, [***], the clinical trials under such Global Study
conducted at clinical trial sites in Japan and shall pay directly, or reimburse
to ARIAD, on a [***], [***] percent ([***]%) of ARIAD’s global out-of-pocket
costs paid to Third Parties (or accrued in accordance with GAAP and subsequently
paid to Third Parties) for the conduct of such Global Study. For clarity, ARIAD
shall be the sponsor of such clinical trials in Japan.

 

  5.5.3 If Otsuka elects not to participate in the funding of any such Global
Study with respect to a New Indication or a New Formulation as described in
Section 5.5.1, ARIAD may, at its option and at its sole expense, conduct such
Global Study; provided, however, that if ARIAD proceeds with such Global Study,
ARIAD shall submit to Otsuka, at least [***] each [***], a written report that
summarizes the then-current development status, the results achieved, the
problems being encountered, out-of-pocket costs incurred and other pertinent
information relating to the Global Study with respect to such New Indication or
New Formulation, as applicable. If Otsuka initially declines to participate in
the funding of such Global Study with respect to a New Indication or a New
Formulation, Otsuka shall subsequently have the right to use the data from such
Global Study to seek marketing authorization for the Product in the Territory
for such New Indication or New Formulation or for any other purpose in the
Territory, provided that Otsuka reimburses ARIAD [***] percent ([***]%) of
ARIAD’s out-of-pocket costs previously paid to Third Parties for the conduct of
such Global Study to date, and Otsuka continues to pay directly, or reimburse to
ARIAD, on a [***], [***] percent ([***]%) of ARIAD’s out-of-pocket costs paid to
Third Parties (or accrued in accordance with GAAP and subsequently paid to Third
Parties) for the conduct of such Global Study.

 

5.6 Each Party hereby acknowledges and agrees that:

 

  5.6.1 further development of the Product will not necessarily result in the
extension or variation of the Marketing Authorization of the Tablet Formulation
of Product in any dosage strength;

 

  5.6.2 other than the Ongoing Study, nothing in this Agreement shall require
ARIAD to perform any additional testing or additional development activities
with respect to the Product, except as expressly set forth in the Development
Plan; and

 

  5.6.3

neither Party makes any warranty, and nothing in this Agreement may or shall be
construed as a warranty by either Party, that the Product will obtain
Registrations in any or all of the countries in the Territory and neither Party

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

27

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  shall have claims against the other Party arising out of any delay or refusal
by Regulatory Authorities to issue Registrations or to issue Registrations that
are acceptable to the Parties.

 

5.7 ARIAD shall own any data, information and other Know-how, and any
Improvements, resulting from development activities for the Product conducted by
ARIAD or its contractors or other activities of ARIAD for the Product conducted
outside the Development Plan, and Otsuka shall have the right to use any and all
such data, information and other Know-how and Improvements solely to the extent
necessary or useful for the research, development, Final Manufacturing and/or
Commercialization of the Product in the Territory in accordance with the terms
and conditions of this Agreement. Otsuka shall promptly disclose to ARIAD all
Improvements resulting from Product development activities conducted by Otsuka
or its Sublicensees or contractors pursuant to this Agreement (“Otsuka
Improvements”). Otsuka agrees to assign and hereby assigns to ARIAD all of
Otsuka’s right, title and interest in and to all Otsuka Improvements that solely
and directly relate to the Compound and/or the Product (the “Assigned Otsuka
Improvements”), provided however that Otsuka shall have the right to use the
Assigned Otsuka Improvements solely in connection with the rights granted to
Otsuka under Article 2, subject to the terms and conditions of this Agreement.
Otsuka hereby grants ARIAD a worldwide, perpetual, irrevocable, royalty-free,
exclusive, sublicensable license to use all Otsuka Improvements (other than
Assigned Otsuka Improvements) solely in connection with the research,
development, manufacture or commercialization of the Compound and/or the
Product, subject to Otsuka’s retained right to exercise its rights and perform
its obligations under this Agreement. Otsuka shall not incur any obligation to
any Third Party that may prohibit or impair its ability to disclose and assign
Assigned Otsuka Improvements to ARIAD. Otsuka shall refrain from filing any
patent applications directed to Assigned Otsuka Improvements and Otsuka shall
assist ARIAD in filing and prosecuting any patent application directed to
Assigned Otsuka Improvements that ARIAD may choose to undertake at its sole
discretion, including by obtaining inventors’ statements and signatures;
provided that ARIAD shall bear the reasonable and direct out-of-pocket expenses
incurred by Otsuka in the course of providing such assistance. ARIAD shall have
unrestricted rights to disclose and license the Assigned Otsuka Improvements to
ARIAD’s Affiliates and distributors outside of the Territory.

 

5.8 Otsuka and its Affiliates shall not undertake or carry out as sponsor any
research project, study or clinical trial relating to the Compound or the
Product except as expressly set forth in the Development Plan.

 

5.9

Otsuka shall report to the JDCC any proposals by Otsuka or suggestions or
proposals that it receives from Third Parties (including investigators) with
respect to Third Party research projects, studies and/or clinical trials
relating to the Compound and/or the Product in the Territory, including
investigator-initiated trials, that Otsuka wishes to support (each, a “Third
Party Research Project”). Any such Third Party Research Projects shall be
reviewed as part of ARIAD’s global medical and clinical development strategy and
may be supported by Otsuka only if approved in writing

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

28

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  by ARIAD. In the event that ARIAD approves the support by Otsuka of a Third
Party Research Project in writing, and the clinical trial or study under such
Third Party Research Project will be funded by Otsuka and conducted under a
protocol designed by Otsuka, Otsuka shall perform or support such Third Party
Research Project in accordance with a detailed plan to be agreed upon in advance
with ARIAD, and all relevant protocols shall be developed in consultation with,
and approved in writing by, ARIAD prior to the conduct of such trial or study.
Otsuka shall ensure that such approvals required of Third Party investigators
are obtained by them for such Third Party Research Projects. Data ownership or
license rights for such Third Party Research Projects, publication rights, drug
safety reporting and other terms shall be agreed between ARIAD and Otsuka (and
by Otsuka with Third Parties, as necessary) prior to the commencement of any
such Third Party Research Project. For clarity, Otsuka shall not support,
participate, or otherwise aid or advise any Third Party with respect to Third
Party Research Projects, including projects, studies and/or clinical trials that
are initiated or sponsored by Third Parties, such as investigator-initiated
trials, that have not been approved as set forth above; provided that, other
than the requirement to obtain ARIAD’s approval, the above terms shall not apply
to a Third Party Research Project that is sponsored by a Third Party under the
Third Party’s protocol without involvement by Otsuka in the design or conduct of
such trial or study (e.g., an investigator-sponsored trial) and, for the
avoidance of doubt, Otsuka may, with ARIAD’s prior written approval, supply
Product and support pharmacovigilance activities for such a Third
Party-sponsored Third Party Research Project. For all Third Party Research
Projects that are approved by ARIAD and for which Otsuka will supply Product,
ARIAD shall supply such Product to Otsuka at [***].

 

5.10 Otsuka shall ensure that all necessary notifications are made and/or
necessary consents are obtained under applicable data protection or privacy
regulations in the Territory such that all personal information obtained in the
course of the conduct of development activities under this Agreement by Otsuka,
its Affiliates or any Third Party subcontractor of Otsuka or its Affiliates can
be lawfully transmitted to, and used by, ARIAD and its Affiliates for
development work relating to the Compound and/or the Product.

 

5.11 Otsuka shall include appropriate provisions in its contractual agreements
with institutions, Healthcare Professionals and other relevant Third Parties to
give effect to the rights granted to ARIAD in Section 5.7 and Section 5.10.

ARTICLE 6 – EXCHANGE OF KNOW-HOW AND IMPROVEMENTS

 

6.1

Throughout the Term, ARIAD shall use commercially reasonable efforts to supply
Otsuka free of charge with Know-how that is necessary or useful for Otsuka to
research, develop, Commercialize or conduct Final Manufacturing of the Product
in the Territory in accordance with this Agreement, including access to Know-how
and information that, prior to the Effective Date hereof, was made available to
Otsuka in read-only mode. Notwithstanding the foregoing, and without limiting
any obligation of

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

29

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  ARIAD under the Development Plan, nothing in this Agreement shall require
ARIAD to develop additional Know-how or to obtain additional Know-how from Third
Parties. Otsuka acknowledges that such Know-how is the result of significant
investment and efforts on the part of ARIAD and its Affiliates and may be highly
confidential, strategically valuable and competitively sensitive in nature.

 

6.2 All Know-how, Improvements and/or other information and data relating to the
Product and/or the Compound and disclosed to Otsuka by or on behalf of ARIAD or
its Affiliates hereunder are at all times and shall after expiration or
termination of this Agreement for any reason remain ARIAD’s or its Affiliates’
sole and exclusive property. Except with respect to information and data arising
from any Global Study that Otsuka elects not to fund pursuant to Section 5.5.3,
Otsuka shall have the right to use, cross-reference, file or incorporate by
reference any information and data relating to the Product and/or the Compound
for purposes of performing under this Agreement, including in order to support
any regulatory filings relating to the Product and in interactions with any
Regulatory Authority in connection with the development and Registration of the
Product in the Territory.

 

6.3 Throughout the Term, upon ARIAD’s reasonable request, Otsuka shall supply
ARIAD in writing or by any other appropriate means, free of charge and without
translation, with any and all information and data relating to the Product
and/or the Compound to the extent in Otsuka’s possession and Controlled by
Otsuka or its Affiliates, including relevant market analyses and assessments of
the competitive landscape for the Product, and, subject to Applicable Laws, any
patient or physician feedback relating to Product. ARIAD shall be free to use
such information and data for the purpose of its business and to disclose the
same to ARIAD’s Affiliates and ARIAD’s distributors outside of the Territory,
provided that no Confidential Information pertaining to Otsuka’s business shall
be disclosed by ARIAD to such other distributors.

ARTICLE 7 – PRICING AND REIMBURSEMENT

 

7.1 Otsuka shall use commercially reasonable efforts to obtain Pricing and
Reimbursement Approval in each country of the Territory where applicable, on a
country-by-country basis, as soon as reasonably possible. Otsuka shall use
commercially reasonable efforts to obtain the best reasonably possible
reimbursement price for the Product in each country in the Territory in which
Pricing and Reimbursement Approval is applicable, on a country-by-country basis,
including seeking Pricing and Reimbursement Approval that is [***] than the
pricing and reimbursement approval of [***] and [***] in each such country
(assuming those products have patent and/or regulatory exclusivity in such
country at such time).

 

7.2

Subject to Section 4.6 and the discussions of the JDCC regarding plans and
strategies for obtaining Pricing and Reimbursement Approval in the Territory,
Otsuka, or a Sublicensee that is the MAH in the applicable country, shall make
all applications and submissions with respect to Pricing and Reimbursement
Approvals to the applicable authorities in each country in the Territory where
applicable. The JDCC shall establish

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

30

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  a Pricing and Reimbursement Approval project team that shall obtain and
consider input from each of the Parties with respect to Pricing and
Reimbursement Approval strategies and target reimbursement pricing. The JDCC
shall review and approve (subject to [***]) (x) the final form of application or
other submission for Pricing and Reimbursement Approval, including the
reimbursement price to be proposed to the applicable Regulatory Authority, and
(y) the decision to cease negotiations, as applicable, and accept the negotiated
Pricing and Reimbursement Approval. Otsuka shall ensure that all applications
and interactions with the Regulatory Authorities relating to Pricing and
Reimbursement Approval, where applicable, are compliant with all Applicable Laws
and Industry Guidelines. ARIAD shall use commercially reasonable efforts to
provide Otsuka with relevant documentation and data to support such applications
for Pricing and Reimbursement Approval for the Product. Otsuka shall keep ARIAD
apprised of Otsuka’s progress with respect to all such applications and shall
promptly provide ARIAD with a copy of all communications received from any
Regulatory Authority regarding such applications, with English translations.
Otsuka shall provide ARIAD with copies of all proposed Pricing and Reimbursement
Approval applications and submissions to Regulatory Authorities where
applicable, accompanied by translations into English if the original was not
written in English, and shall incorporate the strategies for obtaining Pricing
and Reimbursement Approvals in each applicable country in the Territory to the
extent agreed upon by the JDCC, subject to [***]. Otsuka also shall provide
ARIAD with copies of the final submitted forms of all such Pricing and
Reimbursement Approval applications and submissions in the applicable countries
in the Territory and a translation into English if the original was not written
in English.

 

7.3 For clarity, Otsuka shall be solely responsible for determining the actual
selling price to Customers in the Territory.

ARTICLE 8 – REGULATORY MATTERS

 

8.1 Marketing Authorizations.

 

  8.1.1 ARIAD shall prepare the initial JNDA for the Product, incorporating
input and expertise from Otsuka through a joint project team or subcommittee to
be appointed by the JDCC, which project team or subcommittee shall be led by
ARIAD. The JDCC shall approve the initial JNDA before submission (with [***]
having final decision-making authority, including through the Escalation Notice
process; provided that any disputes with respect to [***], shall be resolved as
set forth in Section 30.4). As soon as practicable after approval of such
initial JNDA by the JDCC, but in any event after providing sufficient advance
notice to the PMDA, Otsuka, at its sole expense, shall submit the JNDA to the
MHLW through the PMDA.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

31

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  8.1.2 Otsuka shall, at its sole expense, apply for all other Marketing
Authorizations in accordance with the Development Plan, and upon issuance of
each Marketing Authorization (including the JNDA), Otsuka shall be the MAH in
each country in the Territory and shall maintain such Marketing Authorizations
in good standing at its sole expense, subject to ARIAD’s option to become the
MAH in Japan as set forth in Section 8.6. In light of ARIAD’s conduct of the
Ongoing Study and as the marketing authorization holder for the Product in the
US and the European Economic Area, ARIAD shall use commercially reasonable
efforts to provide Otsuka with information, and access to ARIAD’s personnel, to
support Otsuka’s applications for Marketing Authorizations, including providing
Otsuka with Certificates of a Pharmaceutical Product (CPP) and/or Certificates
of Medicinal Products for the Product from the US FDA and/or the European
Medicines Agency as requested by Otsuka for the purpose of obtaining Marketing
Authorizations in applicable countries in the Territory. Both Parties shall use
appropriately qualified personnel for such activities, including personnel with
local regulatory expertise. In accordance with its responsibilities as the MAH
in the Territory, Otsuka shall act as the authorized contact for the Regulatory
Authorities in the Territory in connection with obtaining and maintaining
Marketing Authorizations (subject to ARIAD’s involvement as provided in
Section 8.3), as well as in connection with the Final Manufacturing or
Commercialization of the Product. For clarity, Otsuka is responsible for [***]
and [***] for Marketing Authorizations in the Territory, subject to ARIAD’s
[***] as set forth in Section 8.6.

 

  8.1.3 ARIAD shall be responsible for maintaining the Company Core Data Sheet
(CCDS) / Company Core Safety Information (CCSI) for the Product. In the event
that a change to the CCDS/CCSI necessitates a change to the local labeling in
the Territory, Otsuka shall be responsible for developing a proposed revised
draft product label or package insert for each country in the Territory. ARIAD
shall provide Otsuka with information and reasonable access to ARIAD’s
personnel, to support Otsuka’s changes to the Marketing Authorizations to modify
the revised draft labeling. Otsuka shall promptly submit a change to applicable
Marketing Authorizations in the Territory to modify the labeling.

 

8.2 Subject to Section 4.6, the JDCC shall review and approve (a) the
prescribing information, label and final packaging of the Product for the
Territory to be submitted in connection with applications for Marketing
Authorizations, and shall subsequently review and approve any modifications
thereto required by a Regulatory Authority or proposed by either Party, and
(b) Otsuka’s proposals for, and the protocols of, all clinical or observational
studies, including post-marketing studies (other than protocols of Third Party
Research Projects that are sponsored by a Third Party under the Third Party’s
protocol without involvement by Otsuka in the design or conduct of such trial or
study as provided in Section 5.9). Otsuka shall prepare and submit the relevant
documentation related to Marketing Authorizations (other than the initial JNDA)
and other Registrations in compliance with Applicable Laws, following review by
the JDCC. For clarity, disputes regarding [***] are subject to resolution under
Section 30.4.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

32

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8.3 Otsuka shall prepare for and conduct meetings with the local Regulatory
Authorities in consultation with ARIAD, and shall promptly:

 

  (a) notify ARIAD in advance of planned scheduled interactions with Regulatory
Authorities relating to the Product and invite ARIAD to attend such
interactions, at ARIAD’s cost, if permitted by the Regulatory Authority;

 

  (b) notify ARIAD of spontaneous interactions with the Regulatory Authorities
relating to the Product as soon as reasonably possible after the interaction;

 

  (c) prepare meeting minutes of such interactions with Regulatory Authorities
and circulate the same to ARIAD, accompanied by a translation into English if
the original minutes are not in English; and

 

  (d) address questions and requests from the Regulatory Authorities relating to
the Product following consultation with ARIAD.

Notwithstanding the foregoing, (i) ARIAD shall participate, at [***], (A) in
meetings with the PMDA in order to respond to PMDA questions relating to the
initial JNDA (including questions relating to the Ongoing Study), and (B) at
Otsuka’s reasonable request or ARIAD’s election if not requested by Otsuka, in
meetings with the PMDA regarding CMC matters, (ii) ARIAD shall promptly prepare
all first drafts of answers to PMDA questions relating to the initial JNDA
(including questions relating to the Ongoing Study), and (iii) upon Otsuka’s
request, ARIAD shall prepare first drafts of responses to questions and requests
from other Regulatory Authorities; and all final drafts of responses to
Regulatory Authority requests and questions relating to the Product shall be
mutually agreed upon by the Parties through the JDCC. In addition, ARIAD shall
use commercially reasonable efforts to provide Otsuka with information, and
access to ARIAD’s personnel, to support Otsuka’s preparation for and conduct of
meetings with the local Regulatory Authorities relating to the Product. For
clarity, ARIAD shall take the lead and shall have primary responsibility (as
between the Parties) for all regulatory matters relating to the activities
conducted by ARIAD, including the Ongoing Study and CMC work for the Product.

 

8.4

Without limiting the foregoing, Otsuka shall (i) provide advance copies to
ARIAD’s representatives on the JDCC of any proposed material submission to, or
material communication with, any Regulatory Authority to the extent they relate
to the Marketing Authorization or otherwise to the Compound or Product, and
shall consider in good faith, and accommodate when reasonably appropriate, any
requests by ARIAD to make any modification thereto, and (ii) keep ARIAD fully
and promptly informed, throughout the Term, about all material communications
received from the local Regulatory Authorities of the Territory concerning the
Product and/or the Compound,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

33

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  including providing ARIAD with a copy of all such material communications
(without translation) no later than [***] after receipt by Otsuka and with a
copy thereof translated into English as soon as practicable thereafter. Without
prejudice to full compliance by both Parties with any obligations established by
Applicable Laws of each country in the Territory, any and all material
communications to local Regulatory Authorities concerning the Compound and/or a
Product shall be submitted by Otsuka only after the relevant contents have been
discussed with and approved by the JDCC; provided, however, that Otsuka shall
not be required to delay any communication with or regulatory submission to any
applicable Regulatory Authority in a manner that affects Otsuka’s ability to
comply with regulatory requirements or Applicable Laws. Otsuka shall provide
English translation of all material documents relating to the Product to be
submitted by Otsuka or its Sublicensees to, or that are received by Otsuka or
its Sublicensees from, Regulatory Authorities in a language other than English.
On a semi-annual basis, Otsuka shall provide ARIAD with an itemized list of
(a) all written communications received from the local Regulatory Authorities in
the Territory concerning the Product and/or the Compound during the prior [***]
([***]) [***]and (b) all documents and written communications relating to the
Product submitted by Otsuka or its Sublicensees to any Regulatory Authority in
the Territory during the prior [***] ([***]) [***]. Upon the request of ARIAD,
Otsuka shall provide ARIAD with untranslated copies of any such communications
or documentation itemized on such list. For clarity, (1) any communications with
Regulatory Authorities or documents submitted to Regulatory Authorities that
relate to Product quality shall not be governed by this Section 8.4 and shall be
subject to Section 12.5, and/or the Quality Agreements, and (2) any
communications with Regulatory Authorities or documents and written
communications submitted to Regulatory Authorities that relate to
pharmacovigilance shall not be governed by this Section 8.4 and shall be subject
to Article 9 until the Pharmacovigilance Agreement becomes effective and
thereafter shall be subject to the Pharmacovigilance Agreement.

 

8.5 If any material alterations, modifications or amendments of this Agreement
or modification of the Product are required to comply with the request of any
Regulatory Authority as prerequisites for the continuation of the Marketing
Authorization or the grant or the continuation of the Registration of the
Product, or if the Marketing Authorization or Registrations are suspended or
withdrawn by any said Regulatory Authority, each Party shall notify the other
Party immediately and the Parties shall use commercially reasonable efforts to
agree upon a reasonable and mutually acceptable resolution thereof.

 

8.6

ARIAD shall have the option to require that the Marketing Authorization for
Japan be transferred to ARIAD or its Affiliate, [***]. Such option shall be
exercisable by ARIAD’s giving at least [***] ([***]) [***]prior written notice
to Otsuka, to be given no [***] than the [***] of the [***] for the [***] and to
take effect no [***] than the [***] of such [***]; provided that, at the time
ARIAD gives such written notice, ARIAD or its Affiliate shall have received a
marketing authorization holder license or other form of approval from the PMDA
to hold a marketing authorization in Japan in

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

34

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  accordance with Applicable Laws and Regulatory Authority requirements,
evidence of which license or approval shall be provided by ARIAD to Otsuka with
ARIAD’s written notice. Upon receipt of ARIAD’s option exercise notice, ARIAD
shall initiate the transfer of the Japanese Marketing Authorization in
accordance with the relevant procedures in Japan, and Otsuka shall cooperate
with ARIAD to obtain such transfer as soon as reasonably possible. On or after
the date of the transfer of the Japanese Marketing Authorization to ARIAD,
Otsuka shall [***], the [***] of the [***] for the Japanese Marketing
Authorization, and ARIAD shall [***] Otsuka within [***] ([***]) [***]. The
Parties, through the JDCC, shall discuss and approve any changes to the label
for the Product in Japan that are required or otherwise appropriate to reflect
the change of MAH in Japan. Promptly upon ARIAD becoming the MAH for Japan,
Otsuka shall transfer all Japanese Regulatory Documentation to ARIAD that is
necessary or useful for ARIAD’s performance of its obligations as the MAH for
Japan.

ARTICLE 9 – PHARMACOVIGILANCE

 

9.1 ARIAD shall own and manage the global safety database for the Product and
ARIAD or its Affiliates shall be responsible for the timely reporting of all
relevant adverse drug reactions/experiences, including those associated with
Product quality complaints, and aggregate safety data relating to the Compound,
outside the Territory. The MAH in the Territory shall be responsible for the
timely reporting of all relevant adverse drug reactions/experiences, including
those associated with Product quality complaints, and aggregate safety data
relating to the Compound, in accordance with local pharmacovigilance legislation
within the Territory.

 

9.2 ARIAD shall be responsible for global medical surveillance, risk management,
global medical literature review and monitoring, and responses for the Compound
to the appropriate Regulatory Authorities outside the Territory. ARIAD shall be
responsible for the interpretation, in light of ARIAD’s global pharmacovigilance
data, of adverse events in the Territory of which ARIAD becomes aware, including
adverse events reported to ARIAD by Otsuka. The MAH in the Territory, in
collaboration with ARIAD’s PV department, shall be responsible for local medical
surveillance, risk management, medical literature review and monitoring within
the Territory, and responses to the appropriate Regulatory Authorities within
the Territory. The MAH shall provide an English-translated copy of the final
responses to Regulatory Authorities to ARIAD.

 

9.3 Otsuka shall implement and execute local Compound-specific risk management
activities, in collaboration with ARIAD’s PV department, that are aligned with
ARIAD’s global risk management strategies.

 

9.4

Further details of the Parties’ respective pharmacovigilance obligations and
responsibilities (e.g., signal management, case processing and reporting,
aggregate reporting, risk management, health authority responses, safety data
exchange, etc.) shall be set forth in a pharmacovigilance agreement that will be
agreed to by the Parties (and

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

35

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  their respective Affiliate(s), as appropriate) within [***] ([***]) [***]
after the Effective Date (as it may be amended from time to time, the
“Pharmacovigilance Agreement”). In the event of a conflict between the terms of
the Pharmacovigilance Agreement and the terms of this Agreement, the provisions
of this Agreement shall govern; provided, however, that the Pharmacovigilance
Agreement shall govern in respect of pharmacovigilance, including safety and
risk management, matters. In any event, no Named Patient Program (other than
with respect to Preexisting Named Patients) or commercial launch or sale of the
Product shall take place in the Territory until the Parties have entered into
the Pharmacovigilance Agreement.

 

9.5 Prior to executing the Pharmacovigilance Agreement, the Parties agree to
work together in good faith to coordinate activities regarding pharmacovigilance
with respect to the Product in accordance with this Article 9, including by
exchanging standard operating procedures and other information relevant to such
pharmacovigilance activities as mutually agreed by the Parties. Without limiting
the foregoing, prior to executing the Pharmacovigilance Agreement, in the event
Otsuka receives reports of adverse drug reactions/experiences or safety data
relating to the Product (including Compound contained therein) (“Safety
Information”) Otsuka shall send the Safety Information to ARIAD on source
documents, or other mutually agreed format, translated into English, via email
or fax as soon as practicable, but, in any event, not later than [***] ([***])
[***] after it receives the Safety Information, and, in the event Otsuka
receives any information concerning any investigation, inquiry or other action
by any Regulatory Authority concerning the safety of the Product, Otsuka shall
send such information to ARIAD via email or fax as soon as possible, but in any
event, no later than [***] ([***]) [***] after Otsuka receives notice of such
regulatory request, inquiry or other action. Otsuka shall not respond to any
Regulatory Authority request or inquiry relating to the safety of the Product
without discussing the issue with and getting alignment with ARIAD.

Otsuka shall transmit Safety Information and Regulatory Authority inquiries
concerning safety of the Product to:

ARIAD Pharmaceuticals, Inc.

 

Address: 26 Landsdowne Street Cambridge, Massachusetts 02139-4234 Tel: +1 (617)
621-2200 Fax: +1 (888)-472-7962 Email: sae@ariad.com

ARTICLE 10 – FORECASTS AND ORDERING

 

10.1

As soon as practicable after the Effective Date, the Parties, through a project
team or subcommittee of the JDCC, shall discuss the timeline and activities
required to commence the Final Manufacturing in the Territory. By [***], [***],
the Parties or

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

36

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  their Affiliates shall enter into a side letter agreement setting forth the
Parties’ respective obligations regarding the Manufacture and supply of Bulk
Product for Otsuka’s performance qualification and process validation testing on
the Product. In addition, within [***] ([***]) days after the Effective Date,
the Parties or their Affiliates shall enter into one or more supply agreement(s)
setting forth the Parties’ respective obligations regarding the Manufacture and
supply of Bulk Product for use in the Final Manufacturing of Product for
clinical trials and for commercial sale and promotional sampling. At a later
date, when applicable, the Parties or their Affiliates shall enter into one or
more supply agreement(s) setting forth the Parties’ respective obligations
regarding the manufacture and supply of Secondary Packaged Product. Each such
supply agreement (each a “Supply Agreement”) shall contain reasonable and
customary terms and conditions, including, e.g., specifications, changes to
Manufacturing process or specifications, forecast, ordering, shipment and
delivery, safety stock provisions, back-up facilities, failure to supply
(including appropriate remedies in the event of a failure to supply), audit and
inspection, shortage allocation, acceptance and rejection, supply of Product for
investigational use, including process validation and performance qualification
testing, as well as provisions consistent with this Article 10 and Article 11 of
this Agreement. The Supply Agreements collectively shall govern ARIAD’s
obligation to Manufacture or have Manufactured and supply or have supplied all
of Otsuka’s and its Sublicensees’ requirements of Bulk Product and Secondary
Packaged Product for the Territory, including for clinical trials, promotional
sampling and for commercial requirements. In the event of a conflict between the
terms of a Supply Agreement and the terms of this Agreement, the provisions of
this Agreement shall govern; provided, however, that the Supply Agreement shall
govern in respect of matters relating to the Manufacture and supply of Product
and the Quality Agreements shall govern in respect of matters relating to
quality assurance for the Product.

 

10.2 ARIAD shall supply the Product to Otsuka in the Tablet Formulation, in
finished drug product form, in bulk packaging (“Bulk Product”). In addition, at
Otsuka’s request, ARIAD shall supply the Product to Otsuka in secondary
packaging and labeling, as then being finished, packaged and distributed by
ARIAD in the US or the European Union (as requested by Otsuka) (“Secondary
Packaged Product”) for Territory-specific labeling and Commercialization in
countries in the Territory other than Japan, South Korea and China, where
Secondary Packaged Product is required or permitted by Applicable Law. The
Parties shall enter into separate Supply Agreements and Quality Agreements as
deemed necessary by the JDCC for Secondary Packaged Products in each country in
the Territory where such Secondary Packaged Product is to be supplied. In the
event the Parties mutually agree through the JDCC to develop Product under this
Agreement in one or more New Formulation(s), the Parties shall discuss and agree
upon which of them shall be responsible for the Manufacture and supply of bulk
Product and for the Final Manufacturing of finished Product in such New
Formulation(s), but unless ARIAD otherwise agrees, ARIAD shall be responsible
for the Manufacture and supply of bulk Product for [***], and Otsuka shall be
responsible for the Final Manufacturing of finished Product in such New
Formulation(s) for [***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

37

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10.3 Within the time period set forth in the Supply Agreement, Otsuka shall
notify ARIAD in advance of the anticipated First Commercial Sale in each country
of the Territory. Such notification shall include a preliminary estimate of the
quantity of the Product in each then-available dosage strength needed for
commercial launch in the Territory. Otsuka may change the estimated date of the
First Commercial Sale and the estimated quantity of the Product needed for such
commercial launch at any time by notifying ARIAD; provided, however, that Otsuka
shall provide ARIAD with an estimate of the minimum amount of the Product that
shall be necessary for the first commercial launch in the Territory (the “Launch
Quantities”), prior to the anticipated First Commercial Sale in the Territory,
within the time period set forth in the applicable Supply Agreement.

 

10.4 In the [***] of each [***] in accordance with the Supply Agreement, Otsuka
shall provide ARIAD with a written [***] ([***])-[***] rolling Forecast of its
anticipated [***] requirements for the Product (expressed as the number of
tablets of each then-available dosage strength) in the Territory (each a
“Forecast”). ARIAD shall use commercially reasonable efforts to ensure
sufficient manufacturing capacity and Raw Materials to meet each Forecast. Each
Forecast is a non-binding estimate and shall not obligate Otsuka to purchase the
volume of the Product set forth in it nor shall it oblige ARIAD to supply such
volume; provided, however, that, beginning on the date of obtainment of the
first Pricing and Reimbursement Approval in the Territory and continuing for the
remainder of the Term, that portion of the volume of the Product Forecasted for
the binding period (number of months) set forth in the Supply Agreement (which
shall be consistent with the binding forecast requirements under ARIAD’s
contract manufacturing agreement with [***] as of the Effective Date) which is
approved by ARIAD shall be binding upon Otsuka and ARIAD. The binding portion of
the Forecast shall be deemed approved by ARIAD unless ARIAD provides written
notice of disapproval to Otsuka within [***] ([***]) [***] of receipt of the
Forecast. ARIAD shall not be obligated to Manufacture or supply Otsuka with
quantities of the Product in excess of the approved binding portion of the most
recent Forecast.

 

10.5

Otsuka shall order the Product by submitting written purchase orders, in such
form as the Parties shall agree from time to time, to ARIAD specifying the
quantities of each dosage strength of the Product ordered, the desired shipment
date for the order and any special shipping instructions. Otsuka shall submit
each purchase order to ARIAD in advance of the desired delivery date specified
in such purchase order, within the number of days (lead time) set forth in the
Supply Agreement. No purchase order shall be binding upon ARIAD if such purchase
order is (a) inconsistent with the approved binding portion of the Forecast, and
(b) rejected in writing by ARIAD within [***] ([***]) [***] of receipt of the
purchase order. In the event that a purchase order is rejected, ARIAD shall
provide the reasons for rejection in writing to Otsuka and ARIAD and Otsuka
shall cooperate in good faith to resolve any supply issues raised by such order.
For clarity, ARIAD shall have no right to reject any purchase order that is
consistent with the approved binding portion of the Forecast. Any purchase
orders for the Product submitted by Otsuka to ARIAD shall reference this
Agreement and shall be

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

38

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  governed exclusively by the terms of the Supply Agreement and the terms
contained herein (to the extent not in conflict with the Supply Agreement). The
Parties hereby agree that the terms and conditions of the Supply Agreement and
this Agreement (to the extent not in conflict with the Supply Agreement) shall
supersede any term or condition in any order, confirmation or other document
furnished by Otsuka or ARIAD that is in any way inconsistent with, or
supplementary to, the terms and conditions of the Supply Agreement and this
Agreement (to the extent not in conflict with the Supply Agreement), unless
expressly accepted in writing by the other Party.

 

10.6 Otsuka shall carry a reasonable quantity of inventory of the Product
sufficient to avoid Product shortages in the Territory in the event of an
interruption to the supply chain, including a safety stock of Product (in bulk
or final packaging) in quantities sufficient to meet demand as set forth in the
Supply Agreement.

ARTICLE 11 – SHIPMENT AND DELIVERY

 

11.1 Delivery Terms. ARIAD shall use commercially reasonable efforts to deliver
each lot of the Product in the quantity and by the delivery date specified for
it on Otsuka’s purchase order. At the time of Delivery, the Product in the
Tablet Formulation shall have no less than [***] ([***]) [***] of remaining
shelf life assuming approved Product shelf life of [***] ([***]) [***] for all
strengths. If the approved Product shelf life is greater than [***] ([***])
[***] for any strength, the Product in the Tablet Formulation shall have no
[***] than [***] ([***]%) of the approved Product shelf life remaining at the
time of Delivery. If the approved Product shelf life is less than [***] ([***])
[***] for any strength, the [***] of remaining shelf life at the time of
Delivery shall be as set forth in the applicable Supply Agreement(s). The Launch
Quantities shall be shipped to Otsuka sufficiently in advance of the anticipated
First Commercial Sale in the Territory, in order to allow Otsuka sufficient time
to complete Final Manufacturing in advance of the anticipated First Commercial
Sale in the Territory, provided that Otsuka submits a binding purchase order for
the Launch Quantities before the anticipated First Commercial Sale in accordance
with the lead time requirements set forth in the Supply Agreement.

 

11.2 Deliveries shall be made [***] (Incoterms 2010) at the [***], the address
of which shall be notified by Otsuka to ARIAD in writing in advance of the first
shipment, or such other location as the Parties may agree in writing (such [***]
or other agreed location, the “Destination Terminal”). Delivery shall take place
when the Product shipment reaches the Destination Terminal (“Delivery”);
however, title to, and risk in, the Product shall pass to Otsuka when Product is
loaded at [***].

 

11.3

Otsuka shall be the importer of record for all Product supplied under this
Agreement and the Supply Agreement. Otsuka shall be responsible for clearing the
Product through customs in the Territory [***]. For clarity, as the importer of
record for the Product, Otsuka shall be responsible for [***]. At all times,
Otsuka shall maintain, [***], a valid import license for the Products, and shall
be responsible, [***], for all

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

39

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  required documentation and communications with the applicable customs office
in connection therewith. ARIAD shall provide assistance with such documentation
and communications upon Otsuka’s reasonable request (e.g., by providing export
documents or assisting with documentation as the exporter of the Product.)

 

11.4 ARIAD shall provide its standard international shipping and handling
specifications to Otsuka upon request.

 

11.5 Acceptance and Rejection. The Parties agree to the following provisions,
which shall be incorporated in substantially the same form into the Supply
Agreement.

 

  11.5.1 Product Testing. At the point of Delivery in accordance with
Section 11.2, Otsuka shall visually inspect all shipments of the Product to
identify any damage to the external packaging. Otsuka may reject any shipment
(or portion thereof) of the Product that is damaged or is otherwise
Non-Conforming by returning a representative sample of the damaged or
Non-Conforming Product or other reasonable evidence of damage, and providing to
ARIAD written notice of such rejection and the reasons therefor within [***]
([***]) [***] Delivery of such Product. If Otsuka does not so reject any
shipment (or portion thereof) of the Product within [***] ([***]) [***] of
Delivery of such Product, Otsuka shall be deemed to have accepted such shipment
of the Product; provided, however, that in the case of the Product having any
Latent Defect, Otsuka shall notify ARIAD promptly once it becomes aware that a
Product contains a Latent Defect and subsequently may reject such Product by
giving written notice to ARIAD of Otsuka’s rejection of such Product and
shipping a representative sample of such Product to ARIAD within [***] ([***])
[***] becoming aware of such Latent Defect, which notice shall include a
description of the Latent Defect.

 

  11.5.2

Replacement of Product and Dispute Procedure. If Otsuka rejects, in accordance
with Section 11.5.1 any shipment (or portion thereof) of the Product as
Non-Conforming and ARIAD disagrees that the alleged Non-Conformance exists,
ARIAD shall so notify Otsuka in writing (an “Objection Notice”) within [***]
([***]) [***] of receipt of Otsuka’s notice of rejection and the following
procedures shall apply: ARIAD shall inspect the returned representative sample
of Product and its Reference Sample and attempt to reach agreement with Otsuka
as to whether or not the Product is Non-Conforming. If Otsuka and ARIAD fail
within [***] ([***]) [***] after delivery of the Objection Notice to agree as to
whether the Product is Non-Conforming, representative samples of the batch of
the Product in question and their Reference Samples shall be submitted to a
mutually-acceptable, independent, qualified Third Party laboratory or consultant
for analysis or review. The results of such evaluation shall be binding upon the
Parties. The Parties initially shall share equally the cost of such evaluation,
except that the Party that is determined to have been incorrect in its
determination of whether the Product was or was not Non-Conforming shall

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

40

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  assume the responsibility for, and pay, the costs of any such evaluation and
reimburse the other Party for any amounts previously paid to the independent
laboratory or consultant in connection with that determination.

 

  11.5.3 Cost of Replacement of Rejected Product. If any shipment of the Product
is rejected by Otsuka due to an alleged Non-Conformance, Otsuka’s duty to pay
all amounts payable to ARIAD in respect of the rejected Product shall be
suspended unless and until there is a determination by the independent
laboratory or consultant in support of ARIAD’s Objection Notice, or the Parties
otherwise reach agreement that the Product was not Non-Conforming. If only a
portion of a shipment is rejected, Otsuka’s duty to pay the amount allocable to
the Non-Conforming portion only shall be suspended.

 

  11.5.4 Return of Rejected Product. If a shipment or partial shipment is
rejected by Otsuka pursuant to the provisions of Section 11.5.1 and (i) ARIAD
does not provide an Objection Notice within the [***] ([***]) [***] period set
forth in Section 11.5.3, (ii) the Parties agree that the Product is
Non-Conforming within the [***] ([***]) [***] period set forth in
Section 11.5.3, or (iii) there is not a determination by the independent
laboratory or consultant in support of ARIAD’s Objection Notice, Otsuka shall
return to ARIAD at ARIAD’s request and expense (or, at the election of ARIAD,
destroy at ARIAD’s cost and provide evidence of such destruction to ARIAD) any
such rejected Product (provided that if the Product has been packaged by or on
behalf of Otsuka at the time of rejection, Otsuka shall not be obliged to remove
any packaging prior to its return). ARIAD shall (i) credit the original invoice
in respect of the rejected Product and reimburse Otsuka for any duties, freight,
insurance, handling or other charges incurred by Otsuka in respect of such
rejected Product, and (ii) adjust the invoice to Otsuka for the Product that was
not rejected, payment of which is due in accordance with the terms of the
original invoice. Except as set forth in Article 14 and Section 22.2, such
credit or adjustment shall be ARIAD’s sole liability, and Otsuka’s sole remedy,
with respect to any rejected Product.

 

  11.5.5 Supply of Replacement Product. During the pendency of any rejection
discussions, upon Otsuka’s request, ARIAD shall use commercially reasonable
efforts to supply Otsuka with additional Product which Otsuka shall purchase on
the same terms as the Product that is the subject of the rejection discussions.
For clarity, the lead time for any such orders shall be no less than the lead
time set forth in the applicable Supply Agreement.

 

  11.5.6 Detection of Latent Defect by ARIAD. If ARIAD detects a Latent Defect
in any Product supplied to Otsuka, ARIAD shall notify Otsuka in writing,
specifying the affected lots, and credit Otsuka for the Non-Conforming Product
as provided in Section 11.5.4.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

41

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  11.5.7 No Product Returns Policy. Except as expressly provided elsewhere in
this Section 11.5 or in Article 14, no Products supplied by or on behalf of
ARIAD to Otsuka may be returned by Otsuka to ARIAD after they have been
Delivered to Otsuka at the location designated under Section 11.2.

ARTICLE 12 – MANUFACTURE AND FINAL MANUFACTURING OF THE PRODUCT

 

12.1 Manufacture of the Product. ARIAD shall use commercially reasonable efforts
to Manufacture or have Manufactured the Product in accordance with the
Specifications, cGMP and Applicable Laws in the country of Manufacture and, to
the extent applicable, in the Territory.

 

12.2 Packaging. ARIAD shall package the Product in bulk packaging in accordance
with the standard operating procedures to be used by ARIAD in Manufacturing the
Product under this Agreement in accordance with the Specifications and
requirements notified to it with sufficient advance notice by Otsuka to comply
with Applicable Laws.

 

12.3

Changes to the Specifications or to the Manufacturing Process. If ARIAD proposes
(a) a change to the Specifications or the Raw Materials, equipment (other than
changes for maintenance, repair, and like-for-like replacement) or process used
to Manufacture the Product, or (b) a change to the procedures or facilities used
to Manufacture the Product (collectively, the “Manufacturing Process”) that, in
the case of (a) or (b) would require approval of the applicable Regulatory
Authority in the Territory or would require an amendment of any Marketing
Authorization application or Registration, ARIAD shall provide written notice to
Otsuka. If a change to the Specifications, Raw Materials, equipment or
Manufacturing Process is required by one or more Regulatory Authorities or
regulatory authorities outside the Territory or shall be applied globally,
including for the manufacture of Products inside and outside the Territory, and
if such change would require approval of any Regulatory Authority in the
Territory or an amendment of any Marketing Authorization application or
Registration, ARIAD shall provide Otsuka with all information needed to amend
the Marketing Authorization application or Registration and/or obtain the
approval of the Regulatory Authority, as applicable, and the Parties shall
cooperate with each other in obtaining any necessary modifications to any
Registrations in the Territory to allow such change to be implemented. If the
proposed change is required by a Regulatory Authority, then such notice shall
include disclosure of the Regulatory Authority request and relevant
correspondence. If any change to the Specifications, Raw Materials, equipment or
Manufacturing Process is not required by any Regulatory Authority (or any
regulatory authorities outside the Territory) and shall not be applied globally
and would require approval of any Regulatory Authority in the Territory or an
amendment of any Marketing Authorization application or Registration, ARIAD
shall not implement such change without the prior written approval of Otsuka. If
the change is required by a Regulatory Authority inside the Territory but not in
any other part of the world, then Otsuka shall bear any expenses of implementing
such change. If the change proposed

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

42

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  by ARIAD is required only by one or more regulatory authorities outside the
Territory, or is not required by any Regulatory Authority, then ARIAD shall bear
any expenses of implementing such change. If the change is required by one or
more Regulatory Authorities inside the Territory and by one or more regulatory
authorities outside the Territory, the Parties shall share the expenses of
implementing such change in proportion to the last calendar year’s Net Sales in
the Territory as a percentage of the global net sales of the Product (calculated
in the same manner as Net Sales) during the same time period, as may be
reasonably estimated by ARIAD to the extent that complete global sales figures
are not available. For the avoidance of doubt, Otsuka shall only be required to
bear expenses of implementing a change to the Specifications, Raw Materials,
equipment or Manufacturing Process if such change is mandated by a Regulatory
Authority inside the Territory, and ARIAD shall solely bear the expenses of
implementing such a change that is not mandated by any Regulatory Authority,
including any such non-mandated change that Otsuka approves and that requires an
amendment of a Marketing Authorization application or Registration or approval
of a Regulatory Authority in the Territory. The Parties agree that the
notification and approval procedures with respect to changes to the
Specifications and the Manufacturing Process set forth in this Section 12.3
shall take effect commencing on filing of an application for Marketing
Authorization of the applicable Product. For clarity, ARIAD shall have the
right, at its sole cost, to change equipment for maintenance, repair, and
like-for-like replacement, and to make other changes that ARIAD reasonably
determines shall not require approval of any Regulatory Authority or affect the
Marketing Authorization application(s) or Registration(s) in the Territory,
without notice to or consent of Otsuka. Further for clarity, the Quality
Agreements shall contain change control procedures, and any changes made to the
Specifications, Raw Materials, equipment or Manufacturing Process shall be made
in accordance with the Quality Agreements and in compliance with cGMP and
Applicable Laws.

 

12.4 Final Manufacturing. Except as set forth in Section 10.2, Otsuka shall be
responsible for the Final Manufacturing of all Product, including performing
primary and secondary packaging, labeling and providing product inserts in
accordance with the Registrations, final release and stability testing in
accordance with the Regulatory Authorization in the country in the Territory
that is the intended market for such lot of Product, and in accordance with all
Applicable Laws. ARIAD shall support Otsuka’s stability testing of Finally
Manufactured Product by conducting a stability testing program for the Product
in Otsuka’s packaging and providing reports and updates to Otsuka at regular
pre-defined time points. ARIAD shall bear the costs of such stability testing
program for [***] ([***]) [***] per strength per packaging size of Finally
Manufactured Product per [***]. If Otsuka requests that the stability testing
program include additional batches of per strength per packaging size of Finally
Manufactured Product per [***], Otsuka shall bear any additional costs relating
thereto.

 

12.5

Quality. Each Party agrees to give the other Party full, accurate and prompt
information in writing with regard to quality defects and quality complaints
associated with the use of the Product within the Territory in strict accordance
with the terms and

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

43

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  conditions of the quality technical agreements described below. The details of
quality obligations and responsibilities of the Parties, including
responsibility for submissions of reports to Regulatory Authorities, shall be
set forth in one or more separate quality technical agreements (each, a “Quality
Agreement”) that shall be agreed to by the Parties (and their respective
Affiliate(s), as appropriate) within [***] ([***]) days after the Effective Date
(or such longer period as agreed by the Parties but in any event at least [***]
([***]) [***] prior to the first shipment of Product to Otsuka). In any event,
no commercial launch or sale of the Product shall take place in the Territory
until the Parties have entered into a Quality Agreement for the relevant Product
and country. Prior to executing the Quality Agreements, the Parties agree to
work together in good faith to coordinate regarding quality matters with respect
to the Product in the Field, including by exchanging standard operating
procedures and other relevant information. In the event of a conflict between
the terms of the Quality Agreements and the terms of this Agreement, the
provisions of this Agreement shall govern; provided, however, that the Quality
Agreements shall govern in respect of quality matters.

 

12.6 Japanese Pharmaceutical Affairs Law, Regulatory Authority Inspection. ARIAD
shall, as a foreign manufacturer and supplier of the Product, comply with the
Japanese Pharmaceutical Affairs Law, including with respect to the content and
filing of the Quality Agreement for Japan and accreditation as a manufacturer at
the time of filing the JNDA for Product. ARIAD shall advise Otsuka as soon as
reasonably practicable after it becomes aware of any inspection, or request for
any inspection, by any governmental authority, including the FDA or any
Regulatory Authority or any environmental regulatory authority, of a facility
(whether owned by ARIAD or an Affiliate or a Third Party contract manufacturer)
where such inspection concerns the manufacture, handling, storage or supply of
Product supplied or to be supplied to Otsuka (a “Product-Related Inspection”).
ARIAD shall, to the extent it is permitted to do so, provide a summary report of
the results of a Product-Related Inspection to Otsuka as soon as reasonably
practicable after such Inspection. Nothing contained within this Section 12.5
shall restrict the right of either Party to make a timely report to any
Regulatory Authority or take other action that it is required to take by
Applicable Laws.

ARTICLE 13 – QUALITY ASSURANCE

 

13.1 Specifications; Testing for Manufacture of Product.

 

  13.1.1 Batch Testing. ARIAD shall have standard analytical testing performed
on each batch of the Product to be shipped to Otsuka to verify that it meets the
Specifications, according to the procedure described in the corresponding
documentation, and ARIAD shall provide the results of such analytical testing to
Otsuka.

 

  13.1.2

Certificate of Analysis. If required under Applicable Laws in the relevant
country of the Territory, in connection with shipment of any batch of the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

44

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  Product, ARIAD shall provide Otsuka with a certificate of analysis for the
Product in finished product, bulk-packaged form (the “Certificate of Analysis”).
Such Certificate of Analysis shall certify with respect to each shipment (i) the
batch number of the Product delivery; and (ii) that the Product Delivered
conforms to the Specifications, as well as any further information required by
the relevant Regulatory Authorities in the Territory. Otsuka shall be under no
obligation to accept any shipment of the Product without an accompanying
Certificate of Analysis.

 

  13.1.3 Certificate of Conformance. If required under Applicable Laws in the
relevant country of the Territory, in connection with shipment of any batch of
the Product, ARIAD shall provide Otsuka with a document certifying with respect
to a particular batch (identified by batch number) that such batch was
Manufactured in accordance with applicable cGMP in the country of Manufacture,
all other Applicable Laws, and the Specifications (the “Certificate of
Conformance”).

 

13.2 cGMP Compliance and QA Audits for Manufacture of Product. ARIAD shall be
responsible for performing cGMP compliance and quality assurance reviews and
inspections of its Third Party manufacturers in accordance with ARIAD’s standard
procedures regarding the same.

 

13.3 Quality Control Problems. In addition, in the event Otsuka or ARIAD
identifies a quality problem after Delivery to Otsuka from ARIAD or its
representative with respect to any batch of the Product, then, if requested by
Otsuka in writing, ARIAD shall authorize Otsuka to review at ARIAD’s facilities
the full batch records corresponding to the applicable batch.

 

13.4 Reference Samples. ARIAD shall retain sufficient samples from each batch of
Product (each, a “Reference Sample”) to allow retesting to be performed. In no
event shall the amount retained from each batch be less than the amount needed
to perform [***] ([***]) complete sets of necessary tests excluding bioburden.
ARIAD shall retain each Reference Samples from the date of production until the
date that is [***] ([***]) [***] following the expiry date for the relevant
batch (or, if longer, the minimum period required by Applicable Laws).

 

13.5 Certificate of Analysis for Final Release. Otsuka shall issue a Certificate
of Analysis compliant with the Product Registration for purposes of final
release of the Product for sale in the Territory. Otsuka shall provide ARIAD
with copies of such Certificates of Analysis upon request.

 

13.6 cGMP Compliance and QA Audits for Final Manufacturing. Otsuka shall be
responsible for performing cGMP compliance and quality assurance reviews and
inspections of the sites used for Final Manufacturing in accordance with
Otsuka’s standard procedures regarding the same.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

45

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13.7 Inspection and Compliance Audits.

 

  13.7.1 Each Party (the “Inspected Party”) shall permit the other Party (the
“Inspecting Party”), or the Inspecting Party’s authorized representative, to
enter the Inspected Party’s premises, as well as the premises of the Inspected
Party’s Affiliates, Sublicensees or Third Party contractors (to the extent the
Inspected Party has the right to allow the Inspecting Party to audit or inspect
such Third Parties) where the Product undergoes Manufacture or Final
Manufacturing or is stored, during normal business hours and upon reasonable
advance notice, to audit and verify compliance by the Inspected Party, its
Affiliates and Third Party contractors with Applicable Laws, this Agreement and
the Quality Agreements and to confirm the correction of any deficiencies
previously identified, in each case to ensure safe Manufacture and Final
Manufacturing of the Product, or in connection with any recall contemplated by
Section 14.1 of this Agreement. Each Party shall use commercially reasonable
efforts to obtain the rights for the other Party to audit and inspect its Third
Party contractors that Manufacture, store or conduct Final Manufacturing. No
such inspection by an Inspecting Party shall relieve the Inspected Party of any
obligation under this Agreement, the Pharmacovigilance Agreement or the Quality
Agreements.

 

  13.7.2 Such audit rights shall include the right to examine any internal
procedures or records of the Inspected Party, its Affiliates or Third Party
contractors relating to the Manufacture or Final Manufacturing of Product. The
Inspected Party shall give and shall cause its Affiliates and Third Party
contractors to give all necessary assistance for completion of the audit by the
Inspecting Party. All information obtained by Inspecting Party or its authorized
representative in any such inspection or audit, including without limitation the
findings and results related thereto, shall be the confidential information of
the Inspected Party.

 

  13.7.3 In the event that any Regulatory Authority or any other competent
governmental authority in the country of Manufacture or Final Manufacturing
carries out or gives notice of its intention to carry out any inspection or
audit of a Party, or its Affiliates or Third Party contractors in relation to
the Manufacture or Final Manufacturing of Product, such Party shall notify the
other Party in reasonable detail as soon as possible and shall use commercially
reasonable efforts to ensure that the other Party shall have the right to be
present at any such inspection or audit to the extent specifically related to
the Manufacture or Final Manufacturing of Product.

 

  13.7.4

The Inspected Party shall take, or cause its Affiliates or Third Party
contractors to take, as soon as practicable, all actions necessary to correct
any deficiency or non-compliance with this Agreement, the Pharmacovigilance
Agreement or the Quality Agreements that is identified

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

46

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  in the course of any audit by the Inspecting Party or any Regulatory
Authority. The Inspected Party shall provide the other Party with written
documentation concerning the steps taken and any further testing or internal or
external auditing to confirm that the deficiency or non-compliance has been
corrected.

ARTICLE 14 – RECALLS AND PRODUCT WITHDRAWAL

 

14.1 Notice. Each Party shall make every reasonable effort to notify the other
Party promptly following the first Party’s determination that any event,
incident, or circumstance has occurred that may result in the need for a Product
Withdrawal anywhere in the world (including in the Territory) or a Recall in the
Territory. Such Party shall include in such notice the reasoning behind such
determination, and any supporting facts.

 

14.2 Product Withdrawal. With respect to a Product Withdrawal within the
Territory, immediately after receipt of such notification, the JDCC (or its
co-chairpersons) shall discuss and, unless the Product Withdrawal is mandated by
a Regulatory Authority, shall attempt to agree on whether to voluntarily
implement the Product Withdrawal within the Territory. If a Regulatory Authority
mandates that the Product Withdrawal within the Territory be implemented then
Otsuka, in consultation and coordination with ARIAD, shall initiate the Product
Withdrawal within the Territory as and to the extent mandated by the Regulatory
Authority and in compliance with Applicable Laws. In the case of a Product
Withdrawal that is not mandated by Regulatory Authority, if the JDCC (or its
co-chairpersons) fail(s) to agree within a reasonably appropriate time period
(depending upon the circumstances) whether to voluntarily implement or undertake
a Product Withdrawal within the Territory, then ARIAD shall have the right to
make the determination whether or not to voluntarily implement such Product
Withdrawal within the Territory; provided that, to the extent practicable prior
to deciding to initiate a Product Withdrawal within the Territory, ARIAD shall
consult with Otsuka’s JDCC co-chairperson or Senior Officer, and shall consider
Otsuka’s reasonable comments in good faith. Notwithstanding that ARIAD shall
have the right to decide whether or not to initiate a voluntary Product
Withdrawal, if Otsuka, as the distributor of Product in the Territory, is
responsible for carrying out and physically recovering the withdrawn Product in
the Territory, Otsuka shall carry out such Product Withdrawal activities in
coordination and consultation with ARIAD, in a manner which enables ARIAD to
meet its regulatory requirements as expeditiously as possible, and in compliance
with all Applicable Laws. If ARIAD does not choose to undertake a voluntary
Product Withdrawal in the Territory, despite Otsuka’s written notice to ARIAD
that such Product Withdrawal should be undertaken, then, notwithstanding
anything to the contrary herein, ARIAD shall indemnify and hold harmless Otsuka
from and against any Losses that may arise or result thereafter from ARIAD’s
failure to undertake such Product Withdrawal following such written notice from
Otsuka.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

47

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14.3 Recall. If a Regulatory Authority mandates that a Recall be implemented or
undertaken by Otsuka in the Territory, Otsuka, in consultation and coordination
with ARIAD, shall initiate the Recall as and to the extent mandated by the
Regulatory Authority and in compliance with Applicable Laws. With respect to a
Recall in the Territory that is not mandated by a Regulatory Authority, (i) the
Parties’ JDCC co-chairs shall discuss and attempt to agree on whether to
voluntarily implement the Recall and (ii) if the Parties’ JDCC co-chairs fail to
agree within a reasonably appropriate time period (depending upon the
circumstances), then Otsuka shall have the right to make the determination
whether or not to voluntarily implement a Recall in the Territory. If Otsuka
does not choose to undertake a voluntary Recall in the Territory, despite
ARIAD’s written notice to Otsuka’s JDCC co-chair that such Recall should be
undertaken, then, notwithstanding anything to the contrary herein, Otsuka shall
indemnify and hold harmless ARIAD from and against any Losses that may arise or
result thereafter from Otsuka’s failure to undertake such Recall following such
written notice from ARIAD.

 

14.4 Expenses. All costs and expenses of any Recall or Product Withdrawal in the
Territory (including Otsuka’s previously-incurred costs of Final Manufacturing
and the Transfer Price previously paid by Otsuka for the destroyed, retrieved,
withdrawn or recalled Product) shall be borne by ARIAD, unless and to the extent
the Recall or Product Withdrawal is based on the fault of Otsuka or its
Sublicensees, Affiliates, or Subcontractors in which case such costs and
expenses shall be borne by Otsuka.

ARTICLE 15 – MARKETING AND DISTRIBUTION OF THE PRODUCT

 

15.1 Otsuka shall store and Commercialize the Product at its cost and in
accordance with applicable cGMP and any other Applicable Laws and Industry
Guidelines in each country of the Territory.

 

15.2 Otsuka shall use commercially reasonable efforts to launch the Product no
later than [***] ([***]) [***] after the receipt of Pricing and Reimbursement
Approval on a country-by-country basis, provided that ARIAD has timely complied
with its obligations to supply Product to Otsuka as expressly set forth in this
Agreement and the Supply Agreement. At least [***] ([***]) [***] prior to the
expected date of the receipt of the first Pricing and Reimbursement Approval,
Otsuka shall prepare and submit to the JDCC a sales and marketing plan for the
Product in [***], [***] and [***] (the “Commercialization Plan”) for the JDCC’s
review and discussion. The Commercialization Plan shall be updated and shared
with ARIAD via the JDCC at least annually and shall be expanded to cover
additional countries in the Territory, as applicable. Disputes over the content
of the Commercialization Plan shall be resolved in accordance with Section 4.6,
and shall not be subject to arbitration or any other form of external dispute
resolution.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

48

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15.3 Promotion.

 

  15.3.1 Otsuka shall use all commercially reasonable efforts, at its cost, to
promote diligently the sale of, and stimulate interest in, and use of, the
Product in accordance with the Marketing Authorization to Healthcare
Professionals in all countries within the Territory where Marketing
Authorization has been received, in accordance with the terms of this Agreement.

 

  15.3.2 Promptly after the filing of the first JNDA in Japan, ARIAD shall
provide Otsuka with copies, in English, of ARIAD’s marketing, advertising and
promotional materials, used for the Product in the USA and the United Kingdom.
ARIAD shall keep Otsuka reasonably informed regarding any updates to such
marketing, advertising and promotional materials, in English.

 

  15.3.3 Otsuka’s promotion of the Product in the Territory shall be consistent
with the global Product profile and positioning provided to it in writing by
ARIAD (the “Global Product Profile”). The JDCC shall appoint a project team with
representatives of each Party to discuss and generate a Territory specific
Product profile and positioning plan for the promotion and marketing of the
Product in the Territory that is consistent with the Global Product Profile (the
“Territory Product Profile”). The project team representatives shall gather and
consider input from each Party with respect to the Territory Product Profile. On
or before [***] ([***]) [***] prior to the anticipated launch of the Product in
a country in the Territory and thereafter in such country not later than [***]
of [***] throughout the Term, Otsuka shall supply to ARIAD, via the JDCC, the
marketing and promotion plans (including the planned number of primary and total
detail numbers to target Healthcare Professionals, consistent with
Section 15.5.2) that Otsuka intends to implement with respect to the marketing
and promotion of the Product in [***], [***] and [***] during the next calendar
year. Such marketing and promotion plans shall be consistent with the Global
Product Profile and the Territory Product Profile. Otsuka shall keep ARIAD
informed of its promotional and marketing activities of the Product in the
Territory through the JDCC or project team meetings.

 

  15.3.4

All initial print marketing, advertising and promotional materials to be used
upon the launch of the Product in any country in the Territory, and all training
manuals for Otsuka’s medical science liaisons and sales representatives shall be
developed and prepared by Otsuka in accordance with ARIAD’s trademark and global
branding guidelines provided to Otsuka in writing in advance by ARIAD
(“Trademark Guidelines”), the Global Product Profile and the Territory Product
Profile, and provided to ARIAD for review in advance of the launch of the
Product in such country (with English translation). ARIAD shall provide any
comments or request changes to such materials within [***] ([***]) [***] of
receipt of such materials, and Otsuka shall make all changes requested by ARIAD
to the extent necessary to comply with the Trademark Guidelines, the Global

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

49

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  Product Profile, or the Territory Product Profile, provided that such changes
are consistent with Applicable Law and Industry Guidelines, and Otsuka shall
provide the finalized copies of such print materials (with English translation)
to ARIAD free of charge. For clarity, ARIAD shall not be obliged to review the
materials for compliance with local laws and regulations, which shall be
Otsuka’s sole responsibility.

 

  15.3.5 Unless requested by ARIAD, after the launch of the Product in a
particular country in the Territory, Otsuka shall not be obligated to submit any
additional marketing, advertising, promotional or training materials concerning
such Product in such country provided that such materials are consistent with
the Trademark Guidelines, the Global Product Profile and the Territory Product
Profile. Upon ARIAD’s reasonable request, Otsuka shall provide ARIAD with
untranslated copies of all current print marketing, advertising and promotional
materials for the Product in the Territory for ARIAD’s review to ensure such
materials are consistent with the Trademark Guidelines, the Global Product
Profile and the Territory Product Profile.

 

  15.3.6 Otsuka shall not promote or advertise the Product for any indication or
patient segment that is not included in the Marketing Authorization of the
Product.

 

15.4 Training.

 

  15.4.1 Promptly after the Effective Date, ARIAD shall provide Otsuka with
copies of ARIAD’s training manuals for its sales representatives for the Product
outside the Territory. ARIAD shall keep Otsuka reasonably informed regarding any
updates to such training manuals.

 

  15.4.2 Otsuka’s training manuals for its sales representatives shall be
consistent with the training manuals provided by ARIAD pursuant to
Section 15.4.1.

 

  15.4.3 ARIAD shall provide Otsuka’s trainers remote access via ARIAD’s global
training portal (known as [***]) to ARIAD’s internal training programs for
ARIAD’s sales representatives (and trainers) who market and promote the Product
outside the Territory. Such training shall be in English and provided without
charge to Otsuka, provided that Otsuka shall bear the out-of-pocket travel and
other expenses associated with its trainers attending any in-person training
sessions that may be held by ARIAD.

 

15.5 Market Development and Staffing.

 

  15.5.1 Otsuka undertakes to Commercialize the Product in the Field throughout
the Territory in accordance with the Commercialization Plan.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  15.5.2 Without limiting the generality of the obligations set forth in
Section 15.5.1, Otsuka shall allocate to the Otsuka Iclusig Staff a sufficient
number of appropriately qualified personnel, including contracted Third Party
medical representatives (provided that the percentage of such contracted Third
Party medical representatives used by Otsuka in Japan to Commercialize the
Product shall be [***]), to successfully Commercialize the Product in the Field
in the Territory and Otsuka shall allocate to the Otsuka Iclusig Staff a
sufficient number of appropriately qualified personnel, including
Subcontractors, to perform Final Manufacturing in the Field in the Territory.
The Otsuka Iclusig Staff that Commercializes the Product, including contracted
Third Party medical representatives, shall be experienced in the promotion of
hematological oncology products (and for clarity, [***] shall be considered a
hematological oncology product for purposes of this Agreement). Otsuka shall use
commercially reasonable efforts to provide details in the primary and second
position that are appropriate in light of [***], and also taking into account
the approved indications in the Territory. Otsuka shall promote the Product in
the primary position in all details (on a country-by-country basis) at least
until the earlier of (A) the [***] ([***]) anniversary of the First Commercial
Sale of the Product in such country, and (B) the date on which [***].
Notwithstanding the foregoing, however, Otsuka shall promote the Product in the
primary position in all details in each country in the Territory for at least
([***]) [***] after the First Commercial Sale of the Product (on a
country-by-country basis).

 

  15.5.3 Otsuka represents and certifies that all Otsuka Iclusig Staff and
Subcontractors have never been and are not currently debarred pursuant to the US
Generic Drug Enforcement Act of 1992, 21 U.S.C. §335(a), as amended, or any
similar law or regulation (collectively “Debarred”), excluded by the US Office
of Inspector General pursuant to 42 U.S.C. § 1320a-7, et seq. or any agency from
participation in any health care program (collectively “Excluded”) or otherwise
disqualified or restricted by the US FDA pursuant to 21 C.F.R. 312.70, or
Regulatory Authority in the Territory (collectively “Disqualified”). Otsuka
shall not employ any Debarred, Excluded or Disqualified Otsuka Iclusig Staff or
allow any Debarred, Excluded or Disqualified Subcontractor to be involved in any
clinical trial relating to this Agreement. Otsuka shall notify ARIAD promptly if
any Otsuka Iclusig Staff or Subcontractors are threatened to become Debarred,
Excluded or Disqualified.

 

15.6 Independent Contractor. Otsuka shall make clear in all dealings with its
actual and prospective Customers that it is selling the Product in its own name
and for its own account as an independent contractor and not as agent of ARIAD.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

51

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15.7 Use of Internet.

 

  15.7.1 With the exception of the purpose of communicating selling prices and
sales terms and conditions and safety related information, Otsuka shall comply
with this Section 15.7 with respect to all internet related advertising,
marketing and promoting in any way connected with the Compound, the Product, the
Trademarks and/or ARIAD. All of Otsuka’s internet marketing, advertising and
promotional materials concerning the Compound, the Product, the Trademarks
and/or ARIAD shall be developed and prepared by Otsuka in accordance with the
Trademark Guidelines, the Global Product Profile and the Territory Product
Profile. Upon ARIAD’s reasonable request, Otsuka shall provide ARIAD with links
to all current internet marketing, advertising and promotional materials for the
Product in the Territory for ARIAD’s review to ensure such materials are
consistent with the Trademark Guidelines, the Global Product Profile and the
Territory Product Profile. Otsuka shall promptly remove or cause to be removed
from any website under the control of Otsuka or its Affiliates any information
connected with the Compound, the Product, the Trademarks and/or ARIAD upon
ARIAD’s reasonable request if such information is not consistent with the
Trademark Guidelines, the Global Product Profile or the Territory Product
Profile, and/or upon expiration or termination of this Agreement for compliance
or quality reasons. Any websites shall not contain links to ARIAD websites
without ARIAD’s prior approval.

 

  15.7.2 ARIAD may grant to Otsuka the right to operate a website under a domain
name registered in the name of ARIAD and relevant to or which contains
information about ARIAD, the Compound, the Product, and the Trademarks, subject
to terms and conditions to be defined by separate domain name license agreement.

 

  15.7.3

In the event that any Applicable Law or regulation in the Territory requires the
domain name of any website relevant to the Compound, the Product, the Trademarks
and/or ARIAD to be registered in the name of Otsuka or an Affiliate, then any
such domain name shall be registered in the name of Otsuka or Affiliate as
legally required. All such content shall be or shall become the exclusive
property of ARIAD upon expiration or termination of the Agreement. Otsuka and
its Affiliates agree to execute any and all further documentation required to
ensure that all such content and all copyright in such content is owned by
ARIAD. Otsuka hereby grants to ARIAD a semi-exclusive, irrevocable, perpetual,
fully paid up, license to each such domain name during the Term. To the extent
permitted by Applicable Law, Otsuka shall be required to assign to ARIAD or its
designee all domain name registrations containing the name of the Compound, the
Product, the Trademarks or the name ARIAD, or variants thereof, upon the
expiration or termination of this Agreement. To the extent that any of the
foregoing may not be assigned, or be required to be assigned, to ARIAD or its
designee as a matter of law, the license grant in

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

52

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  this Section 15.7.3 shall survive expiration or termination of this Agreement
for any reason. Neither Otsuka nor its Affiliate may assign or license any such
domain name to any other Third Party.

 

15.8 Target Net Sales. At least [***] ([***]) [***] before the [***] of the
[***] after the [***] of the First Commercial Sale in the Territory, the Parties
(through the JDCC) shall mutually agree upon a [***] forecast of target annual
Net Sales in [***], [***] and [***] for each of the [***] ([***]) [***]
following such [***] of the First Commercial Sale, taking into account the Net
Sales in [***] to date, the [***] of Net Sales, [***] during such [***] ([***])
[***] and all other relevant factors (the “[***] Forecast”). The [***] Forecast
shall be updated and agreed upon by the Parties (through the JDCC) every [***]
thereafter at least [***] ([***]) [***] prior to the relevant next [***] ([***])
[***] period. In the event the [***] Forecast cannot be agreed upon by the JDCC
at least [***] ([***]) days before the [***] of the [***] after the [***] of the
First Commercial Sale in the Territory or at least [***] ([***]) [***] prior to
the relevant [***] ([***]) [***] period, and if the matter is not resolved by
[***], then the matter shall be resolved by [***]. In the event the actual Net
Sales in [***], [***] and [***]in any calendar year, beginning [***] after the
[***] of the First Commercial Sale in the Territory, are in the aggregate less
than [***] percent ([***]%) of the target annual Net Sales set forth in the
[***] Forecast for such year, the Parties (through the JDCC) shall mutually
agree upon a plan to increase the resources (e.g., advertising and promotion
expenditures and/or number of details) to be applied by Otsuka to the
Commercialization of the Product in [***], [***] and [***] in the [***] by [***]
percent ([***]%), and Otsuka shall, or shall cause its Sublicensees, to carry
out such plan. In the event such plan cannot be agreed upon by the JDCC before
the [***] of the [***], and the matter is not resolved by [***], then the matter
shall be resolved by [***].

ARTICLE 16 – CO-PROMOTION

 

16.1

Co-Promotion Option. ARIAD shall have an option (the “Co-Promotion Option”) to
co-promote Product in the Field in [***] and [***] in accordance with the
remainder of this Article 16. The Co-Promotion Option shall be exercisable at
any time between the [***] of the First Commercial Sale in [***] or [***] (as
applicable) and the expiration of the Full Royalty Term in such country (the
“Option Exercise Period”); provided, however, that the Co-Promotion Option shall
only be exercisable in [***] if co-promotion of pharmaceutical products is
permitted pursuant to Applicable Laws in [***] and is authorized under Otsuka’s
(or its relevant Sublicensee’s) and ARIAD’s (or its Affiliate’s) operating
licenses and permits in [***]. Upon Otsuka’s receipt of written notice from
ARIAD that ARIAD in good faith intends to exercise its Co-Promotion Option,
Otsuka shall use commercially reasonable efforts, and shall cause its relevant
Sublicensee, if any, to use commercially reasonable efforts, to obtain
authorization to co-promote pharmaceutical products under its operating licenses
and permits in [***]. ARIAD may exercise the Co-Promotion Option (with respect
to [***], if permitted and authorized) by giving Otsuka at least [***] ([***])
[***] prior written notice (each, a

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

53

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  “Co-Promotion Notice”), with such Co-Promotion Notice to take effect no
earlier than the first day of the Option Exercise Period for the relevant
country. In the event ARIAD exercises the Co-Promotion Option in [***] (if
permitted and authorized), Otsuka shall invoice ARIAD for [***] percent ([***]%)
of all out-of-pocket costs incurred by Otsuka and/or its Sublicensees in
connection with development and Registration of Product in [***], and ARIAD
shall pay the invoiced amount to Otsuka within [***] ([***]) days of receipt of
such invoice.

 

16.2 Coordination. The JDCC shall oversee all promotional activities relating to
the Parties’ co-promotion of Products in [***] and/or [***] (as applicable)

 

16.3 Co-Promotion Agreement. As soon as practicable after ARIAD gives a
Co-Promotion Notice for [***] and/or [***] (as applicable), the Parties shall
negotiate in good faith and enter into an agreement that governs the
co-promotion, medical affairs activities and other Commercialization activities
to be conducted by the Parties in the relevant country (each, a “Co-Promotion
Agreement”). Each Co-Promotion Agreement shall be consistent with this Agreement
and shall include other, mutually agreed, customary and commercially reasonable
terms, including provisions relating to training, field assignments,
qualifications for sales representatives and medical science liaisons, the
minimum number of sales representatives and/or medical science liaisons to be
provided by ARIAD in the applicable country, advertising, marketing plans,
ethics and compliance, recordkeeping, reporting and auditing, and performance
metrics. In the event of any inconsistency between the terms of this Agreement
and a specific term of a Co-Promotion Agreement, the terms of this Agreement
shall prevail.

 

16.4 Performance. If ARIAD exercises the Co-Promotion Option in [***] and/or
[***], the Commercialization license under Section 2.1.1 shall be co-exclusive
in such country, ARIAD shall perform all co-promotion, medical affairs and other
Commercialization activities in the relevant country in accordance with the
applicable Co-Promotion Agreement and all Applicable Laws and Industry
Guidelines, and the terms of Article 21 shall apply mutatis mutandis to ARIAD.

 

16.5 Co-Promotion Fees. As soon as practicable following ARIAD’s provision of a
Co-Promotion Notice, the Parties shall confer and negotiate a baseline Net Sales
forecast that would be achieved in the relevant country without ARIAD’s
co-promotion (the “Baseline”). For all actual Net Sales above the Baseline (the
“Incremental Sales”), Otsuka shall pay ARIAD, on a [***] basis at the same time
Otsuka pays royalties pursuant to Section 19.3.4, a co-promotion fee of [***]
percent ([***]%) of the Incremental Sales during the Full Royalty Term and the
Reduced Royalty Term (the “Co-Promotion Fee”), in addition to the Transfer
Price. Such Co-Promotion Fees shall be in lieu of the royalties that would
otherwise be due on such Incremental Sales, but royalties pursuant to
Section 19.3 shall remain due on the portion of Net Sales below the Baseline,
regardless of the selling party. For clarity, if no Incremental Sales are
achieved, then only the applicable Transfer Price (on all Net Sales) and royalty
under Section 19.3 (on the Net Sales of the Product below the Baseline) shall be
payable by Otsuka with respect to such period.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

54

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16.6 Co-Promotion Costs. ARIAD shall be solely responsible for the costs that
ARIAD or its Affiliates incur to co-promote the Product in the Territory,
including any such costs for medical science liaisons, detailing, and
advertising and promoting the Product.

 

16.7 Promotional Materials. Otsuka shall supply, and ARIAD shall purchase from
Otsuka, promotional and training materials for use by ARIAD in its co-promotion
of Product in [***] and/or [***] (as applicable), at [***] to Otsuka’s [***] for
producing such materials. In addition, ARIAD shall reimburse Otsuka all
out-of-pocket costs incurred by Otsuka or its Sublicensees in connection with
making any modifications to promotional materials to reflect ARIAD’s
co-promotion of the Product. Such materials shall be supplied in languages
appropriate for ARIAD’s co-promotion of Product in [***] and/or [***] (as
applicable), and shall comply in all respects with Applicable Laws and Industry
Guidelines in such countries in the Territory.

ARTICLE 17 – MEDICAL AFFAIRS ACTIVITIES

 

17.1 Otsuka shall be responsible, at its cost, for medical affairs activities in
the Territory, including providing medical science liaisons (or the local
equivalent), medical information and medical education programs and medical
publications in the Territory, and attending relevant medical or scientific
meetings and congresses, and shall allocate sufficient, appropriately qualified
personnel and resources to conduct such activities, as further set forth herein.

 

17.2 Otsuka shall appropriately disseminate medical information relating to the
Compound and the Product in accordance with Applicable Laws and in a manner
consistent with any medical affairs materials provided by ARIAD to Otsuka in
writing, if any (provided such materials provided by ARIAD are compliant with
Applicable Laws and Industry Guidelines). Through discussion by the JDCC or an
appropriate project team, Otsuka shall discuss and align with ARIAD regarding
Otsuka’s medical affairs activities relating to Product in the Territory.
Through the JDCC, Otsuka shall keep ARIAD informed on its medical affairs
activities relating to the Compound or Product in the Territory and the Parties
shall discuss aspects relevant to the scientific communications and activities
pertaining to the Compound or the Product in the Territory.

 

17.3 Otsuka shall ensure that requests for information by Healthcare
Professionals are answered in an appropriate, accurate and lawful manner by
appropriately qualified personnel. Requests for information that are
inconsistent with the Marketing Authorization for the relevant country shall be
handled by the medical affairs personnel only.

ARTICLE 18 – PRODUCT TRADEMARKS

 

18.1

Subject to approval by the relevant Regulatory Authorities in the Territory, the
Product shall be Commercialized under the Trademarks within the Field in the
Territory

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

55

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  throughout the Term. Otsuka shall not use, or permit the use of, any other
trademark (other than the Trademarks and Otsuka’s and its Sublicensees’ names
and logos) for the Commercialization of the Product in the Territory.

 

18.2 ARIAD shall determine whether to display its or its Affiliate’s name and
logo on Product labels, inserts and packaging and/or on Product promotional
materials used in a country in the Territory. If ARIAD elects to display its or
its Affiliate’s name and logo on such Product labels, inserts and packaging
and/or promotional materials in any country in the Territory then, subject to,
and to the extent permitted by, Applicable Laws, such Product labels, inserts
and packaging and/or promotional materials shall display the names and logos of
Otsuka and ARIAD, in each case with such prominence and in such format or
presentation as is approved by the JDCC; provided that, unless otherwise agreed
by the JDCC (with neither Party having the final decision-making authority,
including through the Escalation Notice process) or unless otherwise required by
Applicable Laws, Otsuka’s or its Sublicensee’s, as applicable, name and logo
shall in all events be listed first on such Product labels, inserts and
packaging and/or promotional materials.

 

18.3 Otsuka shall use the Trademarks only and exclusively in connection with and
for the purpose of the Commercialization of the Product in the Field in the
Territory. Otsuka acknowledges that it shall not be entitled to any rights
whatsoever in the Trademarks or ARIAD’s corporate name or logo except as is
specifically granted pursuant to this Agreement.

 

18.4 The Trademarks shall appear on all Product packaging, labels and inserts
and other materials which Otsuka uses for the Commercialization of the Product,
in such form, location and manner as shall be approved by the JDCC. All uses by
Otsuka of the Trademarks shall be consistent with the Trademark Guidelines
submitted to Otsuka in writing. The Trademarks shall always be used together
with the sign “R” or the sign “TM” or such other customary symbol or legend that
correctly identifies the status of the Trademark (i.e., registered or
unregistered) in the Territory.

 

18.5 Except as otherwise set forth in this Agreement (including in Section 15.9)
or as otherwise agreed by the JDCC (with neither Party having final
decision-making authority, including through the Escalation Notice process),
Otsuka shall not use nor apply for registration anywhere in the world of any
trademarks, trade-names, domain names, logos or designs in connection with the
Product, nor shall it use or apply for registration of any trademarks,
trade-names, domain names, logos or designs which include any of the Trademarks,
the word “ARIAD” or “ICLUSIG” or any variation of either (including translations
or transliterations thereof) or any word, term, name, domain name, logo or
design confusingly similar to any of the Trademarks (or translations or
transliterations thereof), alone or in combination, without the prior written
authorization of ARIAD, which authorization ARIAD may withhold in its sole and
absolute discretion.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

56

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18.6 Nothing contained in this Agreement shall be construed as giving Otsuka the
right to use any of the Trademarks or the name or logo of ARIAD outside the
Territory or for any other product than the Product. Otsuka recognizes the
exclusive ownership rights of ARIAD in and to the Trademarks and the name and
logo of ARIAD and acknowledges that it shall not acquire any ownership or other
rights in respect of the Trademarks or the name or logo of ARIAD and/or of the
goodwill associated therewith and that all such rights and goodwill are, and
shall at all times remain, vested in ARIAD. Otsuka acknowledges and agrees that
all use of the Trademarks and the name and logo of ARIAD inures to and is for
the benefit of ARIAD. Otsuka shall, if requested by ARIAD, execute an assignment
to ARIAD of any and all rights that Otsuka may acquire in respect of any of the
Trademarks or the name or logo of ARIAD and/or of the goodwill associated
therewith.

 

18.7 ARIAD shall use commercially reasonable efforts to maintain the validity of
the Trademarks in the Territory throughout the Term, at its sole cost and
expense. Otsuka agrees to provide any reasonable assistance in this effort at
its own internal cost, provided, however, that ARIAD shall bear Otsuka’s
reasonable out-of-pocket expenses incurred in connection with such assistance.

 

18.8 Otsuka shall promptly notify ARIAD with respect to any threatened,
potential or presumed counterfeits, copies, imitations, simulations of, or
infringements upon, the Trademarks or the name “ARIAD” which comes to its
attention. ARIAD shall decide on the steps to be taken after having discussed
such threatened, potential or presumed counterfeits, copies, imitations,
simulation and/or infringements with Otsuka. Otsuka shall provide all reasonable
assistance (with Otsuka bearing its own internal costs and ARIAD bearing the
reasonable out-of-pocket expenses incurred by Otsuka solely for the purpose of
engaging any Third Party to assist in the performance of any action contemplated
by this Section 18.8) to ARIAD in taking legal action, if deemed necessary by
ARIAD, in its sole and absolute discretion, with respect to such matters.

 

18.9 Otsuka acknowledges that ARIAD would have no adequate remedy under this
Agreement or at law in the event that Otsuka were to use the Trademarks in a
manner not authorized by this Agreement and that ARIAD would, in such
circumstances, be entitled to specific performance, injunctive or other
equitable relief.

ARTICLE 19 – CONSIDERATION AND PAYMENTS

 

19.1

Initial Fee. Otsuka shall pay ARIAD a one-time, non-refundable, non-creditable
payment of seventy-seven million five hundred thousand US Dollars ($77,500,000)
in consideration for the rights and licenses granted hereunder (the “Initial
Fee”). The Initial Fee shall be paid by wire transfer to an account designated
in writing by ARIAD within [***] ([***]) [***] after the Effective Date,
provided that Otsuka has received from ARIAD, on or before the Effective Date,
wire transfer instructions and all of the following currently effective
(un-expired) completed and signed documents: one (1) copy of the United States
Internal Revenue Service Form 6166 (United States

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

57

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  Residency Certification); two (2) copies of Form 3 (Application Form for
Income Tax Convention); and one (1) copy of Form 17 (Attachment Form for
Limitation on Benefits Article). In the event ARIAD does not deliver all of the
foregoing completed and signed documents to Otsuka on or before the Effective
Date, Otsuka shall pay ARIAD the Initial Fee less the amount required to be
withheld for Japanese income tax, and Otsuka shall remit such withheld amount to
the appropriate Japanese governmental authority. ARIAD shall deliver to Otsuka
all of the foregoing completed and signed documents and two (2) copies of
completed and signed Form 11 (Application Form for Refund of Overpaid
Withholding Tax). Otsuka shall use commercially reasonable efforts to assist
ARIAD in its application for the refund of this withholding tax, including by
certifying certain items on Form 11 (Refund of Overpaid Withholding Tax). As
soon as practicable, Otsuka shall transmit the completed documents to the
appropriate Japanese governmental authority in order for ARIAD to receive a
refund of the withheld amount from such Japanese governmental authority.

 

19.2 Milestone Payments. Otsuka shall pay ARIAD the following non-refundable,
non-creditable milestone payments within [***] ([***]) [***] after the first
achievement or occurrence of the following:

 

  (a) [***] US dollars ($[***]) upon the first approval of a JNDA in which the
product indications, including precautions for indications, in the approved
package insert (tenpu-bunsho) include the use of the Product as a second line
(i.e., second tyrosine kinase inhibitor) treatment of patients with CML or
Ph+ALL that is resistant or intolerant to any one tyrosine kinase inhibitor,
[***]. For the avoidance of doubt, no milestone payment shall be made in the
event of an approval of a JNDA in which the product indications, including
precautions for indications, in the approved package insert [***].

 

  (b) [***] US dollars ($[***]) upon the first approval of a JNDA in which the
product indications, including precautions for indications, in the approved
package insert (tenpu-bunsho) include the use of the Product as a [***]

 

  (c) [***] US dollars ($[***]) upon each approval of a JNDA in which the
product indications, including precautions for indications, in the approved
package insert (tenpu-bunsho) include the use of the Product for an indication
[***].

For clarity, such milestone payments are intended to be cumulative. Milestone
payments shall be paid on or prior to the due date by wire transfer to an
account designated in writing by ARIAD.

 

19.3 Royalties.

 

  19.3.1 Full Royalty Term. Otsuka shall pay to ARIAD a royalty of [***] percent
([***]%) of Net Sales in each country as to which the Full Royalty Term is in
effect. For clarity, if ARIAD exercises the Co-Promotion Option in [***] and/or
[***], the royalty payable under this Section 19.3.1 shall apply only to the Net
Sales in the relevant country that are equal to or below the Baseline.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  19.3.2 Reduced Royalty Term. Otsuka shall pay to ARIAD a royalty of [***]
percent ([***]%) of Net Sales in each country in the Territory as to which the
Full Royalty Term has expired. Such royalty obligation shall begin in each
country in the Territory on the day after the Full Royalty Term has expired and
continue until the [***] ([***]) [***] of such expiration (the “Reduced Royalty
Term”). For clarity, if ARIAD exercises the Co-Promotion Option in [***] and/or
[***], the royalty payable under this Section 19.3.2 shall apply only to the Net
Sales in the relevant country that are equal to or below the Baseline. Further
for clarity, after the expiration of the Reduced Royalty Term in each country in
the Territory, no further royalties shall be due with respect to Net Sales in
such country and the licenses granted to Otsuka hereunder shall become fully
paid-up and royalty-free with respect to such country for the remainder of the
Term.

 

  19.3.3 Net Sales Reports and Royalty Payments. Within [***] ([***]) days of
[***] of [***], Otsuka shall deliver to ARIAD a report setting out the details
necessary to calculate the royalty payments under Section 19.3 and the Transfer
Price due ARIAD under Section 19.4 with respect to Net Sales made in the [***],
including:

 

  (a) [***];

 

  (b) [***];

 

  (c) [***];

 

  (d) all relevant deductions from invoiced amounts made in the calculation of
Net Sales in accordance with the definition of Net Sales; and

 

  (e) all exchange rate conversions in accordance with Section 19.6.

 

  19.3.4 Royalties shall be paid on or before the submission of the Royalty
Report, but no later than [***] ([***]) days following [***].

 

19.4

Transfer Price. Otsuka shall pay ARIAD a transfer price (the “Transfer Price”)
for the supply of (i) Bulk Product for use in the Final Manufacturing of Product
and (ii) Secondary Packaged Product, in each case for commercial sale in the
Territory, equal to [***] percent ([***]%) of the weighted average Net Sales in
the Territory, calculated as set forth in Section 19.5. The Parties acknowledge
and agree that the Transfer Price is expressed exclusive of any consumption tax,
goods and services tax, value-added tax or any other form of sales tax, and if
such taxes are required to be charged on any sale of the Product to Otsuka, the
provisions set forth in Section 19.8 shall apply. For each unit (tablet) of Bulk
Product supplied by ARIAD to Otsuka for use in the Final

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  Manufacturing of Product for promotional sampling (in quantities agreed upon
by the JDCC) and clinical trials, Otsuka shall pay ARIAD the Bulk Tablet Cost.
In addition, for each unit (tablet) of Bulk Product supplied to Otsuka for
non-commercial, non-clinical investigational use, including for process
validation and performance qualification testing, Otsuka shall pay ARIAD the
Bulk Tablet Cost. For clarity, the Transfer Price shall only be payable for Bulk
Product to be used for Final Manufacturing for commercial requirements for the
Territory, and shall not be payable for Bulk Product supplied by ARIAD for Final
Manufacturing for use in clinical studies or promotional samples of Product or
for investigational use, such as for process validation and performance
qualification testing. Further for clarity, Otsuka shall use promotional samples
of Product for the purpose of confirming the appearance of Product, and shall
not sell or otherwise provide promotional samples of Product for use in the
treatment of patients. ARIAD shall not be obligated to supply Secondary Packaged
Product to Otsuka for clinical trials and promotional sampling.

 

19.5 [***] Price; Invoices; Reconciliation; and Inventory Risk.

 

  19.5.1 At a reasonable time prior to Otsuka’s initial purchase of Bulk Product
for use in Final Manufacturing for commercial requirements for the Territory,
and thereafter prior to [***] during the Term (or [***] in the event of a Price
Cut as provided in Section 19.5.3), the Parties shall [***] (the “[***] Price”)
at which ARIAD shall invoice Otsuka [***] of Product (both Bulk Product and
Secondary Packaged Product) for such commercial requirements for the Territory.
The Parties shall attempt in good faith to establish the [***] Price as close to
the anticipated Transfer Price as the Parties can reasonably estimate for [***]
(or [***] following a Price Cut), based on [***]. For each shipment of Bulk
Product and Secondary Packaged Product purchased by Otsuka for commercial
requirements, [***], ARIAD shall invoice Otsuka an amount equal to [***]. Otsuka
shall pay ARIAD such invoiced amount in US dollars not later than [***] ([***])
days following [***] of the applicable invoice [***].

 

  19.5.2

On a [***], the Parties shall reconcile in writing the Transfer Price due ARIAD
in respect of Product in the Tablet Formulation purchased by Otsuka from ARIAD
for commercial purposes during [***] against the [***] Price paid by Otsuka for
such Product in the Tablet Formulation. Within [***] ([***]) [***] after the end
of [***] after the First Commercial Sale of the first Product in the Territory,
Otsuka shall submit to ARIAD a written top-line report of Net Sales (i.e., a
report of Net Sales without a detailed breakdown of deductions from the invoiced
prices taken to reach Net Sales) of Product in the Tablet Formulation in local
currency for each country in the Territory (i.e., aggregate Net Sales and number
of units (tablets) of Product in Tablet Formulation) and a calculation of the
Reconciliation Payment (defined below) owed for such calendar quarter based on
the weighted average of such top-line Net Sales. If applicable, such written
report shall also include the amount (if any) to be included in

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  the Reconciliation Payment in accordance with Section 19.5.3 and/or
Section 19.5.4. With respect to any calendar quarter, the “Reconciliation
Payment” shall be an amount payable by Otsuka to ARIAD or due from ARIAD to
Otsuka (as the case may be) to account for (i) the difference between the
amounts invoiced by ARIAD at the [***] Price for the quantities of Product in
Tablet Formulation sold to Otsuka (supplied as Bulk Product or Secondary
Packaged Product) for commercial purposes during such calendar quarter and the
Transfer Price of such quantities of Product sold to Otsuka, and (ii) [***]
percent ([***]%) wastage (Product scrap) that occur from losses in the Final
Manufacturing of Product (including in connection with quality control analysis)
during such calendar quarter, calculated at [***].

 

  (a) The Reconciliation Payment with respect to clause (i) of Section 19.5.2
shall be calculated as follows:

R = [***], where

[***]

[***]

[***]

[***]

 

  (b) The Reconciliation Payment with respect to clause (ii) shall be calculated
as follows:

[***] If the wastage arises in the ordinary course of the Final Manufacturing
process (including quality control analysis), the Reconciliation Payment shall
include a credit for the amount calculated by [***] the quantity of the wastage
([***], [***]%) by the [***] between the [***].

For example, [***]

 

  19.5.3

In the event there is a [***] percent ([***]%) or greater reduction in the
approved reimbursement price of Product in [***],[***]or [***] (including the
NHI List Price in Japan) (“Price Cut”) in any [***] during the Term, the
Reconciliation Payment for such [***] (or for the immediately preceding [***] if
the Price Cut goes into effect on the first day of a [***]) shall include a
reconciliation for Product inventory purchased by Otsuka during such [***] (or
during the immediately preceding [***] if the Price Cut goes into effect on the
first day of a [***]) and held by Otsuka at the time of such Price Cut, based on
[***] paid by Otsuka for such Product inventory

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  held by Otsuka, [***]. As soon as reasonably possible after Otsuka obtains
knowledge that there is likely to be a Price Cut, Otsuka will inform ARIAD of
the same.

 

  19.5.4 To the extent applicable, the Reconciliation Payment for each of the
[***] ([***]) [***] following the First Commercial Sale of Product in the
Territory shall include a reconciliation to account for any Bulk Product, from a
[***] of [***] ([***]) batches supplied to Otsuka, that cannot be sold by Otsuka
as finished Product due to Customer (including wholesalers) shelf-life
requirements, by [***]. Notwithstanding the foregoing, if the remaining shelf
life of the Bulk Product at the time of delivery to Otsuka is less than [***]
([***]) months, the foregoing shall not apply and provisions relating to unsold
Products shall be addressed in the Supply Agreement.

 

  19.5.5 The applicable Party shall pay to the other Party the Reconciliation
Payment within [***] ([***]) days after ARIAD’s receipt of each such [***]
statement from Otsuka.

 

19.6 Payment Currency and Exchange Rate. All amounts due under this Agreement
shall be paid in US dollars. The amount of Net Sales under Sections 19.3 and
19.4 shall be determined in Local Currency. The Net Sales amount shall be
converted from Local Currency into US dollars using the interbank exchange rate
for conversion of one unit of Local Currency to one US dollar as of the last day
of the quarter prior to the payment due date. For purposes of the 19.5.2
Reconciliation Payment, the Net Sales in local currency shall be converted at
the average exchange rate for the period beginning with the first day of the
quarter and ending with the last day of the quarter. Exchange rates shall be as
published by OANDA.com “The Currency Site” under the heading “FxHistory:
historical currency exchange rates” at www.OANDA.com/convert/fxhistory. All
payments under this Agreement shall be made by bank wire transfer in immediately
available funds to a bank account designated in writing by the payee Party or by
other means as directed by the payee Party in writing.

 

19.7 Interest. Payments made under this Agreement shall be considered to be made
as of the day on which they are received by the payee Party’s designated bank.
In the event that any payment due under this Agreement is not made when due, the
payment shall accrue simple interest from the date due at a rate per annum equal
to [***] percent ([***]%) above the US prime rate published in the Wall Street
Journal, (or, if the Wall Street Journal, ceases to publish such rates, such
other reputable financial news source as ARIAD may select) in effect on the date
of the scheduled date of payment; provided that, in no event shall such rate
exceed the applicable maximum legal annual interest rate then in effect. The
payment of such interest shall not limit the payee Party from exercising any
other rights it may have as a consequence of the lateness of any payment. Such
interest shall accrue on a daily basis from the due date until the date of
actual payment of the overdue amount. The payer Party shall pay the interest
together with the overdue amount.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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19.8 Tax Matters. Unless otherwise agreed in writing by the Parties or required
by Applicable Laws, the consideration payable in connection with this Agreement
excludes all withholding, sales, use, consumption, value-added, customs, excise
and other taxes, duties or governmental assessments (collectively, “Taxes”). The
Parties shall use commercially reasonable efforts to structure all amounts
payable by one Party to the other Party pursuant to this Agreement (each a
“Payment”) to minimize the applicability of withholding taxes to the maximum
extent consistent with Applicable Laws. If any Payment is subject to a deduction
or withholding of Tax pursuant to Applicable Laws, the Parties shall use
commercially reasonable efforts to perform all acts (including by executing all
appropriate documents) so as to enable the payee Party to take advantage of any
applicable double taxation agreement or treaty or to otherwise secure any
applicable exemption from or reduction in withholding Taxes. In the event there
is no applicable double taxation (or other exemption) agreement or treaty, or if
an applicable double taxation (or other) agreement or treaty reduces but does
not eliminate such withholding Tax, the payer Party shall pay the applicable Tax
to the appropriate governmental authority, shall provide to the payee Party
evidence of such payment, and shall deduct the amount paid from the Payment due
the payee Party. Any withholding tax imposed on a payment from an Otsuka
Affiliate, Sublicensee or distributor in the Territory to Otsuka is the
responsibility of Otsuka.

 

19.9 No Set-Off. Otsuka shall in no case be entitled to set off or otherwise
withhold or adjust any payment due to ARIAD under this Agreement in view of
claims, whether justified or unjustified, that Otsuka may have against ARIAD for
any reason.

 

19.10 Books, records and accounts. Throughout the Term and for a period of at
least [***] ([***]) months thereafter, Otsuka shall keep complete and accurate
books, records and accounts in accordance with all Regulatory Laws and
Regulatory Requirements and sound accounting practice covering all its
operations hereunder. ARIAD shall have the right, throughout the Term and for a
period of [***] months thereafter, at reasonable times during business hours and
upon reasonable notice to Otsuka, to have such books, records and accounts
inspected and audited by ARIAD’s or its Affiliates’ duly authorized
representatives or by an independent auditor to be nominated by ARIAD and
reasonably acceptable to Otsuka, to ensure the accuracy of all reports and
payments made hereunder. Such audit shall be covered by confidentiality
obligations of the auditor. Such inspection and audit may not be (i) conducted
for any calendar year more than [***] ([***]) [***] after the end of such year,
(ii) conducted more than [***] in any [***] ([***]) [***] period, or
(iii) [***]. Otsuka shall cooperate with ARIAD and its Affiliates and their
respective authorized representatives or independent auditor and make available
all work papers and other information related to this Agreement reasonably
requested in connection herewith (subject to written obligations of
confidentiality to Otsuka).

 

19.11 Currency embargoes. If at any time currency embargoes or similar legal
restrictions in any country in the Territory prevent the prompt remittance of
any payments hereunder, Otsuka shall make such payments by depositing the amount
thereof in local currency to the account of ARIAD in a bank or depository in
such country designated by ARIAD.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ARTICLE 20 – REPRESENTATIONS AND WARRANTIES

 

20.1 ARIAD hereby represents and warrants to Otsuka as of the Effective Date,
and with respect to Sections 20.1.6 and 20.1.7 only, throughout the Term, as
follows:

 

  20.1.1 Organization. ARIAD has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware, USA.
ARIAD has the corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement.

 

  20.1.2 Authorization. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, by ARIAD have been duly and validly authorized by all requisite
corporate actions. This Agreement constitutes a legal, valid and binding
agreement of ARIAD, enforceable against ARIAD in accordance with its terms.

 

  20.1.3 Execution. The persons executing this Agreement on behalf of ARIAD are
duly authorized to do so and by so doing have bound ARIAD to the terms and
conditions of this Agreement.

 

  20.1.4 No Inconsistent Obligations. The execution, delivery and performance by
ARIAD of this Agreement, and the consummation of the transactions contemplated
by this Agreement, do not and shall not (i) contravene or conflict with the
charter or bylaws of ARIAD or its Affiliates, as applicable, or (ii) conflict
with, constitute a default in any material respect under or give rise to any
right of termination or cancellation of, any agreement or instrument to which
ARIAD or its Affiliates is a party that would have a material adverse effect on
the ability of ARIAD or its Affiliates to perform its obligations hereunder. As
of the Effective Date, there is no action, suit, investigation or proceeding
pending against, or to the Knowledge of ARIAD, threatened against or affecting,
ARIAD or its Affiliates before any court, arbitrator or any governmental
authority, including Regulatory Authorities, which, if decided against ARIAD or
its Affiliates, would have a material adverse effect on the ability of ARIAD or
its Affiliates to perform their obligations hereunder.

 

  20.1.5 Registrations. ARIAD understands and acknowledges that, as of the
Effective Date, there is no assurance that Registrations can be obtained for the
Product in each or all of the countries of the Territory.

 

  20.1.6 Product in the Tablet Formulation. Product in the Tablet Formulation
Delivered hereunder shall:

 

  (a) be Manufactured in all material respects in accordance with the Marketing
Authorization, the applicable Quality Agreements, and cGMPs;

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  (b) conform to the Specifications at the time of Delivery until the expiry
date set forth on the label for the given lot of the Product in the Tablet
Formulation;

 

  (c) not be adulterated or misbranded under Applicable Laws; and

 

  (d) at the time of Delivery, be free and clear of any lien or encumbrance.

 

  20.1.7 Secondary Packaged Product. Secondary Packaged Product Delivered
hereunder shall:

 

  (a) be Manufactured in all material respects in accordance with the Marketing
Authorization for the US or EU, as applicable, the applicable Quality
Agreements, and applicable cGMPs;

 

  (b) conform to ARIAD’s US or EU specifications (as applicable) at the time of
Delivery until the expiry date set forth on the US or EU label (as applicable)
for the given unit of Secondary Packaged Product;

 

  (c) not be adulterated or misbranded under Applicable Laws; and

 

  (d) at the time of Delivery, be free and clear of any lien or encumbrance.

 

  20.1.8 Right to Grant License. ARIAD and its Affiliates are the sole and
exclusive owners of the Patents listed in Appendix 1, and ARIAD is entitled to
grant the licenses to Otsuka specified in Article 2.

 

  20.1.9 Patent Validity and No Patent Challenge. To the Knowledge of ARIAD, the
claims of the issued patents included in the Patents listed in Appendix 1 are
not invalid and the issued patents included in the Patents listed in Appendix 1
are not unenforceable in the Territory. No Third Party has challenged in
writing, or, to the Knowledge of ARIAD, has threatened to challenge, the
enforceability or validity of any issued patents included in the Patents listed
in Appendix 1 or any claims therein, respectively in the Territory through the
institution of legal proceedings in a court or through interference,
reexamination, nullity or similar invalidity proceedings before the U.S. Patent
and Trademark Office or any analogous foreign entity in the Territory.

 

  20.1.10 No Know-How or Trademark Challenge. No Third Party has challenged in
writing, or, to the Knowledge of ARIAD, has threatened to challenge, ARIAD’s
right to use and license the Know-How and/or the Trademarks in the Territory.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  20.1.11 No Infringement by Third Parties. To the Knowledge of ARIAD, no Third
Party is infringing or threatening to infringe the Patents, or misappropriating
or threatening to misappropriate the Know-How existing as of the Effective Date.

 

  20.1.12 No Claim that Development or Commercialization Infringes Third Party
IP. There are no claims asserted in writing, judgments, or settlements in effect
against, or amounts with respect thereto owed by, ARIAD or any of its Affiliates
relating to the Patents or the Know-How in the Territory existing as of the
Effective Date. No claim or litigation is pending or, to the Knowledge of ARIAD,
threatened alleging that the disclosing, copying, making, or licensing of the
Patents or the Know-How existing as of the Effective Date, or the development or
Commercialization of the Products in the Tablet Formulation in the manner
reasonably contemplated herein as of the Effective Date, infringes or would
infringe any issued patent in the Territory existing as of the Effective Date of
any Third Party.

 

  20.1.13 No Claim that Manufacturing Infringes Third Party IP. There are no
claims asserted in writing, judgments, or settlements in effect against, or
amounts with respect thereto owed by, ARIAD or any of its Affiliates relating to
the Manufacturing of Compound or Products in the Tablet Formulation. No claim
asserted in writing or litigation is pending or, to the Knowledge of ARIAD,
threatened alleging that the Manufacturing of Compound or Products in the Tablet
Formulation infringes or would infringe any issued patent in the Territory
existing as of the Effective Date of any Third Party.

 

  20.1.14 Right to Conduct Ongoing Study. ARIAD has the right to use all Patents
and Know-How existing as of the Effective Date that are necessary to conduct the
Ongoing Study. To the Knowledge of ARIAD the conduct of the Ongoing Study does
not infringe any issued patent in the Territory existing as of the Effective
Date of any Third Party.

 

  20.1.15 Regulatory Documentation. ARIAD has provided or made available to
Otsuka accurate and complete copies of all material Regulatory Documentation in
the Territory in ARIAD’s Control existing prior to the Effective Date, including
all final Product-related clinical trial reports. In addition, and without
limiting the foregoing, ARIAD has provided the following documents, which ARIAD
represents contain a full disclosure of material adverse information with
respect to the safety and efficacy of the Compound Known to ARIAD as of the
Effective Date: Integrated Safety Summary, Investigator’s Brochure, final
Product-related clinical trial reports, PACE and Phase I updates presented at
ASH 2014.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  20.1.16 Patent Prosecution. The Patents listed in Appendix 1 have been filed
and maintained, and are being diligently prosecuted, in the respective patent
offices where filed in the Territory in accordance with Applicable Laws. All
applicable and material fees due prior to the Effective Date in connection with
the prosecution and maintenance of the Patents listed in Appendix 1 in the
Territory have been paid.

 

  20.1.17 Compliance with Law. ARIAD and its Affiliates and, to the Knowledge of
ARIAD, their respective contractors and consultants, have complied in all
material respects with Applicable Laws, including Good Clinical Practices, Good
Laboratory Practices and cGMP (to the extent applicable), in the development,
manufacture and Commercialization of the Compound and Product in the Tablet
Formulation in the Territory prior to the Effective Date.

 

  20.1.18 Accurate Information. The information, documentation, and other
materials furnished or made available by ARIAD in connection with Otsuka’s
diligence related to the transactions contemplated hereby prior to the Effective
Date are true, complete, and correct copies of what they purport to be in all
material respects.

 

20.2 Otsuka hereby represents and warrants to ARIAD as of the Effective Date as
follows:

 

  20.2.1 Organization. Otsuka has been duly organized and is validly existing as
a corporation in good standing under the laws of Japan. Otsuka has the corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. Otsuka’s Affiliates have been duly
organized and are validly existing as corporations in good standing under the
laws of the respective countries of their organization.

 

  20.2.2 Authorization. The execution, delivery and performance by Otsuka of
this Agreement and the consummation of the transactions contemplated by this
Agreement by Otsuka have been duly and validly authorized by all requisite
corporate actions. This Agreement constitutes a legal, valid and binding
agreement of Otsuka, enforceable against Otsuka in accordance with its terms.

 

  20.2.3 Execution. The persons executing this Agreement on behalf of Otsuka are
duly authorized to do so and by so doing have bound Otsuka to the terms and
conditions of this Agreement.

 

  20.2.4

No Inconsistent Obligations. The execution, delivery and performance by Otsuka
of this Agreement, and the consummation of the transactions contemplated by this
Agreement, do not and shall not (i) contravene or conflict with the charter or
bylaws of Otsuka or its Affiliates, as applicable,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  (ii) conflict with, constitute a default in any material respect under or give
rise to any right of termination or cancellation of, any agreement or instrument
to which Otsuka or its Affiliates is a party that would have a material adverse
effect on the ability of Otsuka or its Affiliates to perform their obligations
hereunder, or (iii) or conflict with, constitute a default in any material
respect under any contractual restriction or obligation, including
non-competition obligations, that survives the expiration or termination of any
agreement or instrument to which Otsuka or its Affiliates was a party at any
time. As of the Effective Date, there is no action, suit, investigation or
proceeding pending against, or to the Knowledge of Otsuka, threatened against or
affecting, Otsuka or its Affiliates before any court, arbitrator or any
governmental authority, including Regulatory Authorities, which, if decided
against Otsuka or its Affiliates, would have a material adverse effect on the
ability of Otsuka or its Affiliates to perform their obligations hereunder.

 

  20.2.5 Promotion. Otsuka is not promoting or otherwise commercializing [***]
in any country in the Territory other than Japan.

 

  20.2.6 Registrations. Otsuka understands and acknowledges that, as of the
Effective Date, there is no assurance that Registrations can be obtained for the
Product in each or all of the countries of the Territory. Otsuka shall not be
entitled to a return or a refund of any payments made hereunder if, for any
reason, one or more Registrations are not obtained or a commercial market does
not develop for the Product.

 

  20.2.7 Qualified. Otsuka is a pharmaceutical company having the size and a
position on the market adequate to Commercialize the Product and it and its
Affiliates have the necessary qualified and experienced Personnel to adequately
Commercialize the Product in the Field in the Territory.

 

  20.2.8 Accurate Information. The information, documentation, and other
materials furnished or made available by Otsuka in response to ARIAD’s requests
for information pertaining to Otsuka’s business as part of ARIAD’s due diligence
process prior to the Effective Date are true, complete, and correct copies of
what they purport to be in all material respects.

ARTICLE 21 – COMPLIANCE WITH LAW; DATA PRIVACY; ANTI-BRIBERY AND ANTI-CORRUPTION

 

21.1 Otsuka shall obtain and keep current all licenses, certificates, approvals
and permits of whatever nature required under the Regulatory Laws and the
Regulatory Requirements for the fulfilment of Otsuka’s obligations under this
Agreement.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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21.2 In the performance of its obligations hereunder, Otsuka shall comply and
shall cause its employees and Affiliates involved in the performance of this
Agreement and its Sublicensees and Subcontractors to comply with all Applicable
Laws and Industry Guidelines and Otsuka’s Global Anti-Corruption Policy; and
without limiting the foregoing, in connection with any Named Patient Program,
Otsuka shall comply and shall cause its Sublicensees, employees and
Subcontractors involved in any Named Patient Program to comply with all Industry
Guidelines, Regulatory Laws, Regulatory Requirements and all other Applicable
Laws with respect to Named Patient Programs.

 

21.3 As of the Effective Date, Otsuka represents that, to Otsuka’s Knowledge no
(i) owners (ii) directors, or (iii) executive management members of Otsuka or of
any of its Affiliates listed in Appendix 2 is a Government Official. Otsuka
agrees to make prompt written disclosure to ARIAD of any changes to this
information during the Term.

 

21.4 Otsuka shall certify to ARIAD on an annual basis the following:

 

  (a) training and training materials on Otsuka’s Global Anti-Corruption Policy
(including Anti-Corruption Laws), as well as applicable rules on interactions
with Healthcare Professionals and payors, including under any Industry
Guidelines, have been provided to all persons employed by Otsuka who perform
work under this Agreement and interact with Government Officials or Healthcare
Professionals in the normal course of their responsibilities;

 

  (b) to Otsuka’s Knowledge, except as may disclosed by Otsuka to ARIAD, there
have been no violations of any Industry Guidelines or Anti-Corruption Laws by
Persons employed by or Subcontractors used by Otsuka in the performance of this
Agreement; and

 

  (c) Otsuka has maintained true and accurate records necessary to demonstrate
compliance with the requirements of this Section 21.4.

 

21.5 In the performance of its obligations hereunder, ARIAD shall comply and
shall cause its Affiliates, employees and contractors involved in the
performance of this Agreement to comply with all Applicable Laws, including
Anti-Corruption Laws, and Industry Guidelines; and without limiting the
foregoing, in connection with any Named Patient Program, including the Named
Patient Program involving Preexisting Named Patients, ARIAD shall comply and
shall cause its Affiliates, employees and contractors involved in such Named
Patient Program(s) to comply with all Industry Guidelines, Regulatory Laws,
Regulatory Requirements and all other Applicable Laws with respect to Named
Patient Programs.

 

21.6

At times, either Party may provide the other Party with personal information
that falls under the protection of certain data security and privacy laws
(“Protected Personal Information”). Without limiting the generality of
Section 21.1, each Party agrees to

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  comply with all Applicable Laws relating to the use, storage, collection or
other processing of such Protected Personal Information (“Data Protection
Laws”). The Parties agree to use good-faith efforts to agree upon and implement
any security protocols and information handling guidelines that their respective
legal advisors recommend in connection with the Parties’ compliance with such
data security and privacy laws.

 

21.7 Notice of Compliance Events. Each Party agrees that if it learns of any
violation of Data Protection Laws, Regulatory Laws, Export Control Laws, or
Anti-Corruption Laws by an employee or Subcontractor (in the case of Otsuka) or
contractor (in the case of ARIAD) that performs work under this Agreement (a
“Compliance Event”), such Party (the “Notifying Party”) shall promptly notify
the other Party (the “Notified Party”) in writing of such Compliance Event and
the measures Notifying Party has taken and intends to take to remedy such
Compliance Event and to prevent its recurrence. The Notified Party reserves the
right to require the Notifying Party to prohibit the employee, Subcontractor or
contractor (as the case may be) from performing any work related to this
Agreement after due consultation with Notifying Party.

ARTICLE 22 – INDEMNIFICATION, LIMITATIONS OF LIABILITY AND INSURANCE

 

22.1

Upon the terms and conditions of this Article 22, Otsuka shall defend, indemnify
and hold ARIAD and its Affiliates, and their respective officers, directors and
employees and agents, wholly free and harmless from and against any and all
liabilities, damages, losses, costs, taxes, expenses (including reasonable
attorneys’ fees and other expenses of litigation and arbitration), claims,
demands, suits, penalties, judgments or administrative and judicial orders
(collectively, “Losses”) relating to any Proceeding or Proceeding threatened in
writing to the extent arising out of or resulting from (a) the use of the
Know-how and the Trademarks by Otsuka, its Affiliates, Sublicensees, or
Subcontractors, or any of their respective officers, directors, employees or
agents other than in accordance with the terms and conditions of this Agreement;
(b) any failure by Otsuka, its Affiliates, Sublicensees, Subcontractors, or its
service providers, or any of their respective officers, directors, employees or
agents to comply with any Industry Guidelines or any Applicable Laws; (c) the
performance (or failure to perform) by Otsuka, its Affiliates, or Sublicensees,
Subcontractors, or its service providers, or any of their respective officers,
directors, employees, or agents of any Commercialization activities relating to
the Product, the exercise of any right or performance of any obligation of
Otsuka under this Agreement, the Pharmacovigilance Agreement and/or the Quality
Agreements; (d) the storage, sampling, record-keeping or transfer of the Product
by Otsuka, its Affiliates, Sublicensees, Subcontractors, or its service
providers, or any of their respective officers, directors, employees or agents;
(e) the Final Manufacturing of the Product by Otsuka, its Affiliates,
Sublicensees, or Subcontractors, or any of their respective officers, directors,
employees or agents, including any failure of the Product to comply with the
applicable specifications to the extent resulting from

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  such Final Manufacturing of the Product; (f) any expired Product distributed
by Otsuka, its Affiliates, Sublicensees, Subcontractors, or service providers,
or any of their respective officers, directors, employees and agents; (g) any
negligent act or omission or willful misconduct of Otsuka, its Affiliates,
Sublicensees, Subcontractors, or its service providers, or any of their
respective officers, directors, employees or agents; (h) any breach by Otsuka,
its Affiliates, Sublicensees, Subcontractors, or service providers, or any of
their respective officers, directors, employees or agents, of any of Otsuka’s
representations, warranties, covenants or material obligations contained in this
Agreement or (i) the [***], the termination or breach of the [***], or the
cessation of co-promotion of [***] in Japan by Otsuka.

 

22.2 Upon the terms and conditions of this Article 22, ARIAD shall defend,
indemnify and hold Otsuka and its Affiliates, and their respective officers,
directors and employees and agents, wholly free and harmless from and against
any and all Losses relating to any Proceeding or Proceeding threatened in
writing to the extent arising out or resulting from (a) any failure by ARIAD,
its Affiliates, subcontractors or its service providers or any of their
respective officers, directors, employees or agents to comply with any Industry
Guidelines or any Applicable Laws, or any regulations and/or administrative
decision regarding the Registration and/or the Product; (b) the performance (or
failure to perform) by ARIAD, its Affiliates, subcontractors or its service
providers, or any of their respective officers, directors, employees or agents
of any of ARIAD’s obligations under this Agreement (including the Manufacture of
Product by ARIAD, its Affiliates or its or their Third Party contract
manufacturers), the Pharmacovigilance Agreement and/or Quality Agreements;
(c) any negligent act or omission or willful misconduct of ARIAD, its
Affiliates, subcontractors or its service providers, or any of their respective
officers, directors, employees or agents; (d) the use of the Know-How or the
Trademark as expressly permitted under the terms of this Agreement; (e) any
breach by ARIAD, its Affiliates, subcontractors or its service providers, or any
of their respective officers, directors, employees or agents of any of ARIAD’s
representations, warranties, covenants or obligations contained in this
Agreement, or (f) the storage, sampling, record-keeping or transfer of the
Product by ARIAD, its Affiliates, subcontractors, or its service providers, or
any of their respective officers, directors, employees or agents.

 

22.3 The Parties acknowledge and agree that neither Party shall have an
obligation to defend, indemnify or hold harmless the other Party or its
Affiliates, or their respective officers, directors, employees or agents from
any Losses relating to any Proceeding or Proceeding threatened in writing to the
extent arising out of or resulting from the infringement of Third Party patent
rights in the Territory due to (i) the Final Manufacturing and/or
Commercialization of the Product by Otsuka in accordance with the terms of this
Agreement or (ii) the Manufacture and/or supply of the Product by ARIAD to
Otsuka in accordance with the terms of this Agreement or the Supply Agreements,
and that the procedures for addressing any such infringement of Third Party
patent rights is set forth in Section 23.5.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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22.4 Procedure. The following shall apply to all Proceedings subject to the
obligations set forth in Sections 22.1 and 22.2 above:

 

  22.4.1 A Party or its indemnified entity seeking indemnification pursuant to
Section 22.1 or Section 22.2 (an “Indemnified Party”) shall give to the Party
from whom such indemnification is sought (the “Indemnifying Party”) prompt
written notice (a “Claim Notice”) of the assertion of any claim, or the
commencement of any Proceeding for which the Indemnified Party believes the
Indemnifying Party may be liable under Section 22.1 or Section 22.2 of this
Agreement, as the case may be. The failure by any Indemnified Party so to notify
the Indemnifying Party shall not relieve the Indemnifying Party from liability
under Section 22.1 or Section 22.2 of this Agreement, as the case may be, except
to the extent that the Indemnifying Party shall have been prejudiced in any
material respect as a result of such failure. A Claim Notice shall describe the
nature of the claim or Proceeding and shall indicate the amount of Losses
(estimated to the extent that the Losses in respect of any claim or Proceeding
are reasonably capable of being estimated); provided, however, that the failure
to estimate Losses (or the inaccuracy thereof) shall not affect the validity of
a Claim Notice or the amount of Losses to which the Indemnified Party may be
entitled.

 

  22.4.2 The Indemnifying Party shall have the right at its discretion to
control the defense of any claim or Proceeding and the right to settle or
compromise any such claim or Proceeding; provided that the prior written consent
of the Indemnified Party shall be required in connection with any settlement or
compromise unless such settlement, compromise, discharge or consent to judgment
(i) includes the delivery of a written release from all liability in respect of
such claim or Proceeding, (ii) does not contain any admission or statement
suggesting any wrongdoing or liability on behalf of the Indemnified Party, and
(iii) does not contain any equitable order, judgment or term which in any manner
affects, restrains or interferes with the business of the Indemnified Party or
any of its Affiliates. The Indemnifying Party shall exercise such right by
delivering written notice of its intent to undertake the defense of such claim
or Proceeding to the Indemnified Party within [***] ([***]) days after the
receipt of a Claim Notice. If the Indemnifying Party elects to control the
defense of the claim or Proceeding, then all expenses and legal fees of such
defense shall be borne by the Indemnifying Party. If the Indemnifying Party
elects to control the defense of the claim or Proceeding, then the Indemnified
Party may participate therein through counsel of its choice, but the cost of
such counsel shall be borne solely by the Indemnified Party. Only in the event
that the Indemnifying Party does not assume such defense within [***] ([***])
days after its receipt of a Claim Notice or the Indemnifying Party notifies the
Indemnified Party that it will not assume such defense, the Indemnified Party
may control the defense of such claim or Proceeding at the Indemnifying Party’s
cost and the Indemnified Party may settle the claim or Proceeding on behalf of
and for the account and risk of the Indemnifying Party, who shall be bound by
the result.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  22.4.3 The Indemnifying Party or the Indemnified Party, as the case may be,
shall at all times use commercially reasonable efforts to keep the Indemnifying
Party or the Indemnified Party, as the case may be, reasonably appraised of the
status of the defense of any matter the defense of which it is maintaining and
to cooperate in good faith with the Indemnifying Party or the Indemnified Party,
as the case may be, with respect to the defense of any such matter.

 

22.5 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, EITHER IN FACT OR BY
OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS
ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTY OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT, COMMERCIAL
POTENTIAL, CAPACITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE
KNOW-HOW, THE PATENTS AND/OR THE PRODUCT. NEITHER PARTY NOR ANY OF ITS
RESPECTIVE EMPLOYEES OR REPRESENTATIVES IS AUTHORIZED TO GIVE ANY WARRANTIES OR
MAKE ANY REPRESENTATION ON BEHALF OF THE OTHER PARTY.

 

22.6 Subject to Section 22.7, to the maximum extent permitted by Applicable Law,
neither of the Parties shall be liable to the other Party for indirect, special,
punitive, exemplary, incidental or consequential damages or losses arising out
of this Agreement, including loss of profits or revenues, regardless of whether
such damages were foreseeable or not and regardless of any notice of such
damages or losses.

 

22.7 The limitations and exclusions of liability set forth in Sections 22.6
shall not limit or restrict: (a) the indemnification rights or obligations of
either Party with respect to Losses awarded to Third Party claimants in Third
Party Proceedings that are subject to the obligations in Section 22.1 or
Section 22.2; (b) Otsuka’s liability with respect to breach by Otsuka of the
limitations of grant or rights set forth in Article 2; (c) either Party’s
liability with respect to breach by a Party of its respective non-competition
obligations set forth in Article 3; (d) damages or losses resulting from a
breach by either Party of the confidentiality and non-use obligations set forth
in this Agreement; or (e) any liability that cannot be limited or excluded under
Applicable Law.

 

22.8

Each Party agrees to procure and maintain in full force and effect during the
Term valid and collectible insurance policies in connection with its activities
as contemplated herein in amounts that are normal and customary in the
pharmaceutical industry generally for prudent companies similarly situated. In
particular, Otsuka’s coverage shall have limits of liability which are
commercially reasonable in the Territory but shall be not less than [***] US
dollars ($[***]) per loss occurrence. Otsuka shall use commercially reasonable
efforts to include a waiver of subrogation against ARIAD and a clause making
ARIAD an additional insured under such insurance policy. Each Party shall
provide to the other Party upon such other Party’s request a certificate
evidencing

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  the coverage required hereby and the amount thereof. Each Party’s coverage
shall be with a reputable insurance company and shall have to be maintained for
not less than [***] ([***]) [***] following expiration or termination of this
Agreement for any reason.

ARTICLE 23 – THE PATENTS

 

23.1 Patent Marking. Otsuka acknowledges and agrees that any of the Product
Commercialized by it shall be marked with a notice of patent rights as necessary
or desirable under Applicable Law to enable the Patents to be enforced to the
maximum extent permissible under Applicable Laws.

 

23.2 Claims Relating to Patent Validity. Otsuka shall reasonably cooperate with
ARIAD in connection with any claim, action, lawsuit, hearing, patent office
review or other Proceeding relating to the validity of the Patents in the
Territory, including by being joined as a necessary party to any such Proceeding
at ARIAD’s expense. For clarity, any Proceeding attacking the validity of a
Patent in connection with an action under Section 23.4 (for example, an alleged
infringer’s attack on the validity of a Patent as a defense to an allegation of
infringement of such Patent) shall be dealt with pursuant to Section 23.4.

 

23.3 Patent Prosecution and Maintenance.

 

  23.3.1 ARIAD shall have the first right to prepare, file, prosecute (including
any reissues, re-examinations, post-grant proceedings, requests for patent term
extensions, supplementary protection certificates, interferences, and defense of
invalidation or opposition proceedings or of other challenges to validity or
enforceability) and maintain the Patents in the Territory, and shall keep Otsuka
reasonably informed regarding any such matters. Otsuka shall provide reasonable
assistance in connection with any such prosecution and maintenance, including
reasonably cooperating with ARIAD, as may be reasonably requested by ARIAD from
time to time for the purpose of filing for and obtaining patent extensions and
supplementary or complementary protection certificates, if available, of the
Patents under the relevant Applicable Laws of the Territory.

 

  23.3.2 In the event that ARIAD intends to cease to prosecute, or maintain a
Patent in a country in the Territory, ARIAD shall provide reasonable prior
written notice to Otsuka of such intention (which notice shall, in any event, be
given no later than [***] ([***]) days prior to the next deadline for any action
that may be taken with respect to prosecution or maintenance of such ARIAD
Patent in such country), and Otsuka shall thereupon have the option, in its sole
discretion, to assume the control and direction of the, prosecution and
maintenance of such Patent in such country. Upon Otsuka’s written exercise of
such option, Otsuka shall assume responsibility and full control for the
prosecution and maintenance of such patent in such country at its own expense.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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23.4 Patent Enforcement.

 

  23.4.1 Each Party shall promptly inform the other Party in writing upon its
becoming aware of any potential infringement or misappropriation of any of the
Patents. Otsuka shall provide reasonable assistance in connection with any
Proceedings to stop such infringement and/or recover damages for such
infringement (including joining any action if necessary), as may be reasonably
requested by ARIAD. ARIAD shall have the first right to control any such
Proceedings and shall pay any and all costs related to the Proceedings,
including but not limited to attorneys fees, expert fees, and court costs.

 

  23.4.2 If ARIAD does not institute an action or proceeding or take other
action to prevent or terminate such possible infringement in the Territory
within [***] ([***]) days following receipt of notice of such possible
infringement, and if ARIAD does not provide Otsuka with commercially reasonable
reason(s) why such action has not been taken within such [***] ([***])-day
period, then, Otsuka shall have the right at its sole discretion to institute an
action or proceeding or take other appropriate action that it believes is
reasonably required to prevent or terminate such possible infringement in the
Territory, including possible infringement of the Composition Patent in the
Territory if (and only if) such possible infringement involves the development
or commercialization of a product that contains the Compound, with the
reasonable assistance and cooperation of ARIAD. In the event that Otsuka
institutes an action or proceeding or takes other appropriate action that it
believes is reasonably required to prevent or terminate such possible
infringement in the Territory, Otsuka reserves that right to have sole control
over such proceedings, but shall not have the right to enter into settlement
agreements with any Third Party without ARIAD’s prior written consent. For
clarity, the foregoing right of Otsuka to institute an action or proceeding or
take other appropriate action that it believes is reasonably required to prevent
or terminate such possible infringement in the Territory shall only apply with
respect to the Composition Patent if such possible infringement involves the
development or commercialization of a product that contains the Compound.

 

  23.4.3 Any recoveries from such Proceedings or amounts received by ARIAD or
Otsuka from the settlement of the same shall be allocated as follows: First,
each Party shall be reimbursed for its direct, out-of-pocket expenses for
conducting, or cooperating with, such Proceeding, and second, the balance shall
be split equally between the Parties, provided that any recovery or settlement
amount that includes countries outside of the Territory shall be apportioned
between the Territory and countries outside the Territory by ARIAD, acting
reasonably and in good faith, prior to such allocation between the Parties.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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23.5 Infringement Claims by Third Parties.

 

  23.5.1 Each Party shall promptly notify the other Party in writing of any
allegation by a Third Party in the Territory that any Product development,
Commercialization (including import or export) or manufacturing activities
conducted by the Parties pursuant to this Agreement infringe or misappropriate
or may infringe or misappropriate the Intellectual Property Rights in the
Territory of such Third Party (a “Third Party Infringement Claim”). The Parties
shall discuss which Party shall defend the Third Party Infringement Claim, and
absent mutual agreement otherwise, each Party shall have the right to control
the defense of any such Third Party Infringement Claim brought against it, by
counsel of its own choice. If a Third Party Infringement Claim is brought
against one Party (the “Defending Party”) but not the other Party, the
non-Defending Party shall have the right, at its own expense, to be represented
in such Third Party Infringement Claim by counsel of its own choice.

 

  23.5.2 Each Defending Party shall keep the other Party reasonably informed of
all material developments in connection with any Third Party Infringement Claim.
Each Defending Party agrees to provide the other Party with copies of all
pleadings filed in any suit or proceeding relating to such Third Party
Infringement Claim. The Defending Party may enter into a settlement or
compromise of any Third Party Infringement Claim, provided that, if such
settlement or compromise would admit liability on the part of the non-Defending
Party or any of its Affiliates or would otherwise have a material adverse effect
on the rights or interests of the non-Defending Party or its Affiliates, the
Defending Party shall not enter into such settlement or compromise without the
prior written consent of the non-Defending Party.

 

  23.5.3 If a Third Party Infringement Claim is brought against both Parties,
all out-of-pocket expenses incurred by each Defending Party in defending such
Third Party Infringement Claim in the Territory (including outside counsel
fees), and all amounts payable by either Defending Party as a judgment based on
such Third Party Infringement Claim or in settlement of such Third Party
Infringement Claim (excluding payments pursuant to any Third Party License,
which is governed by Section 23.6), shall be paid for by the Parties as follows:
[***]% by Otsuka and [***]% by ARIAD.

 

  23.5.4

If a Third Party Infringement Claim is brought against only one Defending Party,
all out-of-pocket expenses incurred by such Defending Party in defending such
Third Party Infringement Claim in the Territory (including outside counsel
fees), and all amounts payable by such Defending Party as a judgment based on
such Third Party Infringement Claim or in settlement

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  of such Third Party Infringement Claim (excluding payments pursuant to any
Third Party License, which is governed by Section 23.6), shall be paid for by
such Defending Party.

 

  23.5.5 Any recovery by a Party of any sanctions or other amounts awarded to
such Party against a Third Party asserting a Third Party Infringement Claim
shall be applied in the same manner as recoveries in an action as set forth in
Section 23.4.3

 

  23.5.6 If a Defending Party elects to enter into an agreement with a Third
Party to obtain a license under such Third Party’s Intellectual Property Rights
(“Third Party License”) in settlement of a Third Party Infringement Claim
asserted by such Third Party, the provisions of Section 23.6 shall apply.

 

23.6 Third Party Licenses.

 

  23.6.1 Final Manufacturing. With respect to any Third Party License that is
necessary or useful for Otsuka to perform Final Manufacturing of Product in the
Territory and is not necessary for such Final Manufacturing to conform to any
specifications provided by ARIAD under this Agreement, [***] shall have the
final decision-making authority and responsibility for negotiating such Third
Party License and for making any payments due thereunder, at its sole cost and
expense.

 

  23.6.2 Territory-Only Third Party License.

 

  (a) With respect to any Third Party License that is necessary or useful for
Otsuka to develop Product, or Commercialize, or perform Final Manufacturing of
Product (to the extent necessary to conform to any specifications provided by
ARIAD under this Agreement) in the Territory and that is not necessary or useful
for the development, commercialization or manufacture of Product outside the
Territory (“Territory-Only Third Party License”), the Parties (through the JDCC)
shall discuss whether such license is so necessary or useful and whether to
obtain such Territory-Only Third Party License.

 

  (b) If a Territory-Only Third Party License is necessary for Otsuka to develop
Product, or Commercialize, or perform Final Manufacturing of Product (to the
extent necessary to conform to any specifications provided by ARIAD under this
Agreement) in the Territory, [***] shall have the responsibility for negotiating
such license and shall have the final decision-making authority regarding the
terms of such license, subject to Section 23.6.4.

 

  (c)

If a Territory-Only Third Party License is useful (but not necessary) for Otsuka
to develop Product, or Commercialize, or perform Final

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  Manufacturing of Product (to the extent necessary to conform to any
specifications provided by ARIAD under this Agreement) in the Territory, the
JDCC shall determine (with neither Party having final decision-making authority)
whether to obtain such Territory-Only Third Party License and, if such a
determination is made to obtain such license, [***] shall have responsibility
for negotiating such license in accordance with terms agreed upon by the
Parties. If the Parties are unable to agree upon terms for a useful
Territory-Only Third Party License that the JDCC has determined to obtain, [***]
shall have the final decision-making authority regarding the terms of such
license, subject to Section 23.6.4. For clarity, if Otsuka determines to obtain
a useful Territory-Only Third Party License despite the absence of a
determination by the JDCC to obtain such license, the terms of this Section 23.6
shall not apply and [***] shall have the sole responsibility and authority for
negotiating such Territory-Only Third Party License and for making any payments
due thereunder, at its sole cost and expense.

 

  (d) In the event Otsuka enters into a Territory-Only Third Party License
(i) in accordance with Section 23.6.2(b) or (ii) in accordance with
Section 23.6.2(c) in the event of a determination by the JDCC to obtain such
license, Otsuka shall have the right to deduct [***] percent ([***]%) of all
royalties paid pursuant to such Territory-Only Third Party License from the
royalties payable to ARIAD pursuant to Section 19.3; provided, that in no event
shall the royalty rate otherwise payable to ARIAD pursuant to Section 19.3.1 and
Section 19.3.2 be reduced by more than [***] percent ([***]%) in the aggregate
(i.e. the royalty rate during the Full Royalty Term never below [***]% and the
royalty rate during the Reduced Royalty Term never below [***]%); and provided
further that, if, but for the preceding proviso, the deduction under this
Section 23.6.2(b) would have reduced a royalty payment made by Otsuka to ARIAD
by more than [***] percent ([***]%), then the amount of such deduction that
exceeds [***] percent ([***]%) will be carried over to subsequent royalty
payments until the full amount that Otsuka would have been entitled to deduct
(absent the preceding proviso) is deducted.

 

  23.6.3 Global Third Party License.

 

  (a) With respect to any Third Party License that is necessary or useful for
Otsuka to develop Product, or Commercialize, or perform Final Manufacturing of
Product (to the extent necessary to conform to any specifications provided by
ARIAD under this Agreement) in the Territory and is also necessary or useful for
the development, commercialization or manufacture of Product outside the
Territory (“Global Third Party License”), the Parties (through the JDCC) shall
discuss whether to obtain such Global Third Party License.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  (b) If a Global Third Party License is necessary for Otsuka to develop
Product, or Commercialize, or perform Final Manufacturing of Product (to the
extent necessary to conform to any specifications provided by ARIAD under this
Agreement) in the Territory, [***] shall have the responsibility for negotiating
such license and shall have the final decision-making authority regarding the
terms of such license, subject to Section 23.6.4.

 

  (c) If a Global Third Party License is useful (but not necessary) for Otsuka
to develop Product, or Commercialize, or perform Final Manufacturing of Product
(to the extent necessary to conform to any specifications provided by ARIAD
under this Agreement) in the Territory, the JDCC shall determine (with neither
Party having final decision-making authority) whether to obtain such Global
Third Party License and, if such a determination is made to obtain such license,
[***] shall have responsibility for negotiating such license in accordance with
terms agreed upon by the Parties. If the Parties are unable to agree upon terms
for a useful Global Third Party License that the JDCC has determined to obtain,
[***] shall have the final decision-making authority regarding the terms of such
license, subject to Section 23.6.4. For clarity, if ARIAD determines to obtain a
useful Global Third Party License despite the absence of a determination by the
JDCC to obtain such license, the terms of this Section 23.6 shall not apply and
[***] shall have the sole responsibility and authority for negotiating such
Global Third Party License and for making any payments due thereunder, at its
sole cost and expense.

 

  (d) In the event ARIAD enters into a Global Third Party License (i) in
accordance with Section 23.6.3(b) or (ii) in accordance with Section 23.6.3(c)
in the event of a determination by the JDCC to obtain such license, the
royalties owed by ARIAD under such Global Third Party License that are
attributable to Net Sales of Product in the Territory shall be paid for by the
Parties as follows: [***]% by Otsuka and [***]% by ARIAD. For clarity, ARIAD
shall be responsible for payment of any other amounts under a Global Third Party
License that the JDCC has determined to obtain, and Otsuka shall not bear any
costs related to such Global Third Party License other than its [***]% share of
royalties attributable to Net Sales of the Product in the Territory.

 

  23.6.4

In the case of Section 23.6.2 and 23.6.3 the negotiating Party shall keep the
other Party reasonably informed with respect to the negotiations and deal terms
relating to such license (including scope of the license and financial terms)
and the negotiating Party shall consider in good faith any comments,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  recommendations or analysis provided by the other Party. With respect to any
Global Third Party License, ARIAD shall ensure that such license includes the
right for ARIAD to sublicense such licensed Intellectual Property Rights to
Otsuka pursuant to this Agreement.

ARTICLE 24 – CONFIDENTIALITY

 

24.1 Each Party shall treat as strictly confidential any information and/or
document received from the other Party or its Affiliates hereunder, and not
generally known to the trade (all hereinafter referred to as the “Confidential
Information and non-public information relating to the business of the
disclosing Party or its Affiliates (which shall be deemed to be the Confidential
Information of the disclosing Party), and Otsuka shall treat as strictly
confidential non-public information relating to the Patents, the Know-How and
the Improvements (which shall be deemed to be the Confidential Information of
ARIAD) and each receiving Party shall use the Confidential Information of the
disclosing Party solely for the purpose of and in accordance with this
Agreement. Each Party may disclose Confidential Information of the other Party
to its employees and agents and to the employees and agents of its Affiliates,
Sublicensees (in the case of Otsuka), Subcontractors (in the case of Otsuka) and
other Third Party contractors solely for purposes, and only to the extent
reasonably required, to facilitate the performance of such Party’s rights or
obligations under this Agreement, provided that each such employee and agent and
such Sublicensee, Subcontractor or other Third Party contractor, as applicable,
has executed a written confidentiality agreement with such receiving Party
containing provisions that protect the Confidential Information of the
disclosing Party that are materially equivalent to, or more protective than, the
provisions of this Article 24. In addition, ARIAD and Otsuka each agrees that
the other Party may disclose its Confidential Information (a) to such other
Party’s legal and financial advisors, (b) as reasonably necessary in connection
with an actual or potential (i) debt or equity financing of such other Party,
(ii) merger, acquisition, consolidation, share exchange or other similar
transaction involving such Party and any Third Party, or (iii) prosecution,
defense or enforcement of any patent pursuant to Article 24 and (c) for any
other purpose with the other Party’s consent, not to be unreasonably withheld,
conditioned or delayed. Except as set forth in the two preceding sentences,
neither Party shall make Confidential Information of the other Party available
to any Third Party, or any of its Affiliates, except in accordance with
Section 24.2 or to applicable government agencies as required by Applicable
Laws, and in this case (a) solely to the extent required by such Applicable Laws
(based on advice of legal counsel) and (b) only upon exercise of its reasonable
efforts to cause said agencies to maintain confidentiality thereof.
Notwithstanding the foregoing, [***], except to the extent required for Otsuka
to perform its obligations under this Agreement or to comply with Applicable
Laws, Otsuka shall not disclose the Confidential Information of ARIAD or
Confidential Information of Otsuka relating to the Compound, the Product, this
Agreement, or any other agreement executed pursuant to this Agreement (other
than the Pharmacovigilance Agreement) to any employee or agent of Otsuka or its
Affiliates who is involved in Otsuka’s activities related to [***] under the
[***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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24.2 Subject to any different arrangements agreed in writing by the Parties
pursuant to Section 5.9, prior to the publication or presentation of any
information or data arising from any Third Party Research Project, development
work performed by Otsuka or its Affiliates pursuant to Section 5.2, or other
research or development activities performed hereunder, Otsuka shall submit to
ARIAD a summary of the proposed publication or presentation at least [***]
([***]) days prior to the submission thereof for publication or presentation.
The purposes for such prior submission are: (i) to provide ARIAD with the
opportunity to review and comment on the contents of the proposed publication or
presentation; and (ii) to identify any Confidential Information to be deleted
from the proposed publication or presentation. Any said publication or
presentation may however be made only upon the prior written consent of ARIAD,
which consent may be withheld by ARIAD in its sole and absolute discretion.

 

24.3 Notwithstanding expiration or termination of this Agreement for any reason,
the foregoing confidentiality and non-use obligations shall continue for a
period of [***] ([***]) [***] after expiration or termination of this Agreement,
provided that the foregoing confidentiality and non-use obligations relating to
Confidential Information relating to the Patents, the Know-How and the
Improvements shall continue until such Confidential Information falls within one
of the provisions below in this Section 24.3. Notwithstanding the foregoing,
nothing contained in this Article 24 shall in any way restrict or impair the
right of either Party to use, disclose or otherwise deal with Confidential
Information of the disclosing Party, which the receiving Party can demonstrate
by competent written evidence:

 

  24.3.1 is or hereafter becomes part of the public domain through no act or
omission of the receiving Party, its employees, Affiliates, sublicensees and/or
subcontractors; or

 

  24.3.2 was in the lawful possession of the receiving Party prior to receipt of
the Confidential Information from the disclosing Party; or

 

  24.3.3 previously was, or at any time hereafter is, provided to the receiving
Party by a Third Party having the right to do so and which did not originate
directly or indirectly from the disclosing Party; or

 

  24.3.4 at the time of disclosure, was known by the receiving Party or an
Affiliate, sublicensee or subcontractor other than as a result of disclosure to
such party by the disclosing Party, or after disclosure was independently
developed by the receiving Party, an Affiliate, sublicensee or subcontractor
without use of the Confidential Information of the disclosing party.

 

24.4 The content of this Agreement shall constitute Confidential Information of
each Party and shall be treated by both Parties in accordance with the
provisions of this Article 24 and Section 31.9 (Public Statements).

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ARTICLE 25 – TERM

 

25.1 This Agreement comes into force at the Effective Date hereof and shall
remain in effect for the Term.

 

25.2 ARIAD shall have the option, at its sole discretion, to take over
Commercialization of the Product in the Territory or to appoint another
distributor at the expiration of the Term (including on a country-by-country
basis in the event of a partial termination of this Agreement by ARIAD pursuant
to Section 26.4; provided that, in the event of termination of this Agreement
pursuant to Section 26.4.1, ARIAD shall only have such option if Otsuka does not
elect to revive this Agreement within the [***] ([***]) [***] period provided
under Section 26.4.1).

ARTICLE 26 – TERMINATION

 

26.1 Uncured Material Breach. If either Party (the “Non-Breaching Party”)
believes that the other Party (the “Breaching Party”) is in material breach of
any of its obligations under this Agreement or under the Pharmacovigilance
Agreement or the Quality Agreements, then the Non-Breaching Party may deliver
written notice of such material breach to the Breaching Party specifying the
nature of the breach (a “Default Notice”). The Breaching Party shall have [***]
([***]) [***] (or [***] ([***]) days in the event of a payment breach) from the
receipt of the Default Notice to cure such breach or to dispute the allegation
of breach. If the Breaching Party fails to cure, and fails to dispute, such
breach within such [***]-day period (or [***] ([***]) day period in the event of
a payment breach by Otsuka), then the Non-Breaching Party may terminate this
Agreement by giving the Breaching Party written notice of termination, which
termination shall be effective immediately upon the Breaching Party’s receipt of
such notice of termination. If the Breaching Party disputes in good faith the
existence or materiality of a breach specified in a Default Notice or disputes
any allegation that the Breaching Party failed to cure or remedy such breach,
and the Breaching Party provides written notice of such dispute to the
Non-Breaching Party within the above [***] period (or [***] ([***]) [***] with
respect to payment obligations), the matter shall be addressed under the dispute
resolution procedures in Article 30 (and during the pendency of such dispute
resolution, the Non-Breaching Party may not terminate this Agreement). If, as a
result of the application of such dispute resolution procedures, the Breaching
Party is determined to be in material breach of any provision of this Agreement
(an “Adverse Ruling”), and if the Breaching Party fails to complete the actions
specified by the Adverse Ruling to cure such material breach within [***]
([***]) [***] after its receipt of such Adverse Ruling (or within [***] ([***])
[***] in the case of an Adverse Ruling resulting from a payment breach), then
the Non-Breaching Party may terminate this Agreement by giving the Breaching
Party written notice of termination, which termination shall be effective
immediately upon the Breaching Party’s receipt of such notice of termination.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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26.2 Bankruptcy or Insolvency.

 

  26.2.1 Either Party shall have the right to terminate this Agreement
immediately upon written notice to the other Party, if such other Party
(i) files a petition under any bankruptcy act or has any such petition filed
against it that is not discharged within [***] ([***]) [***] of the filing
thereof, (ii) makes an assignment for the benefit of creditors, or
(iii) appoints or suffers appointment of a receiver or trustee over
substantially all of its property that is not discharged within [***] ([***])
[***] after such filing.

 

  26.2.2 All licenses granted under or pursuant to this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code or any analogous provisions in any other country or jurisdiction, licenses
of rights to “intellectual property” as defined under Section 101 of the U.S.
Bankruptcy Code. The Parties agree that Otsuka, as licensee of such rights under
this Agreement, shall retain and may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code or any analogous provisions in any
other country or jurisdiction. The Parties further agree that, in the event of
the commencement of a bankruptcy proceeding by or against ARIAD under the U.S.
Bankruptcy Code or any analogous provisions in any other country or jurisdiction
which proceeding is not terminated or withdrawn within [***] ([***]) [***] after
such commencement, Otsuka shall be entitled (unless ARIAD elects to continue to
perform all of its obligations under this Agreement) to a complete duplicate of
(or complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property necessary to exercise its license
rights granted hereunder, which, if not already in the Otsuka’s possession,
shall be promptly delivered to it (i) after [***] ([***]) [***] following any
such commencement of a bankruptcy proceeding, upon Otsuka’s written request
therefor (unless ARIAD elects to continue to perform all of its obligations
under this Agreement), or (ii) if not delivered under clause (i) above,
following the rejection of this Agreement by or on behalf of ARIAD, upon written
request therefor by Otsuka.

 

26.3 Otsuka’s Right to Terminate. Without limiting Otsuka’s rights set forth
elsewhere in this Agreement, at any time, Otsuka may terminate this Agreement on
a country-by-country basis or for the entire Territory, at its sole discretion
for any reason or no reason, by providing written notice of termination to
ARIAD, which termination shall be effective one hundred eighty (180) days after
the date of such notice (or such longer time period as may be specified in such
notice), provided, that if Otsuka elects to terminate this Agreement with
respect to Japan pursuant to this Section 26.3, Otsuka must simultaneously
terminate this Agreement with respect to the entire Territory.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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26.4 ARIAD’s Rights to Terminate. Without limiting ARIAD’s rights set forth
elsewhere in this Agreement, ARIAD shall have the right to terminate this
Agreement with respect to all Products (except as set forth in Section 26.4.1)
within a country in the Territory or the Territory as a whole, as applicable, by
written notice to Otsuka as follows:

 

  26.4.1 ARIAD shall have the right to terminate this Agreement for the entire
Territory, on a Product-by-Product basis, [***] ([***]) [***] after a Product
Withdrawal from the entire Territory (unless, prior to the expiration of such
[***] ([***])-[***] period, such Product is authorized pursuant to Applicable
Laws to be re-launched and Commercialized in the Territory) if such Product
Withdrawal results from a significant safety risk inherent in such Product and
not due to tampering, a remediable Manufacturing problem or other
Non-Conformance that can be cured with respect to such Product Manufactured
after such risk has been discovered; provided, that if ARIAD terminates this
Agreement pursuant to this Section 26.4.1 and such Product is subsequently able
to be Commercialized in the Territory in accordance with Applicable Law, then
ARIAD shall promptly provide Otsuka with written notice thereof and for a period
of [***] ([***]) [***] from Otsuka’s receipt of such notice, Otsuka shall have
an exclusive right of first refusal to elect to revive this Agreement under the
same terms and conditions in effect as of the date of termination, with such
revival being effective as of the date of any such election by Otsuka.

 

  26.4.2 ARIAD shall have the right to terminate this Agreement on a
country-by-country basis in the Territory if (a) ARIAD has timely complied with
its obligations to supply Product to Otsuka as expressly set forth in this
Agreement and the Supply Agreement, (b) Otsuka has failed to launch the Product
within [***] ([***]) [***] of receipt of Pricing and Reimbursement Approval in
such country, and (c) Otsuka has not provided written notice to ARIAD of a good
faith commercially reasonable excuse or reason for not launching the Product in
such country by such date, provided, that if ARIAD disputes in good faith
whether such excuse or reason provided by Otsuka is commercially reasonable,
then the dispute shall be resolved pursuant to Article 30 and if, as a result of
the application of such dispute resolution procedures, such excuse or reason is
determined to not be commercially reasonable, then ARIAD may terminate this
Agreement by written notice to Otsuka, and provided further, that any
termination pursuant to this Section 26.4.2 with respect to Japan shall give
ARIAD the right to simultaneously terminate this Agreement with respect to the
entire Territory.

 

  26.4.3 ARIAD shall have the right to terminate this Agreement on a
country-by-country basis in the Territory if (a) ARIAD has delivered all
required data and other information to Otsuka on a timely basis, and (b) Otsuka
or its Sublicensee has failed to file (x) an application for Marketing
Authorization in such country (if such country does not require additional
clinical trials) within [***] ([***]) months of the Effective Date, or (y) an
investigational new drug application for conducting clinical trials of the
Product in such country (if such country requires such additional clinical
trials to support an application for Marketing Authorization) within [***]
([***]) [***] of the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  Effective Date; provided, that any termination pursuant to this Section 26.4.3
with respect to Japan shall give ARIAD the right to simultaneously terminate
this Agreement with respect to the entire Territory. For clarity, if the initial
JNDA filing in Japan is delayed beyond [***] ([***]) [***] of the Effective Date
due to causes beyond Otsuka’s control (such as ARIAD’s delay in preparing the
initial JNDA or PMDA actions, requests or requirements), ARIAD shall not have
the right to terminate this Agreement pursuant to this Section 26.4.3.

 

  26.4.4 ARIAD shall have the right to terminate this Agreement on a
country-by-country basis in the Territory or with respect to the entire
Territory, in ARIAD’s discretion, if Otsuka breaches its obligations set forth
in Section 3.2.

 

26.5 Regulatory Non-compliance. Additionally, ARIAD shall have the right to
terminate this Agreement in its entirety upon written notice to Otsuka if
Otsuka’s development or Commercialization of the Product is in violation of
Applicable Laws, as evidenced by an order, directive or other official action of
a Regulatory Authority, court or other competent authority (provided, that any
action of a Regulatory Authority, court or other competent authority against an
employee or individual that is not against the company of Otsuka as a whole
shall be excluded from the foregoing) and Otsuka has not cured such failure
within [***] ([***]) [***] after notice from ARIAD (provided that there shall be
no opportunity for cure the [***] that ARIAD provides notice of termination
under this Section 26.5). Any such termination shall become effective at the end
of such [***] ([***]) [***] period unless Otsuka has cured any such failure
prior to the end of such period (or, if applicable, immediately upon notice the
third time that ARIAD provides notice of termination under this Section 26.5).

 

26.6 Termination for Force Majeure. For the avoidance of doubt, this Agreement
also may be terminated as set forth in Article 28 (Force Majeure).

 

26.7 Effects of Termination and Expiration.

 

  26.7.1 Termination or expiration of this Agreement for any reason shall not
extinguish any existing claims either of the Parties may have for
indemnification pursuant to the terms and conditions of this Agreement, and
shall not preclude either of the Parties from pursuing any claim for
indemnification such Party otherwise may have pursuant to the terms and
conditions of this Agreement to the extent that the circumstances giving rise to
such claim arose prior to, on or after the date of termination or expiration of
this Agreement. Furthermore, the termination or expiration this Agreement shall
have no effect on a Party’s obligation to make any payment accruing prior to the
date of termination or expiration.

 

  26.7.2

In the event of termination or expiration of this Agreement for any reason the
payments already made by Otsuka as of the effective date of termination

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  shall be retained by ARIAD, provided, that the foregoing shall not limit any
rights or remedies Otsuka may have at law or equity under this Agreement,
including any remedies for a material breach of this Agreement.

 

  26.7.3 Subject to any arrangements agreed upon in writing between the Parties
to facilitate Otsuka’s sell-off right pursuant to Section 26.7.5 in the event
that ARIAD does not exercise its right to purchase Otsuka’s remaining stocks of
Product, upon expiration or termination of this Agreement for any reason, all
rights granted hereunder to Otsuka shall be terminated with respect to the
terminated Product(s) (each, a “Terminated Product”) and the terminated
country(ies) within the Territory (each, a “Terminated Country”), such rights to
the Terminated Products in the Terminated Countries shall revert to ARIAD, and,
to the extent required or permitted by Applicable Laws, all information,
copyrights, permits, licenses, contracts, documentation, drug approvals, Pricing
and Reimbursement Approvals, Marketing Authorizations, customer lists and other
information and materials specifically and directly related to the Terminated
Products in the Terminated Countries shall be transferred to ARIAD. Solely with
respect to such Terminated Products in such Terminated Countries, Otsuka shall:

 

  (a) (i) promptly cease any use and/or exploitation of the Marketing
Authorization and Registrations with respect to the Terminated Products in the
Terminated Countries and (ii) promptly and unconditionally assign all and every
lawfully assignable official title, or certificate or equivalent document
concerning the Marketing Authorization or Registrations with respect to the
Terminated Products in the Terminated Countries to ARIAD or to ARIAD’s nominee;

 

  (b) promptly cease any use of the Trademarks and Patents with respect to the
Terminated Products in the Terminated Countries and not hold itself out as a
distributor of the Terminated Products in the Terminated Countries;

 

  (c) promptly terminate using (i) the Know-how with respect to the Terminated
Products in the Terminated Countries, (ii) the Improvements with respect to the
Terminated Products in the Terminated Countries, including the results of its
development work on the Terminated Products, (iii) any and all Confidential
Information of ARIAD relating solely to the Terminated Products in the
Terminated Countries, (iv) any and all correspondence and exchanges with any
Regulatory Authority with respect to the Terminated Products in the Terminated
Countries, and (v) pharmacovigilance and/or regulatory files and documentation
relating to the Terminated Products in the Terminated Countries, and return or
deliver all such materials to ARIAD without retaining copies, notes, summaries
or translations thereof (except as expressly required by law or to monitor
Otsuka’s compliance with the terms of this Agreement);

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  (d) promptly cease Commercializing the Terminated Products in the Terminated
Countries;

 

  (e) assign to ARIAD all right, title and interest, including all Intellectual
Property Rights in and to the Terminated Products marketing, sales and medical
affairs materials. Otsuka shall execute any documents and take all actions
reasonably required by ARIAD to perfect the foregoing assignment;

 

  (f) promptly comply with all other post-expiration and/or post-termination
obligations provided in this Agreement; and

 

  (g) cooperate with all reasonable requests of ARIAD relating to the transition
of activities relating to Product to ARIAD or its designee.

 

  26.7.4 Otsuka shall not destroy any documentation pertaining to the Product or
Compound without the prior written consent of ARIAD.

 

  26.7.5 Upon the expiration or termination of this Agreement, ARIAD shall have
the right but not the obligation to purchase all or a part of Otsuka’s remaining
stocks of the Product at the prices paid by Otsuka to ARIAD for such stocks. In
case ARIAD elects not to purchase such remaining stocks, if permitted by
applicable Regulatory Authorities, Otsuka shall have the right to sell such
stock for an additional [***] ([***]) [***] following termination, or any such
other period of time agreed upon by the Parties (the “Sell-Off Period”). In such
event, to the extent that the consent or approval of any Regulatory Authority is
required for Otsuka’s lawful sell-off of its remaining stocks during the
Sell-Off Period, the Parties shall use good-faith efforts to obtain such consent
or approval. If, during the Sell-Off Period, ARIAD is the MAH for the Product in
any country in the Territory, the Parties shall use good-faith efforts to
negotiate a distribution agreement if necessary to allow Otsuka to exercise its
sell-off right during the Sell-Off Period in the country in question. The
Sell-Off Period shall not be deemed to extend the Term, but all provisions of
this Agreement applicable to the lawful Commercialization of Product in the
Territory, and the Quality Agreements and the Pharmacovigilance Agreement, shall
continue to apply with respect to Otsuka’s Commercialization of Product during
the Sell-Off Period.

 

  26.7.6

Upon expiration or termination of this Agreement, however arising, neither Party
shall be entitled to any compensation or fee as a result of such termination.
Following such expiration or termination, ARIAD shall have no obligations to
compensate Otsuka for helping to build or maintain the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  market for Products or for its expectations that it shall continue to enjoy
the benefits of its position in accordance with this Agreement. In no case shall
any provision of Applicable Laws entitle Otsuka to notice of termination in
excess of that to which it is entitled in accordance with the explicit
provisions of this Agreement or to compensation in lieu of such notice. Otsuka
shall have no right to any compensation or damages for loss of goodwill in the
event of any expiration or termination of this Agreement. The Parties agree that
the Transfer Price and other financial terms set forth in this Agreement were
determined on the basis of their mutual understanding that Otsuka is not a
commercial agent as that term is defined in Applicable Laws and that law does
not apply to their relationship.

ARTICLE 27 – STANDSTILL

 

27.1 Standstill Obligation.

 

  27.1.1 Except as permitted by [***], during the Term, without the prior
written consent of the Board of Directors [***] or encourage others to) directly
or indirectly in any manner: [***] or agree to acquire, directly or indirectly,
alone or in concert with others, [***] or in any way participate in, directly or
indirectly, alone or in concert with others, any [***] or in any way participate
in a “group” [***] directly or indirectly, alone or in concert with others
[***], other than in the ordinary course of business; [***] with others to do
any of the actions [***] otherwise act in concert with others, [***], or
(vii) take any action to control or influence the [***] or [***] of [***].

 

  27.1.2 The provisions of Section 27.1.1 [***] announces publicly that it is
seeking [***], [***] or one or more of its subsidiaries to a third party [***]
immediately prior to [***]. For clarity, the foregoing provisions shall prohibit
[***] unless one of the exceptions in the preceding sentence [***]. For
avoidance of doubt, nothing in the Agreement shall prevent [***].
Notwithstanding the above, [***] shall not be deemed a breach of this provision.

ARTICLE 28 – FORCE MAJEURE

 

28.1

If the performance of this Agreement is prevented or restricted by government
action, war, fire, explosion, flood, strike, lockout, embargo, epidemics,
pandemics, quarantines, acts of terrorism, lockouts or other labor disturbances,
act of God, failures of common carriers, or any other similar cause beyond the
control of the defaulting Party, or supply failures due to the foregoing or
similar causes beyond the control of the defaulting Party’s suppliers or
contractors, the Party so affected shall be released for the duration of the
force majeure, or such other period agreed between the Parties as being

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  reasonable in all circumstances, from its contractual obligations directly
affected by the force majeure, provided that the Party concerned shall:

 

  (a) give prompt notice in writing to the other Party of the cause of force
majeure;

 

  (b) use commercially reasonable efforts to avoid or remove such cause of
non-performance; and

 

  (c) continue the full performance of this Agreement as soon as such cause is
removed.

 

28.2 The Parties shall take all reasonable steps to minimize the effects of
force majeure on the performance of this Agreement and shall, if necessary,
agree upon appropriate measures to be taken. Should the force majeure continue
for more than [***] ([***]) [***], then the Party not affected by such force
majeure shall have the right to terminate this Agreement immediately upon
written notice to the affected Party.

 

28.3 Notwithstanding anything contained in this Article 28, obligations to pay
money are never excused by force majeure.

ARTICLE 29 – LAW TO GOVERN AND JURISDICTION

 

29.1 This Agreement shall be governed by and construed in accordance with the
law of the Commonwealth of Massachusetts, United States of America, excluding
any conflicts or choice of law rule or principle that might otherwise make this
Agreement subject to the substantive law of another jurisdiction. The federal
courts of the United States of America located in Boston shall have exclusive
jurisdiction with regard to any (i) a dispute, controversy or claim that
concerns (A) the validity, enforceability or infringement of a patent, trademark
or copyright or (B) any antitrust, anti-monopoly or competition law or
regulation, whether or not statutory, and (ii) any dispute between the Parties
as to whether Article 30 requires a particular matter to be subject to
arbitration. Either Party may seek injunctive relief from any court of competent
jurisdiction with respect to any claim for specific performance or injunctive or
other equitable relief as a remedy for a breach or threatened breach of Article
24. Either Party may seek the enforcement of any award of damages, including
arbitral awards, in any court of competent jurisdiction.

ARTICLE 30 – DISPUTE RESOLUTION

 

30.1 Generally. The Parties recognize that disputes as to matters arising under
or relating to this Agreement or either Party’s rights and/or obligations
hereunder may arise from time to time. It is the objective of the Parties to
establish procedures to facilitate the resolution of such disputes in an
expedient manner by mutual cooperation and without resort to litigation. To
accomplish this objective, the Parties agree to follow the procedures set forth
in this Article 30 to resolve any such dispute if and when it arises.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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30.2 Escalation to Senior Officers. If an unresolved dispute as to matters
arising under or relating to this Agreement or either Party’s rights and/or
obligations hereunder arises (other than any dispute at the JDCC which is
subject to the dispute resolution procedures set forth in Section 4.6, or any
other matter that is expressly subject to either Party’s final decision-making
authority or final approval as set forth elsewhere herein), either Party may
refer such dispute to the Senior Officers or their respective designees, who
shall meet in person or by telephone within [***] ([***]) [***] after such
referral to attempt in good faith to resolve such dispute. If such matter cannot
be resolved by discussion of such officers within such [***] ([***]) [***]
period (as may be extended by mutual written agreement), such dispute shall be
resolved in accordance with Section 30.3. The Parties acknowledge that these
discussions between the Parties to resolve disputes are settlement discussions
under applicable rules of evidence and without prejudice to either Party’s legal
position.

 

30.3 Binding Arbitration.

 

  30.3.1 If the Parties do not resolve a dispute as provided in Section 30.2,
and a Party wishes to pursue the matter, each such dispute that is neither an
Excluded Claim nor subject to resolution in accordance with Section 30.4 shall
be resolved by binding arbitration administered by the International Centre for
Dispute Resolution (“ICDR”) in accordance with its International Arbitration
Rules as then in effect, and judgment on the arbitration award may be entered in
any court having jurisdiction thereof. The decision rendered in any such
arbitration shall be final and not appealable. If either Party intends to
commence binding arbitration of such dispute, such Party shall provide written
notice to the other Party informing the other Party of such intention and the
issues to be resolved. Within [***] ([***]) [***] after the receipt of such
notice, the other Party may by written notice to the Party initiating binding
arbitration, add additional issues to be resolved.

 

  30.3.2 The arbitration shall be conducted by a panel of three (3) persons,
none of whom shall be a current or former employee or director, or a
then-current stockholder, of either Party or their respective Affiliates. Within
[***] ([***]) [***] after receipt of the original notice of binding arbitration,
each Party shall select one (1) person to act as arbitrator and the two
(2) Party-selected arbitrators shall select a third arbitrator within [***]
([***]) [***] of their appointment. If the arbitrators selected by the Parties
are unable or fail to agree upon the third arbitrator, the third arbitrator
shall be appointed by the ICDR. The place of arbitration shall be New York, New
York, and all proceedings and communications shall be in English.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  30.3.3 It is the intention of the Parties that discovery, although permitted
as described herein, shall be limited except in exceptional circumstances. The
arbitrators shall permit such limited discovery necessary for an understanding
of any legitimate issue raised in the arbitration, including the production of
documents. No later than [***] ([***]) [***] after selection of the third
arbitrator, the Parties and their representatives shall hold a preliminary
meeting with the arbitrators, to mutually agree upon and thereafter follow
procedures seeking to assure that the arbitration shall be concluded within
[***] ([***]) [***] from such meeting. Failing any such mutual agreement, the
arbitrators shall design and the Parties shall follow procedures to such effect.

 

  30.3.4 Either Party may apply to the arbitrators for interim injunctive relief
until the arbitration award is rendered or the controversy is otherwise
resolved. Either Party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any preliminary injunctive or
provisional relief necessary to protect the rights or property of that Party
pending the arbitration award. The arbitrators shall have no authority to award
punitive or any other non-compensatory damages. The arbitrators shall have the
power to order that all or part of the legal or other costs incurred by a Party
in connection with the arbitration be paid by the other Party. Each Party shall
bear an equal share of the arbitrators’ and any administrative fees of
arbitration.

 

  30.3.5 Except to the extent necessary to confirm or enforce an award or as may
be required by Applicable Law, neither a Party nor an arbitrator may disclose
the existence, content, or results of an arbitration without the prior written
consent of both Parties. In no event shall an arbitration be initiated after the
date when commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable Massachusetts statute of
limitations.

 

  30.3.6

The term “Excluded Claim” means (i) a dispute, controversy or claim that
concerns (A) the validity, enforceability or infringement of a patent, trademark
or copyright or (B) any antitrust, anti-monopoly or competition law or
regulation, whether or not statutory; (ii) a claim for specific performance or
injunctive or other equitable relief as a remedy for a breach or threatened
breach of Article 24; (iii) any dispute concerning a matter that is subject to
either Party’s final decision-making authority or final approval, as expressly
set forth in this Agreement; or (iv) any dispute concerning a matter that is
subject to the mutual agreement of the Parties, including through the JDCC, as
expressly set forth in this Agreement. As set forth in Section 30.3.1, Excluded
Claims shall not be subject to arbitration. Furthermore, the Parties irrevocably
agree that they shall not institute any action in a court of law or equity with
respect to any dispute to the extent such dispute falls within the scope of
subsections (iii) or (iv) of the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  definition of “Excluded Claim,” it being the intent of the parties that
disputes within the scope of subsection (iii) be resolved by the Party that has
express authority under this Agreement to make such decision or give final
approval, and that disputes within the scope of subsections (iv) be resolved by
mutual agreement of the Parties.

 

30.4 Expedited Arbitration. Any disagreement of the JDCC regarding (i) [***],
(ii) the [***], (iii) the [***], or (iv) [***] shall be finally decided by
expedited arbitration in accordance with this Section 30.4. Following the end of
the [***] ([***]) [***] (or longer if extended by the Senior Officers) period
referenced in Section 4.6.1(c), either Party may request expedited arbitration
of such issue by written notice to the other Party. The place of such expedited
arbitration shall be New York, New York, and all proceedings and communications
shall be in English. Promptly following receipt of any such notice requesting
expedited arbitration, the Parties shall meet and discuss in good faith and
agree on a single expert to resolve the matter, which expert shall have
expertise with respect to the disputed matter. If the Parties cannot agree on
such expert within [***] ([***]) [***] of a Party’s receipt of notice requesting
expedited arbitration, then such expert, who must have expertise with respect to
the disputed matter, shall be appointed by appointed by the ICDR. Within [***]
([***]) [***] after an expert is selected (or appointed, as the case may be),
the Parties shall each submit to the expert, and to one another, a written
statement of their respective positions on the issue to be resolved and their
specific proposed resolution of the issue. The Parties shall also provide the
expert a copy of this Agreement, as may be amended at such time. Each Party
shall have [***] ([***]) [***] from receipt of the other Party’s submission to
provide to the expert a written response thereto. Neither Party may have any
communication (either written or oral) with the expert other than for the sole
purpose of engaging the expert at the outset or as expressly permitted in this
Section 30.4; provided that, the expert shall have the right to meet with the
Parties, either alone or together, as necessary in the expert’s opinion to make
a determination. Within [***] ([***]) [***] after the expert’s selection or
appointment, the expert must, to resolve the dispute or disagreement at issue,
select one of the two proposed resolutions provided by the Parties – without any
modification by the expert – that he or she believes, taken as a whole, is the
most fair and reasonable to the Parties in light of the totality of the
circumstances, consistent with the intention underlying, and the agreed
principles set forth in, this Agreement. The decision of the expert, which shall
be in writing and delivered to both Parties, shall be final, binding, and
unappealable. For the avoidance of doubt, the expert must select, as the only
method to resolve the matter at issue, one Party’s proposed resolution, and may
not combine elements of both Parties’ proposals or devise any alternative or
compromise resolution, award any other relief, or take any other action.

 

30.5

Entire Agreement. Each schedule, exhibit or appendix hereto is integral to this
Agreement and is hereby incorporated herein. This Agreement supersedes all prior
agreements and understandings, including the CDA, whether oral or written, made
by either Party or between the Parties and constitutes the entire Agreement of
the Parties

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

92

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  with regard to the subject matter hereof. It shall not be considered extended,
cancelled or amended in any respect unless done so in writing and signed on
behalf of the Parties hereto. Information disclosed by either Party or its
Affiliates under the CDA shall be governed by the CDA until the Effective Date
of this Agreement, and shall be deemed to be Confidential Information of the
applicable Party disclosed hereunder and subject to the confidentiality
provisions of this Agreement from and including the Effective Date for the
duration set forth herein. If there is any conflict between any provision of the
main body of this Agreement and any provision set forth in a schedule, exhibit
or appendix hereto (each of which is hereby incorporated herein), the provision
set forth in the main body of this Agreement shall govern.

 

30.6 Severability. The Parties hereby expressly state that neither Party intends
to violate any rule, law or regulation. If any provision of this Agreement is in
violation of any rule, law or regulation it shall be invalid and unenforceable,
without affecting the validity or enforceability of other provisions of this
Agreement. The Parties agree to renegotiate such provision in good faith and, to
the extent possible, to replace it with valid and enforceable provisions in such
a way as to reflect as nearly as possible the intent and purpose of the original
provision.

 

30.7 Independent contractor status. The status of ARIAD and Otsuka under the
business arrangement established by this Agreement is that of independent
contractors. Otsuka shall acquire Product from ARIAD or ARIAD’s nominee and
Commercialize them to its Customers in its own name, at its own risk and for its
own account. Except as explicitly permitted in writing by ARIAD or its
Affiliate, Otsuka has no authority whatsoever to act as an agent or
representative of ARIAD except as expressly set forth in this Agreement, nor any
authority or power to contract in the name of or create any liability against or
otherwise bind ARIAD or its Affiliate in any way for any purpose, nor shall
ARIAD or its Affiliate have such authority or power to so bind Otsuka.

 

30.8 Notices. Other than routine communications made through the JDCC, its
subcommittees or project teams, or the Alliance Managers within the remit of
such committees or persons, as contemplated elsewhere herein, all reports,
notices, approvals and communications required or permitted to be made pursuant
to this Agreement by one Party to the other shall be validly given or made for
all purposes, in the absence of acknowledgement of receipt, on the date of
mailing if mailed by registered airmail or by international courier to the
addressee Party at the following addresses, respectively:

Notices to ARIAD:

ARIAD Pharmaceuticals, Inc.

26 Landsdowne Street

Cambridge, Massachusetts 02139-4234

USA

Attention: General Counsel

Tel: +1 (617) 621-2200

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

93

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With copies (which shall be required but shall not itself constitute notice) to:

ARIAD Pharmaceuticals, Inc.

26 Landsdowne Street

Cambridge, Massachusetts 02139-4234

USA

Attention: Harvey J. Berger, M.D.

Chairman and Chief Executive Officer

Tel: +1 (617) 621-2200

and

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

One Financial Center

Boston, Massachusetts 02111

USA

Attention: Jeffrey M. Wiesen, Esq.

Tel: +1 (617) 542-6000

Notices to Otsuka:

Otsuka Pharmaceutical Co., Ltd.

Shinagawa Grand Central Tower

2-16-4 Konan, Minato-ku

Tokyo, 108-8242 Japan

Attn: Director, Pharmaceutical Division

Tel: [***]

with a copy, including by email to the Email addresses set forth below, (which
shall be required but shall not itself constitute notice) to:

Otsuka Pharmaceutical Co., Ltd.

1-7-1 Doshomachi, Chuo-Ku,

Osaka, 541-0045, Japan

Attn: Director, Licensing Department

Email: [***]

Tel: [***]

Otsuka Pharmaceutical Co., Ltd.

Shinagawa Grand Central Tower

2-16-4 Konan, Minato-ku

Tokyo, 108-8242 Japan

Attn: Director, Legal Affairs Department

Email: [***]

Tel: [***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

94

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30.9 Binding Effect. This Agreement shall inure to the benefit of, and be
binding upon, the respective successors of the Parties. For the avoidance of
doubt, the continued existence of this Agreement shall not be affected in case
of change of control of either Party whether by merger with or acquisition by a
Third Party.

 

30.10 Waiver. The delay or failure of a Party to insist upon strict performance
of any of the terms and conditions of this Agreement by the other Party shall
not constitute a waiver of any of the provisions hereof and no waiver by a Party
of any of said terms and conditions shall be deemed to have been made unless
expressed in writing and signed by such waiving Party.

 

30.11 Interpretation.

 

  30.11.1 The language of this Agreement is English. No translation into any
other language shall be taken into account in the interpretation of the
Agreement itself.

 

  30.11.2 The headings in this Agreement are inserted for convenience only and
shall not affect its construction.

 

  30.11.3 Where appropriate, the terms defined in this Agreement and denoting a
singular number only shall include the plural and vice versa. Unless otherwise
stated, references to days means calendar days, references to quarters means
calendar quarters beginning on the first of January, April, July and October and
references to years means calendar years beginning on January 1.

 

  30.11.4 The word “including” and similar words and phrases mean including
without limitation, whether or not expressly stated. The words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular Articles or other subdivision.
References to the singular include the plural. References to one gender include
all genders.

 

  30.11.5 References to any law, regulation, statute or statutory provision
includes a reference to the law, regulation, statute or statutory provision as
from time to time amended, extended or re-enacted.

 

30.12 Assignment.

 

  30.12.1

This Agreement and the rights conferred upon Otsuka under this Agreement cannot
be transferred or assigned by Otsuka without the prior, written authorization of
ARIAD, which authorization shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, Otsuka may make such transfer or
assignment without ARIAD’s consent to its

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

95

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  Affiliates or to a successor of all or substantially all of Otsuka’s business
to which this Agreement relates, whether in a merger, sale of stock, sale of
assets or any other transaction, provided that Otsuka gives ARIAD written notice
of the transfer or assignment. With respect to an assignment to an Affiliate,
Otsuka shall remain responsible for the performance by such Affiliate of all of
Otsuka’s rights and obligations hereunder.

 

  30.12.2 ARIAD shall have the right to assign or transfer, in whole or in part,
this Agreement to its Affiliates or any Third Parties by giving written notice
to Otsuka.

 

  30.12.3 This Agreement shall be binding upon and inure to the benefit of the
Parties’ respective successors and permitted assigns.

 

30.13 Public Statements.

 

  30.13.1 Subject to Section 31.9.2, Otsuka shall not make any public
announcement concerning this Agreement or the subject matter hereof without the
prior written consent of ARIAD. Upon the execution of this Agreement by both
Parties, the Parties shall issue a joint press release substantially in the form
set forth in Appendix 4. Once initial consent to a particular disclosure or
public announcement has been given and the disclosure or statement has been made
concerning particular subject matter, Otsuka may make any further public
statement concerning such subject matter so long as any such public statement is
not inconsistent with the prior public disclosures or public statements approved
by ARIAD pursuant to this Section 31.9.1 and does not reveal non-public
information about ARIAD or the Product.

 

  30.13.2 In the event that a Party is, based on the advice of the disclosing
Party’s counsel, required by Applicable Laws or the rules of a stock exchange on
which its securities are listed (or to which an application for listing has been
submitted) to make a public disclosure regarding this Agreement or its subject
matter (including the terms of this Agreement), such Party shall submit the
proposed disclosure (or proposed redacted copy of the Agreement, as applicable)
in writing to the other Party as far in advance as reasonably practicable (and
in no event less than [***] ([***])[***] prior to the anticipated date of
disclosure) so as to provide a reasonable opportunity for the other Party to
comment thereon. Neither Party shall be obligated to obtain approval from the
other Party with respect to any filings made with the applicable securities
exchange commission. Neither Party shall be required to seek the permission of
the other Party to repeat any information regarding the terms of this Agreement
or any amendment thereto that has already been publicly disclosed by such Party,
or by the other Party, in accordance with the terms of this Agreement, provided
such information remains accurate as of such time and provided the frequency and
form of such disclosure are reasonable.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

96

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  30.13.3 Except as expressly permitted in this Agreement or as required by
Applicable Law (or the regulations of applicable stock exchanges), neither Party
may use the other Party’s trademarks, service marks or trade names, or otherwise
refer to or identify that other Party in marketing or promotional materials,
press releases, statements to news media or other public announcements, without
the other Party’s prior written consent, which that other Party may grant or
withhold in its sole discretion.

 

30.14 Expenses. Unless specifically and expressly provided for to the contrary
in this Agreement, a Party who has an obligation or right to take an action
under this Agreement shall be solely responsible for any and all expenses
associated with such action.

 

30.15 Survival. The following Articles and Sections shall survive expiration or
termination of this Agreement for any reason: 1 (to the extent necessary to give
force to, or otherwise understand, surviving provisions), 3.2.2, 3.2.3, 3.3,
5.7, 11.5.4, 11.5.6, 11.5.7, 13.4, 14.2 and 14.3 (with respect to
indemnification, indefinitely, and with respect to the remainder of Sections
14.2 and 14.3, until the expiration date of the last full or partial lot of
Product purchased by Otsuka hereunder), 14.4, 15.7.3, 19.6 through 19.11
(inclusive), 21.7 (with respect to any Compliance Event that occurred during the
Term and is discovered thereafter), 22, 24, 25.2, 26.4.1, 26.7, 29, 30, 31.1
through 31.4 (inclusive), 31.6, 31.7, 31.9, and 31.11 through 31.14 (inclusive).

 

30.16 Third Parties Beneficiaries. The Parties intend that any Affiliate of
ARIAD that may subsequently become an MAH in the Territory shall have the
benefit of this Agreement. Except for any such Affiliate of ARIAD, or otherwise
expressly provided in this Agreement, the provisions of this Agreement are for
the sole benefit of the Parties and their successors and permitted assigns, and
they shall not be construed as conferring any rights in any other persons.

 

30.17 Waiver of Contra Proferendum Rule of Construction. Each Party has had the
opportunity to consult with counsel in connection with the review, drafting and
negotiation of this Agreement. Accordingly, the rule of construction that any
ambiguity in this Agreement shall be construed against the drafting Party shall
not apply.

 

30.18 Remedies to be cumulative. Each Party’s remedies under this Agreement and
under the law are intended to be cumulative, and not mutually exclusive.

[Remainder of page intentionally blank; signature page follows]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

97

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized officers.

 

For and on behalf of For and on behalf of ARIAD Pharmaceuticals, Inc. Otsuka
Pharmaceutical Co., Ltd /s/ Harvey J. Berger /s/ Taro Iwamoto Name: Harvey J.
Berger, M.D. Name: Taro Iwamoto, Ph.D. Title: Chairman and Chief Executive
Officer Title: President and Representative Director Otsuka Pharmaceutical Co.,
Ltd /s/ Tetsuya Tachikawa Name: Tetsuya Tachikawa, Ph.D. Title:

Senior Operating Officer and Director

of Licensing Department

Signature Page to Collaboration Agreement

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

APPENDIX 1

PATENTS

1. Patents and Pending National Patent Applications

 

Country

  

Patent App. No.

  

Patent Pub. No.

  

Patent No.

  

Status

[***]

[***]

China

   [***]    [***]    [***]    [***]

China

   [***]    [***]       [***]

Japan

   [***]    [***]    [***]    [***]

Japan

   [***]    [***]       [***]

Korea

   [***]    [***]    [***]    [***]

[***]

[***]

China

   [***]    [***]       [***]

Indonesia

   [***]          [***]

Japan

   [***]    [***]       [***]

Korea

   [***]    [***]       [***]

Malaysia

   [***]          [***]

Philippines

   [***]          [***]

Singapore

   [***]          [***]

Thailand

   [***]          [***]

Vietnam

   [***]    [***]       [***]

2. National Patents in the Territory based on the following published

International Patent Applications

 

PCT Publication Number

       

Filed

[***]

   [***]    [***]

[***]

   [***]    [***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 1

--------------------------------------------------------------------------------

APPENDIX 2

PRE-APPROVED SUBLICENSEES

1. List of Affiliates of Otsuka*

 

Country

  

Company name

  

Shareholders

Indonesia

   [***]    [***]       [***]       [***]

China

   [***]    [***]    [***]    [***]       [***]

Philippines

   [***]    [***]

South Korea

   [***]    [***]       [***]       [***]    [***]    [***]

Taiwan

   [***]    [***]       [***]

Thailand

   [***]    [***]       [***]       [***]

Vietnam

   [***]    [***]       [***]       [***]

 

* [***]

2. List of Third Party Contractors

 

Country

  

Third Party Contractor

  

Role

Malaysia

   [***]    [***]

Singapore

   [***]    [***]

Philippines

   [***]    [***]

Vietnam

   [***]    [***]

Hong Kong

   [***]    [***]

 

1) [***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 2

--------------------------------------------------------------------------------

APPENDIX 3

TRADEMARKS

 

Mark

  

Country

  

Serial No.

  

Filing Date

  

Status

  

Reg’n No.

  

Reg’n

Date

  

Class

[***]    [***]    [***]    [***]    [***]    [***]    [***]    [***] [***]   
[***]    [***]    [***]    [***]    [***]    [***]    [***] [***]    [***]   
[***]    [***]    [***]    [***]    [***]    [***] [***]    [***]    [***]   
[***]    [***]    [***]    [***]    [***] [***]    [***]    [***]    [***]   
[***]    [***] [***]    [***]    [***]    [***]    [***]          [***] [***]   
[***]    [***]    [***]    [***]          [***] [***]    [***]    [***]    [***]
   [***]    [***]    [***]    [***] [***]    [***]    [***]    [***]    [***]   
[***]    [***]    [***] [***]    [***]    [***]    [***]    [***]    [***]   
[***]    [***] [***]    [***]    [***]    [***]    [***]    [***]    [***]   
[***] [***]    [***]    [***]    [***]    [***]    [***]    [***]    [***] [***]
   [***]    [***]    [***]    [***]    [***]    [***]    [***] [***]    [***]   
[***]    [***]    [***]    [***]    [***]    [***] [***]    [***]    [***]   
[***]    [***]    [***]    [***]    [***] [***]    [***]    [***]    [***]   
[***]    [***]    [***]    [***] [***]    [***]    [***]    [***]    [***]   
[***] [***]    [***]    [***]    [***]    [***]          [***] [***]    [***]   
[***]    [***]    [***]    [***] [***]    [***]    [***]    [***]    [***]   
[***]    [***]    [***] [***]    [***]    [***]    [***]    [***]    [***]   
[***]    [***] [***]    [***]    [***]    [***]    [***]    [***] [***]    [***]
   [***]    [***]    [***]          [***] [***]    [***]    [***]    [***]   
[***]          [***] [***]    [***]    [***]    [***]    [***]    [***]

 

1 Registered

2 Pending

3

 

LOGO [g862791222.jpg]

 

* [***]

** [***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 3

--------------------------------------------------------------------------------

APPENDIX 4

PRESS RELEASE

 

LOGO [g862791111.jpg]

News Release

ARIAD AND OTSUKA ANNOUNCE CO-DEVELOPMENT AND COMMERCIALIZATION AGREEMENT FOR
ICLUSIG® TO TREAT LEUKEMIAS IN JAPAN AND NINE OTHER ASIAN COUNTRIES

 

•   ARIAD to receive upfront payment of USD 77.5 million and subsequent
milestone-based payments

 

•   Otsuka to obtain rights in ten Asian countries to Iclusig, a
newest-generation treatment for patients with refractory chronic myeloid
leukemia and Ph+ acute lymphoblastic leukemia

Cambridge, MA and Tokyo, Japan December 23, 2014 – ARIAD Pharmaceuticals, Inc.
(ARIAD; NASDAQ: ARIA) and Otsuka Pharmaceutical Co., Ltd. (Otsuka) today
announced that they have entered into an agreement for Otsuka to commercialize
ARIAD’s Iclusig® (ponatinib) in Japan and nine other Asian countries and to fund
future clinical trials in those countries. ARIAD will lead the completion of the
Japanese New Drug Application (NDA) for Iclusig, and Otsuka will file the NDA on
behalf of both companies for regulatory approval in resistant and intolerant
chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute
lymphoblastic leukemia (Ph+ALL) in 2015. Iclusig is an approved BCR-ABL
inhibitor in the United States and Europe.

The agreement provides for Otsuka to receive exclusive rights to market Iclusig
in Japan and nine other Asian countries (the “Territory”) in return for an
upfront payment of $77.5 million to ARIAD, a milestone payment upon regulatory
approval in Japan for patients with resistant and intolerant
Philadelphia-positive leukemias, and additional milestone payments for approval
in other indications.

Following approvals in the Territory, Otsuka will conduct sales activities and
record sales. ARIAD will also receive a substantial share of net product sales.

ARIAD will continue to fund until the completion its ongoing pivotal trial of
Iclusig that will form the basis of the filing for regulatory approval in Japan,
while Otsuka will fund additional agreed-upon clinical studies in the Territory.
For ARIAD-sponsored global studies that include sites in Japan, Otsuka has the
option to contribute to the funding and gain access to the data for use in the
Territory.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 4

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“This agreement meets one of our key strategic objectives – establishing a
strong partnership with an experienced and committed Japanese pharmaceutical
company to commercialize and co-develop Iclusig in Japan and Asia,” said Harvey
J. Berger, M.D., chairman and chief executive officer of ARIAD. “Otsuka is
building a leading hematology and oncology business in Japan and Asia and is an
outstanding partner to successfully commercializing Iclusig in these markets.”

“Over the past several years, we have worked with the leading hematology experts
in Japan and have run the Phase 1/2 clinical trial that will form the basis for
our marketing authorization application,” he added. “Together with Otsuka, we
will be able to make this cancer medicine available to refractory
Philadelphia-positive leukemia patients in need of new treatment options.”

Otsuka Pharmaceutical President and Representative Director Taro Iwamoto noted,
“The future arrival of ARIAD’s ponatanib in Japan and elsewhere in Asia will be
an important evolution for patients with CML and Philadelphia-positive ALL with
BCR-ABL gene expression, said to be particularly difficult to treat. Treatments
have been inadequate for patients with these life-threatening conditions and we
aim to contribute to improve the treatment available to them. ARIAD’s high-level
drug discovery technology powered its discovery of ponatanib and Otsuka aims to
maintain this momentum by making it part of our expanded portfolio in blood
cancers from pre-treatment conditioning to treatments.”

A joint development and commercialization committee will oversee clinical
development and commercialization of Iclusig in the Territory, including
approval of any development or commercialization plans. Otsuka will have
exclusive commercial rights to Iclusig and will promote it as its sole tyrosine
kinase inhibitor in the Territory. In addition to Japan, the other Asian
countries that are included in this agreement are China, South Korea, Indonesia,
Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

About Iclusig® (ponatinib) tablets

Iclusig is a kinase inhibitor discovered by ARIAD. The primary target for
Iclusig is BCR-ABL, an abnormal tyrosine kinase that is expressed in chronic
myeloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic
leukemia (Ph+ ALL). Iclusig was designed using ARIAD’s computational and
structure-based drug-design platform specifically to inhibit the activity of
BCR-ABL. Iclusig targets not only native BCR-ABL but also its isoforms that
carry mutations that confer resistance to treatment, including the T315I
mutation, which has been associated with resistance to other approved TKIs.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 4

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Important U.S. Safety Information for Iclusig® (ponatinib)

WARNING: VASCULAR OCCLUSION, HEART FAILURE, and HEPATOTOXICITY

See full U.S. prescribing information for complete boxed warning

 

•   Vascular Occlusion: Arterial and venous thrombosis and occlusions have
occurred in at least 27% of Iclusig-treated patients, including fatal myocardial
infarction, stroke, stenosis of large arterial vessels of the brain, severe
peripheral vascular disease, and the need for urgent revascularization
procedures. Patients with and without cardiovascular risk factors, including
patients less than 50 years old, experienced these events. Monitor for evidence
of thromboembolism and vascular occlusion. Interrupt or stop Iclusig immediately
for vascular occlusion. A benefit risk consideration should guide a decision to
restart Iclusig therapy.

 

•   Heart Failure, including fatalities, occurred in 8% of Iclusig-treated
patients. Monitor cardiac function. Interrupt or stop Iclusig for new or
worsening heart failure.

 

•   Hepatotoxicity, liver failure and death have occurred in Iclusig-treated
patients. Monitor hepatic function. Interrupt Iclusig if hepatotoxicity is
suspected.

Please see the full U.S. Prescribing Information for Iclusig, including the
Boxed Warning, for additional important safety information.

About ARIAD

ARIAD Pharmaceuticals, Inc., headquartered in Cambridge, Massachusetts and
Lausanne, Switzerland, is an integrated global oncology company focused on
transforming the lives of cancer patients with breakthrough medicines. ARIAD is
working on new medicines to advance the treatment of various forms of chronic
and acute leukemia, lung cancer and other difficult-to-treat cancers. ARIAD
utilizes computational and structural approaches to design small-molecule drugs
that overcome resistance to existing cancer medicines. For additional
information, visit http://www.ariad.com or follow ARIAD on Twitter
(@ARIADPharm).

About Otsuka Pharmaceutical Co., Ltd.

Otsuka Pharmaceutical is a global healthcare company with the corporate
philosophy: ‘Otsuka-people creating new products for better health worldwide.’
Otsuka researches, develops, manufactures and markets innovative and original
products, with a focus on pharmaceutical products for the treatment of diseases
and nutraceutical products for the maintenance of everyday health.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 4

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In pharmaceuticals, Otsuka is a leading firm in the challenging area of mental
health and also has research programs in several under-addressed diseases
including several cancer categories and tuberculosis, a significant global
public health issue. These commitments illustrate more powerfully than words how
Otsuka is a “big venture” company at heart, applying a youthful spirit of
creativity in everything it does.

Otsuka Pharmaceutical Co., Ltd., which employs approximately 28,700 people
worldwide, is a wholly owned subsidiary of Otsuka Holdings Co., Ltd., the
holding company for the Otsuka Group that is headquartered in Tokyo, Japan. The
Otsuka Group has business operations in 27 countries and regions around the
world, with consolidated sales of approximately USD 14.1 billion for fiscal year
2013 (4/1/2013-3/31/2014.) Otsuka Pharmaceutical welcomes you to visit its
global website at https://www.otsuka.co.jp/en.

ARIAD Forward-Looking Statements

This press release contains “forward-looking statements” which are based on
management’s good-faith expectations and are subject to certain factors, risks
and uncertainties that may cause actual results, outcome of events, timing and
performance to differ materially from those expressed or implied by such
statements. These factors, risks and uncertainties include, but are not limited
to the Company’s ability to manufacture and supply Iclusig to Otsuka; the
ability of Otsuka to perform the contracted services, such as obtaining
marketing authorizations, other regulatory approvals, and pricing and
reimbursement approvals for Iclusig in the countries covered by the
collaboration agreement (“Territory”); Otsuka’s ability to distribute, promote,
market and sell Iclusig in the Territory; Otsuka’s ability to fund the clinical
development of Iclusig in the Territory; the timing and scope of the marketing
authorizations obtained in the Territory, as well as the level of pricing
obtained in Territory; third-party reimbursement; and the timing and success of
sales of Iclusig in the Territory. These factors, risks and uncertainties also
include, but are not limited to the costs associated with ARIAD’s development
and manufacturing, commercial and other activities; the adequacy of capital
resources and the availability of additional funding; and other factors detailed
in the Company’s public filings with the U.S. Securities and Exchange
Commission. The information contained in this press release is believed to be
current as of the date of original issue. After the date of this document, the
Company does not intend to update any of the forward-looking statements to
conform to actual results or to changes in the Company’s expectations, except as
required by law.

 

For Investors

  

For Media

Kendra Adams

   Liza Heapes

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 4

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Contacts at

        ARIAD

Kendra.adams@ariad.com

(617) 503-7028

Liza.heapes@ariad.com

(617) 621-2315

Contacts at

        Otsuka

Yoko Ishii

Ishiiyo@Otsuka.jp

+81 3 6361 7411

Jeffrey Gilbert

Gilbert.jeffrey@Otsuka.jp

+81 3 6361 7379, +81 80 8728 6039

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Appendix 4